politicalbetting.com » Blog Archive » PB Video Analysis: The Changing Nature of Work
politicalbetting.com » Blog Archive » PB Video Analysis: The Changing Nature of Work
In the old days, careers would be long, mortgages cheap and job titles easy to understand. But the nature of working is changing. Our grandparents would struggle to understand what we do… YouTuber, anyone?
0
This discussion has been closed.
Comments
Staff earn salaries for their time and skills. Owners take equity risk and need equity returns. Saying to executives that they can get equity returns without taking any of that real personal financial risk fundamentally distorts the free market. CEOs are generally not putting their homes and financial wealth at risk. Once share options started becoming popular, base salaries were able to follow and you end up with a massive inequality between executives and staff.
If smart people can get super-normal returns without risk, you incentivise these people to stop taking equity risk and simply climb the corporate ladder. But large business is the least productive and lowest growing sector of the economy. We want our smart people to start new businesses, not aspire to climb the ladder in business which increasingly is based on the reduction of competition.
Share options are not a genuine reward, they are a way of paying massive salaries but taking that money from shareholders rather than recording it as a business expense. They incentivise short term share performance over long term growth. And they give the wrong signals and incentives. Get rid of them.
Share options are a one way bet, and therefore encourage firms to take risks. Stock up 20%! Whoppeee... Stock down 20%, well, it's the shareholders that lose.
Much better to have a system where management can borrow to buy stock, so they will genuinely think like owners.
So, after I get Demographics Two out, and my "The Trouble With EBITDA" (that I've wanted to do for ever), I might well do a piece on the dangers of share options.
I'd go as far as to say that share options were a contributing factor the financial crisis. They basically encouraged bank managements to act irresponsibly.
1) Brexit-relevant -- why CUs are lovelier than FTAs because of frictions, and the gravitational model of international trade and Europe being closer than America and all that.
2) changes in the way capitalism works
a) branding means goods that ought to be fungible now aren't
b) the return of conglomerates eg Amazon -- as opposed to the 30-year fashion for breaking them up
c) company success (Amazon again) now depending on share prices rising (and hence market cap) rather than actual profits
Pascal, Mark Twain and Lincoln have all been credited with saying something along the lines of “Sorry about the long letter, I didn’t have enough time to make it shorter”, so you’re in good company.
Looking forward to Demographics II and The Trouble With EBITDA.
Very much agree with journalistic output. The football writer Martin Samuel says people always complain to him about how much resource in the industry devotes to Manchester United. Well, now they have the web metrics, it turns out that's people want to read about.
To take the second first, that share options encourage irresponsibility, there is a hidden assumption that management or even traders could identify and quantify risk accurately, and it really looks as if they cannot. A major cause of the global financial crisis was that what people thought was risk-free turned out not to be. It wasn't that managers or traders were intentionally backing 50/1 shots. Now, it is possible that share options encouraged behaviour that with hindsight turned out to be unwise but even that is a stretch.
The first, that managers can borrow to buy shares, and that will make them think like owners. Well, managers can already borrow money to buy shares and if anyone wants to join the party, Wonga is looking for new borrowers -- you can spend the money on new shares or new cars; they don't care. But even if we grant this will make managers think like owners, are we sure this is a good thing? Surely owners, especially of startups, are likely to have been aggressive risk-takers. Maybe once a firm is established, that is not what is wanted. Ask Elon Musk.
But even then moral hazard remains: if our manager who thinks like an owner because he borrowed to buy shares, then the upside of a share price rise remains, just as with share options, and the downside is defaulting on the loan and even bankruptcy but as Donald Trump might have observed, you can pick yourself up and roll the dice again.
The UK has wasted over 2 years since the referendum debating with itself over what sort of Brexit it wants (or if it wants it at all) and now there is no time left to choose anything that isn't a ready-made option offered by the EU. This has been pointed out in simple language (in case it wasn't already clear) by Tusk's excellent Instagram.
