27 Sep 2016, 12:27pm
living intentionally personal finance:
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  • Earning and working are different things in a post FI world

    Before they are financially independent, most people work to earn the money to buy the stuff they need and want, it’s how 21st century capitalism is meant to work at the moment. It gives rise to the term ‘work’ – something that you have to do otherwise bad shit happens, like you end up with all your stuff thrown out on the pavement.

    1609_evicted

    Because it’s something you have to do for many years, many of us get Stockholm syndrome with work. Inveterate story-tellers that humans are, we tell ourselves that work is innately a Good thing and lends meaning to our lives. Let’s take a fine example of this from someone who I’m generally in agreement with, other than in this aspect of life:

    But I believe almost everyone will benefit from having an ongoing economic relationship with society while they can – even if only for a day or two a week.

    Monevator

    I’m the poster child for disputing this paradigm. I consider it a limiting belief, and have taken pot-shots at the Calvinist work ethic every so often on here. The beauty of financial independence, however, is that you get to have the choice of whether to work or not. Over at SHMD, Jim has decided that he missed work, so he went and got himself a job, even though he doesn’t need the money.

    Now I have never missed work, ever since I handed in the tools of an office-worker’s trade way back in June 2012. There is, however, a general psychological principle

    Everything that irritates us about others can lead us to an understanding of ourselves

    Carl Jung, MDR

    I would generalise that to everything that irritates us… I don’t think it’s particularly personal in this case. If Monevator and Jim and 99% of the rest of the FI world want to work till they drop, good luck to them. It’s just the concept that work is an inherent good that gets my goat. As a society, we are going to have very serious trouble and mental distress with this meme if the robots and globalisation really do take half our professional jobs in the coming years, unless we have a social revolution that probably involves bending some of the axioms currently underpinning society. Hopefully one of them will be work = meaning 😉

    I realize today that nothing in the world is more distasteful to a man than to take the path that leads to himself.

    Hermann Hesse , Demian

    In order to live intentionally, therefore, I need to separate the beliefs coloured by past experience from my current experience, and my temperament had the past experiences not happened. Otherwise I will live in an imaginary prison, boundaries that once had value but have no more.

    What does the word Work mean to me

    It means a lack of freedom, it means grind, it means being trapped. It means earning money, it means selling my time for money, it means restrictions on my time. It means doing stupid shit like justifying my existence, it means filling in time sheets that have no bearing on reality, paperwork just because. Because humans are devils with their recency bias, this litany of woe is because the most recent experience was largely negative. But for 27 years out of my 30 it also meant the opportunity to travel, to do good interesting stuff and to build capital across my working life as I slowly exchanged human capital for financial and social capital. If I were to allocate the experience of my years evenly, then only 10% were bad, maybe 12% if I add in the six months I was unemployed between graduating into Thatcher’s first recession in the 1980s and starting work.

    So it’s easy to see the limiting belief. Work = pain, and I need get as far away from that as possible. Even in 2009 I intellectually knew that was an extreme view, but one that because of where I was in my working life I could get away with. The power of the intensity of feeling galvanised me to clobber wasteful spend and save and take the necessary risks with extreme prejudice, and reach FI 8 years early.

    What I did not realise was that simplification also distorts

    and it is the distortion that clouds much of my thinking when it comes to the topic of making money

    I think the word ‘work’ has picked up some unnecessary bad connotations […], especially as we’ve transitioned out of the years when ‘the recipe’ (grammar school -> degree -> job for 40 years -> pay your dues -> final salary pension scheme) still worked.

    liberate.life in this comment on here

    I was that grammar school guy, son of a maintenance fitter, who went to university, got a degree, then worked only four real jobs 1, have a final salary pension scheme. It worked for me. I was able to retire early because I saved roughly half the notional capital behind my FSP, but having the FSP effectively gives me a massive bond-like holding, which means my risk tolerance with stock market investments is insane, because the FSP will keep the wolf from my door.

    Liberate.life is the counterfactual to my experience – younger and more dynamic, but electronics engineering is the field the younger Ermine worked in. And yet he is yin to my yang – he can sell, and freelances, and as I read this it looks like the antithesis of everything I know about work. It’s like looking in the mirror and seeing half the image right way up and half of the reflection upside down. I’m damned if I know which half is off but I suspect it’s mine 😉

    So it was time to investigate the subject of work and money deeper. For a long time the obvious issue, that I associate work with pain, simplified things too much

    I associate specialisation with success with work

    For 25 years I was working in a big company, and in a big company hierarchy. Big companies tend to narrow people down into specialisms in engineering, because they have enough people that they can do that. I pursued some technical interests after leaving work, and have some of this on a blog, when I read it back it is a whole load of random bits and pieces on all sorts of subjects as I flit from one are of interest to another. Mine is worse on that front than your typical engineer’s blog, they at least tend to have a reasonable common thread for a few posts. As someone who is financially independent I can afford to pursue my whims, but if I were looking for staff and I saw that sort of character, I would think Jack of all trades and master of none, and file the CV in the round filing cabinet on the floor.

