We had an important research presentation last month, led by Chris Hendry, about the innovation lessons to be learned from low carbon technology. The title of the event began with the words “The Uncertain Middle”. Separate from this, I noted that a member of the UK government, in talking about the impact of spending cuts, coined the phrase “The Uncertain Middle”.
Being in the middle can definitely be uncertain and squeezed. Do you remember that children’s game “piggy in the middle” where 2 children throw a ball back and forth between them while a third unlucky one in the middle tries to catch it?
There are many examples around of this uncomfortable position in the middle.
Take, for example, the proposal to raise the cap on the fees to be charged in future to EU undergraduate students attending English universities (I have to stipulate English at this point because the situation will be different in Scotland, Wales and Northern Ireland in a way that would make Kafka proud). Students from poorer families and those whose careers lead them to earn below a particular income threshold (around £21000 pa) may get a good deal from these arrangements and may pay back only a fraction of the fees. For those students from wealthy backgrounds and those who go to earn substantial salaries, they are either accustomed to paying for their education or their future incomes will be sufficient to enable them to pay back the fees. But what those in the middle – for example, those graduates whose incomes hover just above the threshold?
Take saving for one’s pension. Those at the lowest income levels can rely on support from the State – through the State pension and means-tested benefits. It is indeed rational for this group not to save at all – any savings would only offset benefits that they would otherwise receive through the social security system. In contrast, those at the highest points on the income distribution will have specialist advisers, offshore accounts and the capacity to optimize their position and best take advantage of any incentives available. As for those in the middle – if in defined benefit pension schemes, they will have seen their schemes being wound up or closed or their benefit entitlements eroded by the interference of successive governments (often the same governments who encourage the poor to save more!); if in defined contribution pension schemes, they will have the pleasure of having to cope with the extra risks being transferred in their direction as well as having to increase their level of savings.
Is there a theme here? Are these schemes ever designed with the squeezed middle in mind? This is after all where most of us sit – so it I strange that we should allow such schemes to work only for the benefit of the 2 extremes! Uncertain and squeezed – just like a piggy.
Monday, 17 January 2011
Thursday, 2 December 2010
Take a ticket and get in line!
I have done a lot of travelling recently, mainly by air and hence have spent a lot of time in airports. In the breaks between reading Robert Harris chapters and work stuff, I have spent some time observing humanity and how they behave in queues.
As many of you will know, there are loads of queues in airports – check-in, security, passport control, coffee, toilets, boarding, disembarking etc.
What interests me is the way that people queue. The UK is supposed to be a country where queuing in an orderly way is a national hobby. We are polite and enjoy nothing more than being a queue (except perhaps for being in a pointless queue). But times have changed and we have all travelled a bit and acquired some “bad” habits, especially from the warmer countries around the Mediterranean where there is little difference between the queue and the melee.
For example, watch an Easyjet queue at an English airport. Watch how people join it at different points and how they do this in surreptitious ways. There is the guy who is looking at the ceiling daydreaming but sidling up to the queue. There is the woman putting something in the bin but who stays close to the bin and then, magically, is in the queue. This clandestine infiltration is of course cheating but in a guilty English way – we cannot quite bring ourselves to do it like they do in southern Europe.
I am as guilty as anyone. But then I think that all of us are guilty to some extent – I guess that the bright side is the liberating of the anarchic nad free spirit in all on us.
The level of guilt came home to me earlier this month in Toronto airport. Now at the risk of being politically incorrect, let me say that Canadians can be very polite and earnest. At Toronto airport terminal 1, passport control on arriving involves queuing in a line that is then split into about 30 mini-queues in a very efficient way. The next step is then to go to the baggage reclaim area. The entry point is a single gate with a guy who allows you through one at a time (a bit like entering Noah’s Ark) in the order of joining his single queue. He turned people back who arrived out of sequence. This experience left many jet-lagged travellers so completely discombobulated that they just sat on the floor and cried in bewilderment. (If you have lost any relatives in Canada this is where they are!). I got through – I pushed to the front and when he asked me if I was in order, my jetlag forced me to say Yes.
Afterwards I was wondering what was the point of this guy. He did not check our papers. Then I got it – he was preparing us for Canada where people still queue properly, quietly and politely. I guess it si something to do in those long winters.
As many of you will know, there are loads of queues in airports – check-in, security, passport control, coffee, toilets, boarding, disembarking etc.
