Don’t Compare

My last post all the way back in 2014 was about salaries remaining stagnant despite massive increases in productivity, focusing on the USA. Recently I’m seeing more and more discussion about the difficulty that new college grads have getting work, and the headlines tend to be along the lines of “Millennials Increasingly Unable To Afford To Live!”

One thing that people keep trying to do which they shouldn’t is compare with the past. We’re not living in the past, it’s a different world! You can say that in the 1960s and 1970s that our parents were able to afford a 4-bedroom house with a car and annual vacations on only one salary, but the fact is there were HALF the number of people on this earth back then! 3.6 billion in 1970 compared to 7.2 billion now! That’s a crazy amount of growth. Technology and industrial processes have rapidly improved meaning that productivity has increased massively.

This means that land/property is becoming more valuable, and labour is becoming cheaper.

This is not the fault of the Boomer generation, nor is it the fault of the government. It’s progress, and this is exactly what should be expected (note I’m not commenting on whether this kind of progress is good or bad, it’s just progress.) It will take a change in civilisation at this point to halt the trend of consumerism that is driving this. And at the end of the day, most people don’t want that.

The same people that complain that they can’t find jobs are often the same people wishing for free college tuition for all. It’s not free, until teachers and colleges are willing to provide the services for free. Someone must pay. And if everyone has a college degree, how do businesses differentiate between candidates when so many people apply for the same jobs, and so many people study for worthless degrees?

The same college grads complaining about low entry level salaries are often the same people that consider smartphones to be essential, when in fact they are just adult toys. Very few people can honestly claim they need a smartphone to lead a full life without impacting their social or professional lives. If you have a low salary, don’t buy a smartphone!

Yeah, it sucks that houses in places like the USA and UK cost 10-15 times the average salary, when our parents paid 3-4 times their salary. But what are YOU going to do about it? Here’s a tip: don’t compare, don’t complain. What you’re really asking for is to slow down population growth and stop promoting consumerism. So, get rid of that iPhone and HD satellite package, adopt a child, have a small wedding, stop buying useless crap, eat out less, and do something useful.

Henry Ford Was A Dick

This post is a two-parter. I’m going to state what I think is going on and then back it up with some figures. You can draw your own conclusions in the comments.

The Rant

Thousands of years ago, before any kind of automation, people worked in order to grow things, craft things, move things, etc. Domestication of animals was one of the first forms of automation – instead of chasing animals around all day, why not keep some for breeding and then just pick them off when they are ready? Why drag things around by hand when you can use a horse? If there were no other jobs, this would have put people out of work, but people went on to become farmers. More people had time to study, colleges of sciences and arts started cropping up, and more professions were born.

Fast forward to 2014 and more jobs are being automated. More people are working on creating and maintaining these robots and processes that keep things going. That means less manual labour jobs and more desk jobs. CEOs of companies are now celebrities and they earn increasingly more than the basic workers at their companies. The CEOs earn so much more not because they are doing that much more work, but because their work is inherently more risky and the talents they bring are harder to find (compare this to professional athletes versus some dude at the gym).

More and more, school leavers are complaining that they have to study for many years, take on a lot of debt, and face an uncertain job market with bills that they cannot pay, and houses they cannot afford. This problem is getting worse every day. Most of our parents could afford a house in a nice area on a single salary in their late twenties.

But isn’t this all exactly as we should expect, the way our society is progressing? Using the smartphone as an example, in the USA it has become one of the most ubiquitous accessories. It assists us with our daily lives and can be considered an extension of our brains. It is also totally unessential for life. It may take 1000 people to develop and produce a smartphone, but that phone can be mass produced by machines and delivered to millions of people. Soon we won’t even need operators for those machines. If the human population doubles, we don’t need to double the number of workers making smartphones. So how do buyers continue to pay for those smartphones indefinitely? What do those people DO in order to make money in a world that is becoming more and more automated, and in a world where fewer workers are needed to produce the same quantity of things?

The answer is that more and more people simply don’t work. Those that do find work wherever they can, and if they can’t afford essentials and fall below the poverty line, governments pick them up and tax the people with money to give to the people without. It’s part of living in a modern society. But where does this end? What do we do when we run out of work for people? Do we end up with a rich few and poor majority with a struggling middle? Most probably, yes.

Sadly none of the predictions that people in the future would have more leisure time are coming true. People working ridiculous hours to make ends meet are still working ridiculous hours, even though those hours are unnecessary given the sheer number of people who don’t work.

Maybe it’s time to tell people that working 30 hours a week is OK and acceptable. Maybe people could use some of this spare time for some genuine good, like teaching children or cleaning up little, although I actually have no faith that most people would actually want to contribute to their community.