    I haven’t even stayed with electronics and software, a few weeks ago I offered to fix a generator on a no fix no fee basis. I was pretty sure that Google was going to be my friend, the world is full of Honda GX small single cylinder 4-stroke petrol engines and Google is full of people who are describing faults and getting hints on how to fix them. The fault was the engine would run for about 20 seconds and the die. Google told me this was likely a blocked breather vent in the fuel cap, which I confirmed by unscrewing the fuel cap as the engine was about to conk out. Whereupon it ran fine 2 😉

    TFS identified this sort of mentality as a ‘scanner’ but twenty-five years of working in big companies has taught me to identify it as ‘dilettante’. Apparently it is more tolerated in today’s world of work, a kinder term for that sort is multipotentialite. It is more tuned to today’s world in some ways, because better communications means provided you can search well, you can gain the benefits of other people’s experiences by covering masses of ground. You just couldn’t do that before the Web, you couldn’t find enough different people to talk to, and it would have taken ages anyway. Multiple tabs were made for that sort of approach to finding stuff out – cover masses of ground, fast.

    lots of tabs is the way to search - untill you run low on memory

    lots of tabs is the way to search – until you run low on memory

    So I have uncovered some unhelpful associations, and indeed at some level I despise that generalist tendency because for 25 years that wasn’t how to have success at work. It is possible I played against type for a quarter of a century because I prized security and stability and did not know how to manage money over more than a monthly basis. I always needed an answer to the Micawber question, and a regular income made that possible. I struggled with that while running several years from savings, in hindsight I didn’t spend enough. The generalist tendency occasionally caused me grief at work and probably slowed my rise up the greasy pole, on the other hand even in a big company you need people who can cross domains. It tended to work well in good times but be awkward in bad times.

    But since I have the drains up I may as well keep on digging at these unvoiced assumptions…

     I associate a steady stream with income – I am virtually blind to feeling uneven income is income

    I can’t really relate to income that comes in unevenly in dribs and drabs, because for 30 years income arrived in roughly the same amount each month, apart from overtime (in the early days) and bonuses (in the last couple of decades). It’s still a little bit of a mystery to me how a string of lousy £50 here, £100 there dividends in my ISA adds up to a good few thousands of pounds of income when rolled up over the year. I was able to jump over the uneven lumps ≠ income in the ISA because there are so many of these minor transactions I can think of this statistically. Many people work really hard to make their dividend income spread evenly across the year, this sort of happened naturally for me, although slightly peaking in Q1 and Q3. You can have 20 companies working for you in a HYP, but I would defy anybody to work 20 part-time jobs or even have 20 streams of income, that sort of diversification is hard to have with many income streams.

    At a gut level I don’t really consider the sort of hit and run one-off jobs like the generator as income. For sure, Quicken adds them up for me so I can declare this, as long as I keep my pension + earnings below the personal allowance I am chilled. Last year I was able to toss a lot more than the usual £3600 in my SIPP because these things added up to a fair bit more than that. But it doesn’t feel like income, because it is unreliable and lumpy.

    I associate earning money with work

    and worse than that, I associate earning money with selling my time for money. So these one-off jobs don’t feel like work which is good, but they don’t feel like earning money either, which is bad. I don’t trust them, so I just bung the result into SIPP and live off the steady income from the SIPP, because I can’t budget with variable lumpy amounts. By a curious twist of fate a retiree older than 55 can put all their earnings into a SIPP in one year and get it bumped up by 20% to extract the next year, provided they don’t draw more than the personal allowance. I’ve only got another few years worth of that before my main pension shoves me well into the normal tax bracket, but I may as well enjoy the windfall while it’s there.

    And yet together with the income from the ISA these odd jobs will start to add up to about the national minimum wage. It was not so long ago that I was chuffed that the dividend income from the ISA matched what I would have got from jumping through the hoops to get JSA (£71p.w so ~ 3700 p.a.) and yet the rate of increase of the ISA income per year is creeping up 3. I don’t draw an income from the ISA because I don’t need to – I want to pump that up as much as I can before I enter the regular BR tax bracket in a few years, since it is tax-free income.

    I have lived in a big-company bubble for 25 years and it has limited my vision

    I owe liberate.life some beers for widening my search. Because the similarities of the engineering skillset (naturally separated by 25 years or so due to the age difference) and yet pretty much everything else looking like a counterfactual, he’s shown me a set of limiting beliefs I was unaware of. More surprisingly to me, they aren’t particularly due to the trauma of the nutty performance management usage and abusage I took in 2009. That does exist, and has it’s own consequences. The idea of following Jim SHMD’s path and selling my time to an employer to draw a salary brings me out in hives. I’m not gonna go there, and I don’t need to.

    But unassociated with that, my concept of making money was massively narrowed by my experience of working life, the unchallenged assumptions of that grammar school kid who followed the default track. Now that I am grizzled of fur and sufficiently past the finish line that I have options all the way up to and including doing nothing, I can zoom out and ask myself the question – is there a better way?

