More than thirty years ago I was Dean of Social Sciences in a major English University, from which I had previously graduated. As a graduate, I regularly receive information from the university, accompanied by invitations to make donations to various aspects of the work that goes on there. In the latest issue, they gave figures for the numbers of graduates in each faculty: and social sciences was more than twice as prolific as any other Faculty. When I was on the staff, social sciences were similar in size [and therefore in numbers of graduates] to the arts, science and engineering faculties.
During the time when I was Dean, the worst of the Thatcherite destruction was being done to the steel and related engineering industries in the region: which had the impact of reducing dramatically the potential for growth of the materials sciences parts of engineering. In the subsequent decades demand from students - especially, from UK students - has been pathetic in applied sciences [which mean that there has been plenty of capacity to train tens of thousands of scientists and engineers and metallurgists for emergent economies], poor in pure sciences and weak in the 'hard' arts like languages. The result is that Britain has been preparing people to do parasitic jobs in the media and other sectors where no material product emerges, and in financial services [which, at high risk, brings significant income to Britain from the world economy: and which could now be threatened by Brexit].
The material economy requires workers to do jobs that are alien to UK graduates, who are 'too good' for farm work or for ordinary jobs in the retail and hospitality sectors, or in building and construction; so those jobs have been taken up by migrants, many from the EU and many from beyond Europe. Thus it is important to note that simply barring EU immigrants will not make the total net migration statistics 'look right'; but it will denude agriculture, construction and hospitality of their essential workforces.
The educational system has totally failed to create the British workforce that Britain needs. Teaching tens of thousands of young people every year the dogmatic nonsense that is uttered by the Econocracy makes the situation worse, because it renders reality incomprehensible to the people who are supposedly educated to illuminate economic life.
Thus the material economy has stagnated: except for those areas of the services sector which largely import the material components of the things they use, and import their labour: to which the British population comes - largely with borrowed money - to buy consolation for their nagging awareness that their incomes have generally not grown [in real terms] for more than ten years. Companies are hoarding their profits, or returning them to shareholders in buy-backs [in the cases where they still make profits, usually in overseas markets]. The only conspicuous sphere of investment is the proliferation of branches of quirky dineries, nail-bars and bars; none of which are famous for longevity.
The misapplication of neo-Keynesianism in the later nineteen-sixties and early' seventies means that it has been impossible to persuade an 'Economics Profession' dominated by 'rational markets' nonsense that a keynesian stimulus would restart the real economy. Instead, successive government have adopted and stuck to the policy of austerity; which has clearly become a mantra that will eventually provoke a populist revolt. The misdirection of education over the last four decades means that the economy lacks the people who could implement a Keynesian reflation of the economy; and the economic devastation that the Thatcherite monetarists achieved means that many of the means by which a traditional Keynesian restoration of economic growth could be accomplished do not exist. Yet is is only by a strong pattern of state support for the revival of construction and manufacturing that the economy can be rebuilt. It will be a task of immense complexity; but it must be achievable.
More of this in the coming days.
Showing posts with label hospitality. Show all posts
Showing posts with label hospitality. Show all posts
Thursday, 27 July 2017
Saturday, 8 July 2017
Hospitality and Productiveness
An area of significant growth within the 'dominant services sector of the British economy' is designated as Hospitality. This covers hotels, restaurants, pubs, cafes and all such outlets; which directly employ 3.2 million people, supported by 2.8 million people who work in support and supply trades to the sector. Thus six million households are wholly or partially maintained by the business. The trade association for the sector, the British Hospitality Association, has undertaken studies that show that the sector is well spread across the whole country, with Hospitality constituting a top-six employer in every region of the United Kingdom.
It is also a sector that has defied the general sluggishness of the British economy since 2008. The increase in output measured over the period is 5.9%, double performance of the whole economy. Labour productivity [measured as gross 'value added' per hour] is around 3.2%, which compares favourably with the shameful national figure for the whole economy of only 1.5%. The sector paid £38 billion in direct taxes and claimed to have brought £161 billion of turnover into the economy in 2016.
The sector also displays many of the structural weaknesses to which the British economy is prone. It is very heavily dependent on low-paid labour, much of which is recruited from abroad: mostly from the European Union and the Commonwealth. This is obvious in the patchy linguistic skills of the staff, where more 'white Europeans' are in front-line jobs, with a higher concentration of non-white people as cleaners, kitchen porters etc. There is very considerable use of casual staff on very uncertain contracts, who receive low wages and thus make little contribution to the buoyant consumer demand on which the momentum of the economy depends. The British Hospitality Association emphasises that there is great potential for growth in the sector, so long as foreign travelers are attracted to the many well-marketed natural and urban assets that Britain and Ireland have to offer, and so long as the resident population have sufficient incomes to enable them to use catering and related facilities. If the now-evident slowdown in the real earnings of the nation at large continues, it will impact disproportionately heavily on the hospitality sector as people buy ready meals and take drinks home from the supermarket rather than eat and drink out.