What interests me is the way that people queue. The UK is supposed to be a country where queuing in an orderly way is a national hobby. We are polite and enjoy nothing more than being a queue (except perhaps for being in a pointless queue). But times have changed and we have all travelled a bit and acquired some “bad” habits, especially from the warmer countries around the Mediterranean where there is little difference between the queue and the melee.
For example, watch an Easyjet queue at an English airport. Watch how people join it at different points and how they do this in surreptitious ways. There is the guy who is looking at the ceiling daydreaming but sidling up to the queue. There is the woman putting something in the bin but who stays close to the bin and then, magically, is in the queue. This clandestine infiltration is of course cheating but in a guilty English way – we cannot quite bring ourselves to do it like they do in southern Europe.
I am as guilty as anyone. But then I think that all of us are guilty to some extent – I guess that the bright side is the liberating of the anarchic nad free spirit in all on us.
The level of guilt came home to me earlier this month in Toronto airport. Now at the risk of being politically incorrect, let me say that Canadians can be very polite and earnest. At Toronto airport terminal 1, passport control on arriving involves queuing in a line that is then split into about 30 mini-queues in a very efficient way. The next step is then to go to the baggage reclaim area. The entry point is a single gate with a guy who allows you through one at a time (a bit like entering Noah’s Ark) in the order of joining his single queue. He turned people back who arrived out of sequence. This experience left many jet-lagged travellers so completely discombobulated that they just sat on the floor and cried in bewilderment. (If you have lost any relatives in Canada this is where they are!). I got through – I pushed to the front and when he asked me if I was in order, my jetlag forced me to say Yes.
Afterwards I was wondering what was the point of this guy. He did not check our papers. Then I got it – he was preparing us for Canada where people still queue properly, quietly and politely. I guess it si something to do in those long winters.
Thursday, 11 November 2010
Times They Are a-Changin'
I have been thinking of change (not the small coins in one’s pocket) and the feeling that there is too much of it at the moment. I could look at this in terms of the global economy or the UK but instead want to consider the mini-world of actuarial science. This may be a narrow perspective but the themes have significant repercussions for us all. I was discussing some of these ‘mega-trends’ affecting actuaries with a group of our alumni in Cyprus last week; the key issues that emerged were:
1. There is increasing regulation with Solvency II, which will affect insurance companies globally and is effectively requiring companies to adopt a systematic approach to risk measurement and management – added to this we have the response of regulators in many countries to the current financial crisis.
2. The development of actuarial standards to provide a set of guiding principles to govern actuarial work – this started in the UK (as one of the recommendations of the Morris Review following the demise of Equitable Life in 2000: www.frc.org.uk) but is being taken up in the US, Canada and more widely.
3. An increasing recognition of the importance of longevity risk and the failure of current actuarial models to estimate the future trend in mortality rates and the inherent uncertainty – this is leading to research on new and improved models and also the Life & Longevity Markets Association (www.llma.org) which has been set up by insurance companies and banks to help with the development of a market in hedging instruments.
4. The is a global switch in the design of pension plans, with a move from defined benefit (DB) to defined contribution (DC), partly because of the longevity problem – the outcome of this will be a transfer of risk from sponsoring companies to pension plan members.
There is an element here of swings and roundabouts. Why swings? Because it was not so long ago (early 1960s) that DC pension plans were being closed in the UK and converted into DB plans because the DC ones delivered poor returns for the customers at times of high inflation. Why roundabouts? Because diversion of actuarial attention on to longevity and mortality takes actuaries back to the historical roots of their subject – to the work of Halley and others in the 17th century.
Is change just a feature of the world of 2010? Is change good? On further reflection, there has always been change – when my actuarial career began there were stock market crashes, the switch from with profits to unit linked insurance…..So change is inevitable and the question is how to cope with it. As James Lowell, the American poet said: “The only argument available with an east wind is to put on an overcoat”. Good advice as winter arrives and the change goes on.
1. There is increasing regulation with Solvency II, which will affect insurance companies globally and is effectively requiring companies to adopt a systematic approach to risk measurement and management – added to this we have the response of regulators in many countries to the current financial crisis.
2. The development of actuarial standards to provide a set of guiding principles to govern actuarial work – this started in the UK (as one of the recommendations of the Morris Review following the demise of Equitable Life in 2000: www.frc.org.uk) but is being taken up in the US, Canada and more widely.
3. An increasing recognition of the importance of longevity risk and the failure of current actuarial models to estimate the future trend in mortality rates and the inherent uncertainty – this is leading to research on new and improved models and also the Life & Longevity Markets Association (www.llma.org) which has been set up by insurance companies and banks to help with the development of a market in hedging instruments.