    Perhaps I should turn the telescope round and ask myself what do I want out of earning money. I have identified a project where I could use a bit more money. It doesn’t directly change my own lifestyle, so my greatest fear of earning more through selling my skills doesn’t apply – that fear is that I would earn money, inflate my lifestyle with Consumer Crap™, get locked into it and lose the delightful freedom of FI. I am happy with what I will have, my lifestyle will inflate somewhat anyway as my income increases once my main pension starts. I don’t need to earn more money to raise my lifestyle. Although once I believed that I screwed up discharging my mortgage early which meant I took an income suckout for the last four years, now I am on the other side I’m not so sure that I regret taking the suckout over the convalescence period. but that’s easy to say from the other side of the mountain. I got a significant ‘pay rise’ this when my DC pension started in June and will get a massive ‘pay rise’ when my non-deferred pension starts in a few years. Breaking the link between making money and my own lifestyle gives me detachment which can distance me from the suffering normally associated with ‘work’.  It is one aspect of the freedom to that financial independence is about, once you have spent the time integrating the freedom from.

    So what do I want from off-piste opportunities to make money?

    It is a subset of asking

    I think I would feel truly fulfilled if I spent most of my days…

    a subset for the simple reason that I have command of my time, being FI. I will do other things that fulfil me, this does not need to replace my use of time, but it needs to add, or at the very least not take away.

    1. I want to earn through doing something that is congenial
    2. and interesting
    3. has some originality or novelty
    4. creative in some way 4
    5. with decent people who aren’t dickheads in general 5.
    6. that helps people or causes that I know or care about personally
    7. that is specifically something I bring to the party from skills, temperament or talent if any
    8. I want to spend less than a day a week on this, but I favour that being in all-or-nothing chunks with long gaps in between. Part of this is that I am limited by the tax system, I don’t want to work for the government 20-40% of my time. I have done my share of that over the last 30 years.
    9. I don’t what to sell my time for money. Obviously doing something creative takes time, but I don’t want it in the form of billable hours, more billable results
    10. I don’t want to ever see performance management. An engineer’s work speaks for itself, should that be the field I use
    11. I don’t want regular or ongoing time commitments. Hit and run jobs are what I  want, get in, do, then get out
    12. I don’t want to carry a smartphone all the time
    13. I am happy with no fix no fee and no guarantee of regular work – but if you aren’t there regularly for me there’s no guarantee I will be there for you 😉 and yes, that is sort of at odds with 9
    14. I prefer to sell Mind, not Stuff. Stuff gives warehousing and cashflow problems, and regulation is a bitch. It’s not hard and fast though.
    15. I do not want to be derivative or routine. I don’t want to be a replaceable work unit. No chuntering out ebooks or matched betting which seem common fave side hustles in the PF scene. I am rich enough not to have to do this, and old enough to know my time is limited.
    16. no franchising, if I am not original enough to make a decent return then I will just walk away

    and if I do do this, I want to earn a lot more than the minimum wage for the time I do spend on it. Unless it really is so much fun that I don’t mind, but I’m not building that assumption in from the off. I am not volunteering. I don’t do that, particularly the sort of staffing job. I have done one-off data analysis and design stuff for the RSPB, but not under the usual volunteer x hours a week, it was task-oriented.

    Unfortunately the logical conclusion is freelancing or contracting. I have no experience of that at all, zero track record, no domain knowledge, I am an introvert and can’t sell. So I have never done this in a big way although I did have a multimedia/web design company on the side in the early days of the WWW mid 90s to early 2000s. But selling was my weak point and when the major customer changed technology I folded the company. I read this and think ‘bloody hell, I can’t do any of that’.

    Not only that, but it appears that small companies are where the most likely chances of success are. I have worked for a small company, a 10-15 man band, but it was at the very beginning of my career 34 years ago. Small companies are like the past – they are a foreign country; they do things differently there.

    The Ermin place of work at my first company. The duff sensor heads are lined up on the back wall. I don't have a good explanation for the can of wifebeater on the bench, perhaps were were celebrating a big Egypt order. 'elf 'n'safety would shut this joint down i na jiffy. We used to wash PCBs in boiling Arklone, a CFC with the instruction 'don't fall down, else you'll stay down'. The vapour was heavier than air.

    The Ermine place of work at my first company. The duff sensor heads are lined up on the back wall. I don’t have a good explanation for the can of wifebeater on the bench, perhaps we were celebrating a big Egypt order that came in around this time. ‘Elf ‘n’safety would shut this joint down in a jiffy nowadays. We used to wash PCBs in an open tank of boiling Arklone, a CFC with the instruction ‘don’t fall down, else you’ll stay down’. The vapour was heavier than air.

