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Work doesn’t pay for multi-part-time employees

Category : Business

On paper the number of people in work has risen. But many of these jobs are part time, poorly paid and insecure

They’re the forgotten victims of Britain’s long recession. The individuals and families who have lost well-paid work, but figure only briefly in the unemployment figures as they patch together poorly paid part-time work while struggling to cope with a collapse in their living standards.

Sophie Gaskin worked for 13 years as a forensic scientist then, as a trainer, she taught government agencies and police forces how to gather valuable evidence. She was made redundant in October 2010, shortly before the government closed the Forensic Science Service after it ran up losses of £2m a month – a decision later condemned by the House of Commons science and technology committee for the impact it may have on the criminal justice system.

But for Sophie, it has been personally devastating. After specialising in a niche area, she has found it impossible to find work elsewhere using her scientific skills.

Her savings were initially too high to qualify for welfare benefits. “I couldn’t claim until I was down to the minimum £5,000. Then it took six months to get any money, by which time I was down to my last few pounds,” she says. She has, though, qualified for housing benefit on the flat she rents in Surrey.

This single, fortysomething, has only been able to find part-time admin work paying £8 an hour, and is desperately struggling to make ends meet. “There’s no possibility of going full time and, even if I could, I’d lose my housing benefit. On such a low wage I wouldn’t be able to pay the rent,” she says.

Gaskin has been helped by her union, Prospect, which has provided training and advice, as well as four days of paid work as a trainer.

However, that income resulted in the loss of jobseeker’s allowance.

She goes to the supermarket in the evenings, looking for sell-by date reductions. “I buy value brands and shop late to pick up cut-price food. I get fruit and vegetables from my mother and bake my own bread,” she says.

She’s resilient but is clearly saddened by the loss of her job: “I am upset that forensic evidence is being overlooked. That could lead to miscarriages of justice.”

Low-paid part-time work and self-employment have mushroomed in Britain since 2007 as laid-off workers battle to maintain their living standards. Many economists have been puzzled at the lower-than-expected levels of unemployment, given the scale of the fall in GDP since 2008.

The jobless total jumped from 1.6m in early 2008 to a peak of 2.7m in 2011, but has since dropped to 2.5m. Meanwhile, those in work has risen to a record high of 29.73m, a result of population growth and what the government hails as a dramatic increase in private-sector employment.

But the majority of the newly-created jobs are in the service sector, many part-time, poorly paid and insecure. Even for these, critics say, there is competition from an army of underemployed workers seeking longer hours. A recent poll conducted by IPSOS Mori found that 40% of people in work (and 65% of 18 to 24-year-olds) said they would take on more hours if they could.

A report from the Resolution Foundation on the “squeezed middle” found that low-to-middle-income workers account for 70% of the overall growth in self-employment. Increasing food inflation means families within this group have to pay a £280 cost of living “premium” as they spend a greater share of their budget on essentials (which have risen faster than other goods) compared with higher-income households.

Lower income households are also bearing the brunt of unavoidable increases in the cost of food and utilities, such as gas, electricity and water.

Andrea Kennedy, 48, a divorced mother of two in Liverpool, is typical of those surviving on casual contracts with no job security and sometimes weeks or even months without work.

Until two-and-a-half years ago she was just about managing to cope taking short-term, six-month and 12-month contracts as a full-time administrator. “It was financially hard work, as I was often out of work for up to a month between contracts,” she says.

After yet another contract ended prematurely, she has turned to cleaning to earn a full-time income. “Until recently I’ve been doing three or four part-time cleaning jobs on the minimum wage of £6.19 an hour in order to make ends meet. However, eight weeks ago my hours were cut as one company lost a contract. Now I only have 21 hours.”

Although she owns her two-bed house, she made the mistake of taking out a £15,000 secured loan on her home in 2006 and is still struggling to pay the debt, which has grown to £24,000. “My mortgage is £251 a month and £223 on the loan. At best, I’m only earning £775 a month and, because my working hours fluctuate, I can’t claim tax credits when they drop below 30 hours a week.”

