Wednesday, 26 January 2022 – Market Forces Only Relate To Rich People

A resident invited to a job interview with one of the council’s contractors emailed the employer in advance of his interview copying me in:

“in regards to my autism I struggle to keep eye contact when I’m nervous, I get quite fidgety when nervous too, also I suffer from anxiety so I just want the employer to know that if I feel uncomfortable that it is my Autism and of course a little nerves for the interview, also I can talk quite a lot and don’t know when to stop, I just love talking but sometimes I can go off topic.”

 

What a great introduction by him!  I think all interviewees should send preambles like this to their interview panel and perhaps continue:

“I know there is a corporate culture to which to adhere and, subsequently, I know these tics and expected social anxieties that most people feel in an interview are used to determine the best candidate, and I also know most managers prefer to employ people they know and who look like them* but, on this occasion, can you get past these dumb criteria and talk to me in the interview instead about what I can offer your business?”

 

*In 2019, 76% of 16 to 64 year-olds in London were in employment (ONS).  83% of white Londoners were in employment and 66% non-white.  No-one can really explain why there is such a stark difference.  43.1% of the same age group in London who are disabled are in any employment.  These disparities are well measured and known in the labour market, if not understood.  Less studied is that height is correlated to better paid jobs.  Erik Lindqvist of the Stockholm School of Economics found a strong correlation between height and the likelihood of achieving managerial positions.  For a man, he found that an increase in height by 10cm leads to a 2.2 per-centage points increase in being in a managerial position.  And it usually is a man: 80.6% of men in London in March 2021 were in employment compared to 71.8% of women.

As our insightful job-seeker above realises, this cultural compliance usually includes behavioural norms, at least some of which bear no relation to an ability to do a job well.  For example, anyone who has worked in an office will know that managers like to wear pink shirts.  Or perhaps people who wear pink shirts become managers, especially the taller ones.  And the taller men.  And surveys have found this.

It is also clear to me working for a London borough that most senior managers recruit other senior managers they know and/or have worked with before despite little discernible ability of having delivered a service well.  This may not be the case in other industries or the private sector where a project has to be delivered or the business doesn’t make any money.  The construction sector seems to be an obvious candidate for needing to get things right and employing enough of the right people to deliver a development.  If they don’t build it, no-one will come.  The construction labour market, then, is fraught.  Hard skills and accreditations are demanded from workers regardless of their interview skills or what colour shirt they wear.  If you don’t get the right skills on site, the project will simply fail.  Project directors don’t endeavour to find the right staff; they either employ them and build the development or developers would have to pay their loans of millions or billions back to banks and venture capitalists with interest and go out of business.  And this is all done in a sellers’ market: demolition, construction, fit-out, engineering, mechanical, electronic, surveying and green engineering skills are in demand.

A review of the construction labour market commissioned by the Government and conducted by Mark Farmer in 2016 found an industry in crisis.  Skilled labour was ageing, Europeans were returning home (since exacerbated by Brexit); the industry dominated by men and a macho culture, and attracting few young people, with higher education qualifications or not, into the sector.  As for employing disabled people, they seemed a long way from that.  Industry leaders and the Construction Industry Training Board (CITB, funded by the industry) were and are doing little to develop the skills essential to keep their industry and the physical infrastructure of the UK viable.

In his survey, Farmer found that 68% of people in construction employment in the UK were over 35 years of age with 30% over 50 and nearing retirement.  c340,000 new trainees were needed to enter the industry per year to meet the Government’s demand for new homes building but only c190,000 were being trained by the industry.  The per-centage of these from a non-white ethnicity were in single figures and women around 2%.  He argues this is partly because of the macho work culture in the sector.

Yet, in the short term, directors deliver major projects largely on time and budget.  They don’t have much choice.  There is no room for mere endeavours; they just find a way to find the skills and sub-contractors they need.  They know their industry.  They know the skills needed as well as the accreditations and the training workers need to have had.    And they know how much that staff costs and these skills don’t come cheap.  But when it comes to S106, local planning authorities, guided by the Government’s Planning Inspectorate, only require in contracts with planning applicants “reasonable endeavours” to employ local residents.

On 7 January, the Guardian reported “Top CEOs to surpass average yearly UK pay after just four days”.  The neoliberal market argument for this is that these pay rates are what is needed to attract the best people into the industry, for example to deliver high-value and high-risk projects in a challenging market (even if those “challenges” have been created by the short-termism of these industry leaders in the first place as highlighted in Farmer’s report.)  The article includes the pay of the Chief Executive of Berkeley Group, Rob Perrins, who collected £8m last year.  

For this salary, it is Perrins who will ultimately be held responsible by Berkeley’s lenders and shareholders if planning permission was ever held up and repayments of loans were stalled by not being able to sell or lease flats.  So, a long way down the corporate ladder, the Rhino (actual job title: Employment & Skills Co-ordinator) for St George in Hammersmith and Fulham, one of the developers for Berkeley Group, emailed me, apropos of nothing I prompted, on 10 January saying:

“I wanted to express my concern at the lack of a candidates [sic] that are getting referred to us from WorkZone [the Council’s employment and skills and jobs brokerage service with whom they are obligated to advertise their job vacancies ringfenced for local residents as part of their S106 requirements]… without any candidate referrals.

“Please can you confirm if reasonable endeavours are being made [by us]?  If not please could you indicate what else you would like to see from us…  Ultimately the job brokerage serice [sic] we are supporting isn’t providing a service so I am not sure how we can meet our fulfilments [sic].  Is there a problem across the borough, or simply not enugh [sic] candidates looking for construction apprenticeships?”

 

As well as making suggestions about construction training being delivered using public money to support her private-sector, profit-orientated industry, not wanting to apportion responsibility without understanding what is being advertised, I replied:

“…I note your point about WorkZone referrals but I would need to see the job ads first before I could assess if they’re reasonable.”

 

She replied the following week with five job ads for apprenticeships, four of which advertising the “salary” offered as “National Minimum Wage for age”.  The National Minimum Wage for an apprenticeship is £4.30 per hour (regardless of age).

I can confirm that this is legal.  But, given that the London Living Wage has been defined by the Greater London Authority as £11.05, this is by definition not a wage anyone can be reasonably expected to live on.  In fact, it’s 39% of what anyone trying to live in London could live on.  Taking the same argument that executives make justifying their salaries needed to attract them to their industry, these disparities between earnings at the top and bottom of the business described by the country’s biggest trade unions as cited in the Guardian article as “disgraceful” and “greedy”, if people are not applying for jobs that are not even close to half of the minimum needed to even live on, then it’s not reasonable.  Therefore, she can’t expect these wages to attract people to apply for these jobs.  This is not my assessment; that these salaries are not enough to attract applicants is the gauge used by industry to justify the “market” rate of salaries including the argument for Perrins’s £8m per year.  And, this in turn, evidently, is at least partly determined by who you know, how tall you are, whether you ape the way your social peers dress and an absence of nervous tics in a job interview.

“No, it’s not reasonable”, I replied.