    I had some bizarre engineering experiences in small firms, two stick in my mind. In my first company, the design engineer swore blind that a virtual earth amplifier had a high input impedance. Now at 22 I didn’t know a lot, particularly when to keep schtum and STFU, and I had been testing these blasted things which used to want to take off and oscillate more often than not. That’s bad in an optical sensor. But I did know that a virtual earth was a low impedance input. So when there was much head scratching in a meeting as to why we have more duds than good ‘uns I go and pipe up “but a virtual earth is a low impedance – the clue is in the name”. I was dead right, and the clue is indeed in the name, but there was a deathly silence and the assembled multitude digested the unwelcome fact that the lead designer had goofed, as pointed out by the rawest recruit. Seemed a good idea to move on from there after a year…

    The second was when I was the lead engineer on a project at The Firm, and we had contracted some clever fellows in the Cambridge Fens. These guys had minds like planets, and I had told them the average TV sound in expected typical audio levels of 0.7Vrms. For some reason they decided they only needed a peak to peak level of 1V, sadly convention has it that the peak to peak amplitude in this case is 0.7×(2×√2) or nearly 2V. The passage of time had gentled the Ermine’s needle-sharp teeth and I had learned that it pays to nudge people to coming to the conclusion that perhaps a mistake had crept in somewhere. But I confess I had to look it up in a textbook after a meeting where one of these guys a lot brighter than me was declaiming that the signal was entirely correctly 1V, he really believed that. They were awesome at digital stuff, could pull their set-top box code apart and have it have it changed in a few hours. In a bigger company somebody else would have been in charge of all that fuzzy analogue stuff and this challenge to basic engineering fundamentals wouldn’t have happened, particularly in front of the customer 😉 Small companies have much more of a heady mix of absolute brilliance and the occasional absence of fundamentals, in my limited experience of them.

    For many reasons I would be a fish out of water trying to apply what’s left of my skills in this different world. I have no knowledge of the terrain, and I don’t know if my passport is good for the country. To my advantage I don’t have to succeed, though of course that may work against me too, perhaps I will not have sufficient fire. It’s not looking good, but I have one key advantage. I am not desperate – I am financially independent. Even at the moment the amount in my current account slowly creeps up month on month and I need to toss it into the Nationwide every so often to win 5%. As a result my risk profile is very different from normal, I can screw up a few times and let it go.

    There are other odd wrinkles, take this perfectly reasonable recommendation

    To free yourself from the grind, be defined by your strengths

    I can see that might work when each piece of work is won anew, ie there is no history, it’s obvious to play to your strengths. But in my career I achieved many wins by fighting down weaknesses – it is this which turned an introverted young Ermine into someone who could speak in public and lead international teams. Even in the specific realm of personal finance I had to fight down the common get rich quick belief that trading is the way to make money with stocks, and come to understand that the noisiness of the information, the abnormally high likelihood of infrequent outliers and the high frictional costs mean that often the less you do 6 the better your long-term performance.

    So there are many hurdles and mindset-shifts before I could turn freelancing for small companies into something workable. And surprisingly, none of them are particularly associated with the issues that finished my big company career. Why consider this route? Because the one thing I know I don’t want to do again is a regular job. I don’t have the time, there are all sorts of bad associations, and it’s not what I want to do with my life. Because that was the only way I knew of making money, I accepted I was never going to make money from my human capital again.

    People have occasionally challenged that assumption. But it took time for the noise and hum from the crash-landing of my career to die down, and for me to see an opportunity that wouldn’t lock me into a consumption lifestyle, so that I could see the remaining limiting beliefs. Whether it will amount to aught is unknown at the moment.

    Andy’s liberate.life is a different take on financial independence, with less emphasis on the financial and more on the independence

    In the personal finance sphere our weapon of choice is  of course personal finance, it is the Law of the Instrument. If all you have is a hammer, everything looks like a nail. It’s written in the term financial independence, hell, what other sort is there? Well, given the assumption we are talking about living in a First world consumer economy in the 21st century, that is.

    We are aiming to save enough money to not have to work. RIT is the poster child for doing this relatively young, but his journey to FI was a pretty harsh ride. I’ve never earned anywhere near the amount of money I guess RIT earns, but I’ve never taken that sort of punishing schedule for years on end either. In my case, because I was naturally closer to the end of my working life, I could get away with focusing on the financial route to independence. You can become more independent, in terms of choice on how you spend your time, without becoming financially independent. The model I and most people follow, working for a company to get nearly all your income, is one of the least independent ways to get the financial capital you need to live life in a Western consumer economy.

    Andy at liberate.life is a new kid on the PF block. Although it doesn’t apply to me, he challenges the principle that financial independence is an indivisible unit. His site is well worth a look if you are in this position

    You made it! You’re financially comfortable. Your car is new enough to not break down all the time. You live in a nice house. If you have kids, they’re well dressed. People hold you in high regard and by society’s standards, you are a success.

    So why the hell does your life feel like such a grind? At one point, you were young and full of optimism but now you just follow the routine, day in, day out. You don’t have any passion for what you do any more. You do it because you have to. You’ve got bills to pay.  You can’t see a way out of this before the sweet release of retirement at 60-something… and then you’ll be too old and worn out to live out the dreams you’ve always had anyway.

    Now since I am not a million years off 60 I would dispute

    and then you’ll be too old and worn out to live out the dreams you’ve always had anyway.

    Bollocks to that, mate, remember that statistically happiness is U-shaped across the life cycle in many Western societies, so some of this is part of the human condition. But that proviso aside, he’s offering a freebie course in how to get FI 7, and if you want to pick his brains specifically 1:1 interactivity is there if you pay him for his time.

