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Or, why I don’t work 9-5 any more

by The Investor on June 29, 2010

Modern work is rubbish, even if you’ve got a McJob

When I was a student, we called them McJobs. Undemanding gigs at a generic pizza place or in a bookstore where no one expected you to smile – not the customers, your employer, and certainly not yourself.

Everyone involved knew you were doing a McJob for the money – all £1.56 an hour of it – and as long as you didn’t vomit into a bin or miss three days in a row for Glastonbury, you’d hang on to it. If you didn’t, there’d be another McJob around the corner.

Yet 20 years on, the McJob is going the way of free student grants, teenage rebellion, and the thrill of finding your dads’ porn stashed behind the tubs of Turtle Wax in the garage.

We’ll miss it when it’s gone.

Faster, stronger, more productive

It’s the competition, you see.

In the globalised, inter-connected, bullshit-fuelled modern world, it’s no longer possible for bright kids to take a multi-year breather, unless it’s for something officially sanctioned like a gap year (deemed improving, despite everyone knowing gap years are Club 18-30 for middle-class kids with a few National Geographic photo opportunities thrown to please Gran).

Due to the intense competition foisted by continual tests in school, ubiquitous A-grades, university for all, and the big influx of talented immigrants, you need to know exactly what you’re doing and where you’re going from the moment you rise from your potty to the day you follow your nose into a modern office.

Get the qualifications, gather the work experience, collect your badges and go, go, go – headfirst into a depressing facsimile of what you were led to believe would be your life.

And boy, you’d better be committed. Even if your job is merely to serve hot brown liquid to commuters at an 85% profit margin.

On track for partner by 40

Pity any poor teenager or twenty-something without a master plan.

While they’re busy wondering what it’s all about (life, I mean), some Hermione with half their imagination is already out of the starting gate, hell bent on achieving Grade 4, Level Six Employee-of-the-Month status in record time.

Far from aggrieved that she’s been turned into just another square peg, Hermione will be all foam and fury if she doesn’t feel adequately shepherded through her career by her employers as studiously as any kid tending his ant farm.

In today’s corporate world, the spiritless Hermiones have taken control, which is why long, gossipy lunches, Mad Men-style gender tension, and genuinely creative and inspiring work has all been outsourced to independent outfits who’ve not yet succumbed to pay scales and route maps.

Once named the rat race, for 95% of people the ordeal of the resultant 9-5(-10) is more like being a hamster running on a wheel.

The difference is nobody expects a hamster to be ‘committed, enthusiastic, and a genuine team player’ when he’s running on the spot to go nowhere.

I’m loving it

If at this point you’re shaking your head, then either:

You’re under 35.

You create short films for Pixar, you manage an exciting investment fund (fixed interest doesn’t count), you work with animals or kids, or you do almost anything medical. Congrats! Today’s post is not about you or your life.

You’re self-employed or you run your own business. (Ditto!)

You still believe what they told you.

It’s excusable to be young, everyone should be so lucky as to get paid for doing what they love if they can, and becoming self-employed is the most realistic escape pod for most of us. (It’s what I did).

But there’s no excuse for believing what they told you.

I was happy to have a job once. Then I reached 30, and younger, fitter versions of me came along to be happy with it instead.

I’d noticed the wrong people got promoted. I saw that when I was promoted or offered new jobs, it was for the wrong reasons. I realised that sucking up was more important than competence.

Finally, I saw that the average office was a white-collar version of a bukakke session – an orgy of desk-based fluffing, slurping, and spitting behind your back.

What about the workers?

To appreciate how the modern workplace can crush the soul of anyone creative and bright faster than Simon Cowell saying, “Really? Who told you that?” then consider this interview with the boss of Whitbread, the owner of Costa Coffee:

Alan Parker, the chief executive who has been with the chain for 18 years, took a £5 million bonus this year for his work turning Whitbread into one Britain’s most successful companies.

Asked if it was time for his employees to share the rewards, the normally smooth Parker prevaricated. “We are looking at improving employee engagement at all levels,” he said. “We take employee morale very seriously.”

Did that mean pay rises? “Engagement has gone up,” he replied, before confirming the pay freeze was lifted.

Let’s repeat that again in slow motion and close-up, with Parker’s mouth opening and closing like a dreadful goldfish of the deep.

“Engagement has gone up,” he replied.

At this point I suppose I should discuss how the average worker just wants this and that, and how ‘engagement’ is a poor parody of the other.

But I can’t be bothered. Really, I’m feeling in a Bolshie mood, and that Karl Marx had a point.

If capitalism had a soul, then all the boring and awful jobs would be the best-paid jobs, and fun careers like playing football for Man United or running hedge funds or being George Clooney would pay the minimum wage.