The Facts

  • In the US, average unemployment length has more than tripled since 1950 (source: BBC)
  • CEO salaries have increased ten times faster than employee salaries since 1950 (source: Huff Post)
  • Productivity in the USA went up by 75% from 1979 to 2012, though I think that a lot of this is down to investment in technologies to make work more efficient (source: inequality.is/expensive)
  • If the median US middle-class income of $51,017 grew at the same rate as the increase in productivity, people would make $77,131 (source: inequality.is/expensive)
  • In 1926, the Ford Model T was sold for $260. Taking into account inflation, this is $3,482 in 2014. The cheapest car currently on sale in the US today is the $12,780 Nissan Versa. That’s almost four times as much (sources: CLIO Journalinflation calculator)

Conclusion

So what do we do about this? Probably nothing, because stopping progress in a country like the USA where big business dictates country policy is not possible. I think the best that people can hope for is to change attitudes and understand that it’s never going to be as easy to get a house on a single income as it was in the 1950s.

PS. I don’t really think Henry Ford was a dick. He picked the best colour for the Model T, after all.

Selfie Generation

This BBC News article is the first time I’ve ever heard the tail end of Generation-Y be called the “Selfie Generation”. Anyway, the article discusses why younger people (16-24 year olds) are finding it so hard to get jobs.

Isn’t it obvious? We no longer live in a society where everyone needs to work – there just aren’t enough jobs for everyone. So our expectations need to change.

This short post is a precursor to a longer post I’m working on, tentatively called “Henry Ford Was A Dick”.

Image credit for this article to www.brainlesstales.com – don’t sue me please!

People are goldfish

I was at a Maroon 5 concert last night and there were so many people taking photos and videos of the show, texting, looking at Facebook, posting stuff to Twitter and Instagram – in fact anything unrelated to simply being satisfied in the moment and enjoying the show. My job involves putting these devices into the hands of people. At one point these devices were critical for safety, communication and business, but now they are just expensive toys.

I watched one woman take a minute long video of her friends that were dancing next to her, then she reviewed the entire video on her phone while her friends were still dancing next to her. ARE YOU REALLY THAT BORED?

It was difficult not to see another in front of me spend the first half of the show trying to get the perfect crappy photo to share online – a blurry far-off shot taken from an angle of 45 degrees from the stage with thousands of heads in the way. WHAT’S THE POINT?

It’s kind of difficult not to notice this phenomenon when it’s all around you. I’ve been waiting in line for food at work and seen people open Facebook, scroll the feed quickly up and down, then exit the app, turn off the screen and turn it back on just 30 seconds later. Repeat and discover that nothing has changed. ARE YOU A GOLDFISH WITH A 30 SECOND MEMORY?

My School Life

School bell

When I was about 8, I moved from a brand new school to one built in 1859, which apparently cost £1400 to build! I moved from a school that didn’t require a uniform, didn’t make a big deal of religion, and was shiny and new. The school I moved to still had a WWII bomb shelter.

I hated changing schools. This won’t be a rant about how much I hated going to school after the age of 8, but just keep that in mind as you read. I’ll take you through a day at my school.

I was in my second year of primary school when I moved, which meant I was a fourth-year (fourth-grader in the USA). After arriving at school at around 8am and meeting my friends in the playground, we’d wait for the school bell to ring. It was a hand bell, rung in the same dull pattern every day by a teacher (clang-clang, clang-clang). We’d line up into our different years behind our teachers in alphabetical order by last name, so I was at the end. There were only four years in my school, and about 25-30 people per year. It was a small school. Starting with the fourth-years, the teachers would read off each name from the register and we’d say “yes” to indicate our presence. We would file inside and sit down in the main hall, which was the biggest room in the school. Fourth-years at the back, first-years at the front.

Then the headmaster would come in. I hated him. I wasn’t alone in this.

This was called assembly. The headmaster would give announcements and he would always make us say the Lord’s Prayer out loud. He’d usually read some kind of passage from the Bible. It was a religious school. A couple of days a week we would have to sing hymns – I think for around an hour.

In addition to being separated into years, each of us would also be assigned to one of four houses when we started at the school. My house was hawks, and the other houses were eagles, kestrels and falcons. Hawks and eagles were the best houses for some inexplicable reason; they would win the house cup every year. Kestrels and falcons were the shitty houses, just like they are shitty birds. We’d collect house points throughout the year for doing good work, and the house with the most points at the end of the year would win the house cup. I still can’t play RPGs without reading HP as house points. If this sounds a lot like Harry Potter, it’s because a lot of UK schools do this. JK Rowling didn’t invent this.

One day a week we’d meet up with the others in our house, though I honestly can’t remember what we did there. Probably talk smack about the other houses.

We would get two 20 minute breaks per day – one in the morning and one in the afternoon. We’d get almost an hour for lunch. Everyone including the teachers would eat in the dinner hall (dinner is the original word for lunch in England) and then the kids would play in the playground when done. Dinner ladies are lunchtime supervisors who watch over kids in the playground and serve food if the school has a full-blown kitchen.

The classes I hated the most were RE and PE. Religious Education quite often involved copying long passages from the Bible into our workbooks. It was a massive waste of time and we learned absolutely nothing of value. I would have much preferred to be learning maths (yes, with an “s” on the end) or science. Physical Education wasn’t much better. As I recall, our school had a total of four rounders bats (rounders is similar to softball) and the largest boy in our year would get the only decent one. The tennis racquets were in a similar sorry state. The first time I went swimming with my school, the headmaster pushed me into the deep end and I felt like I almost drowned. I’ve been afraid of being out of my depth since. He was an evil man but he’s probably dead now.

