Friday 24 July 2009

This 'social mobility' debate completely misses the point

Alan Milburn has sparked off the wild goose chase, yet again, for example per the BBC:

Top professions such as medicine and law are increasingly being closed off to all but the most affluent families, a report into social mobility has said. Former minister Alan Milburn has chaired a study for the prime minister on widening access to high-status jobs.

Now, let's look at high-paying jobs generally and split them into two broad categories.

1. There are those which require some combination of innate skills, education/training, hard work and/or luck. Let's include top footballers, pop stars, film stars, Formula One drivers and of course entrepreneurs in this list. Nobody in his right mind would suggest that these groups are particularly the domain of the middle or upper classes. Of course family and other connections help, but they are not the be-all and end-all.

2. Then there are "the professions", as defined by Alan Milburn, which appears to be journalism, medicine, law and the civil service.

a) Yes, there is nepotism in the media, but in the non-State sector (i.e. everything but the BBC and Channel 4) there is a natural limit; if the sons and daughters of other journalists produce a crap output, circulation and advertising revenues will fall and the newspaper or TV station will fail. Nepotism in the State sector is a disgusting waste of taxpayers' money of course, but then again, State-controlled broadcasting is a disgusting waste of taxpayers' money, so that's easily fixed.

But aside from journalism, his list of "professions" are what I like to refer to as "people who profit from the misery of others, largely at the taxpayers' expense".

b) 'Doctors' is a tricky category as it does require some innate skills and a lot of hard work to qualify, the work is probably not particularly enjoyable and serves a useful purpose, but by the same token, most doctors are paid for by the taxpayer, most handsomely, it would appear. And their pressure group the BMA certainly has ideas above its station, it being at the forefront of the bansturbators.

c) The whole criminal justice system appears to be there largely for the amusement and enrichment of judges and lawyers rather than the protection of the public, despite being funded by the long-suffering taxpayer. Even in other areas, the income of the legal profession depends on the government enacting ever more laws to generate ever more work for them. That's why we'll never get a commonsense rule like divorce courts recognising pre-nuptial contracts, because it would deprive swathes of the legal profession of their incomes etc. Ditto 'employment law', 'human rights law', 'environmental law' etc etc.

d) The civil service is far too big anyway, we just don't need three-quarters of it. So that fixes that problem, rather than 1,000,000 top civil service jobs being hogged by the upper classes, there'd only be 250,000. I'd rather see 750,000 top civil servants being given the sack that create an additional 1,000,000 civil service jobs to be reserved for working class people (as defined).

To sum up, the question is not "Why do so few working class kids make it into the professions?" (whether they do or don't is difficult to prove or measure), the question is "Why are the professions so bloody well-paid in the first place?".

14 comments:

John B said...

You missed accountancy, financial services, professional services and the media...

Mark Wadsworth said...

Accountancy is not dominated by middle classes or snobbery in any way, I can confirm from experience. Chartered Accoutants only give training contracts to young people straight from Uni with a 2.1 degree or better (but it does not matter in what or from where). In tax, you just have to be hard-working and clever.

Maybe merchant banks used to be a closed shop but nowadays 'financial services' seems to be a free-for-all.

What 'professional services'?

I covered media (i.e. journalism).

I didn't mention 'engineering' either, because this is a question of working out solutions to real-life problems, governed by natural and not government-made laws. Yes, it requires skill, education and training, but that does not necessarily make it the preserve of the middle classes with connections.

Lola said...

As both an Engineer and a Financial Services person I can comment on the relative price of each. Engineers are wildly under rewarded, after all they prevent more disease than the whole of the NHS just by getting drinking water into homes and shit out. They are also paid less than FS people, approximately equally qualified.

Much of the reason for the excess rewards in the 'professions' appears to be either because they are state monopolies - doctors - or because of the effect of Adam Smiths comment 'that whenever a group of people in the same trade or profession come together they will always try and collude to work out ways to steal from the public'. In other words cartelisation. Most professions seek to limit supply by requiring ever more 'qualifications' or 'licensing', and I understand that this latter is one of the chief reasons for the excessive cost of healthcare in the USA.

One of the reasons that I started an FS business was because there were no barriers to entry at all especially as regards 'qualifications' and I saw that an opportunity existed for a better more educated apprach to retail FS. Note the difference - 'education' as opposed to 'qualification'. It is much harder to quantify education that qualification, and that has a lot to do with why qualifications are used to boost cartels.

Needless to say over the 20 or more years since I started my FS business both the State and industry requirement has increased exponentially, and in my experience has added bugger all to the stock of educated financial advisory people.

Tim Almond said...

On the journalism point: the nepotism existed because it could.