She admits her standard of living has been hit hard. “I’ve had to sell my car, cut back on food and can’t afford a computer or phone. There are no nights out and a cup of coffee is the only treat I can afford.”

She is now considering moving out of Liverpool and gets by with the help of friends and Citizens Advice.

The Trussell Trust, a charity that operates food banks in the UK, says it is not just the homeless, or those living entirely on benefits, who are using its services, but also the working poor, whose incomes have plummeted.

“We’re opening three new foodbanks every week to try and help local communities meet the growing need for emergency food,” says its executive chairman Chris Mould. “People are often surprised that less than 5% of foodbank clients are homeless but many of the 300,000 people we’re helping are low-income working families.”

Moreover, many workers are also getting into debt. National Debtline is a free national telephone helpline for people with debt problems in England, Scotland and Wales. Its spokesperson, Paul Crayston, says: “Almost half of the 234,000 calls in 2012 were from people in employment.”

But there are some who, having gone through the trauma of losing their job and taking a cut from a relatively high income, are now happier.

Maisie Collin, 36, lives in London with her 18-month-old son and her fiancé. Before the recession she worked on a freelance basis in the youth and family care sector, with an income of around £55,000.

After the downturn she took a job as a director of a charity, earning £40,000. In 2011 it was dissolved and she was made redundant while pregnant.

Maisie was unemployed for 18 months, not claiming benefits. She re-mortgaged her flat and used the money to retrain as an Ofsted-registered childcare provider and turn her flat into a nursery. She now runs a daycare centre from home part time, paying two apprentices from a local college to help. She also does part-time life coaching and massage therapy, as well as voluntary work with young people and families. She estimates her new income at between £33,000 and £35,000.

“I’ve got no security, and I have to work really hard. But I love the variety. My lifestyle had to change: everything stopped – I’d eat out quite a lot before, but we couldn’t do that, so I ate differently. I reduced going out.

“It can really affect everything, from your lifestyle to your friendships and relationships with your family. I had to create my own work, and I do earn a lot less than I used to and have a child to support, but I am happier now.”

Every woman in the boardroom must pull others up behind her | Karren Brady

Category : Business

A report shows that female appointments to FTSE boards have slowed. It is up to those at the top to bridge the gender gap

Margaret Thatcher used to say, “If you want anything done, ask a woman“, but when it comes to applying this at the most senior level of UK business, momentum is lagging. Cranfield School of Management revealed yesterday that in the first half of the 2012 financial year, 44% of board-level appointments at FTSE 100 firms went to women. This slowed to 26% in the second half, and there remains a 33% gap between the current rate of recruitment of women to the boardroom and the recommended level needed to achieve equality. British business continues to fail to tackle the barriers that deter women from fulfilling their potential, with a knock-on impact on our economy and society.

However, the Cranfield research does show that the picture isn’t uniformly bad. Women are dominating in the middle levels of certain careers, such as law and marketing, yet this does not translate into boardroom representation. Now is the time for more women in business to recognise their own potential and have the confidence to aim high. We cannot wait for our male colleagues to champion our cause. Nor should we be held back by any guilt that being ambitious and successful at work is somehow not acceptable for women. Too many women don’t see themselves in senior leadership and so don’t push themselves to advance their careers as their male peer group do.

It’s depressing that ambition and feminism have become almost dirty words for working women. But, there is no reason that they should be and, increasingly, I am struck by how the next generation is challenging conceptions of what it means to be successful at work. I regularly meet young women who, just as I did when I was 23 and took on Birmingham Football Club, are starting their careers with a determination to achieve all they can.

My view is that the key to their success is confidence, and possessing the self-belief to challenge stereotypes. In 20 or 30 years’ time, it is these women who will be fundamentally transforming British boards. But this also begs the question of what happens in the meantime. The Cranfield research shows that, while there are too few women in senior business roles, those who are successful could do more to help other women up after them. When I attend events for Women in Business, I often see the same faces. If every woman who got to the top brought just two up behind her, the number of women in the boardroom would triple. When I joined West Ham FC, there were no women in the boardroom and now 50% of the board are female. Rather than pulling up the ladder behind me, I created an environment where women could balance both work and family while aiming for the top.