Over the past twenty years hundreds of pubs have closed in every part of the country as social habits have changed. It is increasingly unacceptable for chauvinist husbands to leave their wives at home with the television and the children and cups of tea, while they booze with their cronies several nights weekly. Couples, often with their children, dine out together; though it is notable that many families sit as three or more isolated individuals who are communicating with different sectors of the games business, or with different contacts, even as they eat: so they may just as well stay at home where the kids could access 'unsuitable' sites from the bedrooms. It is little hardship to a family to cut out a restaurant meal when economy is forced on the household budget; but the negative impact of that happening a million times to the hospitality business is huge. Supermarket takings increase, and more pubs close.
To preserve their market, the better-designed and best-located pubs are moved upmarket as dining and drinking establishments; and, increasingly, managers are deterring 'traditional drinkers' from occupying floor space in 'gastropubs'. Significant investments are being made in the physical plant and in the image of selected catering outlets: and this requires the 'right sort of customer' to be attracted to them: people with sufficient money to provide a return on the investment [in premises, staff and the offering that is made] and who have the inclination to use just that sort of outlet. So this enhances the need for specialisation, branding, image-building and the need to advertise; which also require heavy investment. The returns that come to successful outlets are increased turnover, higher productivity from staff and increased productiveness which justifies constant further investment. A very few pubs survive as retrospective examples of the 'spit and sawdust' image of hostelries: though sawdust is not welcome on customers' shoes and most people would deeply be offended by any use of spittoons: it is a very subtle job to make an 'olde Englishe pub' attractive to capable consumers.
It is also a sector that has defied the general sluggishness of the British economy since 2008. The increase in output measured over the period is 5.9%, double performance of the whole economy. Labour productivity [measured as gross 'value added' per hour] is around 3.2%, which compares favourably with the shameful national figure for the whole economy of only 1.5%. The sector paid £38 billion in direct taxes and claimed to have brought £161 billion of turnover into the economy in 2016.
The sector also displays many of the structural weaknesses to which the British economy is prone. It is very heavily dependent on low-paid labour, much of which is recruited from abroad: mostly from the European Union and the Commonwealth. This is obvious in the patchy linguistic skills of the staff, where more 'white Europeans' are in front-line jobs, with a higher concentration of non-white people as cleaners, kitchen porters etc. There is very considerable use of casual staff on very uncertain contracts, who receive low wages and thus make little contribution to the buoyant consumer demand on which the momentum of the economy depends. The British Hospitality Association emphasises that there is great potential for growth in the sector, so long as foreign travelers are attracted to the many well-marketed natural and urban assets that Britain and Ireland have to offer, and so long as the resident population have sufficient incomes to enable them to use catering and related facilities. If the now-evident slowdown in the real earnings of the nation at large continues, it will impact disproportionately heavily on the hospitality sector as people buy ready meals and take drinks home from the supermarket rather than eat and drink out.
Over the past twenty years hundreds of pubs have closed in every part of the country as social habits have changed. It is increasingly unacceptable for chauvinist husbands to leave their wives at home with the television and the children and cups of tea, while they booze with their cronies several nights weekly. Couples, often with their children, dine out together; though it is notable that many families sit as three or more isolated individuals who are communicating with different sectors of the games business, or with different contacts, even as they eat: so they may just as well stay at home where the kids could access 'unsuitable' sites from the bedrooms. It is little hardship to a family to cut out a restaurant meal when economy is forced on the household budget; but the negative impact of that happening a million times to the hospitality business is huge. Supermarket takings increase, and more pubs close.
To preserve their market, the better-designed and best-located pubs are moved upmarket as dining and drinking establishments; and, increasingly, managers are deterring 'traditional drinkers' from occupying floor space in 'gastropubs'. Significant investments are being made in the physical plant and in the image of selected catering outlets: and this requires the 'right sort of customer' to be attracted to them: people with sufficient money to provide a return on the investment [in premises, staff and the offering that is made] and who have the inclination to use just that sort of outlet. So this enhances the need for specialisation, branding, image-building and the need to advertise; which also require heavy investment. The returns that come to successful outlets are increased turnover, higher productivity from staff and increased productiveness which justifies constant further investment. A very few pubs survive as retrospective examples of the 'spit and sawdust' image of hostelries: though sawdust is not welcome on customers' shoes and most people would deeply be offended by any use of spittoons: it is a very subtle job to make an 'olde Englishe pub' attractive to capable consumers.
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