Monday, 9 April 2012

Tug your forelocks - Bank Holidays are bad for you

This morning's weather reminds me that it is a public holiday - it's tipping down with rain and the forecast is for this to continue for much of the daylight hours remaining.  Much more reliable predictions also exist - my favourite is that each time there is a public holiday some neo-conservative self-publicising "wonk" will use the reduced editorial resources of the media to complain about the negative impact that allowing any worker any time off, ever, has on the economic recovery.

This Easter, step forward the "Centre for Economic and Business Research", a self-styled economic think-tank that has been peddling its snake oil for the best part of two decades.  Its guru is one Douglas McWilliams, who used to describe himself as Professor McWilliams but now that academic economists have been discredited he has clearly decided that this does not add cachet.  The CEBR's speciality is putting forward assertions dressed as fact with a view to attracting headlines.

Today we apparently suffer from having too many Bank Holidays in the UK - costing the economy vast amounts of money - and the way to free up the latent entrepreneurship is to get rid of them, given the reliance of British economic activity on the service sector.  Quite apart from the obvious speciousness of the argument, given that most "services" actually used by the public are open and trading well on public holidays, this is a risible attempt at promoting "research" that will be subject to less editorial scrutiny by news organisations around holiday periods. 

The CEBR specialises in "black box" models that aren't open to scrutiny or general peer review, which would be the mark of academic credibility.  I remember asking questions of the organisation back in the 1990s when the Royal Commission on Environmental Pollution was examining transport taxation as to how its assertion that shifting the balance of tax from the general taxpayer to the user and polluter would cause a return to the Great Depression if not the Black Death was worked through, and being informed that this was confidential research but that the numbers were right.  They were wheeled out to attack the Congestion Charge in London, again using their patented alchemical formulae, so it's probably reasonable to consider that there is something of a right-wing, disingenuously "pro-business agenda" at work here.

The UK is noted for its long-hours, presenteeist culture - there was a good piece in the paper yesterday about the difference between Britain and Denmark, so it is actually a matter of common sense that workers need holidays.  The CEBR's stunt is not to take into account any of the other factors of humanity, such as sickness and the impact on productivity, that holiday periods alleviate - so its claim is not merely partisan but unsupportable.  Long hours do not equal productivity or creativity - but the myth has been perpetuated around commitment and corporate cultures have supplanted family and community ties as a demonstration of conformity.

A clear corrective is required to this kind of post-feudal spew.  By my most charitable reckoning, virtually every piece of research that the CEBR puts out is sullied by an econometric delusion - if you can "measure" something then it can be modelled.  If what the models show you is not borne out either by reality or by inductive reasoning it's not a flaw in the model but indication that mere humans cannot reach the state of pure rationality that would allow the models to be correct.  "Ceteris paribus" is a scoundrel's refuge but one always pleaded by the spinners when they are cornered.

So the claim that giving public holidays costs the economy money cannot be proved - as it assumes that the additional output gained would:
a) be achieved at the same rate of hourly productivity as the existing levels of output; and
b) not have any impact on productivity or outputs at other times.

The first is a seemingly-reasonable assumption for modelling - the basis for testing a hypothesis.  However, the second is risible.  Sickness, reduced effectiveness through exhaustion and a general reduction in commitment could all impact on people's incentives to work.  If the consequence is a 5% reduction in general productive output per hour, which is an equally-valid assumption to the first, then effectively the loss of output will be one day in every twenty at existing productivity rates.  As there are only eight (or nine, when royal boot-licking takes place) paid bank holidays a year, the impact would be:
-  Eight additional working days per annum
-  Assuming 240 days worked - the loss of 12 days' worth of output through lower productivity, higher sickness

On the basis of this calculation then the assertion is clearly risible - as it assumes constancy where human factors are malleable.  And before the neo-cons suggest that my 5% number is too high, and it might work if there were only a 3.67% drop in productivity, pray consider other factors such as a reduction in the willingness to work unpaid overtime, take work home or connivance in the myriad other ways in which employers dilute people's salaries, as well as the huge number of freelancers who do not observe normal working patterns or whose activities get caught up in the statistics.

The CEBR set themselves up for a fall, but also probably assume that this kind of publicity will result in more work from large companies whose main interest is to grind the faces of the poor.  In a confrontational environment where the trend over the last three decades has been for employers to dilute their obligations (welfare, pensions, working conditions) while ratcheting up the serfdom factor through fear and exploitation, any argument, however apparently specious, that adds grist to the mill is welcome.

neo-con theory which is always dressed up as supporting entrepreneurship.  It nauseates me to see "business" spokespeople popping up to make out that the obligations on firms are all one-way, so that sacking people is not merely a regrettable outcome at the end of s process, but a noble demonstration of commitment to the free market.

Economists have not covered themselves with glory over the last decades, mainly due to the kind of arrogant braggadocio that this latest kite-flying epitomises.   The attack on rights is all of a piece with the assault on citizen's rights.

I do hope, though, that Mr McWilliams will be hard at work on the morning of the additional public holiday that has been granted in honour of sixty years' worth of monarchical tutelage.  But I somehow doubt it, as the media outlets might be distracted with their usual servility...

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