Any board executive can forget just how many people helped them get where they are. Those women who have got to the top need actively to ensure there is a pipeline of younger women, whether by networking or mentoring, who in turn are encouraging those below them. Women in the boardroom must not forget how many challenges and difficulties we have overcome, and we should share our coping strategies.

It is critical to create opportunities to identify talented women in business, then support them to develop their confidence to aim for the boardroom. We need to look outside the corporate mainstream, at female entrepreneurs and self-employed businesswomen, who can inject different insights and diversity to any board.

We also need to look further down the pipeline at the young women who haven’t yet started their careers. When it comes to the route to the boardroom, the barriers start early. Those of us who have achieved success must reach out and inspire young people to aim high, through programmes such as LifeSkills, for which I am an ambassador.

While the peak of female boardroom recruitment has been encouraging, more is needed to bridge the gender gap successfully and sustainably. We need to address the whole journey to the boardroom. Business leaders can and should do more to help instil women in business with the confidence and aspiration to aim for the boardroom and inspire the next generation before they leave school.

Live debate: social enterprise and job creation, – 12-1.30pm, 19 April

Category : Business

Join our experts on Friday 19 April to discuss how social enterprise models can help the unemployed into work

The 2008 financial crash has led to some of the highest unemployment figures on record and politicians are struggling to come up with methods of creating more jobs without stretching the public purse.

This is no easy task, but some believe the answer may lie within the social enterprise movement. Social entrepreneur Colin Crooks has spent decades supporting the unemployed into work and last year published the book ‘How to Make a Million Jobs: a charter for social enterprise’. In a recent article, Colin said:

“Social entrepreneurs are the committed and determined business pioneers who are prepared to make the sacrifices needed to buck the trend. If the government backed those individuals… they would get a massive social dividend on their investment. Higher employment, increased social harmony, increased local income, reduced benefit dependency are just a few of the benefits.”

With this in mind, join us on 19 April to discuss:

• How social enterprises can maximise job creation

• The financial opportunities available for social enterprises in this field

• Success stories that can inspire social enterprise looking to reduce unemployment

One example of a social enterprise working in this field is TABS, or the Telecentre Business School, who won our recent competition to find the best social enterprise job creator. To read more about TABS ahead of the live discussion, click here.

Do get in touch if you’d like to be a panellist – email Joe Jervis for more details.

Also, if you’d like to leave a question, please do so in the comments section below, or come back to ask it live at midday on 19 April – and follow the debate.

Remember, to be on the panel and participate you need to register as a member of the Guardian social enterprise network, and log in. Click here to register.

Panel (others to follow)

Colin Crooks – social entrepreneur and director, Tree Shepherd

Colin has been a social entrepreneur for 22 years and his new book “How to make a million jobs – A charter for social enterprise” is out now.

Paul Nagle – chief executive, TABS

Paul established TABS in 1995. The social enterprise supports personal development for individual and community benefit and helps people start up their own social businesses.

This content is brought to you by Guardian Professional. To join the Guardian Social Enterprise Network, click here.

Heather McGregor: ‘Working from home is the future’

Category : Business

Trust is essential to any business, and it’s a lot easier to earn it face to face, in the office. Nevertheless, lots of people want to work from home, and flexibility is important

Technology has made the world a smaller place. We are all better connected – schoolgirls in Pakistan can study courses in artificial intelligence taught by Ivy League professors thousands of miles away. And it has become ever easier to combine work and home. So why is a CEO such as Marissa Mayer summoning Yahoo staff back into the

What might a world without work look like? | Nina Power

Category : Business

As ideas of employment become more obscure and desperate, 2013 is the perfect time to ask what it means to live without it

A few months before the financial crash hit, the National Lottery issued a new kind of scratchcard. At £5 a go – the more expensive end of the range – it offered the chance to win £40,000 a year, every year, for the rest of your life. Howard Groves, the director of game development, described the idea in the following way: “It’s about not having to put up with life’s everyday irritants.”

