Realsociology

A hyperreflexive blog focussing on critical sociology, infographics, Buddhism and extreme early retirement

A few thoughts on ICT, digital media and stratification in education

Posted by Realsociology on September 27, 2014

In its recent report, OFCOM describe young people as prolific users of digital media, with the vast majority of young people perceiving digital technologies in highly positive ways, and approximately 25% reporting that they see ICT as the key to their future career. (OFCOM 2013, see also Logicalis 2013).

This widespread enthusiastic adoption of digital technologies is met by equally enthusiastic encouragement by business leaders, many of whom voice optimism that such technologies can help maintain UK economic competitiveness in the global knowledge economy. Gantz and Reinsel (2012) for example note that CIOs, data scientists and digital entrepreneurs already know that there is huge, untapped potential in the rapidly expanding collection of digital bits, although this will require the tagging and analysing of big data if this is to be realised, while Lent (2102) suggests the long established blurring between consumption and production is accelerated by the web which opens up new capacities for self-generated value, pointing to a new entrepreneurial spirit amongst today’s younger generation, which should be embraced.

This optimism seems to be mirrored by the DFES1 which has an overwhelmingly positive view of the future role of ICT in schools and colleges, noting that it has transformed other sectors, and that pupils need ICT to equip them with future-work skills. In DFES literature, ICT seems to be presented as a neutral set of technologies through which individual students can be empowered, with emphasis on the benefits such technology can bring to schools, such as more personalised learning, better feedback, a richer resource base and the possibility of extending the learning day.

Following Ball (2013) this optimistic tone surrounding ICT fits with the neoliberal reorientation to economic global competitiveness as part of a global flow of policy based around a shift towards a knowledge based high skills economy, and in terms of broader (‘classic’) sociological theory these optimistic voices correspond to the largely optimistic theories of disembedded individualisation (following Dawson 2012) originally advanced by Giddens and Beck in early 1990s, in that digital technology is constructed as something which can enhance the capacity for young people to employ agency and craft innovative transitional choice-biographies (Giddens, 1991, p5, Beck 1992, p135-6). If there is any truth in this, we should, over the next few years, see several hundreds of thousands of young digital entrepreneurs engaging in cyber-reflexivity and creating innovative online solutions to the systemic problem of decreasing youth employment opportunities, irrespective of their class-location (Beck and Beck-Gernsheim, 2002, p39).

There are, however, several factors which suggest that this vision of the (dismebedded) individualised cyber-reflexive entrepreneurial future is either naive or ideological. Firstly, the extent to which today’s so called ‘digital natives’2 are genuinely innovative digital entrepreneurs rather than simply being ambivalent-consumers of digital products remains unclear3; secondly, cyberspace is far from a neutral arena, in reality I think it is more accurate to view it as a field of action in which the type of agency employed (e.g. whether productive/ entrepreneurial or banal/ consumptive) will be influenced by factors such as cultural capital and social networks; thirdly, this vision overplays the actual opportunities available for using digital media as a route to career success or self-employment – for example little mention is given to the problematic fact that millions of young people in Asia will be entering the ‘flat’ digital-labour market in the coming decade, able to survive off much lower returns than their UK competitors; fourthly, there seems to little interest in operationalising what kind of opportunities will be opening up for digital entrepreneurs in the future – there may well be hundreds of thousands more 20-somethings with their own digital-companies by 2020, but it is uncertain what side of the high skills low skills informational economy (referred to by Apple 2012) the majority of tomorrow’s digital workforce will find themselves; and finally there is the possibility that this is the latest discourse innovation in the denigration of teachers and state education through constructing technologically reticent staff as a barrier to progress, as well as paving the way for further privatisation with the forthcoming renewal of the ICT curriculum being fully endorsed and part-authored by Google, Microsoft, and IBM4.

It is also the case that I see little evidence of digital innovation in my mundane workaday reality – instead what I mainly see is digital-addiction, banal banter, and browsing for shoes, with today’s digital youth seeming largely content to construct themselves through digital-consumption and self-expression. Many of today’s students attach huge significance to such aspects of their lives (browsing for clothes and shoes is a favoured activity in tutorial, as are discussions about the post-exam trip to Malia, photos from the previous year’s trips being standard as social networking profile pictures). It is also apparent that the mobile devices through which many young people access online culture are themselves fetish-objects, central to young people’s experience of being themselves (as researched by Jotham 2012), that young people generally remain uninterested or unable to engage with the more technical aspects of these technologies5 which might actually equip them with the skills to be digitally-entrepreneurial, and that mobile devices link young people to heavily commodified space (Bolin 2012) which connects users directly to corporate (read neoliberal) protocols (Snickars and Vonderau, 2012).

It follows that youth engagement with digital media seems much more likely to centre around what Kenway and Bullen (2008) call the corporate curriculum (2008) which normalises the libidinal economy, a hyperreal realm of carnivalesque jouissance fuelled by desires based on values associated with lifestyle commodity aesthetics rather than the work ethic or responsibility, with any sense of ‘digital entrepreneurship’ being limited to the self-conscious commodification of the self through personal branding via social networking sites (Marwick 2011).

I also think that many students struggle as a result of what Bauman (2013a, 2013b) refers to as the pointillist experience of time online… ‘marked as much by the profusion of ruptures and discontinuities…. more prominent for its inconsistency and lack of cohesion than for its elements of continuity and consistency…. broken up, or even pulverized, into a multitude of ‘eternal instants’. This concept has been developed by Niehaus (2012), exploring what he calls ‘iTime’, describing this experience as being structured by an addictive hunt for frissons, short instants of excitement and pleasure; with each moment ever-more packed with contents, references, and tasks which taken together are likely to take precedence over the linear, single-minded time of one activity.’ This process is likely to be accelerated through multitasking, through which 16-24 year olds manage to squeeze in the equivalent of 9 hours and 30 minutes of data consumption per day (as noted by Davis 2013).

