4 Dec 2015, 8:32pm
personal finance reflections:
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  • The future of work looks like becoming a relentless rat race

    The Grauniad has some good articles on the future of work out today, and it looks like going to seven degrees of hell unless we can seriously reduce the number of people who want/need work. The latter is quite possible, but it is a social and political problem. I guess I can take some solace from being part of the solution, leaving the workforce eight years early. The issues were foreseen in the depths of the 1930s Depression by John Maynard Keynes with his piece on Economic Possibilities for our Grandchildren. Keynes extrapolated some of the trends from the beginning of the Industrial Revolution to the 1930s, and increasing productivity, and figured we’d all be working less. These trends are being amplified by automation and to a smaller extent globalisation. As one of their commenters observed about automation

    “Automation is fundamentally the substitution of capital for labour. The problem is that the people who already have the capital are the ones who will benefit most, because they’re the ones who will invest in the new automation.”

    That, fundamentally, is why some of you are pitching for FI as soon as you can get there. Because you want to be on the side of Capital…, you want to be on the winning side of the fight 😉

    Let’s take a look at some of the other issues

    Workplace Structures/Delayering

    If we ignore summer jobs as a kitchen porter, an Ermine travelled from Technician -> team technician -> (interruption of MSc) -> design Engineer -> research engineer -> international team leader -> strategic engineering consultant-> then some period of wilderness as coder, pseudo ‘intrapreneur’ 1 then running into the flack and financial crisis that made me want to get out-> engineering consultant on prestige project -> right outta there

    That’s roughly seven layers up the greasy pole, and it got harder as time got by, because of this delayering as well as the natural narrowing of the pyramid. I had to switch across four companies and three cities to get there. The Guardian tells me

    Rather than moving up in one direction, ambitious employees will be able to move sideways, tapping into new networks

    Am I the only cynical bastard who reads this and thinks, well that’s fine and dandy for the company, but WTF is in it for the ambitious employee? Sideways moves come with sideways pay. I heard a load of this bullshit at The Firm in the latter years where they were thinning out the management structure, the aim of one prize prick was only six levels ‘twixt the lowliest employee and the CEO. As a result we had line managers trying to manage over two hundred people at some point. Be that as it may, the ambitious employee does get to broaden their experience, true, and in places like London where you can find enough other places to work this may be showing up as a positive force because you take this and sell it to another firm for the pay rise you didn’t get in the sideways move. Look at the career progression the ONS shows for younger cohorts (I am roughly the middle track)

    career progression is much faster now

    career progression is much faster now

    It seems to indicate career progression is much faster now. So maybe it all works out all right in the end, although it doesn’t really square with Merryn Somerset-Webb’s commentary on the extent of the welfare state or indeed nearly five million households on working tax credits 2. If the ONS chart is really adjusted for inflation as it claims then all I can say is that inflation adjusted real money doesn’t seem to stretch anywhere near as far as it used to 😉 It’s the old saw –  luxuries are much cheaper now while essentials like housing and childcare have gone up like a bastard…

    Intrapreneurship? WTF?

    “Large organisations have a huge challenge in attracting the millennial generation to come and work for them. Those people expect much more entrepreneurial environments – more freedom to operate, less control,” says Philippe De Ridder, co-founder of the Board of Innovation, a consultancy firm

    Philippe, me old mucker, I don’t know what you’re smoking at the Board of Innovation but it must be good and I bet it isn’t legal. Out there in the real world some of those poor bastards from the millennial generation are working on London for bugger all, otherwise known as interning, because presumably these large organisations are struggling to attract talent so they have to pay….boom..tish….nothing? The Guardian offers internships here and some, though not all are even paid these days 😉

    Another piece of the interning pie is this sort of thinking:

    Van der Mersch argues that there are career development opportunities for cloud workers, with many startups using the site as a way of testing out freelancers to see if they’re a good cultural fit before offering them a permanent job – and vice versa.

    There’s already the interesting concept of a permanent job at a startup – over half of startups fail within the first five years making the permanence a moot point. I learned some things with that Web design stuff, in particular that people who want you to work for free will never pay you properly. True character will out…

    Not all of us want to be startup entrepreneurs

    There’s a much larger social perspective here, which is what do most of us want to do with our lives? Do we really want to give so much headspace to working, or do some of us want to  turn up, do a reasonable day’s work and then go home and do something with the rest of our lives, you know, all the way from having children to maybe doing something other than work? How the hell have we come to this ugly pass where earning a living takes up so much nervous energy and angst, in what is a rich First World country? Now some of it is due to globalisation and the fact that two thirds of the world (the Communist countries and what used to be known as the Third World) were largely outside the capitalist system, and now this has changed the water is finding its own level. Living standards in the First World will have to fall until they meet rising living standards elsewhere. That’s not enough, IMO, to explain all of what’s happening to labour. Some of the problem is increased mobility and communications. A hundred years ago if you were the carpenter in your town you didn’t have to be the best for 200 miles around, just the best for 20 miles around and you’d have a lifetime of work. Whereas now if you want to grok code for Google, you’d best be among the upper reaches of the bell curve compared with people in a radius of five thousand miles. There are no middle-level regional search engines.

