Thatcher’s legacy?

The figure below is one I found on the Liberal Conspiracy’s website in a post about the need to address Thatcherism. The figure comes from data provided by the Office for National Statistics and shows the 90:10 ratio from 1977 till 2011. This ratio is one way of indicating income inequality, something I’ve written about before. Another is the Gini index. Basically this figure shows the ratio of the income of the households in the top 10% of earners to those in the bottom 10%. It includes all taxes and benefits and (I believe) is based on the average for each decile (i.e., it is the ratio of the average net household income for the top 10% of households to the average of the bottom 10% of households). It is clear that it has risen substantially since 1977 (something that is also indicated by the change in Gini index over the same period). What I find most surprsing is the sudden jump between 1984 (when the ratio was 4) to 1988 (when it exceeded 6). This was smack bang in the middle of Thatcher’s reign as prime minister. No wonder she’s so disliked by those on low incomes.

The 90:10 ratio for the UK from 1977 till 2011.

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There is a report on the BBC website suggesting that the government has underestimated the cost of it’s Higher Education policy. I thought I would reblog a post that I wrote in October 2010 (just after the Browne report was released, but before the government policy was finalised). I suggested not only that it was a questionable policy since it is effectively a regressive tax, but also suggested that the government would only recover about 2/3 of the money anyway. I underestimated how much would be lent to each student, so that would suggest that even less will be recovered. The new report seems to suggest that this is indeed the case. I don’t really like saying “I told you so” but it is confusing that this seemed fairly obvious to me, but for some reason wasn’t to those deciding HE policy.

To the left of centre

Although not surprised, I am quite disappointed with the Browne report. I haven’t read it in detail, but at first glance it reads as something in which the outcome was essentially known from the beginning. There appears to be very little discussion of the fundamental reasons for the existence of a higher education (HE) sector, and it appears to assume that the current funding model has to change. The basic idea from the report is that tuition fees would be uncapped and that students would be lent the money to cover the tuition fees, and to help cover the cost of living. It seems unlikely that fees will actually be uncapped, but will probably rise to about £6250 per year with an additional £3750 per year for living expenses. Students will therefore accrue debts of about £10000 per year. If this does end up being the case, Universities will supposedly…

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Academic promotions (or not)

I don’t normally write much about things that are personal, but I thought I might pen some thoughts about my recent (unsuccessful) promotion attempt. Hierarchies in academic departments (or at least those that I am aware of) can be quite different to what one might encounter in other industries. The normal academic job titles are Lecturer, Senior Lecturer, Reader and Professor and one might expect one’s position to be determined by the job one is required to do, but that isn’t normally the case. It’s quite common for people in more junior positions to have the same kind of role in a department as those who are more senior (in fact, it’s not uncommon for more junior people to have more prominent roles than those who are more senior). To get promoted requires that you build up some kind of portfolio and have some kind of status that satisfies the requirements of each position. By and large, I’m reasonably comfortable with this as people’s roles in a department can change quite a lot over a career and so basing it on what your current role is would be unmanageable.

So, I’ve held a management post in our department for a number of years, have a reasonably heavy teaching load, hold research grants, manage students and postdocs, publish regularly, and am quite well cited. To be fair, nothing particularly spectacular but I do have a good number of highly cited papers and I am first or second author on a majority of my papers. I decided (and was encouraged) to apply for promotion. I wrote all my promotion documents (which I do find a little odd) got some comments from our head of group and sent them off. I was then told that my department was not going to support my application. I was disappointed (as one might imagine) but also a little surprised. I hadn’t expected the department to do this. I knew that the head would have to write some kind of support letter, but I assumed that it would go to whatever central committee decides these things and that the department could indicate the strength of its support in the accompanying letter. To be fair, I knew I was probably marginal and I wasn’t necessarily expecting to be successful, but I expected the decision to come from some nameless university committee, rather than from a group of people who I actually know quite well.

