Nudge Psychology and the Unemployed.

Nudge Psychology and the Unemployed.

A survey using a large questionnaire of 240 questions has been reduced to 48 questions by the Nudge Unit at number 10 Downing Street. The original design was by an American not-for-profit organisation, who at first objected to the way it was used by the Nudge Unit.

The purpose of this survey is to analyse the answers given by the unemployed, in an attempt to improve their chances of getting a job. by showing them evidence of their positive strengths. This has produced criticism of the Nudge Unit for creating a “nanny state”, which does not fit well current government ideology.

More seriously, the unemployed may have feared that this information, and it’s analysis might undermine their chances of future employment. This could lead to deliberate lying in the questionnaire. Whether this fear is well grounded or not, the Nudge Unit has created at least 5 pairs of questions; where the second of the pair checks on the truth of the first. So the nudge unit anticipated lying.

Here are just a few examples. What is striking is that all examples have the first sentence as the positive, and the second as negative; and always in that order. Also, the pairs are next to one another. The possibility of having the pairs further apart would have created a better check on lying.

I always finish what I start./ I get side-tracked when I work.
My life has a strong purpose. /I do not have a calling in life.
I always let bygones be bygones./ I always try to get even.

Secondly, there are 5 cases of questions where a positive answer might indicate a lack of interest in gaining employment. Despite these positive answers which I put to the following questions, an analysis of answers showed that on every count I was extremely suitable for employment. Here are a few examples:
I am easily bored.
I never go out of my way to visit museums.
I get side tracked when I work.
I mope a lot.

Despite agreeing with the “museums” question, one of the results of the analysis of my answers was as follows.

“You always loved school, reading, and museums”.

What this shows is that whatever negative characteristics I reveal, the Nudge Unit shows me to be a very good candidate. Presumably all answers will reveal positive, even positively exaggerated, results.
At the least, this brings into question the validity of this exercise. Beyond that concern, the exercise begins to look manipulative. Firstly, because there are sanctions if this exercise is not completed. Secondly, the exercise produces a “character”, which the unemployed person may, or may not, believe in.

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AA and Saga Job Losses

Three years ago three private equity firms piled their debts onto the books of AA and Saga. This created the need for large interest payments on the debt; this in turn reduced profits. A crisis was created which led to 2,800 job losses and pension cut backs. 
Which are the laws that allow the recycling of debts from private equity firms to other firms they have just taken over? Who are the private individuals who place capital into private equity firms in the first place? Do the individuals even pay much tax? Are they non-doms?  Why do these private equity firms debts in the fitrst place? Have they made bad investment decisions? If so, why do workers have to suffer for the mistakes of financiers?
What to do? Newspapers should name and shame, not only the private equity firms, but also the individuals who invest capital in them.

Strike British Airways Part Four.



Strike: British
Airways: Part Four


For the second time the courts have stopped this strike. On the first
occasion the issue was to do with a small number of voters who should not have
been allowed to vote. This time it is to do with 11 ballot papers which were
spoiled. 11 is a small number compared with the total number of union members
of around 10,000. One of three judges recognised this.


Under Section 231 of the 1992 Trade union act 4 separate pieces of
information are specified. All 4 pieces must be notified to all members of the
union. The pieces are:


Number of votes cast in ballot

Individuals answering yes

Individuals answering no

Number of spoiled voting papers.


The court found against union as not all members were informed about the
spoiled papers. Even though the place where spoiling took place had notices put
up. Further, the union used a number of ways to communicate; via the union
website, via text and email, via notices at airports, and via a newsletter. One
barrister argued that letters should have been sent in the post. The union is


None of this addresses the current issues which are causing conflict. Specifically,
the issue of about 5,000 cabin crew who went on strike last March, and a number
of union activists whose jobs are at risk. The cabin crews had their “perks”
taken from them. These “perks” included subsidised and free travel. However, it
is probably true, though not certain, that most of this travel was not for
holidays, but to get to work on time.


The union now feels that they cannot go on strike legally. So, what to
do? Some years ago many workers at Heathrow reported illness on the same day.
Should this tactic be tried again?


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British Airways Strike Part Three.

British Airways Strike: Part Three.


An on-line members poll of 11,000 British Airways flight attendants is expected to vote for 4 waves of 5 day strikes each. This is happening with a hung parliament, which means that there is not likely to be any government intermediary to calm the two conflicting parties.


The original issue was about cutting staff on long haul flights. Management have now repealed this proposal. The issue now is the reinstatement of staff travel “perks”. Management has now allowed free travel, but only when staff are travelling to work. But senior staff  lose their perk of priority for stand-by tickets.


Further, a senior union official has just been sacked for failing to turn up for duty. He was engaged on union business at the time. This used to be called victimisation; and has traditionally caused great anger amongst union members. Was there no agreed allowance for this union work?


The union tactic in this second strike seems to be firstly to hit peak travel in school half term: and secondly to double the length of the strike, and make it more difficult to find and keep temporary workers.


Who will win?

Management is suffering financial losses from volcano ash, from the first strike, and reputation loss from frustrated passengers. The Union might not receive the very high support in got in the previous ballot. Workers on low pay have already lost some pay. They are being asked to lose more. But the sacking of one union official, and the future possibility of other sackings may well increase the vote for a strike. Also the Unite Union is more supportive of it’s members than last time, when it was said that a 12 day strike was over the top!