The card proved successful, despite its cost, and a new version in 2009 is still selling well. Everything that is carried in the hope of the card – life (how long might I live for?), security (how might I care for myself and others?) and leisure (what might I do with my free time?) – is really code for a life without work. The “everyday irritants” identified by the card-makers pose an important question: is work one of these “irritants”? Perhaps even the largest irritant of all?

As with all major institutional entities – law, prison, education – to question work is to tamper with reality itself. As with law, prison and education, it is almost always “never a good time” to talk about reform, or the abolition of existing structures. The ideological mishmash represented by the word itself is worth examining. Paid employment is an economic necessity for all but a tiny percentage of the population, but “work” is tied up with miasmic qualities that touch on social and even quasi-religious elements: identity, status, community, habit, duty.

The Tories, as ever, seek to exploit these complex social, moral and economic factors in the crassest way possible. Just as the “big society” sought to cynically exploit genuine fellow feeling by turning social and cultural life into an unstable amalgam of philanthropy and volunteering – thus eliminating the role of state provision – the recent campaign opposing “strivers” to “scroungers” and pledging to support “workers not shirkers” is an opportunistic mobilisation of the residual idea that to work is to be a good person. This idea, reinforced by TV shows (The Fairy Jobmother, for example), implies that to be unemployed is a personal, moral failing, and that if you just tried harder, got a haircut or on your bike, or changed your attitude, employment would fall into your lap like a leaf dropped by a benevolent Job-God.

The reality of attempting to make work a moral, personal issue, rather than a global, structural, economic one has devastating consequences, not only on those who are unemployed or precariously employed, but on those deemed “fit to work” when manifestly they are not. The stripping of disability benefits by Atos and the Department for Work and Pensions did little to push those deemed fit to work into jobs, but left many impoverished and suicidal. When work is used as a moral stick to beat the population with, it is clear that the imperative is less to actually employ people than to cut government spending, with the bonus that the most vulnerable can be used as political scapegoats.

Campaigns against unpaid work as a condition of receiving benefits – workfare – and cuts affecting disabled people have drawn out the truth behind government schemes. Boycott Workfare and Disabled People Against Cuts, among others, have drawn repeated and serious attention to the punitive nature of deeming people fit for work, or attempting to place people in jobs when the jobs don’t exist or are unpaid. The value of labour as such – from internships across the creative industries and media to the pittance paid to factory workers across the world – is deliberately undermined by those who profit from it, as it always has been. But as wages bear less and less relation to the cost of living, it seems as good a time as any to ask if the underlying fantasy is that employers will one day be able to pay their workers nothing at all, because all those issues like housing, food, clothing, childcare will somehow be dealt with in another, mysterious, way.

In the current state of the UK economy, as identified by John Lanchester, the labour market looks very strange: The “truly weird and not at all understood fact is that this self-same economy has been energetically producing jobs. In the quarter to October, in the middle of this Stygian economic gloom, the British economy added 82,000 jobs. That’s an all-time quarterly record. From the normal economic perspective, this makes almost no sense.”

As Lanchester notes, these jobs are part-time and low-paid; jobs with some security – those in the public sector where women dominate – are being eliminated, for good if the Tories have their way. Employment, presented as an all-encompassing existential imperative, nevertheless exists less and less to provide a living, let alone a life.

But against this backdrop – rising inflation, increasing job insecurity, geographically asymmetrical unemployment, attacks on the working and non-working populations, and cuts to benefits – a debate about what work is and what it means has been taking place. Some discussions at Occupy focused on what an anti-work (or post-work) politics might mean, and campaigns not only for a living wage but for a guaranteed, non-means-tested “citizen’s income” are gathering pace.