    The gig economy is all right for some and not for others

    I’m with Lucy Kellaway on this FT article – one of the biggest issues about freelancing is that a lot of it isn’t about the work, it’s about getting the work.

    You are forced to become a one-woman sales team, endlessly having to flog yourself — which means networking and being nice to people you don’t like much. You also have to do all your own tiresome admin and then, when your computer crashes, you have to be your own IT help desk, too.

    FWIW I have some experience of running a separate company, I ran a modestly successful web design operation on the side for a few years. But what I above all else hated about the job was selling and finding new business, and in the end I wound it up when a large customer moved their work in house. Some of us just don’t want this endless fight. Being a startup entrepreneur is a fantastic story and it’s great for some people – but I’d put that number of people at a lot less than half of us.

    For a contrary view on the precariat Money Week tells us that yer average self-employed geezer is on £50k p.a. It’s a classic example of lies, damned lies and statistics, since this assertion comes from Boox who presumably have the same supplier of marching powder as Philippe, since they are making this rosy conclusion on a sample of 1000 of the self-employed and when you ask the ONS then you find that the median income from self-employment has declined to £207 p.w or £10764 p.a. Nice creative use of sample bias, Boox. Presumably the self-employed army of Avon and Betterware and Kleeneze reps who infest my letterbox with their worthless tracts to get enough self-employment income to claim tax credits rather than be mentally tortured for being unemployed under the DWP sanctions system don’t need Boox accounting services 😉 Roll on the universal income if only so that I will be able to find the odd real letter among the blizzard of multilevel marketing material one day.

    This is what many Britons mean by self-employment. You can easily get your 16 hours a week hawking crap like this. £50,000 p.a.? I guess it's possible in theory, unlikely in practice

    Avon catalogue I think. I don’t read dross like this though I could wish people didn’t get uptight if I throw it away. This is what many Britons mean by self-employment. You can easily get your 16 hours a week hawking crap like this. £50,000 p.a? I guess it’s possible in theory, unlikely in practice

    That’s the trouble with working from home opportunities. If you need someone to design the business for you, you’re always going to be on the bottom rung at best. Part of the reason is encapsulated in the Google strapline for that link

    Working from home is a great option if you want to spend more time with your children. 

    Trying to process self-employed statistics is always going to be the devil’s own job because of the wider range of forms of self-employment. Presumably the Government will move an Ermine from the ranks of the economically inactive – a slightly offensive term for a beast with investment income of a significant part of the NMW, to the ranks of the self-employed though I will still be virtually catatonic in terms of hours a week worked. The only information HMRC collect is the total earned in the tax year – it’s irrelevant if I earned that in five minutes of frenzy or 220 days of getting  a pittance for twelve-hour days.

    History is written by the winners

    Part of the trouble is the narrative is being written by the winners in this fight. From Robin Chase, co-founder of Zipcar

    She says: “My father had one job in his lifetime, I will have six jobs in my lifetime, and my children will have six jobs at the same time.” Does she think that is that a positive thing? “Well,” she says, “it seems strange to me that we would always recommend to companies that their revenue streams are diverse, yet for individuals, the smallest and most fragile economic unit, we say: you must only do one thing all your life. What a crazy way to live; 87% of people in full-time employment are not passionate about what they do. When I look at this new way of work, I think of it as opt-in. It gives people economic agency, it puts them in charge. And it gives them flexibility. People love those things.”

    Well, she would say it’s all great – because it’s great for her. There’s something to be said for diversification in income streams, and for those with the temperament, go for it. I can say from personal experience working a job and a bit is a lot harder than working one…

    The narrative sounds great from Robin’s lips. Maybe not so great from the huddled masses working minimum wage jobs on zero hours contracts. Now we should ask ourselves why we encourage many people into higher cost lifestyles such as having more children than can be paid for with the wages their talents can command , and then mentally torture them using the DWP sanctions system when they fail to find the jobs that aren’t there for their abilities/time commitments. The Quiet Man IDS thinks this is a failure of process and 14 day warnings are the answer. There’s something to be said for George Osborne’s more direct approach of limiting benefits to families with up to two children; it may be unpopular but it is at least honestly straight between the eyes and aims to fight the fire before it starts. Either way these are not concerns for the likes of Robin – after all people have agency, they’re in charge and have flexibility, so that’s all right then. Me, I’d want to be on the side of Capital in this fight rather than Labour. The battle between the Irresistible Force and the Immovable Object ain’t gonna be pretty.