Anything other than continued membership, or remaining in both the Customs Union AND Internal Market, will require a hard border in the Irish Sea, given the NI backstop that the Maybot foolishly conceded last December.
There are also some sectors where it's harder to make a living. The average income of an author continues to decline. Forget the precise figure but the last I saw was well under £10,000 a year. Obviously, that's not sustainable as a career for most people. Alas.
Got a reply from Ladbrokes. There's no record of them, apparently. If I knew the bet IDs then tracing said bets might be possible.
I'm sure I'm not alone in simply not taking notes of that detail when betting, but I'm going to go back and find the bet IDs for all the bets I can still see.
The stakes I put down were very small, but with a potential 67 and 26 winner, I'm still less than thrilled.
Just delighted by this.
I agree it was very stupid to go down this road at all. When Barnier came up with his 'legally binding' backstop text in March the correct response would have been to withdraw the backstop undertaking on the grounds that the UK clearly had not agreed to what was now being proposed. But instead of standing her ground she continued to concede and look where that got us.
It is of course nonsense that an FTA requires a hard border either in NI or the Irish Sea. That is just Brussels propaganda.
Having agreed the Backstop we need to stick to it.
(And yes, this has bitten me in the past.)
I have never directly made any money from share options in any company I have worked at - and neither has Mrs J. I'd much rather have an extra few grand on my salary.
Not that I'm earning at the moment ...
Best definition of EBITDA I heard was (inevitably) Buffett: he called it “earnings before bad stuff”
https://www.facebook.com/Channel4News/videos/950636658453500/
https://www.facebook.com/Vox/videos/246000362776585/
I have taken screenshots of my current outstanding bets (three dozen). It's not just the potential of lost winnings, but also that there's a certain sum locked up. Even if my bets average £3, that's a hundred quid.
If I'd forgotten about the bet with the new system and not made an extra note of it, perhaps the bookie would have just kept my cash.
It isn't an issue for bets placed in person as you just keep the slip in your sock drawer, but one doesn't expect to have to print every bet and ID out from online, though that's probably wise (Or keep a pdf say) of each bet now. It's a pain though and all done because it suits the bookie for the average football punter not go go able to see huge lifetime losses.
It's not just self-publishing altering things, although that has drastically changed the game. The mid-grid has become a lot thinner too. There aren't as many writers between enthusiastic hobbyists and megastars any more. It's not good for writers or readers that there's a tiny chance of making even a meagre living from it.
As an aside, working on a new book. Not sure of an ETA but the first draft is nearly done.
Success came to him relatively late in life, and was because he worked hard, was very, very good and had a couple of decent breaks in breaking into the mass market.
The problem I see is that our economy is increasingly built around the traditional forms of employment which barely exist outside the public sector and sometimes not even there. So we purchase our housing on 25 year mortgages. In traditional employment this is a good risk because most will be employed by the same company for that period with minor risks of ill health, death etc that can be covered by insurance. In the modern world without job security it is a much bigger risk. So the lender demands much higher deposits to cover that default risk and a significant number of people are excluded from the housing market.
Even those helped by the bank of mum and dad are not without risk. Their employment is unpredictable. Ever larger numbers find that the only employer who might treat them reasonably is themselves and go self employed. Many are self employed involuntarily. As some authors discover this excludes even minimum wage. What these changes consistently do is take the risks away from the (short term) employer and put them on the employee. This makes them a much worse credit risk.
We still have those in the public sector who, in the event of ill health get 6 months on full pay and 6 months on half pay, who get a year on full pay for maternity, who have final salary, index linked pension and can be pretty much guaranteed a "package" when the time comes involving payment of substantial sums. Even there, however, the pressure is on this platinum plating. Pensions become more based on average earnings, caps are imposed on packages, HR departments start muttering about capability dismissals much earlier, etc etc. Much of corporate Britain used to have similar rights but now they don't and the more alien these sorts of rights come to peoples' experience the more they will be attacked.
