UK wage collapse

Loughton_Monkey

Actually I do blame Brown. Don't get me wrong, I don't blame him for the worldwide meltdown, but I blame him for emulating in this country all the components that would have caused it anyway.

But most of all, I blame him because we would long since have fully recovered if he hadn't created such a sick economy that it is almost impossible to recover from whatever the worldwide economy.

Most of our problems today are nothing to do with the 'global crash', but to do with structural problems in our economy - most of which are the subject of other threads here......

• The huge shift towards public sector expenditure, with no public benefit.
• Wage inflation far higher than we could afford.
• A phenomenal explosion of benefits, and the creation of a benefits culture second to none in the world.

etc.

BobQ

Loughton_Monkey wrote: »

Hamish has gone 'graph mad'.

But his post #16 explains adequately why wages in UK are too high. Wages have gone up more agressively than GDP. We continue to pay ourselves more than we afford. Productivity is effectively down the drain.

But the good news is that some of us don't work any more, and therefore can't get a wage cut or freeze.

Some people are indeed fortunate to have retired and can make such observations about paying more than we can afford. But averages are deceptive, there are many people doing very nicely indeed in professional jobs, working the black economy, exploiting the poor through financial services, doing bureaucratic jobs etc. But there are many more earning a NMW, doing ZHCs, enforced part time working and not using the skills their expensively acquired education has given them. On average we may indeed be paying ourselves more than we earn but our society is still in a mess like our economy.

CLAPTON

Loughton_Monkey wrote: »

Actually I do blame Brown. Don't get me wrong, I don't blame him for the worldwide meltdown, but I blame him for emulating in this country all the components that would have caused it anyway.

But most of all, I blame him because we would long since have fully recovered if he hadn't created such a sick economy that it is almost impossible to recover from whatever the worldwide economy.

Most of our problems today are nothing to do with the 'global crash', but to do with structural problems in our economy - most of which are the subject of other threads here......

• The huge shift towards public sector expenditure, with no public benefit.
• Wage inflation far higher than we could afford.
• A phenomenal explosion of benefits, and the creation of a benefits culture second to none in the world.

etc.

I'm sure you are old enough to know that the biggest ever explosion of the benefits culture was the increase of less that 1 million unemployed to over 3 million in about 2/3 years.

The causes depend upon one's political preconceptions.

Thrugelmir

Posted by chucky
How long do the current government have to be in place until your warped partisan 'view' makes them have some responsibility?

Thank goodness I still have you on ignore. Been a while......

We'll be through a few more elections I suspect before the issues are finally resolved. As we may just be half way through base rates remaining at 0.5%. Which shows the mountain that has to be climbed. I've always been consistent that there are no quick fixes. Irrespective of whose in power.

Generali

macaque wrote: »

http://www.bbc.co.uk/news/business-23655605

I'm less than convinced by the analysis They seem to be comparing before tax wages with goods prices including VAT (CPI/RPI includes VAT).

They don't say what measure of inflation is used which doesn't help: because of the way it's calculated, RPI will almost always be higher than CPI. European nations only have CPI for the most part.

michaels

CLAPTON wrote: »

In 2007 the government (% of GDP) was about the same as in 1997


the financial melt down was mainly caused by USA mortgage debt and the securitisation of these bad debts.

So here is the thing, securitization (of mortgage debt and pretty much anything else) was a great wheeze for brining forward 'profit' that would have accrued over say 25 years for a mortgage and having it all now. this was obviously great for the bankers who structurd the products and made their mega bonuses but it was also great news for the govt as GDP and tax revenues suddenly looked much larger than they actually were.

Thus the govt felt able to push the boat out on public sector spending and benefits as it looked like it was not unaffordable in terms of the deficit and policy was that the govt should redistribute to ensure all shared in the economic growth not just the 'wealth creators'.

Of course it turned out that national output hadn't increased and that we were just living of future income but unfortunately all those spending commitments that had been made off the back of the assumption that income had permanently increased could not suddenly be reversed so suddenly there was an almighty structural gap between revenue and expenditure.

Now this was not Broons fault; no one really was aware at the time what was happening, had their been a Tory govt then the 'spoils' might have been distributed differently (less redistribution and public sector expenditure, more tax cuts) but the net position would have been the same - unmanageable deficit. Perhaps reversing tax cuts might have been politically quicker and easier than reigning in the welfare state and public sectors but who knows, one thing we can be certain off is that there is not a politician around who, even had the known what the true fiscal/cyclical position was would not still have spent the money.