    In many ways getting to FI is a matter of asking the right questions as much as finding the right answers. The right questions can lift limiting beliefs into the light of conciousness. You don’t have to fight limiting beliefs if you don’t want to or need to. I’m not going to bother fighting the belief that working for an employer has become a soul-destroying issue of gamesmanship and playing the game with meaningless metrics that strip out the joy of solving problems sometimes otherwise known as work, because I don’t need to. It’s probably not universally true, even for me now.

    But now I have found a potential application for deploying the residual vestiges of human capital I may still have which won’t lock me into lifestyle inflation and consumer crap, it is worth challenging some of the limiting beliefs about making money other than just using my financial capital. And without a doubt, Andy helped me ask some of those questions, and I have found that the default answers were often wrong, inconsistent and incomplete.

    So if you feel you have made it but want a way out go read some of his work, if only to ask yourself some awkward questions. You may not like the answers but they can serve you well.

    Notes:

    1. excluding casual crap before leaving university – kitchen portering, repairing radios and TVs and odd-jobbing
    2. Obviously you shouldn’t run an engine with the fuel cap open because petrol vapour is inflammable and invisible so don’t try this at home.
    3. in fairness that was written nearly six years ago when the best you could put into an ISA was about 10k p.a. Some of the win in getting to three times that was the fact Osborne turbocharged this to time and a half, the time honoured magic of Saving Hard at work rather than any particulalry sharp investing chops
    4. it doesn’t have to be engineering – for the past few years I have been makingsome money from photography and from sound recording. But trends in the wider economy are running away from those sorts of things
    5. Everybody s a dickhead sometimes, it’s part of the human condition, and that’s OK. Persistent dickheadery is what I want to avoid
    6. inaction on its own is not enough although Robert Kirby’s The Coffee Can Portfolio made a good case it was, inaction is necessary but not sufficient IMO
    7. for the sake of full disclosure I have done neither
    13 Sep 2016, 9:24pm
    economy reflections
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    45 comments

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  • The Smartphone as a tool of oppression in the Gig Economy

    Smartphones connect us with the virtual world, but also bind us. 1

    A digital nomad in her natural environment (Bali I think). Smartphones work just fine for people like these

    A digital nomad in her natural environment (Bali I think). Smartphones work just fine for people like these, they never had it so good

    The smartphone epitomises what has changed about the world of work, and a whole bunch of articles this last week have reminded me that it has changed, in my view adversely for many workers. I am beginning to understand why so many people are pissed off at the lower end of the employment spectrum. At the middle and top end, they are having a blast – the smartphone is emancipation of the four hour work week, the contractor, the digital nomad and all that. All these dudes are whooping it up and going “wassup, you never had it so good?”. Tim Ferris’s The 4 Hour Work Week is the bible for this crowd. . Back in the real world, it’s the lumpenproletariat taking the shaft, along with a lot of disrespect through what has become a tool of oppression.

    How low end work used to be in the 1960s to 1980s

    The world of work in the analogue world had a lot of hazard and unpleasantness in it, there was overt racism and discrimination is many areas, and humans did a lot of physical work which was terrible for their health. Some of the improvements in longevity and the narrowing of the expected lifespan between men and women of recent years has been due to running some of these jobs out of town. My Dad worked with glass bottling machinery, he was already losing his hearing by my age and was stone deaf by the time he died. There’s a whole gratuitous rant in this post about for God’s sake don’t trash your hearing with loud sounds and use hearing protection with power tools when you’re over 40 inspired by his experience. Blue collar work was a bastard and took it out of you.

    Arthur Scargil, 19 years a miner and rabble rouser deploying flying pickets against Edward heath. Met his match with Thatcher in 1984

    Arthur Scargill, 19 years a miner and then rabble rouser successfully deploying thugs otherwise known as flying pickets to switch off the lights under Edward Heath’s 1970s administration. Met his match with Thatcher in 1984.

    As I child I used to listen to the revolting turkey Arthur Scargill harp on on the radio about how mining was a tough and dangerous job demands oodles of pay, and yet resisting like hell when Thatcher offered 2 to stop future generations going down t’pit by switching power generation away from coal to natural gas. WTF was going on there? Scargill called a strike to guarantee that uneconomic pits should not be closed, presumably a social service to keep dangerous employment open despite it not making money. Coal mining was typical of a lot of blue collar work in the past – dirty, dangerous but compared to low-end unskilled work now, paid better to compensate for that. This Is Money have an interesting contrast of working conditions between 1952 and 2012. In pretty much all aspects conditions in 1952 were worse. But there was a place in the economy for unskilled labour, and people knew where they stood. On the downside, opportunities were dreadfully limited for women and for the brighter poor.

    Many blue collar jobs had a decent level of community spirit among the workforce, which manifested in the strong union presence. These jobs were stable across years, even a working lifetime, largely because work practices didn’t change much. In some manual jobs skill and experience built up over decades. So although there was a lot wrong with many jobs, there were some things right. In particular the sense of community and the dignity in work. Some employers provided pensions which were defined – my Dad was a fitter but benefited from one of these.