The chances of a scratchcard winning you a life without work are of course miniscule, but as what it means to work becomes both more obscure and increasingly desperate, 2013 might be the perfect time to ask what work is, what it means, and what it might mean to live without it. As Marx put it in his 1880 proposal for a workers’ inquiry: “We hope to meet … with the support of all workers in town and country who understand that they alone can describe with full knowledge the misfortunes from which they suffer and that only they, and not saviours sent by providence, can energetically apply the healing remedies for the social ills that they are prey to.”

In other words, the best place to start would be with those who have a relation to work as such – which is to say nearly everyone, employed or otherwise.

Work Programme: why I knew the figures would be awful | Zoe Williams

Category : Business

The idea that the way out of unemployment is via huge contracts for profit-driven enterprises invites them to game the system

Number geeks point out that, as stunningly bad as the Work Programme figures are, they are actually slightly worse than they look. Between 1 June 2011 and the end of July this year 877,800 people were referred to the Work Programme and only 31,240 people got jobs and stayed there long enough (three or six months) for the relevant company to get paid. This is 3.4%; the Department for Work and Pensions’ lowest expectation was 5%. But if they had done this evaluation in the regular way – June to May, rather than June to July – the figure would drop even lower: 2.5%. And yet I remain unstunned, because I knew the Work Programme figures would be awful.

I knew because Working Links, proud holder of Work Programme contracts worth £307,752,305, put out a press release a few weeks ago saying they’d found 40 people jobs in McDonald’s. It’s not exactly specialist knowledge, is it? “Psst, I know this low-profile employer that never advertises, but just might give you a trial … Ronald McDonald.”

I knew because the National Council for Voluntary Organisations has published its experiences. This programme was never intended to work with only these giant providers (primes). Large companies were meant to refer a lot of clients to smaller ones (subs), often voluntary or social in purpose. And yet over a third of subsidiaries had no referrals at all; 15% had had between one client and 10. Many had walked away, and a fair few had gone bankrupt.

So either the primes were doing so well that they suddenly didn’t need these subsidiaries, or so badly that they were “parking and creaming”, which is what happened in Australia and the Netherlands when they had a system like ours: gargantuan companies competed aggressively for government contracts on price – parking the impossible people, creaming off the easy cases (the ones who walk in wearing a suit having just been made redundant) often into jobs they’re overskilled for, and only working on the ones in the middle.

The Australian and Dutch governments have stopped asking companies to compete on price for exactly this reason – it creates perverse incentives that serve the contract and not the unemployed person. These comparisons should have warned anybody at the DWP that, having created the same system, they would repeat the same mistakes.

I knew the figures were probably screwed because, as the New Statesman pointed out on Monday, the DWP was trying to “hose down expectations” ahead of their release: “As the Work Programme supports people for two years or more,” the employment minister, Mark Hoban, wrote to MPs in a letter leaked to the Statesman, “it is too early to judge Work Programme performance by Job Outcome and Sustainment Payment data alone.” It’s so lame as to be almost frightening, this assertion that a programme designed for two years can’t possibly be evaluated at 14 months. But nobody was frightened, because anybody interested had already guessed.

Most of all, though, I knew the numbers wouldn’t look good because we’re in a double-dip recession, and it takes a lot more than a can-do attitude and a pristine CV to land that job when there are 34 other people going for it.

By the rules of gotcha politics, this is the time to point out the arrogance of David Cameron, calling Labour’s Future Jobs Fund a failure when actually it was quite good. It’s always amusing to note the amateurish flapping of this government, and last Thursday Iain Duncan Smith, on Question Time, was bugling his success in bringing a revolution to the prospects for the unemployed, compared to the way they were left to rot by the last government. In fact, the Work Programme is the most clanging failure in the history of this country’s welfare market.

IDS either knew this, in which case he

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Would you give up employment rights for shares in your company? | Poll

Category : Business

Would you consider making use of a ‘shares for rights’ scheme like the one unveiled by George Osborne?