    Work is increasingly always-on in a random way

    The 1990s dream of being able to work at home with phones and remote access and what-have you happened – in a big way, from the Blackberry email appliance to the smartphone. But it was a gun that fired on both ends, it seems, because it corrupted the meaning of the working day too. Once again, that’s great for the startup, and the entrepreneur – that technology lets you look a lot bigger than you really are. It also facilitates the zero-hours contract and a pernicious leakage of work into time that once upon a time was clearly off the clock.

    There’s a secondary problem in that a lot of work nowadays is terribly hard to qualify whether it is done well, and many of the political issues that ERE described in his post about careerism start to raise their ugly heads.

    The difficulty of qualifying a job then runs up with bullshit metrics that focus on process rather than intent. This delightful piece of management theory gives us DWP setting targets for the number of the unemployed sanctioned, because presumably some pipsqueak has prior knowledge handed down on tablets of stone that x% of claimants are taking the piss. I’ve no doubt that many well be, but nevertheless the point of the DWP isn’t to turn down the claims of x% of applicants, it is to evaluate the claims and pay up if they meet requirements. If we are spending too much on unemployment benefit than that is the job of Parliament to fix – by paying less, by paying under fewer circumstances or whatever. The setting of job performance targets to process statistics by incompetent gits who don’t understand statistics, the inherent variability on small sample sizes and who are fetishisers of tickboxery is making a lot of jobs needlessly crap with a misery of micromanaged metrics.

    Perhaps what you measure is what you get. More likely, what you measure is all you get. What you don’t (or can’t) measure is lost.

    H Thomas Johnson, Lean Dilemma, 2006

    That’s all very well, but in the case of the DWP as so often the managers set the targets on an internal marker. Even the Harvard Business Review concedes the problem as applied to CEOs

    Human beings adjust behavior based on the metrics they’re held against. Anything you measure will impel a person to optimize his score on that metric. What you measure is what you’ll get. Period.

    We pay the blighters more and get less for it. As the guy said

    if we measure just what’s easy, we’ll maximize just what’s easy.

    The Ermine is introverted, it was already picked up at school that I was not a team player – I never have been, and never want to be. I believe that the finest engineering work is had in a duel with the laws of physics and the constraint of engineering without the incessant background flapping of lips, although like all things balance is needed, I won’t go as far as to say every man is an island. And I was able to work with and lead teams, but it probably is true to say I did my best work alone or with fewer than two other people. Success was identifiable in innovation, in faint signals pulled out of the noise and the success of projects and their teams.

    It’s absolutely at right-angles to the current correct business thinking, which is all about the hive-mind and networking and collaboration – the group is the hero and individual talent and expertise is zero. The hive-mind is normative, it stamps out dissent and difference. Not in the old way of prejudice and stereotyped -isms, but in new ways. As Lucy Kellway observed, this conformity takes new forms – people in the new East London cavernous creative spaces have no space for the ugly. What really worried me, however, was that when she was making a radio programme, even the sound engineers were pretty boys. Engineers aren’t meant to be pretty. When I worked for the BBC, this wasn’t the case, you could immediately tell Production from Studio Engineering in the Television Centre bar – as soon as you got in the door and looked round 😉

    I’m glad to be out of it

    To some extent as you get older you get less adaptable, and while I can use some of these methods I don’t want to live life that way, and I am lucky enough to have the choice. In one of the other good articles on this topic in the Graun Jeremy Rifkin (author of The End Of Work) opines

    A lot of the change, he suggests, has to do with a transformed idea of freedom. When the older generation thinks of freedom it imagines it as autonomy, self-sufficiency, personal choice. “Freedom is exclusivity.” When the younger generation thinks of freedom, he suggests, it is no longer about exclusivity, it is about inclusivity. “For them the more networks they are in, the more social capital they establish, the more free they feel,” he says. “It is about expanding the network. This is the sharing economy.”

    Partly, though, I say, isn’t it also that grim economic necessity has become the mother of all that invention, all those millions of apps? The fact is that in developed countries, that generational gap about ideas of freedom is also a glaring generational inequality in assets and opportunities.

    Rifkin likens the gig economy to the establishment of common land in feudal times. “This sharing economy is reestablishing the commons,” he says, “in a hi-tech landscape. Commons came about when people formed communities by taking the meagre resources they had and sharing then to create more value. The method of regulation of these systems is also comparable,” he suggests. “If people are trusted and vouched for they are accepted as part of the sharing economy group. If they behave badly they are excluded. Your social capital means everything in this new economy.”

    I read that a couple of times, and I still can’t work out whether it is the most arrant load of claptrap or there is a kernel of truth and I’m just on the wrong side of the divide. I recognise some of what he says about the sharing economy. I also recognise squarely that my view of freedom is exclusivity – the freedom to choose what I do with my time, and largely with my resources. I don’t understand the part about networks, but then I am not a cloud person, and I always ask who gains from munging my data ‘for free’. And yet I see the symptoms of this networked utopia at least – in every railway station the soft glow of smartphones reflecting off other people’s eyes. People used to think you were a nutter if you talked to yourself in the street, and I still have the urge to cross the road when I hear someone talking to nobody in particular before realising that they are on the phone yelling out details of their love life or business transactions to all and sundry.