    A key part of  most jobs in those days was that they were clearly defined into working time and non-working time. When the factory whistle blew and the workforce downed tools they were off the clock and work was out of mind. This was because communications were limited – phones were connected to places not people. I personally feel the smearing of work into non-work has been one of the most pernicious things to have changed over the last 20 years. As John Philpott of the Chartered Institute of Personnel and Development said in 2012

    The world of work has fundamentally changed, but it is not a change which is making many of us happy, according to the Chartered Institute of Personnel and Development.

    He blamed the invention of new technology, from laptops to the BlackBerry 3  and the iPhone, which is ‘imposing entirely new pressures on staff.’

    While it has liberated people to work from home or from outside the office, it has resulted in ‘information overload, created pressure for an instant response, enabled more sophisticated monitoring and surveillance of employees, and blurred the boundaries between work and non-work time.’

    It is possible that I have a limiting belief because my idea of the place of work and leisure was formed in the previous generation – Stephanie Buck (H/T Monevator) puts it elegantly:

    Leisure came to define a person’s identity during this time, in many cases superseding career identity. Having a hobby was not only accessible, it was a status symbol. It meant one had time to relax, a privilege previously enjoyed only by the very wealthy.

    This is probably one of the reasons why I just don’t miss working at all. I have been able to surrender a career identity because it had less meaning to me. That is the upside of my antediluvian understanding of work. I was also fortunate enough to have spent most of the time working in a reasonably congenial environment with enough challenge to be interesting. I don’t recognise most of my job in Buck’s later observation

    Instead of viewing work as the inevitable grind and hobbies as core to one’s identity, as in the post-war era, today’s professionals strive to equate career with leisure.

    I started work in 1982, in the transition period between that world and the one we have now, and benefited initially from the improved flexibility but the old community structures of the workplace.

    That was then – better communications is changing the workplace massively

    Communications have improved over the last 20 years – the advent of the Internet and WWW came in tandem with mobile communications where you now call a person rather than a place you expect them to be, and of course you have more modes of communication.

    Strange things have happened as a result. In the early days we expected better comms would mean people to be able to do remote working from anywhere, even on the beach. See digital nomad, above – just imagine all of us doing that. At school I was really told that the future would have lots for leisure time and  we’d be typically working one day a week. How did that turn out for y’all?

    In fact what has happened is that high-paying jobs have concentrated in London 4 which sucks in people and money, creating a lot of misery in the middle range of ability because they are all in competition with each other for finite geographical space and skyrocketing housing costs. It really wasn’t meant to turn out like this, but it seems the network effect, combined with the increasing instability of jobs means workers need to concentrate geographically, both to interact more with each other but also to have a better chance of replacing one job with another when they get the chop without having to move or take huge commutes.

    We didn’t realise it at the time, but the limitations on communications and physical transport of goods and services was a great equaliser. As a thought experiment, say we still made chairs by hand but otherwise had all the information comms and containerisation and Deliveroos we have now. When a horse limited a day’s range to 20 miles, every market town could support, say, a skilled carpenter. In a globalised and high transport world, you’d only need as many carpenters as you need to make the amount of wooden stuff needed. Put them all in one place, call it Heartwood Valley and transport the goods for next to nothing. The quality of the carpentry will probably be a little be higher, and the price probably cheaper, but there will be far fewer carpenters employed worldwide. House prices in Heartwood Valley will probably rise, both because the star carpenters will be making more money but they all have to live where the jobs are.

    So now take finance, management consultants, IT and stick ’em all in London. No wonder grunts can’t afford to live there. This is not a new phenomenon, though the intensity of the effect is increasing. Thirty years ago an Ermine in a modest but above-average paying technical job was driven out of London. Where I was more fortunate than Millennials was that the concentration of jobs in London and hollowing out of the rest of the country hadn’t happened, and that jobs were more stable so the risk of ending up in a one-hoss town was less strategically dangerous than it would be now.

    Zero-hours contracts aren’t new

    I worked on what would now be called a zero-hours contract, in 1979/80-ish ISTR. As a kitchen porter – the idea was you go to an agency early in the morning and they would allocate work on a first come first serve basis. There was no guarantee of any work at all, but you generally got to know the system. No phones or anything. When I inflation adjust my earnings to now I was working for a lot less than the minimum wage, too. That sort of work allocation existed elsewhere too,  dockers used to line up in the morning on the same sort of basis to get casual work unloading ships.

    Smartphones let employers dynamically allocate work to people via apps, that has the opportunity to turn zero hours contracts into oppression. Casual work is casual because anybody can do it – if you can drive you can drive for Uber, for Deliveroo, and pretty much anyone can flip burgers for McDonald’s. The best way to improve your earning power is to get out of this commodity competition for replaceable skills, because if you have undifferentiated skills then competition is always going to drive your pay down to the minimum wage or lower.