Read this article: Would you give up employment rights for shares in your company? | Poll

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A working life: the head of pets

Category : Business

Veterinarian Maeve Moorcroft is responsible for all areas of health and welfare for the thousands of animals that pass through the doors of nationwide chain Pets at Home

“Sorry to keep you waiting. My snake is about to shed.” In 25 years of writing this is certainly the most unusual excuse I have ever heard, and Maeve Moorcroft is one of very few people who could get away with it.

Moorcroft is head of pets for Pets at Home, responsible for all areas of health and welfare of the thousands of animals that pass through the doors of the nationwide chain.

I am meeting her the morning after a very difficult evening for both her and Pets at Home: BBC’s Watchdog programme had run a lengthy feature on the health of a few of the pets sold by the store. I thought Pets at Home was going to fare quite well after seeing the first segment, which mostly related to a couple of cases of ringworm in guinea pigs; but the second part involved undercover filming in several stores, showing dead fish in tanks. A few looked like they had been dead for several days.

“We were answering calls until 11pm last night,” Moorcroft says. As we walk around the head office in Wilmslow, Cheshire, it’s clear more are still coming in, and one or two colleagues (you are not allowed to use the word “staff” at Pets at Home, everyone is a colleague) stop Moorcroft for advice or to ask her to talk to the pet owner on the other end of the line.

Moorcroft, who is Irish, qualified as a vet in Dublin in 1990 and spent 10 years working in the Peak District dealing mainly with domestic animals, “with the odd sheep and wildlife emergency thrown in”. She met her husband to be, a shepherd who now runs their farm, after treating one of his sheepdogs on New Year’s Eve, and now has two sons aged seven and five.

Like many vets, Moorcroft found that the long and often unsociable hours of being in practice did not fit well with having a family. She switched to working for a pet product manufacturer as their veterinary adviser, helping to make sure their products were safe and suitable.

Three years ago she moved to Pets at Home, becoming the first vet to hold the position of head of pets, involved in all areas of health and welfare of the company’s pets, fish and reptiles. Among other things, the role involves liaising with suppliers, checking where animals come from, supervising their care in store and overseeing the stores’ adoption centres.

She runs a team of about 10, including specialists in reptiles and fish, and two veterinary nurses working in a support role. Given the size of the company – 80 stores employing about 5,500 people with a turnover of £12m a week – this seems quite a modest number.

Moorcroft spends part of the morning answering emails and calls, mostly from the stores or vets contacting her about animals bought from Pets at Home, and is briefed by her team on the progress of a new range of guides published in association with the RSPCA and the licensing of various stores.

The open-plan office she sits in is like no other I’ve ever visited. There are a couple of dogs meandering between a selection of baskets and bean bags, and nearly every desk includes an aquarium or vivarium holding a wide array of fish, snakes, reptiles and amphibians. Moorcroft’s snake, Jean Genie, sits in a tank on her desk.

She moves on to visit a Stockport store with a specialist aquatic centre and featured prominently in the Watchdog programme. The staff are upset, and there is a high manager-to-colleague ratio on the shop floor to reassure staff and deal with customer inquiries.

While Pets at Home disagreed with some of the points made by the BBC programme, chief executive Nick Wood issued a statement saying the company would review its health check training and the frequency of the checks on its fish tanks.

We meet “Fishy” Pete, a marine biologist who is one of Moorcroft’s team, to inspect the fish: cold water, tropical and marine. The tanks are spotless and the only inverted fish is one which Pete assures me likes being upside down.

Some vets have a poor opinion of pet shops, and until recently the RSPCA has opposed the sale of animals through a shop environment. Has Moorcroft received flack from her veterinary peers for switching over to pet sales? “Veterinary science is a vocation, and I spent all those years in college because I wanted to help animals. Now I’m in a really good position to do that. Yes I’m one step removed, but I can get things in place to make things better,” she says.

Curriculum vitae

Hours Officially 8.30am to 5pm. Five weeks holiday plus bank holidays.