According to Bauman (2013b), those young people who are distracted by pointillism and the jouissance of the corporate curriculum, engaged in what he would call ‘banal’ cyber-reflexivity, are afflicted with a ‘fatal coincidence of the compulsion/ addiction of choosing with the inability to choose’, and if Bauman is correct, those who are more engaged with such aspects of digital media are probably less-likely to have thought about their long-term futures, and be less able to construct the kind of entrepreneurial ‘choice’-biographies that DFES champion (Bauman, 2012).

While there is a lack of critical research available on the use of digital media in an educational context (as Selwyn 2014 notes), there is some evidence that higher levels of ‘social’ use of digital technologies could be correlated with lower levels of engagement  with educational opportunities. Fisher’s (2009) personal experience of teaching in an FE college was that FE students who were heavy users of communications technologies were more likely to get bored of standard, offline lessons, Junco (2011) has theorised that the negative correlation between the frequency of posting updates on Facebook and final GPA could have been due to due to cognitive overload, given that the former variable was not negatively correlated with time spent engaged in college work, while Hall and Baym’s (2012) analysis of mobile maintenance expectations uncovered that once established mobile technologies can encourage high levels of ‘mundane maintenance’ to meet communicative obligations within a friendship group.

Possible avenues for research….

There’s definitely scope for further research to examine the extent to which student use of digital technology6 encourages the production neoliberal subjectivties, and the scope for and meaning of resistance to such subjectivities. One possible avenue might be to look at the extent of ‘digital entrepreneurship’ (for example, ability to code and create software or use software to generate innovative products) compared to other more common uses of digital media (such as information-seeking, maintaining social networks and game-playing).

My own feeling is that it would be useful to employ Bauman’s theoretical framework7 to explore the extent to which different forms of (socially embedded) digital-reflexivities stratify young people into (different types of) digital-producers and digital-consumers, although there is potential for this to be a ‘sociology of education’ type study, which might usefully draw on the theoretical work of Bordieu, exploring how digital reflexivities are embedded in social networks and influenced by cultural capital, and how these reflexivities influence students’ ability to meet the performative demands of further education.

 Works cited

Apple,M (2010) Global crises, social justice and education, Routledge: New York.

Ball, S (2013) The education debate, Kindle Edition.

Bauman, Z (2013a) Dividing time, or Love’s Labour’s Lost, Thesis Eleven 2013 118: 3

Bauman, Z (2013b)  The art of life, Kindle Edition (originally published 2008).

Bauman, Z (2012) On education: Conversations with Riccardo Mazzeo, Polity Press: Cambridge.

Beck, U (1992) Risk society: towards a new modernity, Sage: London.

Beck, U and Beck-Gernsheim, E (2002) Individualisation, Sage: London.

Bolin, G (2012) Personal media in the digital economy, in Snickars, P and Vonderau, P (2012) Moving data: The iphone and the future of media, Columbia University Press: New York.

Davis, M (2013) Hurried lives: Dialectics of time and technology in liquid modernity. Thesis Eleven 118:7.

Dawson, M (2012) Reviewing the critique of individualization: The disembedded and embedded theses. Acta Sociologica 55: 305.

Fischer, M (2009) Capitalist realism: Is there no alternative? Kindle Edition.

Gantz, J and Reinsel, D (2012) The digital universe in 2020: Big data, bigger digital shadows, and biggest growth in the far east, IDC. (Accessed online January 25/ 2014 – http://www.emc.com/leadership/digital-universe/iview/index.htm).

Giddens, A (1991) Modernity and self identity: Self and society in the late modern age, Polity: Cambridge.

Hall, J and Baym, N (2012) Calling and texting (too much): Mobile maintenance expectations, (over)dependence, entrapment, and friendship satisfaction. New Media and Society 2012 14: 316.

Jotham, V (2012) iSpace? Identitiy and space – A visual ethnography with young people and mobile phone technologies. PhD Thesis, University of Manchester, Faculty of Humanities.

Junco, R (2011) Too much face and not enough books: The relationship between multiple indicies of Facebook use and academic performance. Computers in Human Behaviour, 28: 1 (http://www.sciencedirect.com/science/article/pii/S0747563211001932, accessed 24/01/ 2014).

Kenway, J & Bullen, E (2008) ‘The global corporate curriculum and the young cyberflaneur as global citizen’ in Dolby, N & Rizvi, F (eds.) Youth moves – Identities and education in global perspectives, Routledge, New York.

Lent, A (2012) Generation enterprise: The hope for a brighter economic future, the RSA. (http://www.thersa.org/action-research-centre/enterprise-and-design/enterprise/enterprise/generation-enterprise, accessed 25/ 01/2014.)

Livingstone, S (2008) Taking risky opportunities in youthful content creation: teenagers’ use of social networking sites for intimacy, privacy and self-expression, New Media and Society, 10: 293.

Logicalis (2013) Realtime generation (http://www.uk.logicalis.com/knowledge-share/reports/real-time-generation-2013/, accessed 22/01/ 2014).

Marwick, A (2011) I tweet honestly, I tweet passionately: twitter users, context collapse, and the imagined audience, New Media and Society, 13: 114.