    Perhaps what looks to me like a dreadful, overweening and controlling aspect of work for employees, or a revoltingly competitive bear-pit favouring the loudest wide boys selling their wares on the freelance/entrepreneur side is simply a new generation defining new ways of being human. If it’s the latter, then it should all come out in the wash and good luck to them, I will try and stay on the side of Capital and sit back and enjoy the ride. I do wish that people would seem to be happier with the result, however. It looks like hell on earth to me, but maybe I just don’t understand the digital commons. I confess that one of the first thoughts I had when I read Paul Mason’s stuff about the end of capitalism and the sharing economy was ‘yes, but what will people eat and where will they live’ which a fellow reader took up with greater vim.

    man-with-savingsA lot of the things that are offensive about the way work is going cease to be offensive once you are financially independent. What is going wrong is the power balance between capital and labour. If you don’t need the money then the power balance swings back, you can afford brinkmanship or indeed to walk away. As my favourite 1950s ad says, the financially independent can walk tall, because they can walk away. However, it does take over 10 years of decent and continuous earnings at a pretty high level become financially independent, or several decades of still a decent level for the rest of us. It’s the dirty little secret of the retire early scene – you need to earn well to get to retire early, as well as not screwin up. Most of the narrative out there is about not screwing up, which is necessary, but not sufficient nowadays.

    If you are entrepreneurial you can do that well in the gig economy, because more of the fruits of your labour accrue to you – as the old saw goes you never get rich working for someone else. It is presumably the successes who are skewing those ONS figures up for cohort earnings for those aged 21 in 1995, but at the same time the ONS figures show the reality of self employment is an average wage of less than the National Minimum Wage. If you work in finance or IT you can do it in less time too, indeed you will need to do it, because if you work in an office where fewer than a third of your colleagues have grey streaks in their hair 3 then statistically you want to be FI or have alternative employment planned by the time you are twenty years from State Retirement age.

    Perhaps all the non-entrepreneurs will be kept as pets by the entrepreneur winners, via universal income so they don’t all gang up against them, while the go-getters charge around like flash Harrys with bigger and bigger yachts. Else there could be trouble in Paradise.

    Notes:

    1. thank you, Guardian, for that piece of jargon/insight
    2. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/423621/ChildandWorkingTaxCreditsStatistics-April_2015.pdf
    3. based on a working life from 21 to 67, and assuming their hair goes grey around 50)

    Sometimes, moving sideways isn’t bad because it could be that someone could be unhappy with their job but not unhappy with the company so they want to stay there (in another role) to see what other opportunities arise later on. The extra experience in the different role comes in good stead as you become an all rounder. I look at our leadership team and some have gone through this route. Also, sideways moves don’t necessarily come with sideways pay.

    I totted up my own layers and like you, I too have 7 layers, 5 of which are with the same company. Layers 5 and 6 I found the toughest and although were both really sideways moves, I had the biggest increases in salary. I’m not interested in going beyond layer 8 nor being self-employed/my own boss – looks like too much hard work! ๐Ÿ™‚

    Maybe I’m mercenary – if a sideways move comes with more pay it’s a promotion to my eyes, so I congratulate you on your promotions ๐Ÿ˜‰

    It is probably fair to say that as I reached the end of my forties I started to grow narrower and less open to moves to broaden skills. Not particularly because I was becoming hidebound, but more to do with that U shaped happiness curve and I was tackling issues in my personal life, and Sun Tzu in the Art of War says fight on as few fronts possible.

    The Firm was moving more to IT and it slowly dawned on me that some aspects of IT (Agile, pair programming) were really ways I didn’t like working, and my first love was still electronics, with IT as a supporting role. Which is some of what I’ve done since. And my last project for the Olympics was a legacy elecronics/RF skillset. So perhaps I am more a fan of the sideways move than I thought I was.

    You’ll be pleased to know that the pair programming fad has run its course, it’s now clear to people that it’s massively disruptive to achieving flow. Agile, (aka micro management billed as a way of improving communication) is still much in vogue, though the wiley practitioners usually figure out how to obfuscate things such that the daily update is much less of a burden.

    I’m glad pair programming has been shot. And indeed that your perecption of Agile is exactly the same as mine, oh boy, those SCRUM calls to set you up for the day at the start, so you were either half asleep or ready to kill anything that moved for wasting half an hour of precious time, on ‘five minute’ phone conferences, geez. I’m amazed anybody is able to write code in a big org, though looking at the reliability of the results maybe they can’t ๐Ÿ˜‰

    You’ve hit so many nails, with so many hammers, exactly on the head in this one I’m starting to wonder exactly how many arms an Ermine has…

    Absolutely cracking post and I’m going to take some time to re-read and digest this – for now, it expresses a lot of what I’ve been thinking for some considerable time now.