Work-life balance “It’s better than when I was in practice, and getting better still because of my veterinary nurses.”

Salary The average starting salary for a vet can be anything between £21,800 and £33,500 a year, depending on experience. However, further training and experience can increase the average salary to around £36,500. Moorcroft’s salary is equivalent to that of a senior vet, who can earn upwards of £50,000.

Best thing “Getting the chance to influence the health of thousands of animals all around the country.”

Worst thing “Laying awake at 4am, worrying about guinea pigs and rabbits.”

Mitt Romney and the myth of self-created millionaires | George Monbiot

Category : Business

The parasitical ultra-rich often deny the role of others in the acquisition of their wealth – and even seek to punish them for it

We could call it Romnesia: the ability of the very rich to forget the context in which they made their money. To forget their education, inheritance, family networks, contacts and introductions. To forget the workers whose labour enriched them. To forget the infrastructure and security, the educated workforce, the contracts, subsidies and bailouts the government provided.

Every political system requires a justifying myth. The Soviet Union had Alexey Stakhanov, the miner reputed to have extracted 100 tonnes of coal in six hours. The US had Richard Hunter, the hero of Horatio Alger’s rags-to-riches tales.

Both stories contained a germ of truth. Stakhanov worked hard for a cause in which he believed, but his remarkable output was probably faked. When Alger wrote his novels, some poor people had become very rich in the US. But the further from its ideals (productivity in the Soviet Union’s case, opportunity in the US) a system strays, the more fervently its justifying myths are propounded.

As the developed nations succumb to extreme inequality and social immobility, the myth of the self-made man becomes ever more potent. It is used to justify its polar opposite: an unassailable rent-seeking class, deploying its inherited money to finance the seizure of other people’s wealth.

The crudest exponent of Romnesia is the Australian mining magnate Gina Rinehart. “There is no monopoly on becoming a millionaire,” she insists. “If you’re jealous of those with more money, don’t just sit there and complain; do something to make more money yourselves – spend less time drinking or smoking and socialising and more time working … Remember our roots, and create your own success.”

Remembering her roots is what Rinehart fails to do. She forgot to add that if you want to become a millionaire – in her case a billionaire – it helps to inherit an iron ore mine and a fortune from your father and to ride a spectacular commodities boom. Had she spent her life lying in bed and throwing darts at the wall, she would still be stupendously rich.

Rich lists are stuffed with people who either inherited their money or who made it through rent-seeking activities: by means other than innovation and productive effort. They’re a catalogue of speculators, property barons, dukes, IT monopolists, loan sharks, bank chiefs, oil sheikhs, mining magnates, oligarchs and chief executives paid out of all proportion to any value they generate. Looters, in short. The richest mining barons are those to whom governments sold natural resources for a song. Russian, Mexican and British oligarchs acquired underpriced public assets through privatisation, and now run a toll-booth economy. Bankers use incomprehensible instruments to fleece their clients and the taxpayer. But as rentiers capture the economy, the opposite story must be told.

Scarcely a Republican speech fails to reprise the Richard Hunter narrative, and almost all these rags-to-riches tales turn out to be bunkum. “Everything that Ann and I have,” Mitt Romney claims, “we earned the old-fashioned way”. Old fashioned like Blackbeard, perhaps. Two searing exposures in Rolling Stone magazine document the leveraged buyouts which destroyed viable companies, value and jobs, and the costly federal bailout which saved Romney’s political skin.

Romney personifies economic parasitism. The financial sector has become a job-destroying, home-breaking, life-crushing machine, which impoverishes others to enrich itself. The tighter its grip on politics, the more its representatives must tell the opposite story: of life-affirming enterprise, innovation and investment, of brave entrepreneurs making their fortunes out of nothing but grit and wit.

There is an obvious flip side to this story. “Anyone can make it – I did without help”, translates as “I refuse to pay taxes to help other people, as they can help themselves”: whether or not they inherited an iron ore mine from daddy. In the article in which she urged the poor to emulate her, Rinehart also proposed that the minimum wage should be reduced. Who needs fair pay if anyone can become a millionaire?