Niehaus, N (2012) Whenever you are, be sometime else’. A philosophical analysis of smartphone time (https://www.academia.edu/3664754/Whenever_you_are_be_sometime_else._A_philosophical_analysis_of_smartphone_time, accessed 22/ 01/ 2014).

Selwyn (2014) Making sense of young people, Education and digitial technology: The role of sociological theory. Oxford Review of Education 38:1.

1http://www.education.gov.uk/schools/teachingandlearning/curriculum/a00201823/digital-technology-in-schools accessed 16/01/2104, updated 18 October 2013

2Despite the fact that recent research by the Open University suggests the concept bears no relation to empirical reality, the DFES and business analysts still seem all too willing to use it.

3 In my own college, reporting of 60+ hours a week use of digital-media is not uncommon, but the majority seem to simply use digital media for communication with significant-peers, entertainment or consumer-related information-seeking purposes, and thus it seems likely that most 16-19 year olds are currently more accurately characterised as digital-consumers rather than genuinely innovative digital-producers/ or a range of diverse prosumer hybrids.

4https://www.gov.uk/government/news/harmful-ict-curriculum-set-to-be-dropped-to-make-way-for-rigorous-computer-science DFES 11/01/2012, accessed 16/01/2013

5for example, Livingstone (2008) reported that teenage users of a variety of social networking sites were unsure of what aspects of their profiles were private, which requires a ‘deeper’ level of technical awareness than that required to maintain a profile, but in itself is hardly a ‘deep’ level of technical knowledge.

6I use the term broadly at this stage, although I realise I may need to limit the study to certain types of digital-engagement.

7If that’s even possible given his love of ambivalence?

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Stop buying crap you don’t need now and retire 4 years earlier!

Posted by Realsociology on September 24, 2014

In this post I continue my statistical critique of the ordinary life of the everyday worker-consumer. This is done through comparing a hypothetical 35 year old who earns the median salary and has average expenditure to a hypothetical construction I call the frugal-consumer who spends as little as possible without completely cutting themselves off from society. The expenditure levels of the former effectively tie them into working for a further 33 years until the current projected standard retirement age of 67-8, while the later, assuming they maintain their frugal levels of consumption, will be able to retire when they are 52-3, or 14 years earlier, or in half as much time as the average-consumer on the average wage.

Here I consider spending on Consumer Frivolities (see previous posts for other categories of expenditure).

The average-consumer spends £216.71 a month on what I call consumer frivolities, which includes unnecessary expenditure on restaurants and hotels (£73.15), furniture and furnishings (£51.48), ‘miscellaneous goods’ (£69.33), which in the ONS family spending survey mainly consists of beauty products and jewellery, and finally recreation and culture (£111.06), which for most people means the cost of purchasing audio-visual equipment and subscriptions to various services, and also includes the cost of entrance to things such as cinemas, concerts and festivals.

Over the course of one year this amounts to £3,933 and maintaining this for another 33 years will cost £129, 798,  which represents 6.0 years working earning the median salary.

So what does the average person get for this £129, 798, or 6 years of toil? Most people would say it’s hard to generalise, because the consumer gets what ever they want for the money they’ve got, assuming the market can provide it. Some people will choose a house full of antiques, others a house full of gadgets, and stilll others closets full of clothes and  boxes full of jewellery. Increasingly likely, though is that money will be spent not on stuff, but on experiences, such as playing the dating game, or weekends away and longer holidays, supplemented by such products as fake tan and sun cream to prevent an actual sun tan.

To many people, such consumerist experiences are the very purpose of life: the products we buy define us, mark us out, and the events we purchase play a crucial part in our weekly, monthly and yearly life-course – they are things we look forward to, and back on, the events which help to maintain and define our relationships with our friends and family and give us something to talk about at work, other than work.

I’ve managed to resist the urge to be utterly cynical about the role which consumption plays in most people’s lives, because just recently I’ve come to perceive most ordinary consumption as tragic, and in this context cynicism seems innapropriate. Those people  who define themselves through their stuff become tied to it (and possibly require a bigger house in which to stuff their stuff), and for those who define themselves through their experiences, it seems to me that the way in which many people consume such events involves them not really being present because they’re too concerned with acting for the sake of sharing the experience via social media, and for me if you’re not actually present, then you’re not really even alive.

Ultimately such unnecessary consumption costs the average-consumer on the median salary 6 years of their working life. In contrast to this the frugal-consumer rejects the trivial, shallow and short-lived fake-joys of consumerism and instead engages in meaningful, productive and either free or very cheap activities when not working.

The frugal-consumer is not, however, an anti-consumer, and maintains an expenditure level on ‘consumer frivoloties’ which allow them to avoid being completely cut off from ordinary society. This is mainly because I could not, hand on heart, say that I am ever likely to cut out consuming frivoloties all together myself, cut down radically yes, cutting out altogether, highly unlikely.

The frugal-consumer spends just £60 a month on such frivolities, allowing for £20 a month on restaurants and hotels (so basically no hotel stays and one trip to a restaurant a month), £20 a month on furniture and furnishings, given that this category includes spending on basic household items such as hoovers, a further £20 for ‘miscellaneous goods’ because everyone needs a little something extra, and a whopping £30 a month for recreation and culture. This amounts to an annual expenditure of £1080 a year, a total of £35 640 over 33 years, representing a saving of £94 158 or 4.33 working years of working at the median salary compared to the average-consumer.

NB If this looks unrealistic, or even unbearable, something like the bottom fifth of the U.K.  in terms of income live such a life out of necessity rather than as part of an early-retirement strategy, so it is possible.