    I’d be interested to hear more (and I’m sure others would be too!) about your experiences with your web design company sideline experiences at some point – I’ve considered (and done on a limited scale) similar myself in the past, and as you say, it’s a lot harder than just one and a bit full time jobs

    Mike S

    Thanks – those Grauniad articles set me off. I’m still trying to work out if I don’t get it or they don’t ๐Ÿ˜‰

    The Web design company was an early adopter in Web 0.01 and 1.0 – 1995(!) to 2004. Much of that early days stuff was fun but tough because processing credit cards was really hard-the early days were encrypting https forms send back via GPG for regular processing which still makes me a little queasy when I think about it, though it worked fine for years until it was decommissioned.

    I found trying to run an operation like that alongside a decent professional job is an absolute bear – I lost lots of holiday to customer meetings and fundamentally I had enough money but was short of time – I just didn’t know that then. Perhaps it would be easier now with smartphones and the like. If the older Ermine could go back in time to give the younger Ermine some sage advice it would be “FFS can that side gig, use your holiday to do fun stuff and just because you don’t have debts doesn’t mean you aren’t spending wastefully – spend on what matters to you and cut the crap, rather than earning more to fuel the waste”

    But that’s a whole different article ๐Ÿ˜‰

    “But thatโ€™s a whole different article”…
    Indeed it is, and one I look forward too ๐Ÿ™‚

    I remember looking at card processing back in the day and then running away laughing hysterically (or was it crying?).

    ‘Course nowadays everything is perfectly secure and dandy ๐Ÿ™‚

    I remember thinking at the time “exactly what technology is going to win out here? because there must surely be a best possible solution” only to realise much later that, in the same way that VHS beat Betamax, the better solutions get lost via the commercial imperative that cheaper is always better & always wins…

    (ironically when typing this “Betamax” get’s highlighted by the spell checker – it’s already become an “un-format”)

    I too have used holiday time to try and generate income – just feels like you’re beating yourself even harder against the Wall of Work… now I try my best to take a walk and “stand and stare”

    Feels weird to be nostalgic about the early days of the web – reminds me I have a BBC micro down in the cellar I need to play with at some point.

    10 PRINT “THINGS ARE EVER THUS…”
    20 GOTO 10

    MikeS

    > I remember looking at card processing back in the day and then running away laughing hysterically (or was it crying?).

    Indeed, and though my company was a limited company I had no professional indemnity insurance personally. At least it’s now past the statute of limitations and nothing went wrong ๐Ÿ™‚

    I just don’t get it when people talk the joys of working for yourself, but I am of the view that people fall into either employees who are prepared to accept the compromises of employment for offloading the across-the-board responsibilities and the entrepreneurs who truly chafe against the constrictions of employment. And I still don’t think more than half of us want to be entrepreneurs. True entrepreneurs (Monevator, DM, Mrs Ermine) just don’t get the fish-out-of-water aspect – it’s a Two Cultures sort of thing

    Oh, dear !

    It should actually be “FFS throw off the shackles and can that soul-destroying, anodyne 9-to-5 job and go for the side gig 100%. Even if it doesn’t work out, having once had the nerve to strike out you’ll never again be satisfied as anyone else’s employee and you can start to really enjoy the fun, freedoms and satisfaction that work can bring instead of ending up twenty years later moaning about what a bastard it all was….”

    Sorry, just couldn’t resist it ! ๐Ÿ˜‰

    Ah, but it was a great place to work, with interesting stuff and intelligent people. Whereas the side gig was lonely, and I found it hard making some of the calls. F’rinstance using secure https and GPG encrypted emailing the data to the back end was fine but I worried about what happens if some black hat hacks the server and wins the data there? The correct answer to that (TKmaxx, TalkTalk etc since this was the exact attack vector) is to whistle a dancing tune and ignore that, but we didn’t know that then.

    And I really, really, hate selling. Lucy Kellaway nailed the problem beautifully. The ‘work’ I am doing now came to me – I am definitely of the better mousetrap school of thought. Which doesn’t work in the real world if you need it to earn a living. If you are FI it’s great – a whole lot of things about work get a lot better when you have the option of walking away/not starting in the first place. I was not in that position in my thirties.

    –> “Am I the only cynical bastard who reads this and thinks, well thatโ€™s fine and dandy for the company, but WTF is in it for the ambitious employee”

    Nope! Company structures seem to be getting flatter and flatter, so you are ‘closer to senior management’. And there’s much less positions to progress into. And they’ve renamed junior positions, there’s no more ‘Assistant’ or ‘Junior’, it’s all ‘Associate’s now.