In 2010, the richest 1% in the US captured an astonishing 93% of that year’s gain in incomes. In the same year, corporate chief executives made, on average, 243 times as much as the median worker (in 1965 the ratio was 10 times lower). Between 1970 and 2010, the Gini coefficient, which measures inequality, rose in the US from 0.35 to 0.44: an astounding leap.

As for social mobility, of the rich countries listed by the OECD, the three in which men’s earnings are most likely to resemble their father’s are, in this order, the UK, Italy and the US. If you are born poor or born rich in these nations, you are likely to stay that way. It is no coincidence that these three countries all promote themselves as lands of unparalleled opportunity.

Equal opportunity, self-creation, heroic individualism: these are the myths that predatory capitalism requires for its political survival. Romnesia permits the ultra-rich both to deny the role of other people in the creation of their own wealth and to deny help to those less fortunate than themselves. A century ago, entrepreneurs sought to pass themselves off as parasites: they adopted the style and manner of the titled, rentier class. Today the parasites claim to be entrepreneurs.

Twitter: @GeorgeMonbiot

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Business leaders and economists call for reform of national public sector pay

Category : Business

Campaign backing drive to end national pay bargaining comes a week after TUC voted in favour of strike over pay reforms

Business leaders and economists have launched a campaign backing George Osborne’s drive to end national pay bargaining in the public sector.

The chancellor has focused on ending national pay bargaining as one of his next significant reforms, but has been meeting resistance from Liberal Democrats.

In a joint letter published on Tuesday in a national newspaper, 25 senior academic economists call for individually negotiated public sector contracts. They propose that the total public sector pay bill in each location be kept the same while allowing individual wage negotiations. Local wages would then be determined locally, with any savings used to enhance, or protect local services.

The letter, a variation of proposals made by Osborne, suggests national pay makes public services such as education and health worse in wealthier areas, and that “public sector wages are out of line with local conditions in many parts of the country”. Reform would create more jobs as “the private sector struggles to recruit, making it hard for private sector firms to survive and expand”.

The letter comes a week after the TUC voted in favour of a general strike over reforms to public sector pay. The shadow chancellor, Ed Balls, has called proposals to reform national pay bargaining a “mistake” and unfair.

The campaign is likely to be seen as an indication that Osborne is intent on the shakeup, and has not been deterred by the political opposition.

In a statement released alongside the letter, Andrew Oswald, professor of economics at Warwick University, said: “The cost of living in John O’Groats is markedly different from the cost of living in St John’s Wood and that is not going to change. A pound in one part of the UK does not buy the same as in another part. Any sensible public-sector pay system has to face up to reality. It might be thought that it is somehow ‘fair’ to have lower real wages for teachers and nurses in the generally prosperous south of England, but it is hard to see why it is fair on pupils and patients if key public workers are reluctant to take jobs in the south.”

Alison Wolf CBE, professor of public sector management at King’s College London, said: “The ‘same’ pay for the ‘same’ job sounds fair. But if one person lives in an area with a shortage of housing and very high prices, then it isn’t the ‘same’ job as it would be where prices are low and housing plentiful. The public sector should be free to respond to local circumstances and local skill shortages. Individually negotiated contracts would improve services, create more jobs and encourage sustainable private sector-led economic growth.”

Mark Harrison, professor of economics at Warwick University, added: “A thought experiment: imagine what would happen to the Greek economy if a European trade union managed to secure the same salaries for Greece’s public employees [had the same salaries] as for their German counterparts. If that sounds like a bad idea to you, then consider the fact that in Britain we already have this arrangement across our country’s regions.”

They noted that more than half the public money – roughly £180bn – spent on schools, hospitals and police goes on pay, the equivalent of 12.3% of GDP.

They also pointed to opinion research conducted by the Institute for Directors of its members, which found that 28% of manufacturers said they had found it difficult to attract skilled staff at least once because of public sector pay levels.