    The lower than minimum wage is achieved by zero hours contracts – there are fixed costs associated with being available and ready for work – commuting to the workplace, having a car in the case of Uber, not being able to work for someone else or take your children to school. So you are always are risk of taking a hit if you can’t get your hours up enough. Now in the past the agency sometimes did take a dislike to some people and would always call out others for work before them, but at least that discrimination was visible, and done in person. When an app doles out the work you have no protection against that sort of thing and may even be unaware – as the FT’s “When your boss in an algorithm” describes.

    The problem isn’t so much zero hours contracts as such, or even app scheduling – after all every taxi company used to have dispatchers who would match the drivers to incoming jobs over the radio. The problem is zero hours contracts combined with unskilled work, where the work allocators can simply pitch the workers against each other, micromanaging jobs and people in a never-ending treadmill. When one hamster falls off the wheel, there’s an unlimited supply of  rodents to replace them.

    1404_hamsterwheel

    One hamster is pretty much like another – hamster work is fungible

    In that sort of environment the advantages of flexibility accrue to the employers not the workers. To add insult to injury, the welfare safety nets like unemployment benefit are predicated on the job for life, or at least the job for weeks. They just don’t help you fight that sort of here today gone tomorrow employment pattern. These are not entrepreneur hamsters playing the market for their talents. This is unskilled piecework.

    The so-called joys of self-employment

    The Grauniad asks whether zero-hours contracts really are worse than jobs for life. Sure, for many people with skills that command a premium, contracting and zero-hours contracts can be great. There are the guys that write about how great the opportunities are. Heck, a retired Ermine hasn’t been able to avoid making money totally, and I would be happy with the lack of commitment of zero-hours contracts 5 – if it pissed me off in any way, I’d just walk away. I can afford to do that because I am financially independent. Financial independence is very rare in a first world consumer society – there are many, many people who have far more wealth and income than I but who are not financially independent because of their spending.

    It’s easy to big up the joys of self-employment. Yes, you have the freedom of self-defined work and your time is a little bit more your own. Set against that you have the stress of managing a variable income, you have all the grief of self-assessment and the trials of HMRC, you have to run the business, make the judgement calls on capital spend versus return. You also have to carry a massive cash float to manage contingencies, else you risk getting slaughtered in the first cashflow crisis that comes along.

    Those that make self employment work for them tend to be the more entrepreneurial, and those with skills that can command a premium. I look at Liberate Life’s description of how to live life working without a job and it looks like one of Dante’s Inferno’s circles of Hell to me – I hate selling in all of its forms 6 – all that hustling would be a nightmare for me. I am so glad that I managed to get to the end of my working life before these changes happened. Perhaps there is sample bias – if I were 21 again then this gig economy world would be all that I had known and I would follow such a path, which looks a great way to play that sort of hand.

    But I knew another way, and to my eyes it was a far better compromise for the majority of people, who are of average talent but want to have some stability, have kids and FFS do something other than thinking about work all the time. It served me well, I like to think I had a little more talent for the scientific, engineering and analytical than the average Brit, though I am nowhere near clever enough to work for Google. It isn’t like the compromise kept everybody down, and if you really wanted to run your own business and had talent then you could knock yourself out and go do that too.

    Maybe I am simply at odds with current thinking. There was an interesting thread on MSE where a fellow retired, and got so bored he went back to work, which made me think what was summed up in this post

    It’s a bit sad to spend such a large part of your life working, retire, and then realise you haven’t actually got a real life to enjoy so go back to work again. It suggests an absence of hinterland

    Whereas now you’re increasingly on call all the time without getting paid for it, at below the mean level of ability you seem to be yanked about on a smartphone string and have to think about work all the time. In particular, the sort of digital Taylorism the FT’s Sarah O’Connor talked about in this podcast and article treats their unskilled workers with a shocking level of disrespect.Not only are these unskilled workers micromanaged via their smartphone apps, but they are stripped of the employment rights that used to protect casual workers from the variability of the workload (by paying them for their time, including downtime during the working days). The work providers talk up the virtues of self-employment and being able to choose how much you work, but decline too many jobs in a row and you’re embargoed for 24 hours, so the choice is pretty clear, do as we say or piss off. Hobson’s choice, not a better work/life balance.

    It tickled me to hear John Gapper’s faint public school accent debating the plight of the precariat with O’Connor’s slightly preppy uptalking and lashings of vocal fry. I don’t think they know the territory, though kudos to Sarah O’Connor for doing some fieldwork at Uber Eats. It’s epitomised when Gapper asks Sarah at 2:24

    “Are they employed? I means what is their actual status? Are they workers…”

    It’s not so much what is said – it’s a reasonable question, but you can hear the arm’s length treatment in Gapper’s tone of voice – these aren’t the sort of people the FT hacks typically consort with. I can almost picture him holding the dirty rag at a distance asking “so what exactly is it that we have here?” 😉

    Elsewhere in the FT, however, it seems that there are still a lot of recalcitrant proto-Ermines among the millennial set that aren’t that enamoured with the go-getting entrepreneurial dynamism of the gig economy. Over to Sarah again

    young workers seek traditional permanent contracts to unlock the necessities of life …

    The traditional permanent job contract is still the key that unlocks a range of life’s necessities. Without one, you will struggle in many countries to secure a loan, a mortgage, a mobile phone contract 7 or even a room to rent.

    like all that boring shit like a roof over your head and not having to think about work for 24 hours every flippin’ day.