References

http://www.ons.gov.uk/ons/rel/family-spending/family-spending/2013-edition/index.htmlhttp://www.ons.gov.uk/ons/dcp171776_335332.pdf

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On the Social Ideology Ideology of the Motorcar (UK version, 2014)

Posted by Realsociology on September 20, 2014

One unexpected finding from my statistical analysis of average consumption patterns (E R E for infographsBLOGv3) is that an irrational addiction to the motorcar is the single most significant  factor which locks the individual into having to work until they are 68. Giving up the car and moving to within cycling (preferably walking) distance of work and most other places you want to go is the single most significant thing you can do to save money and make early retirement possible.

The average-consumer’s crazy car habit.

According to the National Travel Survey 2012, the average distance travelled per person  in 2012 was 6,691 miles, with 78% of these miles being travelled by car, which means roughly 5000 of these miles were travelled by car. If we assume that someone makes an economically rational choice and purchases a relatively cheap car, then using the AA’s Motoring Costs Survey 2014, the overall average standing costs of the cheapest category of car (up to £13K in this survey) stood at £1913, with a running cost per mile of £18.56. If we factor all of this together, the average cost of running a cheapish, and thus probably small car in 2014 was £2841. (See endnotes 13-14)

This works out at £277.77 a month or £3333.20 a year, which rounds up to a staggering £110 000 over 33 years, equivalent to 5.2 years worth of earnings on the median salary.

worst-ever-jams3-01122012-jpg_130019
I was first alerted to the incredible economic inefficiency of the motor car by Andre Gorz’s excellent 1973 essay ‘The Social Ideology of the Motorcar’. Following Ivan Illich, Gorz made the point that the average American spent four hours a day devoted to their car, either sitting in it (moving or not-moving), or working to pay for the various services associated with driving. He calculated that if you added up all of these hours and divide by the average distance travelled by car, the average American travelled at an average speed of 3.5 miles an hour, or the same as walking pace, but thousands of dollars worse off and probably a lot more stressed as a result.

In Britain today, the statistics aren’t quite as bad as this. If we take the approximate average distance travelled of 5000 miles a year, and divide by the average speed of 24.6 mph, this makes a total of 203. 25 hours spent driving. If we then add to this the 212 hours it would take you to pay for one year’s worth of motoring costs, the total amount of hours we get is 415.25, which when divided by 5000 miles gives us an average speed of 12 mph.

Given that this is comparable with the speed of a bicycle, and that I am being quite generous in my calculations (the bigger your car, which won’t go any faster in all that traffic, the more local your journeys, the more of them are in peak hours, and the lower your wage, then the more time inefficient the car becomes), all in all I’d say the car is, for your typical person, a total waste of money and of 5.2 years of a precious human life.

References

The National Travel Survey

AA’s car costs

http://www.bikereader.com/contributors/misc/gorz.html

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/310251/congestion-local-a-stats-release-mar-14.pdf

http://www.thebikestation.org.uk/storage/BS_Travel_Cost_Comparison_2011.pdf

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Some ‘nice’ infographics on inequality in the UK…

Posted by Realsociology on September 17, 2014

Wealth Distribution

It’s a bit dated already, but I guess these things take a bit of time to put together – A video outlining wealth distribution in 2008/10. One of the stand-out statistics is that to be that in the bottom 10% of households, the HH had to have wealth of less than £13000, whereas to be in the top 10%, the HH needed wealth greater than £967 000. Or…

Top 10% of households –       Minimum Wealth = £967, 000

Bottom 10% of households – Maximum Wealth = £13, 000.

So the poorest household in the richest 10% is at least 74 times richer than the richest household in the bottom 10%.

(Quick aside – From an extreme early retirement perspective, £967,000 is about three times what you need to retire on, so not one of those households needs to be working, although some will be because of unnecessary consumption addiction syndrome).

 

Inequality has actually increased since this video – In 2010 the wealthiest 20% of the UK were 92 times wealthier than the poorest 20%, in 2012 they were 105 times wealthier.

WEALTH3

 

Life Expectancy

Richmond upon Thames had the highest healthy life expectancy (HLE) for both males (70.3 years) and females (72.1 years). The lowest HLE was in Manchester for males at 55.0 years and Tower Hamlets for females at 54.1 year

health2

 

Education

There’s no pretty picture for this one, but there is a nice interactive infographic here (courtesy of learning plus)

The short story is that, nationally, while there has been an overall improvement in the GCSE 5 A*-C pass rate, there has been an increase in both the FSM (Free school meal) gap and the CLA (children looked after) gap between 2012-13, so those from disadvantaged backgrounds have fallen further behind those from more advantaged backgrounds.

The site notes… ‘Nationally we see an increase in the percentage of pupils eligible for pupil premium achieving 5+ A*-C GCSEs including English and mathematics between 2011 and 2013. At the same time the gap in the achievement of this threshold measure has widened between 2012 and 2013, reflecting a greater increase in the achievement of other pupils. The percentage of CLA pupils achieving 5+ A*-C GCSEs including English and mathematics increased by just 0.3% between 2012 and 2013 while among all other pupils this rose by 1.8%, widening the performance gap to 45.9%. Among FSM eligible pupils there was an increase of 1.8% achieving this threshold measure in 2013 than in 2012; similarly there was an increase of 2% for all other pupils, increasing the gap to 26.7%’

On the plus side, there is evidence that London is successfully closing this education gap.

In summary – CLASS INEQUALITY IS STILL RIFE IN MODERN BRITAIN!

Posted in Infographics, Wealth and Income Inequality | No Comments »

Your mortgage or your life?