School finishes at 3:30pm in England and evenings are usually spent doing homework, which is like having to crack rocks in prison after you’ve been released.

One other interesting thing to mention is that in the Harry Potter books, mention is made of OWLs and NEWTs that the students work towards. These are equivalent to the GCSE and A-Level qualifications that real students in England obtain.

School in England

graduation_cap_with_tassel

I was talking to someone recently about schools in my home country and decided to make a blog post about my experience. I haven’t written in a very long time and this seemed like a good way to start again. Note that all of this is based on my knowledge and experience – I haven’t attempted to fact-check anything here. It’ll probably be more amusing that way.

In England, children typically start school at the age of five and are required to go to school for 11 years. Most stay on for another two years for what is often called sixth form – that will make more sense later. The first two years are spent in an infants’ school. The next four in a primary school, and the next five in a secondary school. We don’t say grade one and first-grader, we say year one and first-year. We don’t use the terms freshman, sophomore, junior and senior – instead we reserve fresher exclusively for the first year of university.

Before 1992, the numbering system for years was a bit weird. Year numbers started back at one with every new school, so you could be a first-year three times. In 1992 the numbering changed, so I jumped from being a fourth-year to a seventh-year when I went from primary to secondary school!

Students in secondary education receive qualifications known as GCSEs (General Certificate of Secondary Education, formerly O-Levels) after year 11 at the age of 16. They typically get ten of them in subjects such as maths, science, English and a second language. This is roughly equivalent to the high school diploma in the USA.

Following secondary education, students can leave school or stay on for sixth form or college for another two years. During these two years, they work towards qualifications known as A-Levels, which are usually required to apply to university. Sixth form means staying on at your secondary school for a sixth year, hence the name. Strangely, the seventh year is also referred to as sixth form (form being another word for a class of students). College is not the same as university; it’s between school and university, and some people enter the workforce right after college. At college you can instead obtain qualifications in work-related skills, and these are called GNVQs (General National Vocational Qualifications).

In my next post I’ll talk about my own experience at school and you’ll see how the stuff in the Harry Potter books is similar. Aside from the fact we didn’t learn magic at my school.

Goodbye Colorado

In September 2010, I left Colorado after ten years of living there. I moved to Mountain View in California to work for Google, a dream of mine always being to work at a tech company in Silicon Valley.

One of the last things I did before leaving Colorado was to finish my back garden. It was bittersweet, because a lot of weekends were spent getting it done, a lot of weeds were pulled, and a lot of money was spent – and after all was said and done, someone else is enjoying it. Not only that, but thanks to the rotten economy, the house isn’t exactly a big money earner in the rental department. Quite the opposite. I even took a week off to finish the deck, which I made by hand. It was certainly a learning experience.

Debt

Debt

A year ago I gave myself a goal to stop making interest payments on credit cards. I have to admit that it never really dawned on me that making interest payments on credit cards is like paying more for every single product you buy on it.

Something else occurred to me – people tend to use credit cards to buy stuff that they can’t afford at the current time, and then make payments on it later. This is fine if you really need something immediately and you know that in the long run, you will be paying more for the product through interest payments. However, a lot of people use them to live beyond their means in the hope that tomorrow they’ll be making more money. This cycle continues, because when they make more money their credit limits go up, and they live further beyond their means.

However, credit limits exist for a reason. They don’t allow you to live infinitely beyond your means, because some people just can’t stop themselves from spending. They allow you to spend a dollar/pound/yen amount over your means, literally your means plus some fixed amount. However, you end up paying back more than you originally spent because of interest, so over time you are effectively living below your means!

Imagine you decided to have a really frugal year and you put all your extra money in a savings account. When the year is up, you continue using your credit card as normal for purchases, but you pay off your card every month using your savings account, thus accruing no interest. Everything you save on interest goes back into this savings account. You can spend within your means plus the contents of your savings account. Your savings account doesn’t empty because instead of a portion of your salary going to credit card payments (including interest), it gets paid into your savings account. Essentially you have become your own lender, and as a result, you don’t make any interest payments! Not only that, but the bank will actually pay you interest because of the money in your account. As a result, after one frugal year, you have more spending power than the person on the credit card. You also maintain good credit scores because of the constant use and good payments of your credit card.

So why don’t all people do this? Because people prefer to live for now and not for next year. Because credit card companies advertise that taking on debt is good (just look at MasterCard). Because credit card companies feed off hard times by increasing their interest rates when people are struggling to pay. Credit cards are seen as the normal way to spend, when in fact they should really only be used as tools to access money you already have, and for strict emergencies.

The same is true of mortgages – imagine that your parents are wealthy enough to buy you a house, on the one condition that you save to do the same for your kids. As a result, no one in the family (as long as the chain is not broken) ever has to make interest payments on a mortgage! The family through generations can even share an account to put surplus money into, so that if one generation hits hard times, the chain will not be broken. This is actually not a big secret – wealthy families have been doing this for many generations, and it’s the lack of interest payments that helps keep them wealthy.