On the other hand, I can completely understand that it doesn’t make sense for the department to submit applications that they’re not really supporting. If the decision was based on some objective, unbiased analysis of my case then, although disappointing, I would be comfortable with this. Honesty being the best policy. The feedback I got, however, suggests that the process can be somewhat tribal. There are a limited number of cases that the department can realistically support. There are a number of groups within the department and so you probably need to be the strongest applicant in your group. Even this may not be strictly true as there is a sense that there is an order (i.e., who gets to go first). It seems as though someone who’s applied before will get supported ahead of someone who is applying for the first time. To be fair, I don’t really know how it works and, given that I felt myself that my case was possibly marginal, I can’t really be too dissatisfied about not being supported this time. I also have a good job at a good university that pays me a decent salary to do something I enjoy, so can’t really complain too much.

What’s probably most disappointing though is that even though I’ve had a reasonably substantial management role in the department and had one of the higher teaching loads, I’ve maintained a healthy research programme. I think that I had hoped that anyone looking at my overall performance would be supportive. The main criticisms, however, seemed to be that I didn’t have any real indications of leadership outside my university. Part of this is just how I do research. I don’t really belong to any major collaborations so can’t be leader of some part of a major research project. What they were looking for was, supposedly, something like me being on some national committee that was deciding some kind of policy. I haven’t really done much of this, partly because it’s not clear how doing these things would make me a better teacher and researcher and partly because I’ve never been asked. Not being asked may well indicate how I’m thought of in the community, but it does seem that it’s quite common to put yourself forward for these type of things and I’m not that comfortable doing that. If it’s thought that I could contribute to something and if I thought it worth doing, I would be happy to be involved. What I don’t want to do is push to be on various high profile committees just to tick some box on a future promotion application. This is probably my main issue with the process: the sense that you need to do some things that may not benefit your research or teaching, but make people – who don’t know or understand your research well – think that you have some kind of leadership role in your scientific community. I’m not suggesting that it’s terrible to do these kinds of things, just not clear why they are seen as so important (especially if it can be a little self-selecting and if noone actually checks whether you’re any good at these things).

Anyway, that’s all I was going to write. If anyone does reads this, I hope it doesn’t come across as whiny. Writing this has felt a little cathartic, so maybe it has helped. I do worry sometimes that someone involved will read a post and take some kind of offense, but given my typical readership I probably don’t have to worry about this too much. Overall, I’m reasonably comfortable with my lack of promotion support, but I do think that there are some aspects of academic promotions that leave a lot to be desired. Let’s hope I’m still as philosophical about this when the email comes around next year congratulating all those who’ve been successful.

External examining

It’s a few weeks into our semester which means it’s time to prepare and set the exams. The process here, as in many other UK universities, is that those who teach on the course set the questions. The exam is then checked by someone else, then by a committee, and then sent to the external examiner. The problem is that to get this all done in time, the exam has to be set before the middle of the semester. In many cases, people setting questions haven’t yet starting teaching their part of the course.

Personally, I think that setting exam papers so early in a semester is not ideal. It’s not maybe a major problem, but I would certainly prefer to set the paper after I’ve taught most of the course. I don’t think that setting it early is necessarily disastrous, it just feels like I’ll have a better sense of how to assess the students later in the semester than I do early in the semester. The UK is, however, so fixated with the external examiner system that it seems like it is virtually impossible to change it. I have, however, taught in the US where no such process exists and I don’t think the outcomes were worse as a consequence of this (or rather, I don’t think the students were particularly disadvantaged).

The main reason for having external examiners is, supposedly, to provide comparisons and to check that there is a reasonable consistency between UK universities. To me, this is a general comparison, rather than a specific course by course comparison. If so, why do they need to see the papers before the students sit the exams? Surely, if they were to look at the papers afterwards (when they attend the exam board for example) they could comment on the standards and, if there were any issues, this could be addressed for the next exam session. The point is to make sure that degree programmes across the UK are consistent not to specifically check (on an annual basis) individual courses. They are, of course, related but I don’t think anyone would suggest that every course at every university should be taught in the same way and at exactly the same level. What one wants to ensure is that graduates from different universities with the same degree classifications have, roughly speaking, the same skills and abilities.

