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January 23, 2008

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Matthew

That Konnie Huq cost the economy £3.9bn a year is not 'the logical conclusion of the assumption that people on benefits could work if they want to'.

chris

It is, with ancilliary assumptions - some of which are vindicated by the picture, and another of which is that labour supply is highly elastic, which is a reductio ad absurdam of the assumption that people could work if they want to.

chrisc

Huge numbers of jobs have been created, as we see from the numbers of Eastern European arrivals.
So it's not the lack of opportunities...

redpesto

So, the 3m unemployed of the 80s really was the fault of Kylie Minogue and not Kenneth Minogue?

Rish

And of course, wasn't Konnie's degree in Economics? Maybe she's got some evidence to substantiate the hypothesis further?

ad

That Konnie Huq cost the economy £3.9bn a year is the logical conclusion of the assumption that 5% of people of working age claiming state benefits, stayed off work in order to watch Konnie Huq on Blue Peter.

I am tempted to conclude that Chris thinks that "that people on benefits could work if they want to", but does not want to say so. Why else make such a ludicrous argument to the contrary?

Dominic

The analysis seems sound enough, although it could have included the fact that lower benefit payments would decrease the burden of public sector spending; this would either result in immediate balanced-budget tax cuts, further stimulating demand, or the expectation of tax cuts in the future, stimulating demand through the Barro-Ricardo mechanism.

The fault in the argument is its suggestion that the appearance of Konnie on Blue Peter had a substitution effect in favour of leisure large enough to account for a five percent change in the voluntarily unemployed. Also, much empirical evidence suggests that the income and substitution effects caused by changes in the wage rate or changes in the quality of leisure roughly cancel each other out -- this is why countries with lower real wages do not tend to have much shorter working weeks: The labour supply curve is fairly flat in the long run. If so, it's difficult to argue that changes in the quality of leisure have an effect on productivity.

Mark Harrison

Surely it's only the logical consequence of the assumption that _ALL_ people on benefits could work if they want to.

I agree, that would be a wildly wonky premise.

But it's not a premise that flows from "There are some people on benefits who would be capable of work."


There again, the last time I watched "Blue Peter" it starred John Noakes. Looking at the photo of Ms. Huq, I suspect that the impact of Noakes on the economy was in a different niche :-)

Andrew Duffin

Your sums contain a flaw.

Of the 260,000 people who might go out to work if she were not on daytime TV, assume that about half will go to work in the Public Sector.

So their work is probably a nett cost to the country, rather than a nett gain.

Go to back of the class!

Guido Fawkes

I do the totty. Stick to yield curves or else I will move in to your zone.

Jim

Also consider the decline in tissue sales.

Graeme

You have to add to that those of us waiting for Gethin getting his kit off for no great reason too.

jameshigham

Bit of a wardrobe malfunction there in the pic.

Matt Munro

Not a patch on Sarah Green in her prime.

a very public sociologist

Can you say the same about the uber-delectable Noel Edmonds? Has his facial hair, snappy dress sense, witty repartee, and avuncular hosting style conspired to rob our hard-working tax payers of billions? Is Konnie Huq but a distraction from the main problem?

Bruce

Ah, so that's why unemployment rates have risen since the 1950s/60s: they correlate with the growth of daytime TV. It's not just dear Konnie, it's the whole shebang. Perhaps the authoritarian government could ban daytime telly entirely. It might do wonders for getting the work shy off the sofa and into productivity.

kio

This post clearly indicates deep misunderstanding of personal income distribution. People staying at home for some (any) reason will not increase real GDP, as expressed in monetary units, when find a paid job or its equivalent. This effect has been demonstrated many times. For example, in the USA a strong growth in participation rate was observed between 1965 and 1985. During this period, real GDP was not growing at elevated rate. This means that people entered the economy effectively had the same personal income as they would have staying at home. As a trade-off, productivity (dollar per hour) was growing at lower pace during these years.
Opposite effect is observed in recessions - decreasing employment is accompanied by an elevated productivity.

So, I would recommend those people who want to stay at home and do not want to increase their personal incomes - stay where you are now. Nothing will happen to your economy if you enter it.
Quantitative proof of all above statements is available at http://inequalityusa.blogspot.com/

Matt Munro

Surely that doesn't work in extremis though - if everyone stayed at home what would happen ? Where would the tax come from to pay them ?

In theory the cost to the exchequer of uneployment are reduced every time someone gets a job. The reduction enables tax cuts, which result in increasedd wealth as that money is traded through the open market, rather than through the inefficient state machine.

kio

My example is obvious. There is no extra profit (for people and country) from some people obtaining paid job except they stay at work 8 (more or less) hours per day 5 days a week. Thier job just results in decreasing productivity. Nothing else.

Home Theater Chairs

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