4. The is a global switch in the design of pension plans, with a move from defined benefit (DB) to defined contribution (DC), partly because of the longevity problem – the outcome of this will be a transfer of risk from sponsoring companies to pension plan members.
There is an element here of swings and roundabouts. Why swings? Because it was not so long ago (early 1960s) that DC pension plans were being closed in the UK and converted into DB plans because the DC ones delivered poor returns for the customers at times of high inflation. Why roundabouts? Because diversion of actuarial attention on to longevity and mortality takes actuaries back to the historical roots of their subject – to the work of Halley and others in the 17th century.
Is change just a feature of the world of 2010? Is change good? On further reflection, there has always been change – when my actuarial career began there were stock market crashes, the switch from with profits to unit linked insurance…..So change is inevitable and the question is how to cope with it. As James Lowell, the American poet said: “The only argument available with an east wind is to put on an overcoat”. Good advice as winter arrives and the change goes on.
Friday, 17 September 2010
The changing nature of work
Welcome to my second blog, I would like to stick with the theme of change that came up in my first posting and move from looking at changing appearances to looking at change with regard to changing jobs – and, in particular, the changing nature of work and its impact on employees and employers. This topic came to mind recently when I was reading about the career of Sir Terry Leahy who retired in June as Chief Executive of Tesco, having only ever worked for Tesco.
So why do people stay with one employer? The answers vary from the flippant - a lack of imagination; laziness; inability to find the way out; failure of the employer to find out what one actually does (in one of my jobs I had a boss who had reduced this to an art form – he managed always to look busy but actually did nothing) – to the slightly more profound – feel valued; like the environment; part of a community; nice colleagues; interesting and challenging work that makes a difference. The reality is that one employer rarely means just one job. If it does mean this, then something is probably wrong with both parties.
Then I was wondering if this phenomenon is just of historical interest, something that has applied in the past to a few lucky generations and that the modern nature of work means that in the future everyone will be changing employers much more frequently. Would we better off in the new world? It is certainly more uncertain for all concerned and more expensive in terms of the time and money spent by employees in job searching and by employers in recruitment, and the risks involved of getting these decisions wrong.
This led me to reflect on my own working career which has mainly been spent at one employer. And then looking at close friends I noticed that many of them have only worked for a small number of employers in careers that have spanned over 3 decades. One friend was quick to point out that, although he has only worked for 2 organisations, he has actually had 20 different roles. That then got me to doing some counting – I suppose that I have worked for 3 employers and probably had at least 10 different roles. It adds up!
So why do people stay with one employer? The answers vary from the flippant - a lack of imagination; laziness; inability to find the way out; failure of the employer to find out what one actually does (in one of my jobs I had a boss who had reduced this to an art form – he managed always to look busy but actually did nothing) – to the slightly more profound – feel valued; like the environment; part of a community; nice colleagues; interesting and challenging work that makes a difference. The reality is that one employer rarely means just one job. If it does mean this, then something is probably wrong with both parties.
Then I was wondering if this phenomenon is just of historical interest, something that has applied in the past to a few lucky generations and that the modern nature of work means that in the future everyone will be changing employers much more frequently. Would we better off in the new world? It is certainly more uncertain for all concerned and more expensive in terms of the time and money spent by employees in job searching and by employers in recruitment, and the risks involved of getting these decisions wrong.
Thursday, 8 July 2010
Welcome to my first blog!
This is my first posting of a weekly blog which will touch on a range of subjects, including: higher education in the UK and the sometimes unusual culture that exists in universities and business schools; what actuaries do and an understandable commentary on current actuarial research and its impact (trust me, we are more interesting than you might think!); as well as random views on modern life. Comments will be personal, hopefully with a touch of humour and a hint of controversy.
We all know that first impressions are very important and we all instantaneously form opinions of others just based on their appearances. So what happens when we change our appearance? How do we and others react? Such a change is probably an irregular occurrence for most men, and certainly for most middle aged men.
So after decades of being clean shaven, I have grown a beard. I will say why at a later date. When I say decades, of course, there was a brief dalliance with a drooping moustache in the 1970s which, according to my mother, ruined my graduation photographs and made me look like a minor character from a Sergio Leone western as well as giving me a permanently depressed (or depressing) look.