You could be quite a crap columnist in a major newspaper because the competition was pretty thin. In the post-blogging world, most of these people aren't going to be able to get 6 figure salaries any more.

The other professions are largely like this: medicine and law both have high barriers to entry in terms of qualifications, time at university and then post-qualification time.

It's protectionist, basically. Let's face it: most GPs are at a level of understanding a body isn't that much better than a pharmacist (who does only a couple of years training). Most of them end up passing a lot of things to specialists. Most of them are poor at doing a holistic analysis - considering all the symptoms and forming a theory based around them - they just try things, the equivalent of front-line call centre scripting.

Mark Wadsworth said...

L, OC, you have partly answered the question why 'the professions' pay so well - protectionism, which to a large extent overlaps with 'taxpayer funding'.

Once there is a trough, you need protectionism aka 'barriers to entry' aka 'regulations' to prevent others getting their snout in as well.

See my rants about child nurseries (see UPDATE at the end of this post and the asbestos removal industry (see UPDATE at the end of this post, for example.

John B said...

The cartelisation of the professions point is absolutely true, but has absolutely no bearing at all on why engineers aren't paid as much as accountants or lawyers: what the hell d'you think the ICE, IStructE, IME and IEEE are?

Lola said...

MW - I thought I was bang on the 'protectionism' money in my post? I am watching it develop in retail FS as each 'professional' body fights to gain more turf. Latest wheeze is to get a Royal Charter for FS businesses, reluctantly doled out by the CII, also recently Chartered. Personally I reckon a Royal Charter is like the old Royal Patent (or patents come to that). An official granting of a monopoly.

Note to self. Write more clearly to ensure that your agruments are clearly put.

dearieme said...

A bit off your point, but only a bit: I hate stuff such as "...only give training contracts to young people straight from Uni with a 2.1 degree or better (but it does not matter in what or from where)". If it doesn't matter in what or from where, it's probably a silly bloody requirement - a lazy dog's "credentialist" arse-covering, intellectually frivolous approach to what ought to be a serious business.

DBC Reed said...

I would've thought the reason certain professions are paid a lot is precisely because the upper and upper middle classes have always put their surplus children (the oldest only getting the landed property) into professions such as the Navy,the Army and the Church in the eighteenth century,the law and medicine being too common.
Now they've got to make all those school fees pay off ,they are keen on the professions and state institutions being as well-staffed and well paid as possible.The BBC is absolutely stuffed with up-market ne'erdowells on this basis.

Mark Wadsworth said...

L, yes, you were bang on, but there is no real distinction between state-granted monopoly rights (without corresponding payment - 3G licence auctions are state-granted monopoly rights sold for market value and hence acceptable) and taxpayer-funded-subsidies.

D, it is a totally silly requirement, but has little to do with 'class snobbery' in the traditional sense.

DBC, exactly. These 'professions' are a good second best for land ownership, yet another state-granted monopoly right, I see little absolute distinction between the two.

DBC Reed said...

The landed gentry/ professional connexion probably explains the relative downgrading of engineers.British politics dividing up in the 19th century into the Landed Interest (Conservative) and the Manufacturing Interest (Liberal),the one thing that stuck in the landed gentry's throat was that the great engineeers were as much gentlemen as themselves in terms of wealth and expertise,so they were not keen on their sons having a technical education and thereby going over to the opposition.Some of the Radical Liberals got rid of the Corn Laws ( a class-biassed subsidy of British farmers)and then began agitating about the decline of the land tax and taxing earned income instead.Charles Bradlaugh Northampton radical liberal MP was supported by his small master electorate even though he was disbarred for atheism and was a major proponent of land tax.He kept accusing the Royal family of being in league with the landowners over tax shifting.

Mark Wadsworth said...

DBC, notwithstanding that Charles Bradlaugh rocked (whether for his stance on tax or his atheism), I think the common thread (between land owners and well paid civil service jobs) to which you are alluding is known as 'rent seeking'.

Anonymous said...

You might ask why 'Escorts' are paid so well?
In theory this employment needs very little training.

Lola said...

Anon. 06.44. Old story. The Crown Solicitor is walking through Soho and is approached by a working lady as to whether he needed and female company.

Crown Solicitor: 'Madam, Do you know who I am? I am the best Crown Solicitor in London'.

Tart: 'That's all right dearie. I am the best half crown solicitor in London'.

If you are paid by the hour all that separates you is the service you offer. Lawyers, accountants, tarts, it's all the same.

Mind you, thinking about tarts, and living in Ipswich and not more than half a mile from where one of the bodies was found, I am fully aware of the tragedy of street prostitution, which is mostly driven by the need to feed a drug habit. The 'happy hooker' is an urban myth.