    –> “A hundred years ago if you were the carpenter in your town you didnโ€™t have to be the best for 200 miles around, just the best for 20 miles around and youโ€™d have a lifetime of work. ”

    Winner takes all effect, it’s everywhere! Being self employed doesn’t appeal, at least not until I have more capital to sit on. Common wisdom tells us to take risks when we are younger, as there is time to recover, say by starting up our own business. I think a better approach is to work hard while you’re young and build up that capital. Then, if you want to have a go at being an entrepreneur, do it later, when failure doesn’t mean restarting as you’re already FI. It’s easy to look at the successful entrepreneurs forgetting that there will be many more failed ones…cynical? Sure

    Excellent post, and one I will read again. For now, I’m going to carry on building up my capital. Capital gives you options, years in the workforce and nice trinkets gives you the opposite. I’ve just recently re-trained, and whilst hard work I enjoyed it. But I can’t see myself being willing to do that again and again if that’s what it’s going to take in the modern work force…

    Have a good weekend.

    โ€œLarge organisations have a huge challenge in attracting the millennial generation to come and work for them. Those people expect much more entrepreneurial environments โ€“ more freedom to operate, less control,โ€

    Reminds me of the Devils child, Kirsty Allsopp, proclaiming that young people prefer the flexibility of renting these days. Millennials that I speak to would like decent and fairly paid permanent employment and home that they can call their own, how they are having to live is not a reflection of what they want.

    Sad times when they might be better off following the example of the Poster Child of tax credits, Michelle Dorrell, knocking out 4 sprogs and claiming tax credits for a working shady hours, for a dubious nail bar business with dubious non profits (insert Kleenez, Kirby Vacuum Cleaners as appropriate). Not bad when it all tots up to more than average full time employment, with a spot of free housing thrown in. I’m left of centre but encouraging the nation to be reliant on part time “work” and benefits is a disaster.

    Which explains my response when the Firm kindly offered to double my workload recently, to protect me from possibly redundancy. I politely declined and said I’d rather take the payoff to enable me to leave London than to stay and be stressed to the max… thanks for thinking of me though. :0 I’m not a complete idiot, you don’t have to be the fastest in the pack, just not at the back (and/or genuinely mean what you say). As a fellow introvert, one of the appealing things about The Firms cutbacks is 99% of social events/team building/out of office activity is cancelled until further notice ๐Ÿ˜€

    MLM: I’ve just completed a weeks worth of internet research on this after being approached as a potential recruit by a “friend”. How to alienate friends and family 101. Fascinating reading, recommended.

    “Michelle Dorrell, knocking out 4 sprogs and claiming tax credits for a working shady hours, for a dubious nail bar business with dubious non profits ” – Yeah, it makes you think, I have young kids but am close, possibly at FI, I do still wonder if it might be worth me not going fully retired and doing a couple of days a week so I can pull in all the benefits/credits. For the time you have to put in it seems like a great return for working at some job you can daydream your way through. I’ve paid a far amount of tax during my time so perhaps it’s not totally immoral…..

    Beware Universal Credit – tax credits don’t take wealth into account, curiously, but UC will do.

    Although UC has been coming for at least five years or more, and probably will still be coming for another five years, so hit it while you can under the old regime ๐Ÿ˜‰

    @Starla MLM is the pits, it’s like the National Lottery, a tax on the gullible. In the same way as we don’t let people supply alcohol to children, there ought ot be a prohibition of rooking the arithmetically challenged!

    5 Dec 2015, 2:46pm
    by Neverland

    reply

    Actually when you look at the way the income tax system works in the UK its highly redistributive for conventional company employees:

    – ยฃ50,000 40%+ income tax and NI and child benefit goes
    – ยฃ100,000 personal allowance starts disappearing and no free child care
    – ยฃ150,000 45%+ income tax and NI and limits to pension contributions

    The incentives to climb the greasy pole aren’t that great as a “company man”

    By contrast “entrepreneurs” and inheritances are barely taxed in the UK

    I think that’s what a SIPP is there for for the employee sorts, so they can get out faster if they rise up the pole because they’ll need to ๐Ÿ˜‰

    It’s inherently harder to redistribute with the tax system for the entrepreneurs because the swings in cash flows are much harder for good reasons. It’s always harder to hit a moving target. That’s one of the advantages for the entrepreneurial, it comes with the different forms of opportunity and risk.

    I hate this sort of thing: “87% of people in full-time employment are not passionate about what they do”. I had a succession of jobs, most of which I enjoyed, some of which I enjoyed a great deal. But “passionate”: silly bint.

    “Commons came about when people formed communities by taking …”: oh what bullshit. Nobody knows how commons came to be formed; they simply emerged from the mists of the Dark Ages as functioning institutions, as far as I can tell. You can call the context Manorialism or Feudalism, but that explains nothing about their origins. Rifkin is clearly a tit.

    Great post Ermine, much food for thought in there. Since I’ve “retired” in my fifties I’ve wondered about being self-employed myself, and about peers who are already self-employed. Can I get a straight answer on what fellow fifty year old “consultants” and “freelancers” are earning? No I cannot. (Mind you, most of these people are ex-sales or marketing managers.) My suspicion is “not a lot”. And believe me, a lot of them hate pitching themselves as much as you, despite their background. It seems that the majority of their work, when they get it, comes from networking, not necessarily “cold calling”, so maybe the young have it more right. Keep your network close and vibrant. You are going to need it.