I don’t really think, however, that there is much chance of changing the system anytime in the near future. Partly, I think it’s because it is seen as a strength of the UK system. We have external examiners who check everything and therefore our degrees are somehow more valid than those elsewhere. Furthermore, external examiners are now used to actually check for mistakes on exam papers. I think this is wrong. Why should we need external examiners to do this. Surely we could just as easily check our papers ourselves. There’s nothing particularly special about external examiners. They’re just academics from other UK universities. However, we now put so much emphasis on research that many (or at least some) academics can’t be bothered to put any real effort into setting their exams properly. Consequently we need this convoluted and lengthy process (involving external examiners) in order to compensate for the minority who can’t do their jobs properly. Personally, I’d rather we insisted that people did their jobs properly instead of all of us having to set our exams much earlier than is probably ideal.

Today is Ada Lovelace day. Ada Lovelace was one of the world’s first computer programmers and the idea about the day is to draw attention to the achievements of women in science and technology. I’m very supportive of this as women are very under-represented in many of the sciences and highlighting their achievements so as to encourage more women to consider careers in science is a good thing to do (in my view at least). I was going to try and write something, but didn’t really know what to say. I thought, instead, that I would reblog something I wrote a couple of years ago. It pretty much says what I think and, given that few read it originally, it probably makes sense to recycle it. I don’t, however, expect the readership to increase substantially.

To the left of centre

Today is apparently Ada Lovelace day, a day when bloggers are meant to draw attention to the achievements of women in science and technology. Although I am aware of many women who have done and still do contribute greatly to science and technology, I had – embarrassingly – never heard of Ada Lovelace.  It turns out she lived from 1815 to 1852 and was one of the world’s first computer programmers, working with Charles Babbage on his mechanical computer.

The idea behind Ada Lovelace day is for bloggers to “tell the world about these unsung heroines”, but I wasn’t really sure how to do this. I probably don’t know enough about any scientist (man or woman) to really do them justice in this blog. What I thought I would do instead was to write something that would at least support what I think is the goal of Ada Lovelace…

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The idiocy of austerity!

Two interesting stories about austerity today. One is a report in the Guardian today reporting that the International Monetary Fund (IMF) has estimated that George Osborne’s austerity measure will have sucked £76 billion out of the economy by 2015. The idea seems to be that every pound cut from government spending reduces economic output by some amount. The Office for Budget Responsibility (OBR) used a multiplier of 0.5 (i.e., 50p). The IMF, however, has suggested that the multiplier should be something between 0.9 and 1.7. If it’s bigger than 1 (as some now suggest) cutting £1 of government spending reduces economic output by more than £1.

I think this probably makes sense. If you pay someone money to do a job, the receiver of revenue gets about 40% back directly, through direct and indirect taxation. Furthermore, the money that doesn’t come back directly is spent paying for and buying things that will also attract tax. The person is also performing some task that has some value. If you decide to cut government spending so that people lose their jobs (as has happened), you end up paying them some money anyway (through benefits). A fair amount of what they are given will return to the public purse through various types of taxation, but they are no longer performing any direct economic function. For this to make sense, what they were doing before has to be worth less than the difference between what they receive now (in benefits) and what they were receiving when employed. This would seem to suggest that those who are now unemployed were being overpaid when employed which, given our skewed income distribution, would seem unlikely.

