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August 13, 2007

Subsidizing Education

There's really only one good answer to this sort of request:

In a report today, it calls on ministers to create incentives for students who study maths, science and engineering at A-level and university. It wants £1,000-a-year bursaries for degree courses in the subjects and a requirement that almost half the brightest teenagers study sciences at GCSE.

The CBI says that without the move the British economy will suffer, with top firms forced to hire engineers and technicians from India and other rival nations.

Off you go then.

If industry thinks that it is industry's best interests to have more maths and science A levels and degrees taken, so much so that extra money should be spent upon attracting people to do so, then there's nothing at all stopping said industry from setting up such a scheme and paying for it.

August 13, 2007 in Academia | Permalink

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Comments

"there's nothing at all stopping said industry from setting up such a scheme and paying for it."

For a fact, some large science-technology companies in Britain used to offer bursaries for students taking science or engineering degrees years ago, long before top-up fees came in.

Posted by: Bob B | Aug 13, 2007 8:57:47 AM

Good point.

Posted by: Mark Wadsworth | Aug 13, 2007 10:03:39 AM

I was thinking about this last night when I wrote my piece on using a 100% LVT to fund a Citizens Income that would work out at about £100 per week per adult falling to about £20 per week for a 2 year old. It would not give people enough to be able to pay for an education at even current state funding rates (which is probably grossly inefficient of course) so I was wondering about how to finance the shortfall and thought that persuading employers that they ought to be putting money into the system that was supposed to train future employees amongst other things might work.

Posted by: Jock | Aug 13, 2007 10:11:38 AM

And, of course, there's nothing stopping industry from offering engineers and scientists higher salaries than, say, accountants.

The fact that they don't tends to suggest that the importance of said scientists and engineers is somewhat less than they themselves like to think it is.

When the market speaks, it's sensible to pay attention.

Posted by: Andrew Duffin | Aug 13, 2007 10:31:59 AM

Hmm - in 1985 when I was hunting around for what was then called "industrial sponsorship" to top up what would have been a grant for university the best ones available were for science and engineering subjects. As someone proposing to study English the only one offer I got was from M&S if I would consider a graduate fast-track program in human remains. I decided I would rather not do a degree...:)

Posted by: Jock | Aug 13, 2007 10:36:34 AM

Jock, here's a cunning plan, use existing welfare spending to fund a CI scheme.

We submitted this to the Commons Committe who appear to have taken some of it on board in their "SWAB" proposals. (I've heard some daft acronyms in my time but that is just taking the piss).

Posted by: Mark Wadsworth | Aug 13, 2007 12:58:19 PM

GEC, which was one one time Britain's largest electronics and electrical engineering company, used to have a bursary scheme for science and engineering students at university in the hope and expectation that some would come to work for GEC after graduating although there was no contractual obligation upon them to do so.

That was when the company was run by Arnold Weinstock, whom the Guardian had once dubbed "Britain's premier post-second-world-war industrialist."
http://en.wikipedia.org/wiki/Arnold_Weinstock

On his retirement, the company was "reorganised" - or "modernised" after Blairite fashion by George Simpson, a New Labour peer - parts were sold off to BAE and what was left was renamed "Marconi" and that shortly went disastrously bust.

"Marconi was once the jewel in the crown of British manufacturing. But disastrous investments have seen some of the worst losses in UK corporate history - over £5bn. The Money Programme investigates how a cautious company with billions in the bank set off on a rollercoaster ride to ruin.

"Marconi was once Britain's biggest and best known manufacturing concern. Until last year it was cheered by the City and its shares soared in value. Today Marconi has become notorious as one of the worst disasters of British corporate history."
http://news.bbc.co.uk/1/hi/business/3087333.stm

On the man who broke Marconi:
http://news.bbc.co.uk/1/hi/in_depth/uk/2000/newsmakers/1527551.stm

Yet another Blairite achievement.

Posted by: Bob B | Aug 13, 2007 1:52:27 PM

What Mr Duffin said, but with bells and whistles on.

If industry stopped employing muppets with no-name-brand-degrees and putting them in positions of authority maybe people might consider doing a "hard" degree instead.

According to PC Copperfield, the police might do well to follow the same advice.

Posted by: The Remittance Man | Aug 13, 2007 3:18:04 PM

Hmm. Weinstock's over-cautious mismanagement was what broke GEC in the first place (no business worth c£10bn should have a £5bn cashpile - it should have been steadily invested in the business, returned to shareholders, or both).

Simpson took charge at the worst possible time and overcompensated, but the reason he did it was that the company's previous position and policy was obviously untenable.

Posted by: john b | Aug 13, 2007 4:44:34 PM

"If industry stopped employing muppets with no-name-brand-degrees and putting them in positions of authority maybe people might consider doing a "hard" degree instead."