    There’s hope. but not soon

    New ways of working have often led to oppression of the weakest party (generally labour) until regulation can catch up with it. There’s nothing inherently wrong with better information and mobile platforms, after all Uber and GPS means relatively unskilled drivers can provide a low cost London taxi service that was previously the domain of cabbies in a guild with The Knowledge. Because these things started in the teeth of the 2007-9 recession and regulation hasn’t caught up, they have spread quickly, because they give an advantage to the work providers and probably the work consumers, at the cost of the work doers. Our definition of employment and self-employment that has been acceptable for many decades isn’t fit for this sort of employment/work. So regulation needs to catch up, there’s probably space in the marketplace for smartphone mediated work matching to give novel services with a better balance between the conflicting interests of capital, labour and the consumers. It’s inherently the way of capital to to misuse it’s power over people, for the reason identified by Baron Acton in 1887

    Power tends to corrupt and absolute power corrupts absolutely.

    Capital is a claim on future human work, the power to get people to do what you want. It needs regulation to gentle it away from being purely a tool of oppression, and it takes time to find that balance. Of course there is always the head-banging Ayn-Randian counter proposal for a no-holds-barred let it all get sorted out in the market. I guess once we’ve killed off the weaklings perhaps the water will find its own level. It’s a bit harsh, but I guess it works. For some strange reason it tends to piss people off seeing that sort of thing happen to their friends and family members, so unless there really is a Galt’s Gulch Uber can retire to they will probably have to come to some less one-sided agreement in time.

    It’s not all about the money

    though at the bottom end it is… Some of it is about dignity and respect. When I boil it down to the essentials, what I came to hate so much about working at The Firm when they laced it up with stupid performance management metrics wasn’t that the pay was crap, it wasn’t. It wasn’t what I did, which was okay and mildly interesting when it was the actual job in my job title, as opposed to feeding the performance management system bullshit. It was the increasingly demeaning and disrespectful nature of the micromanaging performance reviews and endless justification of my existence, the gamification of the workplace. This crap was unnecessary – it was either a deliberate ploy to make people feel so shit about themselves that they would leave, without having to pay redundancy, or it was some sort of management fad. I recently heard from someone still there, at a more senior level than I reached, who was going through this again – he had to justify his existence, say why he was meeting objectives half of which had been imposed without discussion, and I was so glad to be out of there. But at least the pay was enough to reach FI with a bit of grunt.

    When you’re working at the casual end of things, your boss is an app, you have the same sort of arbitrary rules plus various ratings for jobs taken, customer feedback etc you have the same disrespect without the compensation of getting paid the FU money.It’s one of the tedious things about buying online from the gig economy. You get bombarded with requests for feedback to up their metrics. Sorry, but I don’t do feedback any more. I just want to pay the money, get the goods and get out of there.

    Recently I bought a replacement car battery from Halfords because I had been a jerk and ignored the signs the old one was fading. So I jumped the battery with a leisure battery and got lost on my way to the cheaper joint. Knowing I was at risk of not starting the engine again if I stopped it took the hit at Halfords. Then realised I only had spanners in my car toolkit, not a socket long enough to reach the lower battery clamp, and my 30-year old jump leads weren’t man enough to turn over a diesel engine from the new battery. So I was faced with pay the £10 fitting charge or buy a socket set, well,  I was idle and paid up. It was a pleasant enough transaction, but no, I didn’t actually want to get a card soliciting feedback on my experience. It’s bad enough online, and there’s no need to feed these stupid monitoring systems in bricks and mortar shops too.

    No wonder people are pissed off at the bottom end of the gig economy – they are paid sod all and treated like shit. One or the other you can live with, but not both.

     

    Notes:

    1. I don’t speak of it from experience, because the first smartphone I got was after I finished work. And I decommissioned the bugger about a month ago because it was seriously pissing me off. It did most of the things I could do with a computer, but all at half cock, and was poor at answering phone calls.
    2. I know it was an existential fight and all that but the miners lost my sympathy when they turned the lights off while I was at school and I heard arrogant SOBs like Scargill tell how they were going to run things by sending thugs round to stop other people working.
    3. Doesn’t that date the report – this was a year after the hot summer of rage when da yoof ran amok and rioted in London for better trainers, communicating via BlackBerry Messenger. I don’t know if you can get a Blackberry these days
    4. I know, not all of them, but the drift has been huge
    5. that which I do is probably closer to individual contract jobs, I wouldn’t take low end ZHC jobs where you have to be there for them but they don’t have to be there for you, because I am not having people take the piss out of me for money, the second word in my response to such a proposal would be “off”
    6. I chose LL because he is an engineer with IT and electronics which was what I used to do in a former life
    7. I have never attempted to get a mobile phone contract because I am a PAYG aficionado, but presumably as someone without a permie job I would be SOL on that one too
     
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