    I don’t know what you did in your working life, but of course in your fifties you’re more likely to rely on a form of ‘networking’ as you call it.

    But it’s absolutely not simply ‘…who you know…’. It’s more along the lines of ‘…who you know that knows you know what you’re doing …’ that’s the defining characteristic of being successful in consulting. Nobody with the authority to bring you in is going to put their own cock on the block for you just because you’re friendly with them, follow their Tweets or Facebook page or you play golf together. If you turn out to be crap at what you’re supposed to be doing, it reflects really badly on the hirer. Conversely, if you do a great job they can get a lot of kudos out of the deal.

    If you’ve previously worked for the same outfit for thirty years as a staffie, surrounded by other people in the same boat, then you’re unlikely to be very well known outside that company. On the other hand, if you’ve been around the block a few times and were involved with dozens of different companies or projects, then by default you’ll know a wide range of influential people in the industry who know what you’re capable of. These people will often come to you without any solicitation. Even better are the callers you don’t know at all but who say “…so-and-so gave me your details and told me you helped them out on the xxxx project…”.

    Note sure from your comment why you’d expect anyone to tell you what they’re earning, but because of your ‘suspicions’ I’d expect you’d amazed at the money you can command for a job. If you’re already ‘retired’ then you’re actually in a great position because you can ask for top dollar and afford to just walk away if they kick up about it. But if you’ve a proven track record then you’ll probably find that your asking price is not a problem – companies turn to external consultants when they’re way up shit creek and so they’ll be more than happy to pay if you turn out to be the paddle they need.

    And if you’re ‘retired’, then why not just give it a try ? Depending on what it is you do, it could actually cost next to nothing, or for what I do say ยฃ10-15k for a decent PC and a few suites of industry-standard software. Either way, if you can pull in just one half-decent job a year then it’s a great return on a low-cost investment in yourself. What have you got to lose ?

    However, don’t kid yourself that going it alone is an easy route – navigating through the bureaucracy and reporting requirements imposed by the state for both limited companies and the self-employed is not for the faint hearted.

    And you’ll soon think differently about the disparaging comments from the ignorant about your supposedly fabulous tax advantages when you’re forced to be an unpaid administrator, book-keeper, accountant and tax-collector, even though you’ve no sick-pay, paid holidays, free third-party pension contributions, or any employment rights at all, and you might go months at a time without bringing in any paid work. You’re also carrying the signficant risks of late payment or even not getting paid at all because of disputes or the client going tits-up. And you’re actually responsible for the work you do as the ermine points out, a totally alien concept to any employee – if you cock it up, then you have to sort it out, and that might mean it costing you a lot more than the job was worth to you in the first place.

    There’s no HR department to go running to when you get into difficulties, which in my experience is a good thing (in the contracting / freelancing world, which incidentally is not at all the same as consulting, it’s well known that the desirability of working for a particular company is inversely proportional to the number of HR staff they employ…).

    But, despite these downsides, I wouldn’t have it any other way. I’ll never be an employee again !

    6 Dec 2015, 10:59am
    by Neverland

    reply

    Mrs Neverland and I have run our own business for something like a decade and our net tax rate is pretty much half what it would be if we were similarly paid employees. You simply have a lot more leeway about what you can expense to your own business, when you take the cash out, the NI treatment is more generous and the opportunity to claim back VAT is generous

    I’m really not surprised you would never want to be an employee again

    And thanks for the link to the FT article on freelancing, The comments following on were very entertaining!

    Awesome, awesome article, deep & well thought out as usual; it totally resonated. I agree with it all & think that it is clear now that we are at an endgame state, [that started at least with globalisation] to finally break any remaining local power of organised labour.

    As such, any given individual is almost powerless, no matter how highly qualified – a surgeon from Cuba can easily be better than a rich-country equivalent & will look at even half that salary awestruck. Apart from playing people against each other with the ever-reliable Divide & Rule strategy, robotisation too will add to the competition.

    So what will the vast army of former workers do, where will they live, how will they pay to eke out the rest of their lives if they can’t earn? One clue may be from the period of chaos in Russia in the upheaval of changing economic systems after ’89. Millions of [mostly] men simply drank themselves to death within a few short years, after realising that they’d never work again, yet had to pay for everything now …….& losing hope.

    Society is fundamentally restructuring at an unprecedented rate – this should come as no surprise, given that the world’s population has been doubling for at least the last couple of generations. That elephant in the room, with the joy of globalisation has flooded the labour market, making the contest of capital vs labour as competitive as a gladiator kicking a blind, new-born puppy to death. It’s a numbers game ……..& history shows that the 0.001%/ ruling elite can always pay one half of the poor to easily subjugate the other, thus maintaining the status quo. The few exceptions [Russian & French revolutions for example] were relatively temporary reverses that in the fullness of time served more to prove the rule.