Posted by Realsociology on September 13, 2014

Following on from my realisation that the average income earner could retire at 52, I’ve started to analyse the relative importance of various categories of expenditure in preventing early retirement. Here, I look at housing.

Given that housing represents the single largest life time expenditure item for most people in the U.K., getting your housing strategy correct is vitally important for early retirement. As far as I’m concerned, it is simply irrational to rent in the long term, so, if you can afford it, buying really is the only option. However, the average-consumer goes about this in the wrong way – i.e. by spreading their mortgage repayments over a relatively long, 25 year term and dragging the mortgage out even longer because of trading up to a larger property.

According to this is money, a typical first-time buyer who buys a £151,000 home with a £121,000 repayment mortgage over 25 years will pay back £212, 000, calculated at 5% interest. In my calculations I’ve been a little more optimistic, to reflect some of the better interest rates out there at the moment, and assumed an average life-time interest rate of 4%, so borrowing the same amount  (£121 000) at 4% over 25 years means paying back a total of £191,600, at £638 a month or £7664 a year, which is equivalent to 9 years worth of earnings on the median-salary. Of these repayments, interest accounts for £191, 600 – £121, 000 = £70, 000, which in itself is equivalent to almost 3 years of work earning the median salary. (See endnotes 8-12)

In my frugal-consumer model (Spread sheet ) the same figure is paid back over 11 years, which means paying back a total of £149, 764, at £1135 a month or £13, 620 a year,  equivalent to 7 years worth of earnings on the median salary. Compared to the average individual, the frugal-consumer saves themselves over £40, 000 or the equivalent of nearly 2 years worth of work earning the median salary.

The above scenario is actually extremely generous in its comparison – In the sense that while my 11 year pay-back model is, I think, reasonably achievable for the average income earner, my ‘average’ consumer model is in fact not realistic – If a couple chooses to ‘trade up’ to a house then their costs of housing almost double.

The Average house price is currently £264K – And if we apply the same payback-ratios as above, then a  4% mortgage over 25 years gives a total payback amount of £385K (5% gives  £424K).

(NB – Many people will pay back more than this – 30 years is rapidly becoming the norm for mortgage repayment periods - In 2012, the number of mortgages with more than 30 years on the term had risen to 27.8%, up from less than 3% ten years earlier, and the longer the mortgage term, the greater the interest!

So let’s just pause…. assuming that you stay in a one or two bed flat for the rest of your life and stick to the standard mortgage term, then that will cost you £250K over the course of your lifetime, but if you want a family-home, you are looking at something in the region of £400K. Looked at in starker terms, if we take the median salary, these figures represent approximately 12 and 20 years of work respectively. If you compare the later of these to my frugal-consumer model, you lose 9 additional years working to pay for property.

To make an even starker comparison, there are several people in the UK who have built their own houses for 10 times less than these figures both in terms of money and time, it becomes clear that most of the above years are basically years spent making someone else rich – A combination of the land owner, property developer, previous owner and/ or mortgage-lender – And I think anyone who is either considering getting on the property ladder or who is currently on it needs to urgently consider some of the available, cheaper, alternatives to housing.

Or look at it this way – If you walked in to work tomorrow and your boss offered you a year, or two, or ten off on full pay, that’d be pretty nice, wouldn’t it? Or if you won £100K on the lottery, that’d be at least Facebookable. These are the types of figures radical housing alternatives can save you…..And these are the figures you throw away by being a mortgage slave.

NB – The point of this post isn’t necessarily to criticise the injustice of a system based on debt, the aim is simply to raise awareness of the extreme savings that can be made in terms of your money and your life if you just pay that damn mortgage down as quickly as possible.

References

http://www.thisismoney.co.uk/money/mortgageshome/article-1633400/Mortgage-calculator-Compare-true-cost-rates-fees.html

Related Posts

1. How the Average Income Earner could retire at 52

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TTIP – Putting Profit before People

Posted by Realsociology on September 10, 2014

The government is about to sign up to a treaty which will would allow companies like Sports Direct (just a random example) to sue a future government for increasing the minimum wage, if introducing such a policy damaged corporate profits.

The treaty’s called the Transatlantic Trade and Investment Partnership – And it’s seems to be primarily about shafting the 300 or so million citizens of European countries so that Transnational Corporations can make even more profit.

CORP

 

Having clicked around a few web sites which try to summarise what the TTIP is, I think I’ve done a better job below – down to just FIVE KEY POINTS… (Handily for anyone studying Global Development, this also reads like a ‘what is neoliberalism’ check llist).

1. The Transatlantic Trade and Investment Partnership (TTIP) is a free trade treaty currently being negotiated – in secret – between the European Union and the USA.

2.  The main goal of TTIP is to remove regulatory ‘barriers’ which restrict the potential profits to be made by transnational corporations on both sides of the  Atlantic.

3. These ‘barriers’ are basically social and environmental protections currently enforced through the laws of various nation states within Europe and include the following:

  • labour rights (e.g. Minimum wages, holiday pay, public sector pensions)
  • food safety rules (including restrictions on GMOs),
  • regulations on the use of toxic chemicals
  • digital privacy laws
  • new banking safeguards introduced to prevent a repeat of the 2008 financial crisis.

4.  TTIP also seeks to create new markets by opening up public services  to competition from transnational corporations, threatening to introduce a further wave of privatizations in key sectors, health and education.

5. Most worrying of all, TTIP seeks to grant foreign investors a new right to sue sovereign governments in front of ad hoc arbitration tribunals for loss of profits resulting from public policy decisions.

So here we go again – a further wave of neoliberalisation, given that it looks like many Nation States in Europe are about to agree to a set of international rules which put Corporate profits before the well-being of their citizens.

