Unit 1: Cost of London Olympics

How much did the London Olympics cost?

Well in 1948, the London Olympics cost a meagre £730,000, with athletes staying at home and commuting by tube to save money. The event turned a profit of £29,420, on which the organisers then had to pay £9,000 in tax. (article at BBC on 1948 London Olympics)

The cost of the 2012 London Olympics has sparked quite a debate. In an era of austerity, spending around £7.267bn on new sporting facilities, infrastructure improvements and luxury accomodation may seem of dubious value, at least to those on public sector pay freezes.

However, in cost and benefits of 2012 London Olympics, I still feel the benefits outweigh the costs. Keynesian fiscal policy is currently out of fashion, with austerity ruling policy. But, an injection of £7bn into the economy will be of some boost in this difficult time.

Real Rate of Unemployment

A lot of focus has featured on why inflation is so high. A more interesting question is why is unemployment not higher given depth of recession and also, the number who are economically inactive.

The employment rate in the UK is currently 72.3%. The employment rate is the % of those of working age in employment, (it also includes part time employment). This means we have 27% of the working age population not in employment. This includes
unemployed (either claiming JSA or unemployed by Labour force survey)


Those in full time education taking early retirement
Left the labour force - e.g. mothers bringing up children, those on disability allowance.Obviously, if people leave labour force to study, this can be beneficial in long term. But, if a significant proportion of workforce are pushed on to disability allowance or take early retirement this represents significant lost output for economy.Despite the recession, there are quite a few reasons why unemployment is not higher
cost of redundancy.
Increase in student numbers to avoid a saturated job market.
Underemployment - people working less hours than they would like
Recession hit hardest sectors of the economy which were less labour intensive e.g. finances rather than manufacturing.

Back in the UK and it didn't take me long to visit Leeds, Leeds, Leeds. I spent a while looking for the indie music section, which I used to enjoy browsing. It took a while to realise the department had been now squeezed into two shelves between easy listening, branded retro clothes, weird T-Shirts and computer game consoles.

It then hit me that HMV was no longer a record shop, but, a company trying to valiantly cope with the rapidly changing high street.

With new technology, there are always winners and losers. This goes back to the Luddites of the nineteenth century; unemployed weavers who went around northern towns smashing machines they thought had cost them a job. In a way, the machines did create structural unemployment, but for every job lost, new jobs were slowly being created in different fields.

Technology has been hard on music sales. Some of my students say they can't understand why anyone would buy a CD, when everything can be downloaded for free. Maybe I'm still too old fashioned to be buying CDs. But, even when I get downloads I go to Amazon and pay for them. I've never understood this idea that you should be entitled to creative art for free and not offer any recompense to the artist.

Having said that the greatest irony of visiting HMV was seeing a retro Leeds United top from the 1970s (a time of trophies and the strongest side in the country, not barely escaping from a division third from bottom, but, that's another post). The top was cool. But, at £40 a little on the pricey side. I noticed a website on the label, so when I got home I checked out the website. The price was £10 lower and there was greater choice of sizes.

So thanks to HMV I was able to buy a retro top, cheaply on t'internet. At least HMV is trying to avoid the fate that befell other less flexible record shops such as Zavvi's

Future of High Street

Ten (or even five years) ago, I think it would have been difficult to predict the rapid decline of record shops (record shop sounds very satisfying, even if they don't sell records).

In the next few years, the interesting thing will be the fate of bookshops. Will people still like buying books, when you can read online and download? Books will always retain a charm that ipad screens can't match, but, then buying 7 inch black disc singles had a certain charm too. Charm and nostalgia is not enough to guarantee survival. I guess, the future of bookshops is to expand the ever growing number of Costa cafes, so bookshops just become a virtual place where people tapping away on their laptops can download Shakespeare's greatest hits. Though in an era of free wireless, it is hard to see a business model that is too robust.

If internet shopping does become the norm, what will happen to the high street, surely there are only so many Starbucks and Costa coffee shops that can be supported. People say clothes shops are safe, but, I'm not sure. At least for men, the attraction of buying clothes online is quite high if it saves you £10.

Maybe shopowners should take a leaf out of the Luddites books and try smash up t'internet. Though, on second thoughts, maybe the only way is to accept the inevitability of change - even if it does mean replacing Schubert and Beethoven with retro furry dice.