Edit: The BBC is really P*ing me off running this as top story - how is it news, every month they announce the average earnings and inflation numbers, everyone knows real wages have been falling. Much is made of 'Labour having hit a nerve', no mention is made that falling wages have allowed employment to reach record levels. To me it feels like a party political broadcast on behalf of the Labour party. Are any other media running with it as the biggest story of the day?

chucky

Thrugelmir wrote: »

Thank goodness I still have you on ignore. Been a while......

We'll be through a few more elections I suspect before the issues are finally resolved. As we may just be half way through base rates remaining at 0.5%. Which shows the mountain that has to be climbed. I've always been consistent that there are no quick fixes. Irrespective of whose in power.

It's best you keep me on ignore otherwise you'll continue to get found out with your unintelligent and unfactual posts.

macaque_2

chucky wrote: »

We could blame Gordon Brown for the global financial crisis but we woulld be wrong...

Gordon Brown did not create the global financial crisis but he was more culpable than any other leader in the world. Under his stewardship, both as chancellor and PM, the city of London grew into a monster. He took credit for this along with 'light touch regulation'.

In the years leading up to 2007, the EU and US were pushing for tougher financial regulation. When they imposed stricter measures however, the crooks and spivs just moved to London. This is a version of the phenomenon called 'The Tragedy of the Commons'.

It has been argued that sub-prime lending was mainly a US problem. We know that it is not true. Unlike Greece and Ireland however, the UK was able to use its critical mass to hide its sub-prime lending with 4 measures: mass immigration, forbearance, continued loose lending and ultra low interest rates. More recently a fifth measure has been used: light touch regulation in the rental market. Renters in the UK have no security of tenure and no protection against predatory rent rises.

Sub-prime debt is still with us but remains hidden by low interest rates and artificial support measures for house prices. These however are serving as a slow acting poison. Retired people are having their savings destroyed, businesses cannot borrow, young people cannot buy homes and are being ripped off by landlords. The fallout from mass immigration is also starting to bite with overcrowded schools, falling healthcare standards, falling wages and declining care for the elderly.

CLAPTON

macaque wrote: »

Gordon Brown did not create the global financial crisis but he was more culpable than any other leader in the world. Under his stewardship, both as chancellor and PM, the city of London grew into a monster. He took credit for this along with 'light touch regulation'.

In the years leading up to 2007, the EU and US were pushing for tougher financial regulation. When they imposed stricter measures however, the crooks and spivs just moved to London. This is a version of the phenomenon called 'The Tragedy of the Commons'.

It has been argued that sub-prime lending was mainly a US problem. We know that it is not true. Unlike Greece and Ireland however, the UK was able to use its critical mass to hide its sub-prime lending with 4 measures: mass immigration, forbearance, continued loose lending and ultra low interest rates. More recently a fifth measure has been used: light touch regulation in the rental market. Renters in the UK have no security of tenure and no protection against predatory rent rises.

Sub-prime debt is still with us but remains hidden by low interest rates and artificial support measures for house prices. These however are serving as a slow acting poison. Retired people are having their savings destroyed, businesses cannot borrow, young people cannot buy homes and are being ripped off by landlords. The fallout from mass immigration is also starting to bite with overcrowded schools, falling healthcare standards, falling wages and declining care for the elderly.

Just love the idea that Brown hammered both USA and the EU into line.

Even better than Maggies's handbag.

chucky

macaque wrote: »

Gordon Brown did not create the global financial crisis but he was more culpable than any other leader in the world. Under his stewardship, both as chancellor and PM, the city of London grew into a monster. He took credit for this along with 'light touch regulation'.

In the years leading up to 2007, the EU and US were pushing for tougher financial regulation. When they imposed stricter measures however, the crooks and spivs just moved to London. This is a version of the phenomenon called 'The Tragedy of the Commons'.

It has been argued that sub-prime lending was mainly a US problem. We know that it is not true. Unlike Greece and Ireland however, the UK was able to use its critical mass to hide its sub-prime lending with 4 measures: mass immigration, forbearance, continued loose lending and ultra low interest rates. More recently a fifth measure has been used: light touch regulation in the rental market. Renters in the UK have no security of tenure and no protection against predatory rent rises.

Sub-prime debt is still with us but remains hidden by low interest rates and artificial support measures for house prices. These however are serving as a slow acting poison. Retired people are having their savings destroyed, businesses cannot borrow, young people cannot buy homes and are being ripped off by landlords. The fallout from mass immigration is also starting to bite with overcrowded schools, falling healthcare standards, falling wages and declining care for the elderly.

macaque, you are one of the best posters on here. Great post, I love the drama in it!!

A lot of the above may be true but our economy may be in a bad state but it's not as bad as most out there and it seems to be getting better (fingers crossed)...