Of course you’ve probably never heard of this treaty, it’s firmly off the news agenda, even though, right now, your democratic rights are being undermined and this treaty will almost certainly mean that you are worse off in the future in terms of your labour rights, environmental protection, and quality of public services.

If you want to sign a petition to get Vince Cable to fix or scrap the deal then click here

This post is mainly summarised from this nice document – TTIP – A Charter for Deregulation, an Attack on Jobs and an End to Democracy

Posted in Agenda Setting, Capitalism, Global Development, Globalisation, Neoliberalism, TNCs | No Comments »

The freedoms of living without money

Posted by Realsociology on September 6, 2014

I think learning to live with less money is a crucial life-skill that pertains to greater freedom, but here are two examples of people who have managed to live without money altogether…

Based in the UK and author of the Moneyless Manifesto, Mark Boyle gave up money for more than 2 years in November 2008. Having studied economics for six years he found himself looking around for a ‘big cause’ to devote his life to, he concluded that the one thing that disconnects us from nature more than anything else is money. Boyle points out that while we tend to associate money with independence, in fact it just makes us dependent on people far away from us, and less likely to look to our local communities for our sustenance. It is also money that is the root disconnect which facilitates the type of global production processes which are associated with social and ecological injustice. In the video below he makes the point that he couldn’t really proselytize about such things unless he actually lived them, and hence the moneyless experiment was born.

He originally set out to do this for one year, but after that year started to question how he could return to a money based economy, so he carried on.

A second example from the US is Daniel Suelo who occasionally updates the Moneyless World Blog has been money free since the year 2000 – Seriously, the video below is one of the most inspiring things I’ve ever watched. He says that he’d thought about going money free ever since he was a child, when he used to question why his Christian household didn’t really keep to the ideals of Jesus. He then went on the study other religions and realised that what they had in common was that they all stressed the importance of living a ‘giving’ life based on compassion, rather than one in which you do something now for future gain, which is precisely the typical lifestyle associated with our money-based economy. There’s also a major ecological thread running through his philosophy – he lives a ‘natural life’ rather than an ‘accounted’ life, and if you want an interesting perspective on death, this video is a must watch. (Also, I may have this completely wrong, but Suelo is what I imagine the Zen Masters of the Tang to have been like.)

The man who quit money from Sacred Resonance on Vimeo.

 

The difference between the two is that Suelo seems to be living without money for spiritual reasons, part of which involves living spontaneously, and connecting with nature, and although networked and now joined by similar people, he seems to be more of a lone agent amidst other lone agents, whereas for Boyle his experiment is much more political, and he’s well-embedded in the Transition Movement and is currently involved in in establishing Streetbank, a nation wide money-free skills and stuff sharing site. Mark Boyle’s book also has some interesting criticisms of the money economy, whereas Suelo seems much more content just living a money free life, relatively disconnected, stating that the problems with the money-economy are so obvious they don’t really need to be criticised.

Such radical lifestyles serve as a reminder of not only how central money is to our present social system, but just how colonised the average mind is by the very idea of money.

 You might like to ask yourself the following questions

  1. What do you need money for?

  2. Do the benefits of consuming the things you purchase actually outweigh the cost (working) of getting that money?

  3. Could you get the things you want by other means other than money?

  4. Could you let go of the the desire for the things you want and live with much less money, or without money altogether?

  5. Why is it that I struggle so much giving up take-out Cappuccinos?

OK, so the last one’s personal….! 

Posted in Alternatives, But what can I do? | Tagged: , | No Comments »

How the median income earner could retire at 52

Posted by Realsociology on September 3, 2014

Over the summer I worked out that a 35 year old earning the median salary could potentially retire at 52, if they just stop buying crap they don’t need now. In contrast, the expenditure levels of the average worker-consumer effectively tie them into working until the current standard retirement age of 68.

This post is simultaneously a critique of the ordinary worker-consumer and of the Extreme-Early-Retirement model, which I don’t think can be applied in its fullest sense to an average person in the U.K. (Although if someone wants to modify my stats using different investment models to see if the retirement date could be brought forward, I’d be interested!).

In this blog post I compare two hypothetical 35 year old individuals (4) who both earn the median UK salary. One individual has average consumption and expenditure while the other has in mind the goal of retiring as early as possible and so is much more frugal, without completely having cut themselves off from society.

As testimony to my lack of Open Office Calculator and Inkscape skills, this is represented below:

Ret Info

To make reading this more meaningful, you should refer to this spread sheet throughout – Comparing 33 years of expenditure

For the sake of making an easy comparison, I’ve used expenditure figures based on one person living alone for the remainder of their life, and imagined that they have just bought their first property at the age of 35. The reason for selecting a 35 year old is because this is the age by which most people are settled into a stable career, and this is also the age by which most people are at least starting to think about retirement, if not yet looking forward to it in the near future. It also happens to be the age at which today’s typical graduate student can reasonably have expected to have paid off their student debts and have some kind of savings towards their first property. Although the figures in each expenditure category will vary considerably depending on variables such as age, or household make up, the levels of expenditure are generally not going to be that far away from how the majority of people spend their money for much of their lives, and thus most people should at least recognise something of their own and their friends’ expenditure habits in these figures.

However, to satisfy those who just can’t get over the problems of using averages when variables which will differ widely, I’ve included a link (4) to the spread sheet where I’ve done my calculations so you can add in your own expenditure and income levels in order to personalise these calculations for yourself, or you can even modify at a deeper level to add in things such as inflationary effects, investment returns and changes in circumstance over time.

