The Reason for Pay Rises?

I'm loathed to simply accept that things have changed for no reason, or because people are somehow different to how they once were.

So, why has the ratio of the highest and lowest paid in a company, or even highest and average pay in a company risen over the past 30 years. The wrong answer is that management were more noble then. They weren't.

But I suspect the answer lies in something that Chris Dillow has said about complexity:-

And a similar thing might be true for management jobs. The assertion that bosses must be paid a fortune because their jobs are so difficult begs the question in the true sense of the phrase; it assumes that the jobs have to be so complex when this premise should be questioned.

The thing is that the increase in the complexity in management isn't because management want it to be more complex, but because it's more efficient. It's cheaper to have a small number of people doing things very cleverly, even if it makes it more complex, than having huge numbers of people doing things in a less complex manner.

As a for-instance, using IT creates a concentration of risk on a small number of people. Those small number of people can stop your whole business from functioning in a way that a manual business with lots of staff acting intelligently can't. Yet, even with the risk, it's the approach most businesses take, because that small team's work scales like crazy.

I recently did some work for a large UK retailer, and the shop staff, including the managers have very little to do with how the shops are run. They're there to be a human face, and that's it. They don't decide stock, where it goes, how much to charge, what sales to run... nothing. A few decades, I worked retail and store managers did do that. What do you think happens to real wages when people are less skilled that work for you?

Everything is now about marketing departments, HR departments, all those centralised teams, and that includes the management teams. The decisions taken by the board have far more serious effects on businesses than they did 30 years ago. Sainsbury's got their ass handed to them by Tesco because they picked a bad software solution. Would bad software have done that 30 years ago? No. So, having people who can pick the right software matters in a way that it didn't then.

Now, this doesn't mean that those people are necessarily the right people, but the company is putting a very high value on how much the company is about the decisions of those people in a way that they weren't in the past.

What the Royal Yacht is Really About

From the Independent

"But I would like to be one of the first to offer tangible support to the concept, by offering up to £5m towards the construction costs of building a new, effective and flexible royal yacht."

The proposed vessel – 650ft long and as tall as St Paul's Cathedral – would provide education and vocational training for young people, facilities for scientific research, and a venue for trade missions and commercial exhibitions as well as staterooms for the use of the Royal Family on trips around the United Kingdom and overseas.

There are two things worth pointing out in this:

1. "£5m towards the construction costs". This yacht might be privately financed, but no-one is saying anything at this point about who's going to pay to run it. 
2. and a venue for trade missions and commercial exhibitions

As a reasonably sane man, who has met sane businessmen, none of them is so soft-hearted as to just throw a large amount of money at something as obviously childish as the monarchy. So the reasons are less obvious - the project is an investment in a facility by these people. Spend a few million up front, then the taxpayer funds Brenda travelling around the world, then you get to use it to entertain your foreign clients when they're in port. Large upfront costs, but will soon pay for itself.

Olympic Travel

From MSN (19th January 2012):-

"If everybody seeks to travel the way they always travel every day, the system won't cope. You can't suddenly bring in hundreds of thousands of new people to travel in by train and expect the system to cope so the answer is they have to look at working differently," Norman Baker said.

So, that's how they're going to solve the problems during the Olympics - the people working in London are going to have to travel in less. Like solving the food problem by starving people.

Speaking to MSN, Baker also criticised the demands of the Olympic authorities for dedicated traffic lanes to ensure VIPs don't suffer from the same congestion as ordinary Londoners.
"I think the VIP requirement has been rather overdone - but that's not a government requirement it's a requirement from the IOC," he added.

Which the government could have opposed, or told the IOC that they wouldn't accept that condition and Paris could have the games. And whilst it was Labour that agreed to this, the Lib Dems were right behind the Olympic bid.

To ease the congestion over the three weeks beginning July 27, the government is encouraging commuters to work from home or offices outside London or be flexible about their hours if they do need to travel to the capital.

Yes, I'm sure all those cafe staff, road sweepers and policemen can telecommute. The chorus of Les Mis can just turn up when it suits them.

"The answer is they have to work remotely, they have to work from rural hubs, they have to work from home. They have to come in at different times, they have to use different lines," Mr Baker said. "This is an opportunity to prove to people that working differently can be OK."
However the minister said he was confident that the economy would not suffer as a result.

So, at what point did Norman Baker fully research every business in London to calculate the impact of staff working from home or doing flexitime, or having to travel longer hours?

Conservative Keynsiasm (no, really)

From the FT:

The minister responsible for the Olympics rounded on those attacking the government for spending money to promote the UK, saying the event was “a massive Keynesian boost to the economy”.

So, the Conservatives aren't even just a bit soft Conservative, but full on Keynsians now? Of course, it would help if Jeremy Hunt actually understood Kenysian economics, you know, that whole thing about having a surplus to use in the bad times. We don't have a surplus, so Keynsianism doesn't work.

Jeremy Hunt, the culture secretary, told the Financial Times: “This is the government saying, ‘We are going to ignore the siren voices telling us to back off.’ We are never going to have this again. We want to make sure we do everything we possibly can to help Britain.”

So stop spending money on the Olympics. Probably not worth cancelling now as most of it is paid for, but spend no more. Use it to fund science, research, education.

The opening ceremony was an opportunity to reach a TV audience he claimed could reach 4bn, and he said it was an occasion worth hundreds of millions in publicity.

I have no idea where he gets 4bn from, when the LOCOG site says that the Beijing opening ceremony had a live audience of 1bn people. And I doubt that Jeremy Hunt can back up his "hundreds of millions" in publicity. No-one spends money because of the Olympics, there is simply no data to support that.

