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Weak Wage Growth Strains Festive Finances

StevieJ
StevieJ Posts: 20,174 Forumite
Part of the Furniture 10,000 Posts Combo Breaker
in Debate House Prices & the Economy
Wage increases fall behind inflation, all part of the India/China/West rebalancing?
The headline measure of relative wealth, calculated by Oxford Economics using incomes and living cost data for the average adult, sank to 93.5 in November (Berlin: NBXB.BE - news) from 93.8 in October.
http://uk.finance.yahoo.com/news/Weak-Wage-Growth-Strains-skynews-591167184.html?x=0
'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
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Comments

  • abaxas
    abaxas Posts: 4,141 Forumite
    StevieJ wrote: »
    Wage increases fall behind inflation, all part of the India/China/West rebalancing?

    A bit of that, plus also a bit of 'we already spend it and are now trying to pay it back'.

    I say trying, because in reality it will never be paid back.
  • ChrisMcKendrick
    ChrisMcKendrick Posts: 84 Forumite
    abaxas wrote: »
    A bit of that, plus also a bit of 'we already spend it and are now trying to pay it back'.

    I say trying, because in reality it will never be paid back.

    I'm inclined to agree. The banks loaned out more than even a healthy economy could hope to pay back for some time...
    January: Jolibook netbook. :DFebruary: Nothing :(March: May fortune smile upon me! Thanks to all the Comp posters & good luck everyone :beer:
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    abaxas wrote: »
    A bit of that, plus also a bit of 'we already spend it and are now trying to pay it back'.

    I say trying, because in reality it will never be paid back.

    Not with you there? not sure what private companies paying pathetic pay rises has got to do with govt debt?
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
  • abaxas
    abaxas Posts: 4,141 Forumite
    StevieJ wrote: »
    Not with you there? not sure what private companies paying pathetic pay rises has got to do with govt debt?

    It's not just the government who has huge debts. Business is wallowing in it.
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    abaxas wrote: »
    It's not just the government who has huge debts. Business is wallowing in it.

    The business guys that I know are taking full advantage of the bargaining position of the workforce, debts or no debts :eek:
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
  • Loughton_Monkey
    Loughton_Monkey Posts: 8,913 Forumite
    Part of the Furniture Combo Breaker Hung up my suit!
    StevieJ wrote: »
    Wage increases fall behind inflation, all part of the India/China/West rebalancing?

    Would anyone (sane, that is) have predicted any differently?
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Loughton_Monkey wrote: »
    Would anyone (sane, that is) have predicted any differently?

    Perhaps the workforce of the west should have taken more seriously those globalisation protests.
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
  • nearlynew
    nearlynew Posts: 3,800 Forumite
    Wages have been falling in real terms for the past 40 years. And will continue to do so.

    Up until a couple of years ago, it didn't matter because people could just borrow to supplement their income. Whilst this works for a while, eventually the debt catches up with you and you realise that instead of being richer, you are, in fact, poorer.
    Most people's financial problems are not caused by their income but by their spending.

    In other words, debt is not wealth.



    While I'm at it I might as well mention that inflation is theft.
    "The problem with quotes on the internet is that you never know whether they are genuine or not" -
    Albert Einstein
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    StevieJ wrote: »
    Wage increases fall behind inflation, all part of the India/China/West rebalancing?

    Higher wages can only be afforded if a Company correspondingly increases their selling price. To maintain margins. Much of inflation is imported and is being absorbed not being passed on.
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    abaxas wrote: »
    It's not just the government who has huge debts. Business is wallowing in it.

    I'm not sure that's true. If anything companies are sitting on large cash piles in many cases, looking for decent investment opportunities which aren't there.

    eg:

    http://seekingalpha.com/article/240348-corporate-america-cashing-in-with-cash

    Eg The S&P 500 companies (basically the biggest 500 companies listed on US stock exchanges, so excluding privately owned companies) hold $1,200,000,000,000 in cash between them plus they have returned $1,700,000,000,000 to shareholders in the form of share buybacks.

    Apple and Google between them hold the best part of $75,000,000,000 in net cash on their books. Even at a measly 1.2% interest they're making $2,500,000 in interest on that every day!
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