    For the lucky few who will just get FI in time due mainly to their birth dates, making more good decisions than bad & getting enough well-paid work for long enough to reach escape velocity, they can relax, feel relieved & hopefully grateful. As you say, the most powerful negotiator in the market is the person who doesn’t actually need anything – they can name their price & stick to it – because if they don’t get it then they don’t care. Yes, when all’s said & done …..& all are circling the plughole, it’s better to be in the few sitting on the plug watching instead.

    6 Dec 2015, 11:07am
    by Neverland

    reply

    @survivor

    The last period of globalisation at the dawn of the 20th century also led to a huge concentration of wealth in a few hands

    Then we had two world wars in 40 years, large scale confiscation of private wealth and the dividing up of the world into several political/ trading blocks which were only dismantled 70 years later

    There is this prevalent thought in the anglo-saxon world that history has stopped and this current state of affairs is forever

    Personally I think that’s a stupid as a Roman thinking the empire was eternal in 100 AD

    Flavour of the month where i work is Six Sigma and CNQ (Cost of Non-Quality. To survive in the corporate world you have to pay lip service to all these initiatives and then game the system so they don’t make your life a misery. It’s definitely possible to do that and remain sane if you can manage to suppress the parts of your brain that value integrity, logic and so on.

    Nooooo – say it ain’t so, didn’t we have this claptrap in the mid Nineties as Total Quality Management and ISO9001 and friends? Which fits a research facility like a three fingered glove.

    > if you can manage to suppress the parts of your brain that value integrity, logic and so on

    I found that got harder as I got older. I know you get more cantankerous with age, but an inability to tolerate corporate BS is largely because after a few years you’ve seen the first three attempts to deploy this silver bullet fail, usually because it was aimed at the wrong class of problem.

    @Neverland,

    Agreed, it can change – often just when The System looks so impregnable that most give up, it fails & the vulnerabilities only later become clear. My theory though, is that history has proven that nothing ever changes without the massive upheavals that the incredible violence you mention results in – mainly because any elite wont relinquish one crumb unless they realise they absolutely have to. Total brinkmanship due to greed is their instinct.

    So, if you are the venal incumbents, the smartest thing to do is to give people just enough to fill their stomachs, so they’re too comfortable to riot that day & can still delude themselves into thinking it’s not so bad/can get better. It doesn’t take as much as most would think, just a shack with a TV & enough poor quality food – [still just bread & circuses] – exactly as actually happens in the slums most of the world’s population live in today. This is why so many bullsh*t jobs survive even now, that closer scrutiny would reveal consist of simply turning up & pushing meaningless bits of paper around a desk all day while clock-watching until the boss leaves & it’s safe to go home.

    But surely it’s just like the action of a pendulum – if there’s ever a hint of equality/social justice, it’s just a matter of time before another elite arise – initially from random natural advantage. Then compounded by the urge to cement that for their progeny in perpetuity, they use their influence to gatekeep the system. So any rare lurch of the pendulum from the still position eventually just comes to rest back where it was before – giving a different caste, but the same situation/principle anyway – effectively only rotating individual pigs at the trough.

    We both agree wholeheartedly with the comment in your post that “remote access” led to “a pernicious leakage of work into time that once upon a time was clearly off the clock.”

    One of the worst trends in teaching was becoming accessible via email. Students used to come to my regularly scheduled office hours to talk about paper ideas, how to improve their writing, discuss literature, etc. Now that personal connection has been replaced with emails asking me to “correct” their drafts or requesting “urgent” feedback on paper ideas just hours before an assignment is due, etc.

    And, as everyone knows, in high tech, one is constantly tethered to the smartphone…

    Brilliant!

    Pretty much sums up the way my life has been progressing. I worked hard, saved hard and have taken the approach of getting some cash and getting out of the workplace asap. I could see this change as I sat in the workplace, I am late 40s and think my days on the work treadmill are well and truly numbered now.

    I worked at a firm where most of my projects were cost-cutting/man-hour reduction initiatives that laid off people and automated the workplace. It took all the decision making out of the jobs and killed the ‘passion’ for the workers. I worked up a career ladder there – until I didn’t like the next rung and sat it out – holding on grimly – until I was kicked off the ladder and outta there!

    I now sit looking in at the work world, I am trying to re-enter after having a period of FI time. Its hard going.. employers don’t like people who appear to be able to have time off, they want a way to control you!

    […] you don’t feel is right for you or your principles. The brilliant 1950’s advert ermine linked to hereย says it all: savings allow you to walk tall, because you can walk […]

    Nice rant Ermine. I think you shouldn’t conflate / see a contradiction though in the way that the world is going for the majority who go into the workforce and the difficulties for the minority who don’t have the skills / work ethics / role models / emotional stability / education / whatever to play, so are stacking shelves on the minimum wage. There is definitely an issue there (perhaps a more serious issue) but their existence hardly contradicts the changing work culture for that majority who are in the game. ๐Ÿ™‚

     

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