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lloyds Bank and Wolfgang Berent.

Lloyds Bank Bonuses & Wolfgang Berendt.


The Chair of the Remuneration Committee at Lloyds has just resigned for
personal reasons and without giving prior warning. He was the longest serving
non-executive director for 7 years. The government, which owns 41% of Lloyds
Bank, was reported as intending to use it’s vote at a share holders meeting to
show disapproval of the size of directors’ bonuses.


Wolfgang Berendt had been a director of 8 other companies in recent
years, where he may have had an influence on bonus payouts. These companies
included : Cadburys, Procter & Gamble, Halifax Bank of Scotland, GFK SE,
MIBA AG, Telecom Austria,
and Tambards USA.
This considerable experience was not unusual, especially in the role of a
non-executive director with responsibility for the remuneration committee.


In the case of Lloyd’s the remuneration policy in 2009 was officially a
prudent and conservative approach. No payment for failure; base salaries below
the level of the competition, and lower levels of bonus for higher levels of
risk taking: all are respectable policies.


So, what was the government objecting to?


It was the allocation of £2.3 million to the managing director, and £3
million shared by 4 other directors; and this in a year when the bank made a
loss. It began to look like that there was payment failure. The managing
director did not take his bonus, but this did not seem to be enough to remove
the possibility at the shareholders meeting on May 6th of a
challenge to the size of these bonuses.


What is happening here? Are remuneration committee chairs going from one
directorship to another and raising bonuses because other companies have raised
bonuses? Is this pay inflation, but for company directors only?


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Goldman Sachs and The Royal Bank of Scotland.

Goldman Sachs and The Royal Bank of Scotland.


The American Security and Exchange Commission has recently charged Goldman Sachs of collaborating with a hedge fund called Paulson and Co.. Goldman Sachs (hereinafter GS) sold it’s clients a complex financial instrument called a “Collateralised Debt Obligation”; (hereinafter CDO). This CDO was structured by adding together sub-prime mortgages. These mortgages, for a variety of reasons, were very likely to fail. In which case those who bought the CDO were liable for any unpaid mortgages, or debts.


As Paulson knew that these CDOs were liable to fail, they bet on failure, correctly as it turned out; and made a fortune. The clients of GS included the Royal Bank of Scotland (hereinafter RBS) made great losses; and RBS had to be bailed out by the Treasury.


The moral issue here is why did GS not tell its’ clients what it knew from meetings with Paulson. Specifically, that the CDOs were designed to fail, and cost the purchasers; but make fortunes for Paulson? GS’s defence is that it lost money on their deal with Paulson; about $90 million, and received a fee of £15 million. This produced a net loss of £75 million? How significant a loss was this for GS?


The charge brought against GS has affected their share price, and their reputation. The chief executive had claimed that GS was doing “God’s work”. They now appear to have been acting against their clients’ interests.

Were the clients, including RBS, told that the CDOs were originated by Paulson? Were the clients told that the CDOs were based on sub-prime mortgages? It has been argued that other banks other than GS were behaving in the same way. This may allow a defence of normal business practice. This is a dangerous defence as it may bring legal charges against other banks. But that should not stop this case proceeding.

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National Rail Strike: Part Two

National Rail Strike: Part Two.


Following the court’s objections to a strike on April 6th, the RMT union will organise the practicalities of  a new ballot on April 7th. This shows the determination of the union to pursue a strike, even though it achieved just over half of it’s members supporting a strike.


A possible reason for this level of support is that the majority of the members are signallers, whose jobs are not seen to be threatened; and the minority of maintenance workers who do fear loss of their jobs.  The court found in support of Network Rail largely because the union’s data base was not updated.


This raises the question of the employer’s responsibility in the accuracy of the data base. The relevant Act is “Trade Union and Labour Relations (Consolidation) 1992: Section 181. This requires the employer at all stages of collective bargaining to disclose to the union all of the following information.


1                   Information without which the union is impeded in collective bargaining.

2                   Information in accordance with good industrial relations.

3                   Information shall be disclosed, or confirmed in writing at the union’s request.

4                   ACAS Code of Practice shall guide good practice.


The union was clearly impeded by balloting 11 signal boxes that did not exist; 23 work places omitted from the ballot; and 67 workplaces balloted with more member than employees. Secondly, information which is in the employer’s possession, should be disclosed for good relations to exist. Thirdly, the union was merely “told” about inaccuracies in the data base. This is very unclear. Finally, the ACAS Code is not at all explicit about good practice with respect to the employers responsibilities to disclosure.


So where does the blame rest for a severely inadequate data base? The court’s finding for the employer seems to imply that it is the union’s responsibility. Further, a second ballot with the same data base looks doomed. The union consulting it’s member seems a reasonable action to take. But it is unlikely that this will solve all the problems. The union consulting the employer is clearly encouraged in the act. The exact response of the employer is however vague in the act. The union should not settle for being told, but should ask for everything in writing. How helpful the employer is in providing this information; what delays, if any, there are; should surely show a court that it is not only, or indeed not mainly, the union’s responsibility for updating the data base. 


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