The bigger problem is that our consumption driven credit based model requires a security of employment that the market is no longer delivering. We should be borrowing less and yet we are borrowing more. This is not going to end well.
#obviousjokes
https://twitter.com/tseofpb/status/1044486179859701760?s=21
I write for fun, and being retired, the small returns don't matter. Self-publishing takes skills I don't possess, so I count myself lucky that a small publisher (Wild Wolf) likes my particular style. I finish the book, refine it a little and send it off. They do all the pictures, blurb (master of menace?), and other stuff, put it out as an e-book, and I occasionally check the score on the Amazon rating system.
They've published three so far, sometimes offer advice and send me a small royalty cheque from time to time. No way, could I make a living from it.
Getting four figure readership sounds very impressive, and having read one of your books and enjoyed it, I wish you well for the future. Even if a writers' life is doing a lot for very little, I like to play with sexual stereotypes as I please, even reinforcing them from time to time. It beats gardening.
You’re up there with the families of people behind bars.
In fact, given the cult like status around Jezza, that Boris is just 2pp behind him in terms of people who would actually like him to be PM, I'd say that's pretty damn good.
I think that’s immoral
I once wrote a PB thread during a mediation hearing.
Put simply, people are willing to take more risk with other people’s money (assymetric returns)
Most voters in NI would accept a border in the Irish Sea but no hard border in Ireland but the DUP will not and as long as the DUP hold the balance of power that is a problem
"Hold on a minute, this is important - can you believe russianbot23 seriously thinks that byelection in upper nowhere last night means Corbyn is on track to be pm? I need to call then a fool real quick".
I think the blow would be more to our own self-image.
The last Yougov poll testing this had the Tories under Boris tied with Corbyn Labour
The jobs market in tech - or at least certain areas of it - appears to be booming. Mrs J got made redundant along with some colleagues in the early summer. She did not immediately look for a job, but word got around and before her last day five companies had been in contact with her, and within a week of finishing she had three firm offers, one without an interview. She chose one with a large pay increase and negotiated the summer off, so she could have a break after her old, rather exhausting, job.
What's more, she's working with some old friends in her new job.
I cannot say if this is true for the whole tech sector, but her area is booming.
Despite Brexit.
(Please forgive this rather smug post. I am very happy for her.)
It should also be noted that hers is very much a 'new economy' job. She's been made redundant three or four times, always with her team, but has always got another job pretty much immediately. There's relatively little job security, but lots of demand.
Mr. Charles, the sums involved don't make it worth it, I think (plus I have zero experience of such things). It's just odd and disheartening and entirely unnecessary.
Hopefully I'll be able to get the bet IDs for all my outstanding bets. Only 3 of 36 are recent enough for me to do it myself. Because why would you want people to be able to check their own bets?
Anyway, longer term I'll just have to shift money out of Ladbrokes and put it into the Betfair Exchange. Probably still use Ladbrokes for F1 stuff (we'll see if any of my title bets come off. I have some winning bets if either Bottas or Raikkonen is top three, so expect at least one of those to come off.
I believe there is another agenda working out in labour and almost certainly accounts why labour have not split yet because it is so obvious that if they can stop brexit they stop Corbyn and McDonnells mad cap policies.
At a stroke McDonnell's speech yesterday hits the buffers. Indeed that is why McDonnell and McCluskey will fight against remain on the ballot.
And of course he will have lost tons of labour votes in the leave area
Its amazing what you can achieve in just five minutes with over fifteen people in the room.
IMO it worked really well. Especially as Mrs J was one of the engineers.
Amusingly it's a strategy putting faith in the government being competent enough to get a deal.
But it's also why those who think a GE would solve anything on the basis labour don't care about the issue as much are wrong.
Congrats to your wife on the new job, good luck to her.
I take it you won the contract?
http://www2.politicalbetting.com/index.php/archives/2016/06/13/guest-slot-the-impact-of-leaving-the-eu-on-londons-technology-start-up-scene/