The other interesting story comes from Paul Krugman. The main point of his non-burden of debt post is (I think) that if most of your borrowing is internal (i.e., borrowed from your own population) then borrowing now doesn’t burden future generations. Any interest that is paid remains in your country and so it doesn’t actually reduce the wealth of future generations. In the UK I believe about 70% of the public debt is internal. Furthermore I think that an amount equivalent to the remaining 30% has been lent to the US. In a sense we (the UK population) own an amount of public debt equivalent to the total UK public debt. This plus the interest will, over time, return to the UK population. This is very different to Greece and Portugal, where most of the debt was external and so comparing the UK to them is extremely disingenuous.

If our borrowing remains like this, there is no real disadvantage to future generations unless the money borrowed could have been better spent elsewhere. Given that the current austerity measures appear to be depressing our economy, it doesn’t appear as though the money is being better spent elsewhere. If we can keep our borrowing primarily internal, it would seem sensible to borrow more so as to cut more slowly. It would then, if the IMF is correct, actually benefit our economy and, in the long-term, not costs us anything.

Wonga’s got its interest rate wrong!

Wonga is one the UK’s payday loan companies. Basically they primarily lend relatively small amounts of money to people who need cash in order to survive until their next payday and they charge a rate of interest that is significantly higher than any major high-street lender. I think these companies are abysmal and we should be setting a maximum annual interest rate. Wonga has also been in the news recently because of it’s £24 million pound sponsorship deal with Newcastle United. The criticism (justified in my view) is that Wonga makes its money from people who are struggling to survive, and to use this to then support a football club with players on massive salaries seem morally questionable.

The issue with Wonga is the amount of interest they charge – on an annual basis it is extremely high. Their claim, however, is that it is essentially 1% interest per day, that it is not compounded and that the loan periods are short. If you go to their homepage and look at their representative example it shows that if you borrow £207 for 20 days you will pay interest of £41.92 which they claim is 360% per annum (fixed – i.e., not compounded). According to my calculation it is not. The interest is actually 1.013% per day which appears to be very close to 365/360. If their interest was 360% per annum, it should be 360/365 = 0.986 % per day. What they appear to have done is calculated 365% over a period of 360 days which is actually 370% per annum (fixed). It’s fairly close to 1%, so maybe they’re just approximating. Maybe they know that it is really 370% per annum (fixed) but think 360% sounds better, or they actually don’t realise that they’ve divided the numbers in the wrong order. They think it’s 360% per annum but instead of calculating 360/365, they’ve done 365/360. If so, it is rather concerning that a loan company can’t even get that correct.

The other thing they do is also show an Annual Percentage Rate (APR) which, for their representative example, is 4214%. They apparently have to do this, but it is also essentially nonsense (although they may be forced to show one anyway). Their example is £207 over 20 days, which attracts interest of £41.92 and a transmission fee of £5.50. The total is then £254.42. One can calculate an equivalent compound interest rate using FV = LV (1 + int)n, where FV is the full amount paid back, LV is the amount that is lent, int is the interest, and n is the numerical of intervals over which interest is calculated (20 days). For the representative example, this gives a compound interest rate of 1.037%. You can then calculate the total that would have to be paid if this compound rate where applied for the entire year and you get a total of £8952. Subtract the amount lent and then divide by this amount to get an APR of 4225 (slightly bigger than that quoted, but close enough).

What’s the first issue. It includes the transmission fee of £5.50. If you remove this, you get a compound rate of 0.93% and an APR of 2801 %. Change the loan period from 20 to 30 days and the total payable to Wonga (including transmission fee) is £275.38. The compound rate is now 0.956% and the APR is 3130%. Reduce the loan period to 10 days. Total payable to Wonga £233.46. Equivalent compound interest 1.21% and APR 7994%. Reduce the loan period to 5 days and you get an APR of 22766%. Essentially the APR tells you nothing. It depends on the loan period and whether or not you include the one off transmission fee. They have to show an APR, but it is really meaningless. What surprises me a little is that they didn’t choose one that was slightly smaller, but that is about the only positive thing I can say. It’s always going to be bigger than 1000%. Personally, I think these payday loan companies are extremely damaging and the sooner we do something about it the better.