But we don't DO industry now.

We DO business instead.

Remember, our new government has just changed the name of the DTI to the Department of Business, Enterprise and Regulatory Reform, or DBERR for short.

That's modernisation.

Posted by: Bob B | Aug 13, 2007 4:52:27 PM

Andrew Duffin says:

"And, of course, there's nothing stopping industry from offering engineers and scientists higher salaries than, say, accountants.

The fact that they don't tends to suggest that the importance of said scientists and engineers is somewhat less than they themselves like to think it is.

When the market speaks, it's sensible to pay attention."

This argument would have some validity if accountants worked in a global free market in the same way as engineers do. If you look at the best paid occupations in the UK, they are all ones where there is no international competition, local laws/rules apply or where there is closed shop and union-restricted supply. Medicine, Law and Accountancy are three of the best examples of this.

The problem with this is that we have to pay our lawyers, medics and accountants much more than their true market worth - there has never, for example, been any shortage of people well qualified to become medics in this country, but the Royal Colleges have been able to restrict entry in order to increase the price.. This makes these occupations look relatively more attractive and makes it more expensive to live in this country. A recent report in the US showed that American companies offshoring skilled engineering work to India only had to pay one third of the salary in India to give their employees the same standard of living. In the long term, however, we can't pay for all the nice imports we are currently sucking in by having more medics, accountants and lawyers.

Hayek pointed out that if the state is complicit in artificially protecting the incomes and security of certain groups of workers, it negatively impacts the income and security of other groups of workers. This is what has happened to engineers and scientists - their salaries and security have been negatively affected by the security provided either directly or indirectly to other groups. I'm all in favour of the free market, but we don't really have one.

Posted by: HJHJ | Aug 13, 2007 6:22:46 PM

"We submitted this to the Commons Committe who appear to have taken some of it on board in their "SWAB" proposals."

Interesting report, but did you really have to use the phrase "unearned income"? What's wrong with "investment income"?

Posted by: Kay Tie | Aug 13, 2007 7:52:18 PM

Hey, I just did the numbers. I did suggest saying "interest income" (because I personally would exempt dividend income, tax already having been paid at company level) but was overruled.

Posted by: Mark Wadsworth | Aug 13, 2007 8:23:05 PM

"If you look at the best paid occupations in the UK, they are all ones where there is no international competition, local laws/rules apply or where there is closed shop and union-restricted supply."

Not so. Various surveys have come up with similar findings that in Britain economics graduates tend to be relatively well paid compared with graduates in other subjects, especially compared with other social science subjects:

"Economics graduates commanded a well-above average salary, at £21,118 – the highest of the six social science subjects covered here. Graduates from the other five subjects reported salaries below (but some close to) the average figure for all subjects."
http://www.prospects.ac.uk/cms/ShowPage/Home_page/What_do_graduates_do__2007/Social_sciences_editorial/p!elkbpfi

"The survey, reported in the Times (24th June 1997) showed that the average salary of a graduate economist was some £35,000 p.a., putting them above law, accountancy, business management and way ahead of other social sciences such as geography and politics."
http://www.socialsciences.manchester.ac.uk/disciplines/economics/undergraduate/careers/

"The career opportunities for trained economists are extremely good. A recent survey showed that economics graduates had the second highest average salary a decade after graduation (being topped only by clinical dentists)."
http://www.socialsciences.manchester.ac.uk/undergraduate/courses/course/?code=00400&pg=all

One reason for the relatively high average salaries of economics graduates is that a disproportionate number of economists go to work for financial institutions in the city or for international consultancies. It would be difficult to convincingly argue that such jobs are not open to international competition.

Posted by: Bob B | Aug 13, 2007 9:08:08 PM

"Hey, I just did the numbers. I did suggest saying "interest income" (because I personally would exempt dividend income, tax already having been paid at company level) but was overruled."

I'm a bit touchy on that phrase "unearned income". It was a nasty piece of spin from the Wilson era, that somehow this kind of income is unjustified, unfair, no work was done for it, and it can be justifiably confiscated by the state (e.g. the 98% tax rate applied in 1979) and redistributed to more "worthy" causes.

Tim adds: 130%, retrospectively, under Woy Jenkins.

Posted by: Kay Tie | Aug 13, 2007 10:14:05 PM

I'm a bit touchy on that phrase "unearned income"

Agreed, I don't like it either, like I'm saying, I just did the numbers, not the spin. The team that wrote that paper features a hard-core leftie, an old Lib-Dem, a CoE vicar and a Ukipper.

Posted by: Mark Wadsworth | Aug 13, 2007 11:04:05 PM

Although "unearned increment" was of course a Churchill phrase in his Liberal period.

Posted by: Jock | Aug 23, 2007 10:54:01 AM

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