Instead, capitalism has a sense of humour.

Doublespeak but no overtime

Whitbread CEO Alan Parker’s job isn’t good because he gets paid £5 million a year. That’s an awesome bonus.

Parker has a good job because he’s in charge, he can make things happen inside his company, and because work excites him when he wakes up and never leaves his side.

Compare that to the average worker in a coffee shop. He or she will spend all day making coffee, be abused by customers, and even has to put up with patronizing garbage about ‘engagement’ – with only a piss poor level of hitherto frozen pay to compensate.

While the CEO is moving little plastic figurines depicting his various executives around his industry battle map, his employees are choking on their cappuccinos at the thought they’d come to work for anything other than a day’s pay.

A coffee chain CEO thinks his staff are facilitating a third space encounter for beverage-based mini-break client experiences or whatever waffle it uses to describe fleecing the drones as they make their way to their corporate slave ships, foolishly hoping a shot of caffeine might make another day of being dragged down by the Hermoines a smidgeon more bearable.

But his staff think they are selling coffee.

And they have to sell it like they love it! Like arriving to work in Unit 41B at 8am every morning is almost as good as being the fighter pilot, poet, brain surgeon, or lap dancer that they once imagined they’d become.

They have to love their little part of the big picture, even if it’s not a job anyone ever dreamed about except in one of those “Would you rather have syphilis or crabs?” type daydreams.

If they don’t pretend to love their dreary career convincingly enough, then sooner or later somebody else will come along who can.

McJob R.I.P.

Tune out, drop in

Ignoring for now the downsides, the revolution in art, culture, tolerance, and opportunity that happened in the 1960s occurred because bright people could drop out.

There were plenty of McJobs to clock into half-asleep while you were being a part-time hippy, and a clever person with a degree and fast tongue could sweet talk their way into a career in Bloomsbury or on Madison Avenue when they were done with peace and love.

A disappointing career in a dull office was never the be-all and end-all, but we knew it and admitted it back then.

In contrast, last week I met a top-flight Oxford graduate who has already done nine months of unpaid intern work – racking up huge debts living in London in doing so – and who insists she needs to do more.

She hasn’t had a job yet. I wonder how long she’ll feel engaged for when she does?

Readers, I suggest you consider these new realities of work, and start building a freedom fund pronto. Live cheap, and consider working with your hands or doing something else that keeps you from the Hermiones. And never leave a job you love, because there aren’t many left out there. What do you think?

{ 23 comments }

Weekend reading: Je ne regrette rien

by The Investor on June 26, 2010

Thoughts on the week, then some good links.

I want to thank you for reading Monevator. It must be hard at times. Over 1,000 people now subscribe to hear me say the UK economy is growing nicely and that UK shares are good value, while virtually everyone else talks about a double-dip recession and a new bear market.

The truth is neither they nor me can be sure – nobody can be – but at least I’m honest about it.

With the FTSE 100 closing the week at 5,045 and the Dow at 10,142, it’s been a bad year for quick gains. The leading UK shares are down nearly 7%; that’s even worse than the US market, party because of the dire performance of BP.

Shares in the stricken oil giant are barely floating above the £3 level. Its price is down 25% from when I wrote that I thought BP shares were good value.

Was I wrong? Yes, and no.

Yes – In retrospect, the situation was still in play. The political fury was close to peaking, but the well was still leaking oil and estimates of the amount gushing out were rising fast. It would have been safer to wait.

No – I was clear that there were plenty of negatives. I also stressed it can often take a very long time (think years) for crisis situations to resolve themselves. Buying a plunging share is a calculated gamble. Buying one and expecting its price to rise tomorrow is wishful thinking.

Most analysts still have ‘buy’ ratings on BP for the same reason I liked the shares at £4.35. The potential reward seem to outweigh the risks. At £3, that case is stronger, although the final costs have risen as more oil has surged into the gulf and the mishaps have continued.

I’ll probably still not buy, having calculated my exposure through passive funds and trusts is 2-3% already, but I can see why someone else would.

It’s the stupid economy stupid

As for the economy and the wider market, no excuses are necessary. I simply tell it as I see it.

This blog would be more popular if I wrote about buying gold three times a week and screamed the sky is falling. That’s what does well on the web. But the whole point of Monevator is it’s a place for my thoughts on investing, with information on everything from the wisdom of tracker funds to the historical returns from equities, via Star Wars.

The forward-looking tea leaf stuff is a sideshow, but it’s honestly delivered.

With the FTSE 100 on 14x historical earnings over ten years and a forward P/E of 9, I still think shares are a bargain compared to nearly every other asset classes. And that’s partly because I think the economy will continue to grow, despite all the doom and gloom.