The purpose of this exercise is to put in the starkest terms possible how many years and months (expressed in decimal terms) of one average human life one individual would have to spend working to buy certain things for the remainder of one’s normal working adult human life. In those stark terms – The expenditure levels of the average-consumer effectively lock them into working until the current standard retirement age of 67-8, while the frugal-consumer, assuming they maintain their frugal levels of consumption, will be able to retire when they are 51, or 14 years earlier, or in half as much time as the average consumer on the average wage.

 

Executive summary – A comparison of the 33 expenditure patterns of an average-consumer compared to a hypothetical frugal-consumer.

As far as I see it, there are three main factors which work together to keep the average 35 year old worker-consumer locked into the need to work for 33 years until they are 67-8. In terms of overall expenditure, the single most significant item is the 25 year mortgage with massive interest payments (costs 9 years). However, this lock in occurs primarily because the high cost of car ownership (costs 5 years), and what I can only characterise as fragmented expenditure on a range of unnecessary consumer frivolities (costs 4 years), which together means that a person earning the average median salary has no choice other than to drag the mortgage out over a 25 year period, and accept the attendant massive interest costs.

In contrast, what I call the frugal-consumer chooses to get rid of the car and buys a bike (saving 4 years), radically reduces consumption of frivolities (saving 2.3 years), and in addition makes some relatively marginal savings on necessities (saving 1.5 years) such as food and utilities. Taken together, these changes in lifestyle allow for an 11 year mortgage repayment term and much lower interest payments as a result (saving 2 years). All of this, factored with the lower cost of living, mean that this individual could potentially accrue enough savings over 16 to years to pay for 33 years worth of frugal consumption, allowing for an early retirement age of 52.

In future blog posts, I’ll compare expenditures across four categories – housing, transport (focusing on the car), consumer frivolities and things which may be reasonably regarded as necessities.

If you can’t wait, you can always buy my book and help me retire a few minutes earlier…..

 

Boring but important – A few (selected) notes on data sources and expenditure categories and statistics

Categories of Expenditure In my analysis below I have four main expenditure categories, mainly drawn from The Office for National Statistics’ Family Expenditure Survey (5) -Mortgage repayments -Transport costs -Necessities – food, utilities, council tax, clothes, pensions contribution, communication, maintenance of dwelling, health -Consumer frivolities – recreation and culture, restaurants and hotels, ‘miscellaneous’, household goods and services, alcohol and tobacco and education.

To get my figures for individual expenditure based on one individual living along I’ve mainly used the data from the ONS’ family spending survey and divided by the average household size (2.4 people) where it makes sense to do this (dividing makes sense for clothes, but not for council tax). Because the figures are mostly weekly, I’ve multiplied by 52 to get the annual figures and then 33 to get the 33 year overall expenditure to the normal retirement age. I’ve calculated how many years working it would take the average consumer to pay for one category of expenditure earning the median net salary by  dividing the total cost of 33 years worth of expenditure by this figure (£21, 240). Where housing costs are concerned, I’ve used the figures for the cost of repaying the average mortgage which is £121 000 according to this is money (6).  Here, for the average-consumer repayment is over a 25 year term, while for the frugal-consumer, the repayment period is over an 11 year term.

Median Income

According to the UK Annual Survey of hours and earnings (7) median, full-time gross weekly earnings stands at £517.00 per week, which amounts to (*52) a median gross annual salary of £26884, which equates to a take home annual salary of £21, 240, or a monthly salary of £1770 after income tax and national insurance are taken out (£408/ week for those who like to work in weeks).

Potential problems with my modelling

Firstly, I don’t take into account inflation, I’ve just worked out everything at today’s prices, and neither do I take into account any returns you might make investing rather than paying down the mortgage, which is the main early-retirement strategy in my scenario. However, these two things being equal in both my average and frugal-consumer examples, you are still a lot better of spending as little as possible on anything other than the mortgage or savings. Another potential limitation of the model is that it is mainly based on someone having a stable job, and being single, although it is possible to ‘stick to the programme’ while moving around jobs and holding down a relationship, maybe even kids, just a lot more difficult.

 

References

(4)See the spread sheet above

(5)Office for National Statistics – Family Spending 2013 http://www.ons.gov.uk/ons/rel/family-spending/family-spending/2013-edition/index.html

(6)http://www.thisismoney.co.uk/money/mortgageshome/article-2553023/Two-thirds-time-buyers-turn-Bank-Mum-Dad-deposit-help.html

(7)ONS – Annual Survey of Hours and Earnings 2013 – http://www.ons.gov.uk/ons/rel/ashe/annual-survey-of-hours-and-earnings/2013-provisional-results/stb-ashe-statistical-bulletin-2013.html

Posted in But what can I do?, Capitalism, Infographics, Retirement - Early, Things I like, Uncategorized, Work | Tagged: , , | No Comments »

Increasing income inequality in the UK

Posted by Realsociology on August 30, 2014

I thought this infographic showing income inequality was worth sharing (From the Equality Trust) –

income-inequality-uk-2

Unfortunately (if you think income inequality is bad!) things have got even worse since 2012!

Britain’s top executives are now paid around 130 times their average employee, according to analysis released today by the High Pay Centre think-tank. 

Income inequality has got a LOT WORSE in recent decades. In 1998, the average FTSE 100 CEO was paid 47 times their average employee, which means that while average incomes have stagnated in relation to the cost of living, the incomes of the very richest have almost trebled in 15 years.

The video below illustrates this in stark terms by comparing the typical wage of a nurse with that of a typical CEO, the headline figures being as follows:

  • A CEO earns as much in 3 days as a nurse does in a year.