The government is facing further questions about Olympics-related spending priorities, with Labour’s Tessa Jowell warning in an Observer interview that the Olympics would go down as “one of the great missed opportunities” to boost sports participation among young people unless funding for school sports was restored.

And Tessa Jowell is lying here, because she put her name to a government report, that the Olympics makes absolutely no difference to sports participation.

I'll reiterate my acid test: any politician that supports the hosting of the Olympics as a good use of public money is not worth your vote. The Olympics are a clear-cut waste of money. If they support them then they're a bloody idiot. That pretty much means that you don't want to trust them with anything. And that's all 3 parties.

Olympic Tourism

From Reuters:-


"I personally think that there will be less displacement than many people feel because London is such a huge cultural city, and there are going to be huge numbers of reasons for people to visit," he said citing exhibitions planned for its leading art galleries.


Hunt is lying over this. The evidence is very clear that there is a displacement effect in Olympic years.


Here's what the European Tour Operators Association report says:-

One feature of sports events, of any large event, is that it attracts people who would not
normally come to a city. During the Olympic period, the entire bed-stock of a destination is
devoted to the travelling officials, the press and spectators. These visitors are unlike ‘regular’ tourists, having different spending and behaviour patterns. They are not interested in “tourism” – they are interested in sport. So their behaviour is akin to business visitors attending a convention. They tend not to spend money on leisure and entertainment, and when not in stadia they watch events on TV rather then engaging in other activities. Theme park owners in Los Angeles saw a decline in revenue during 1984. In Barcelona the Costa Brava resorts had a drop in demand and at the Sydney games the normal attractions experienced a downturn in business.

(in fact, the whole report is worth a read as it utterly crushes the myths about long-term tourism, and seems to suggest that spending money on movie makers has a far better return).

On top of that, there's Andrew Lloyd-Webber saying exactly the same thing:-

The composer said that tourist bookings for next July and August were already at just 10 per cent their normal level and predicted that the theatre was in for “a bloodbath of a summer”.
He said he already knew of three major musicals that were not going to play during the Olympics and admitted that he would have to close some of his own shows or theatres too.

Everyone knows it's going to be a security and travel nightmare. Rich Japanese tourists will go to Paris or New York instead. And the effect will be felt further away. People won't come to the UK to see the rest of it, like Stratford-upon-Avon, Windsor and Bath. The prime destination for foreign tourists is London, with those other places gaining from tourists taking excursions. They won't come just to see Bath.

Olympic Tickets - Dodged a Bullet

Some time ago, in the first round of Olympics tickets, I bid for them. Now, I have some serious problems with the Olympics, but not with the sport itself.

So, I bid for 3 tickets, for me and the kids to see some qualifying rounds and the decathlon (my views of the decathlon belong in another post). It wasn't too pricey as there were special prices for kids. Unfortunately, I didn't get them.

But as it happens, I recently found out how long it was going to take me to get into the Olympic stadium by checking the Spectator Journey Planner on the 2012 London website. For an arrival at the stadium at say 9:00 for a 10:00 start, we'd have to leave our station in Wiltshire at 04:30, a total journey time of nearly 4 hours, or to be up at about 3 in the morning. Would I have liked to take my 2 kids to do that? Uh... no. Think we'll go and have a day doing something else.

The real problem here is that the time it's going to take to get into the stadium seems to be estimated at about an hour and a half, as it's normally a 40 minute journey from Paddington to Stratford and they're estimating 2 hours for Olympic trips. And if you want to know why, here's the London 2012 guide to travel:-

There will be airport style security at venues so please arrive in good time for your event.

Oh... joy. 

Another Olympics Justification Bites The Dust

From the Graun,

Hugh Robertson, has admitted that the aim of the London 2012 Games to inspire a million more people to get involved in sport has no chance of being realised.
The target was believed to be the brainchild of the Labour government rather than the Olympic organisers and was widely quoted during London's successful bidding process.
But less than seven months before the London Games are due to begin, only 110,000 extra people have taken up a new sport and Robertson, the minister for sport and the Olympics, said: "It is disappointing – a million sounds like a target that was plucked off the wall and it was."

Well, yes. The civil service even did a report into the Olympics and other mega sporting events back in 2002 (signed off by Blair and Jowell) which said this. It's good of Hugh to point this out, though.

"Do I think it's money well spent? Yes I do," Robertson told the Sunday Times. "The opening is a spectacular. Get it wrong and we will spend three or four days batting back why was the opening ceremony such a failure. It will kick the thing off in the worst possible way.
"Given the importance we are putting as a country and using 2012 to drive economic growth and tourism, it would be foolish not to spend what is necessary to lay on a good opening ceremony. Danny Boyle [artistic director for the opening ceremony] is a top professional and has produced an extraordinarily good ceremony."

Oh dear. The Olympics are not a magnet for tourists. The European Tour Operators Association have looked into the effect of the Olympics on tourism. There's a drop during the games (as non-Olympics people avoid the massive disruption) and no obvious growth was seen. Of course, the government will trot out some "this time it will be different" and in 2 years time I'll be reporting how it wasn't.

Something that does concern me about the Olympics is that there's actually a huge risk of a disaster, but no real gains from it. I have 2 memories of Atlanta: Michael Johnson's magnificent 200m world record and a bomb. And for most people, it's the bomb. Google Munich Olympics, and you won't find much mention of Mark Spitz and Olga Korbut.