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Recession deniers should shut up as down we continue to go

David Blanchflower makes the case for an immediate increase in public investment in building.

The drop in gross domestic product of 0.7 per cent in the second quarter of 2012 was greeted with incredulity by those who have been saying for months that the UK is not in a double dipper when we obviously are. Business and consumer confidence and lots of other measures have been in recession territory for a year. The latest industrial production figures suggest only a small upward revision. The economy shrank in five of the past six quarters, including all of the past three. GDP is now lower than it was when George Osborne became Chancellor in 2010. It’s time for the recession deniers to shut up.

The government’s current spending continues to prop up output. Manufacturing made  a negative contribution to growth in each of the past four quarters. Construction made the biggest negative contribution in the past two quarters, with declines of roughly 5 per cent in both. Disaggregated data for the first quarter shows that this was driven by declines in the value of public housing and non-infrastructure public spending (-11 per cent and -17 per cent, respectively, quarter on quarter; and -18 per cent and -20 per cent, year on year). This looks like a collapse in construction, driven by the coalition’s decision to kill off public investment. The evidence is that public investment crowds in private investment, contrary to the coalition’s bizarre claims that it crowds it out.

Decline and fall

The big decline in construction output has been questioned by some as not being plausible, even though there is a good deal of corroborating
evidence. The Bank of England’s agents’ reports show that it has been declining for months and is at levels previously seen only in the depths of recession in 2008 and 2009 (see chart 1). Many of the agents’ other scores, including those on capacity constraints, employment and investment intentions, have been declining through most of 2012 and are also in recession territory. These scores were good predictors of bad things to follow in 2008. The collapse in construction appears to be driven by the coalition’s disastrous decision to slash public investment.

The purchasing managers’ index (PMI) for construction in July showed a marginal rise in output, rebounding slightly from June’s two-and-a-half-year low. The data (see chart 2) is again at levels seen only in the recession of 2008-2009. This survey suggests that output rose for 18 of the past 19 months but is based on a small sample of big firms and may well be subject to a degree of survivor and optimism bias. No other evidence suggests this, including the new orders and output data from the Office for National Statistics (ONS), the RICS survey, or any of the industry’s sector-specific surveys.

Strong supporting evidence of a collapsing construction sector was provided by the latest trade survey from the Construction Products Association, which showed that during the second quarter of 2012 construction suffered another sharp fall across all parts of the industry, including current workloads, new orders and tender prices. Large and medium-sized building contractors reported that output in the second quarter of 2012 was lower than during the first quarter of 2011, which in turn was lower than the fourth quarter of 2011. Public-sector investment continues to decline, and the survey found no sign of private-sector recovery to offset these cuts, leaving little optimism for recovery in the near future. This was the fourth fall in the past five quarters.

The employment data is consistent with the picture of continuing decline in construction. According to the ONS’s labour force survey, used to calculate the unemployment rate, construction employment is down 2.8 per cent on the year, whereas private-sector employment as a whole is up 2.9 per cent. The number of employees in construction is down 6.6 per cent on the year; as a result, the self-employment rate in construction is up from 35 per cent in 2008 to 40 per cent in the first quarter of this year.

It is interesting to compare the performance of the UK labour market under David Cameron and Osborne with what has happened in the US. The latest data release showed that non-farm payroll employment in the US increased for the 22nd month in a row by 163,000 on the month. The presidential candidate Mitt Romney, who continues to put his foot in his mouth, said these numbers, which were much better than economists had expected, were a “hammer blow” to middle-class families. He probably mixed up the positive sign with a negative one.

Over the past two years, employment in the US has climbed by three million (a rise of 2.5 per cent); the number of unemployed is down by 1.7 million (12 per cent) and the number of long-term unemployed is down by a fifth. Employment in the UK over the same period is up by 200,000 (0.7 per cent); it has risen in only 12 of the past 22 months. Unemployment is up by 100,000 (5 per cent), while long-term unemployment is up by 120,000 (9 per cent). In job-creation terms, Barack Obama and his Treasury secretary, Timothy Geithner, easily beat Cam­eron and Osborne.

Gloomy weather

It seems likely that growth for 2012 as a whole will be negative and the Bank of England’s Monetary Policy Committee will again lower its forecasts for the next three years, having already downgraded expectations of 2012 output to zero. The National Institute of Economic and Social Research expects the economy to shrink by 0.5 per cent. The International Monetary Fund anticipates growth of 0.2 per cent.

This is a long way from the 2.8 per cent predicted for 2012 by the Office for Budget Responsibility in its cloud-cuckoo-land “emergency” Budget forecast of June 2010. I am expecting growth of below -1 per cent in 2012. The case for an immediate increase in public investment in infrastructure is building.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

This article first appeared in the 13 August 2012 issue of the New Statesman, The New Patriotism

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This Ada Lovelace Day, let’s celebrate women in tech while confronting its sexist culture

In an industry where men hold most of the jobs and write most of the code, celebrating women's contributions on one day a year isn't enough. 

Ada Lovelace wrote the world’s first computer program. In the 1840s Charles Babbage, now known as the “father of the computer”, designed (though never built) the “Analytical Engine”, a machine which could accurately and reproducibly calculate the answers to maths problems. While translating an article by an Italian mathematician about the machine, Lovelace included a written algorithm for which would allow the engine to calculate a sequence of Bernoulli numbers.

Around 170 years later, Whitney Wolfe, one of the founders of dating app Tinder, was allegedly forced to resign from the company. According to a lawsuit she later filed against the app and its parent company, she had her co-founder title removed because, the male founders argued, it would look “slutty”, and because “Facebook and Snapchat don’t have girl founders. It just makes it look like Tinder was some accident". (They settled out of court.)