But shares are volatile, and reading the economic runes is very much a ‘for what it’s worth’ activity. The small print is the big picture when investing.

[continue reading…]

{ 13 comments }

By George I think he’s done us proud with this emergency budget

by The Investor on June 23, 2010

Like anyone over 30, I’ve pretty much given up on politicians doing what they say they will. The emergency budget from George Osborne is therefore a surprise.

Here is the bold plan we were promised to do the unpopular to eliminate most of the deficit by 2015.

Here are the big cuts in public profligacy, with 77% of the savings to come from spending cuts rather than higher taxes.

And the pain has been fairly broadly spread, too. The poor are seeing benefits curtailed, the middle classes will pay more tax, and the Queen faces a frozen civil list.

True, the poorest will be hit proportionally as hard as the richest. But this is not a reflection of the Conservative party’s secret inner Himler, as Labour will suggest over the next few days. Rather, it’s a line in the sand against redistribution – an attempt to make work pay.

If solving the problems of the underclass was as simple as throwing money at it, I’d be all for it. But it’s not – in fact, one lesson of the past few years is that state money can make things worse. Nightmarish scenarios where people are kept on benefits by effective marginal tax rates of over 100% if they take a job and lose tax credits are an insanity.

A welfare safety net is meant to catch you when you fall, not keep you trapped when you try to climb higher.

The sensible Lib Dem policy that the Conservatives have adopted of aspiring to remove income tax on those earning up to £10,000 is a step towards making work pay, too. But you have to be in work to gain from it.

Will the spending cuts hurt growth? I believe that the UK will recover sufficiently to shrug off the impact, particularly as interest rates will now stay lower for longer. Gilt yields should remain restrained, and inflation subdued as workers jettisoned from the public sector keep wages lower in the private sector

As an advocate of free markets, I also happen to believe the private sector will allocate these incoming workers more efficiently than the Government did, and so in time boost UK productivity.

There are huge execution risks, of course. Taking 25% out of Government spending must be done with surgical precision if the patient is to leave the sick bay in better shape than he came in.

What about investors?

Turning from the fate of the UK economy to the narrower pursuit of our own attempts to get filthy rich gain financial freedom, this wasn’t a bad budget for us investors.

True, that relief comes from the ‘nil-nil – could have been worse’ school of thought that’s currently holding sway in the England football camp.

We were warned we might face 40% capital gains tax, and see the annual allowance slashed to just £2,000. As it is the CGT rate remains 18% for lower-rate payers, while higher earners will pay 28%. Best of all, the £10,100 annual CGT allowance remains in place, albeit frozen.

The net result is that by religiously using ISAs and intelligently realising our gains, most Monevator readers will be able to avoid capital gains tax on their share portfolios.

Property investors are a different kettle of kippers. Most disposals of older investment properties will be hit by a capital gain, and it’s likely to be sufficient to move them into the 28% bracket for a year, even if they’re usually lower-rate payers.

But I can’t wring my hands at this. It’s unfortunate that the rules have changed, but we face a property shortage in this country and prices are too high. And retaining 72% of your gains from the biggest property bubble the UK has ever seen is not a bad deal. Property owners have also enjoyed a windfall gain from extraordinarily low interest rates, so it’s swings and roundabouts.

Finally, there’s a hidden treat for investors – and start-up entrepreneuers – in the shape of lower corporation taxes.

Small businesses will see corporation tax fall back to 20% from 21%, which is handy if you’re a freelancer like me.

General corporation is to drop by a penny a year for four years, from 28% to 24%. This article from The Motley Fool reasonably suggests that should mean more profitable UK companies and maybe even higher dividends for investors.

Emergency budget or suicide note?

Back in October I wrote that David Cameron’s Curse was to save the UK and be hated for it. Courtesy of his best chum George Osborne, the saving – and the hating – has begun.

Unfortunately, people tend to remember the good times, and discount what never happened. Gordon Brown broke his own Golden Rule over the cycle to the tune of £485 billion, yet silly Labour propaganda has it that we’re in this mess from bailing out the banks.

We’ll almost certainly eventually make a vast profit on our stakes in the banks, and I think we’ll be better off in the long run from this budget, too.

So well done for now, George. You’d better take my praise for this emergency budget, because in a year’s time there’ll be little enough from elsewhere.

{ 15 comments }

Weekend reading: England’s dreaming

by The Investor on June 19, 2010

My Saturday musings, followed by the week’s links.

Anyone who doubts the power of mental belief only needed to witness England’s dire performance against Algeria in the World Cup last night to have their preconceptions tested.

In Rooney, Lampard, Gerrard, and Cole, England boasts players the equal of any in the world. The rest of the squad is rich in talent, too, even after all the injuries.

Yet England still doesn’t have a team.

[continue reading…]

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