Saturday, February 2

Another classic example of solutions in search of problems

This is a classic example of a solution looking for a problem. Specially government intervention. The problem? somebody noticed that non-white people have lower employment rates than white people in the UK. And this costs £8.6 billion an year to the UK economy.

Like women have lower employment rates than males. So they went and plonked huge amounts of my money down gigantic government programmes to get ethnic minorities back into work. I snorted when I read it in today's FT.

I quote: In spite of repeated government efforts to help to close the gap it would take 30 years to do so at the current rate of progress, the NAO said.......Between 2002 and 2006 the department put £40m into programmes aimed at ethnic minorities, which proved a qualified success, the NAO says, moving 15,500 into work at a cost of more than £2,000 a job.

So came back home and dug a bit deeper into this. Here's the full report if anybody is interested. And well, I am sure you can find out the simple reason why such large government programmes will fail.

You see, they assumed that anybody who is not white has a problem in getting a job. So you would expect that they have a very good analysis on exactly what problems they face? Yes? No. Their basis for sprinkling millions is based upon.

1. Human Capital: Apparently ALL ethnic minorities have problems with education (Figure 11). Oh, sorry, actually, Indians and Chinese are doing BETTER than the whites, so we will simply ignore them. So here's the first grand stupid moronic step. Let us just ignore 4 out of 10 ethnic minorities then, shall we? So pumping educational money to all minorities is a bit stupid, is it not?

2. Geography: Well, who lives in deprived areas with high unemployment? I quote from the report: Seventy per cent of ethnic minorities live in the 88 most deprived local authority districts, compared with 40 per cent of the general population. Notice they have not broken it down by the type of ethnic minorities but looking around anecdotally, there is a difference between the ghetto behaviour of many ethnic minorities as well as the desire / ability / willingness to move to another location where jobs are available. So instead of trying to find jobs where they are, ask the people to move to places where there are jobs.

3. Discrimination. Now I can well believe this despite lack of personal experience. But is it skin colour? or religion? or gender? or ethnic origin? In other words, is there a difference between

  • Brown, Hindu, Indian, Male....
  • Brown, Hindu, Bangladeshi, Female....
  • Brown, Muslim, Indian....
  • Black, Muslim, Caribbean
  • White, Muslim, Tonga...

So we need to determine what is the discrimination vector before you can determine what is the best way to address it. If nobody has a problem with Green Skinned Buddhists from Mars, then there isnt much point in targeting them, is there? If people have a problem with skin colour, then address that. But in this case, they are targeting everything and everybody. It is like ignoring the 200 piece tool kit and just using a hammer for everything.

4. And then there is a pathetically limp list of "other factors". I quote: There may also be cultural factors which discourage
ethnic minorities from participating in the labour market. Ethnic minorities can face multiple barriers to obtaining employment (Figure 13 on page 20). In addition to those above, they can include: lack of, or reluctance to take up, childcare provision; lack of job readiness; and low confidence or motivation. Many of these factors
are interrelated
. Many if not all these factors are not colour, religion, origin specific at all. Childcare provision applies to everybody.

So here we are, £40 million of taxpayer money, poured down some hole, minimal progress, will need 30 years (multiply this with 12 to get to 30 years, plus say a factor of 2 on top to cater for population growth rates plus say a factor of 2 to cater for the increased fertility of ethnic minorities), all based upon some very very stupid half baked reasoning.

We have not spoken about the fact that there is a very large self employment and improvement ethic in the Indian and Chinese communities and that manifests itself by showing up in higher earnings. They value education, they do not mind setting up their own businesses, they do not treat their women like brood mares (much!).

The NAO report addresses this point in 1.20 and I quote: One important result of lower employment for all ethnic minorities is poverty. Nineteen per cent of the white population live in low income households compared with 56 per cent for Pakistanis and Bangladeshis. Twenty three per cent of white children live in low income households compared with 60 per cent of Pakistani and Bangladeshi children. This in turn affects many areas of life including housing, health, education and childcare.

Even after identifying that their problem identification sucks big time, they proceed to shower my tax money down this hole and then wonder why it is not working as well as it should. Why do you not put in time limits on welfare payments for economically capable persons? And this itself was ignored in the study, for example see Table 23, USA section. So instead of asking, what makes the Indians and Chinese minorities work and replicating it, they will force weird public policy down the throat of everybody.

And the amusing thing is, the Table says that targets for affirmative action do not work based upon USA results but see this quote from the FT: Measurable targets for ethnic minority employment should become a condition of funding for local City Strategies, which were being developed to run welfare-to-work programmes. Sometimes I just get reduced to helpless giggling reading these.

Disclaimer: I am one of those ethnical minorities mentioned above.

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