Today, 13 October, is Ada Lovelace day – an international celebration of inspirational women in science, technology, engineering and mathematics (STEM). It’s lucky we have this day of remembrance, because, as Wolfe’s story demonstrates, we also spend a lot of time forgetting and sidelining women in tech. In the wash of pale male founders of the tech giants that rule the industry,we don't often think about the women that shaped its foundations: Judith Estrin, one of the designers of TCP/IP, for example, or Radia Perlman, inventor of the spanning-tree protocol. Both inventions sound complicated, and they are – they’re some of the vital building blocks that allow the internet to function. 

And yet David Streitfield, a Pulitzer-prize winning journalist, someow felt it accurate to write in 2012: “Men invented the internet. And not just any men. Men with pocket protectors. Men who idolised Mr Spock and cried when Steve Jobs died.”

Perhaps we forget about tech's founding women because the needle has swung so far into the other direction. A huge proportion – perhaps even 90 per cent - of the world’s code is written by men. At Google, women fill 17 per cent of technical roles. At Facebook, 15 per cent. Over 90 per cent of the code respositories on Github, an online service used throughout the industry, are owned by men. Yet it's also hard to believe that this erasure of women's role in tech is completely accidental. As Elissa Shevinsky writes in the introduction to a collection of essays on gender in tech, Lean Out: “This myth of the nerdy male founder has been perpetuated by men who found this story favourable."

Does it matter? It’s hard to believe that it doesn’t. Our society is increasingly defined and delineated by code and the things it builds. Small slip-ups, like the lack of a period tracker on the original Apple Watch, or fitness trackers too big for some women’s wrists, gesture to the fact that these technologies are built by male-dominated teams, for a male audience.

In Lean Out, one essay written by a Twitter-based “start-up dinosaur” (don’t ask) explains how dangerous it is to allow one small segment of society to built the future for the rest of us:

If you let someone else build tomorrow, tomorrow will belong to someone else. They will build a better tomorrow for everyone like them… For tomorrow to be for everyone, everyone needs to be the one [sic] that build it.

So where did all the women go? How did we get from a rash of female inventors to a situation where the major female presence at an Apple iPhone launch is a model’s face projected onto a screen and photoshopped into a smile by a male demonstrator? 

Photo: Apple.

The toxic culture of many tech workplaces could be a cause or an effect of the lack of women in the industry, but it certainly can’t make make it easy to stay. Behaviours range from the ignorant - Martha Lane-Fox, founder of, often asked “what happens if you get pregnant?” at investors' meetings - to the much more sinister. An essay in Lean Out by Katy Levinson details her experiences of sexual harassment while working in tech: 

I have had interviewers attempt to solicit sexual favors from me mid-interview and discuss in significant detail precisely what they would like to do. All of these things have happened either in Silicon Valley working in tech, in an educational institution to get me there, or in a technical internship.

Others featured in the book joined in with the low-level sexism and racism  of their male colleagues in order to "fit in" and deflect negative attention. Erica Joy writes that while working in IT at the University of Alaska as the only woman (and only black person) on her team, she laughed at colleagues' "terribly racist and sexist jokes" and "co-opted their negative attitudes”. 

The casual culture and allegedly meritocratic hierarchies of tech companies may actually be encouraging this discriminatory atmosphere. HR and the strict reporting procedures of large corporates at least give those suffering from discrimination a place to go. A casual office environment can discourage reporting or calling out prejudiced humour or remarks. Brook Shelley, a woman who transitioned while working in tech, notes: "No one wants to be the office mother". So instead, you join in and hope for the best. 

And, of course, there's no reason why people working in tech would have fewer issues with discrimination than those in other industries. A childhood spent as a "nerd" can also spawn its own brand of misogyny - Katherine Cross writes in Lean Out that “to many of these men [working in these fields] is all too easy to subconciously confound women who say ‘this is sexist’ with the young girls who said… ‘You’re gross and a creep and I’ll never date you'". During GamerGate, Anita Sarkeesian was often called a "prom queen" by trolls. 

When I spoke to Alexa Clay, entrepreneur and co-author of the Misfit Economy, she confirmed that there's a strange, low-lurking sexism in the start-up economy: “They have all very open and free, but underneath it there's still something really patriarchal.” Start-ups, after all, are a culture which celebrates risk-taking, something which women are societally discouraged from doing. As Clay says, 

“Men are allowed to fail in tech. You have these young guys who these old guys adopt and mentor. If his app doesn’t work, the mentor just shrugs it off. I would not be able ot get away with that, and I think women and minorities aren't allowed to take the same amount of risks, particularly in these communities. If you fail, no one's saying that's fine.

The conclusion of Lean Out, and of women in tech I have spoken to, isn’t that more women, over time, will enter these industries and seamlessly integrate – it’s that tech culture needs to change, or its lack of diversity will become even more severe. Shevinsky writes:

The reason why we don't have more women in tech is not because of a lack of STEM education. It's because too many high profile and influential individuals and subcultures within the tech industry have ignored or outright mistreated women applicants and employees. To be succinct—the problem isn't women, it's tech culture.

Software engineer Kate Heddleston has a wonderful and chilling metaphor about the way we treat women in STEM. Women are, she writes, the “canary in the coal mine”. If one dies, surely you should take that as a sign that the mine is uninhabitable – that there’s something toxic in the air. “Instead, the industry is looking at the canary, wondering why it can’t breathe, saying ‘Lean in, canary, lean in!’. When one canary dies they get a new one because getting more canaries is how you fix the lack of canaries, right? Except the problem is that there isn't enough oxygen in the coal mine, not that there are too few canaries.” We need more women in STEM, and, I’d argue, in tech in particular, but we need to make sure the air is breatheable first. 

Barbara Speed is a technology and digital culture writer at the New Statesman and a staff writer at CityMetric.