So back to acquiring this beard. It is interesting to reflect on how people react – colleagues, family, friends, just acquaintances and indeed strangers. Do they comment? If so, why? What do they say? Are they being honest? In this case, about me, I have had compliments and the opposite of compliments (not sure what the word should be), I have had recommendations that I go to a barber and even an optician.
And then there are the complete strangers and the way that they react to a man with a beard. Two illustrations spring to mind, my wife and I were at a local restaurant. The table that we had booked was not quite ready and the manager suggested that we have a drink to while away the five minutes or so that we had to wait. So over to the bar. This fresh-faced young man says to my wife – Madam: what can I get you? Then to me – you look like a pint man, sir! A pint man. Suddenly, I have stopped being a slightly intellectual, middle aged professor with a beard and become a consumer of alcohol on an agricultural scale. Where did he get that assessment from?
On the second occasion, my wife and I were sitting in the Old Vic theatre, waiting for the performance of the Cherry Orchard (by Chekhov – you all knew that – with Simon Russell Beale in a starring role). The attractive lady sitting in front turns round and asks me rather expectantly a) if I have ever been to a Chekhov play before and b) if so, could I help her understand the style of the play and what the play would actually be about. So now, I have stopped being a slightly intellectual, middle aged professor with a beard and become an expert on Russian theatre and a great intellectual. Actually, the wife thought that this was an attempt at a pick-up, but I couldn’t possibly comment!
Presumably, women have to tolerate this stuff all the time – people reacting to how they look and making assumptions. They are used to it and probably get skilled at manipulating the opportunities provided.
And how do I feel – do I feel different? At one level, no. At another level, yes – because of the reactions of others and indeed the reactions of those who are impressed by the fact that someone as mature as I could indeed make a change at all.
Change is difficult and dealing with it is difficult even if you only change one thing. Add to that this aspect of our all trying to assess those we come into contact with in a “blink” (to use the Malcolm Gladwell term) – so that we can separate out the agricultural drinkers from the Russian intellectuals.
We all know that first impressions are very important and we all instantaneously form opinions of others just based on their appearances. So what happens when we change our appearance? How do we and others react? Such a change is probably an irregular occurrence for most men, and certainly for most middle aged men.
So after decades of being clean shaven, I have grown a beard. I will say why at a later date. When I say decades, of course, there was a brief dalliance with a drooping moustache in the 1970s which, according to my mother, ruined my graduation photographs and made me look like a minor character from a Sergio Leone western as well as giving me a permanently depressed (or depressing) look.
So back to acquiring this beard. It is interesting to reflect on how people react – colleagues, family, friends, just acquaintances and indeed strangers. Do they comment? If so, why? What do they say? Are they being honest? In this case, about me, I have had compliments and the opposite of compliments (not sure what the word should be), I have had recommendations that I go to a barber and even an optician.
And then there are the complete strangers and the way that they react to a man with a beard. Two illustrations spring to mind, my wife and I were at a local restaurant. The table that we had booked was not quite ready and the manager suggested that we have a drink to while away the five minutes or so that we had to wait. So over to the bar. This fresh-faced young man says to my wife – Madam: what can I get you? Then to me – you look like a pint man, sir! A pint man. Suddenly, I have stopped being a slightly intellectual, middle aged professor with a beard and become a consumer of alcohol on an agricultural scale. Where did he get that assessment from?
On the second occasion, my wife and I were sitting in the Old Vic theatre, waiting for the performance of the Cherry Orchard (by Chekhov – you all knew that – with Simon Russell Beale in a starring role). The attractive lady sitting in front turns round and asks me rather expectantly a) if I have ever been to a Chekhov play before and b) if so, could I help her understand the style of the play and what the play would actually be about. So now, I have stopped being a slightly intellectual, middle aged professor with a beard and become an expert on Russian theatre and a great intellectual. Actually, the wife thought that this was an attempt at a pick-up, but I couldn’t possibly comment!
Presumably, women have to tolerate this stuff all the time – people reacting to how they look and making assumptions. They are used to it and probably get skilled at manipulating the opportunities provided.
And how do I feel – do I feel different? At one level, no. At another level, yes – because of the reactions of others and indeed the reactions of those who are impressed by the fact that someone as mature as I could indeed make a change at all.
Change is difficult and dealing with it is difficult even if you only change one thing. Add to that this aspect of our all trying to assess those we come into contact with in a “blink” (to use the Malcolm Gladwell term) – so that we can separate out the agricultural drinkers from the Russian intellectuals.
Subscribe to:
Comments (Atom)