  • A CEO earns more in a year than a nurse will earn in her entire life.

  • If we redistributed the income of the top 1%, then on average each household in the UK would be better off by £3K a year.

 Related questions you might like to think about include….

1. Why does such income inequality exist?

2. Is this fair? (are CEOs worth 130 times more than their average employee?)

3. Is income inequality good or bad for society?

4. If you’ve answered ‘no’, and ‘bad’ to questions 2 and 3, can anything be done about increasing income inequality?

Posted in Changing Britain, Infographics, Marxism, Wealth and Income Inequality | Tagged: , , | No Comments »

Early Retirement Extreme – A Summary

Posted by Realsociology on August 27, 2014

EREI came to conclusion over summer that if I could make this 6 week holiday my life, my life would be a lot nicer. Hence why I’ve got the early retirement bug and hence this blog post summarising the following book -

Early Retirement Extreme offers a critical intellectual framework for rethinking your approach to retirement that would allow someone on the median salary to retire several years earlier, and the more you earn, the earlier you should be able to achieve this goal. (The book has helped me (on £40+K) to work out an 8-12 year early retirement plan, which I’ll post on later).

Early Retirement Extreme is not a step by step guide about how to achieve early retirement. It is a critique of the paucity of normative ways of thinking about work-consumption-retirement and an overview of an alternative way of thinking about this nexus which ultimately means working and consuming less and retiring a lot earlier than normal.

If I could pick one single stand-out idea which captures the ethos of the book it is this: If your current yearly income is £10 000 and you spend 75% and save 25%, it will take you 3 years to accumulate enough savings to take 1 year off. If you invert this ratio by spending 25% and saving 75% then after 3 years you can take 9 years off.

While this hypothetical example doesn’t factor in real-life variables such what you might actually be earning, or inflation or interest on savings, it does illustrate the central principle of the book – Whatever your income, if you get used to living on as little money as possible and save as much as possible, then you will be able to retire A LOT earlier than the norm. In this model, early retirement will also require you to invest sensibly (this is not an anti-capitalist manifesto!) and develop a range of skills (social, physical, practical and technical) which will make you a more resilient person who is able to meet their downward-adjusted needs and wants with much less money.

By saving 75% of his income Fisker managed to become financially independent in five years, ane the blog recommends that you aim to save at least 40-60% of your income to make early retirement possible (I’ve managed 56%).

In Fisker’s model, the first step to early retirement is to get over the habitual way of thinking about work as something we do for 40 years, and to get over the idea that a high-level of consumption is what we do with those small chunks of time when we are not working. In his view, many of the consumer goods and services which are regarded as normal have little real value, and as examples he lists everything from kitchen gadgets to gym memberships but also cars and higher education.

Instead of working-consuming for 40 years, Fisker suggests that we stop consuming and start saving and we spend our non-working time developing ‘resilience skills’ which will make us less dependent on money. He suggests four types of skill – practical (e.g. building your own house rather than paying £100K interest on a mortgage), technical (a diverse range of professional skills), physical (being able to cycle rather than needing to drive), and social (sharing a house rather than living alone).

Each individual will approach early retirement in different ways depending on their own specific circumstances, and Fisker sugggests that it is up to the individual to weigh up their own talents and find their own individual (or couple/ small network) path to retiring early – In this vision, thinking for yourself, and creativity are crucial.

The fact that the idea of saving 75% of your income will seem unrealistic to most and down-right impossible to many is, to Fisker, simply a sign of how colonised our minds have become by societal work-consumption-retirement norms and very early on in the book Fisker contrasts his own creative ‘renaissance’ approach to early retirement to the slavish mentality which keeps us chained to our sub-optimal 40 hour a week/ 40 year career working norm.

He uses Plato’s cave analogy to illustrate how we have become wage slaves, the wall in his modern rendering of this tale representing us being trapped by the multitude of things we mistakenly think we need. However, unlike physical walls, our chains are mental, because rather than using our imagination to creatively break free of this cycle, we develop excuses which keep us locked into this cycle of a long-career and short-retirement.

Fisker criticises what he casts as the ‘wage-credit-spend-consume-retire on a million-cycle’ – Into which we have been duped. He is especially critical of our wasteful consumption practices – we are taught to be materialists through toys from childhood and later on our mortgage-purchased houses become places in which we store stuff which goes largely unused.

As briefly outlined above, rather than spending, Fisker’s solution to breaking free of this cycle is simple – spend less and save like what appears to be crazy to build a relatively small retirement pot. His own version of retirement really is extreme – saving 75% of his income, it took him 5 years to retire on a third of the median income (something like $700 annually), reducing his expenditure to the very basics of life and finding creative ways to enable him to live on less.

Given that he lives on $7000/ year, it seems reasonable to assume that he had an income of $30 000 over these five years of saving, meaning that he has ‘retired’ on an income pot of $150 000, although it will almost certainly be more than that given that he appears knowledgeable about investing.

Obviously this is more than most people will be earning in their late 20s/ early 30s when he started out on his early retirement mission, but Fisker holds that it is the 75-25 ratio that is the crucial thing, and more crucially, the mindset to spend as little as you can by finding creative ways to avoid the con-of-consumption and save what remains.

If you haven’t already done so, I thoroughly recommend checking out the early retirement extreme blog which has details of many people on a mission to retire early, and in a future post I’ll put together a number of links to U.K. based early retirers…

Related Links (more to follow)

The Early Retirement Extreme Blog

How the median income earner could retire at 52

Posted in Retirement - Early, Work | Tagged: , | No Comments »