UK wage collapse

Thrugelmir

wotsthat wrote: »

but the relationship between banks and government would likely have been cosier with the Tories in power.

Who funded the Labour party?

Any co-incidence ?

Ex-HBOS chief James Crosby stripped of knighthood

Former RBS chief executive Fred Goodwin stripped of his knighthood

27 honours to bankers.........

In a 2007 speech to the City, Mr Brown even claimed bankers had forged an ‘era that history will record as the beginning of a new golden age for the City of London’.
Of the finance chiefs honoured by the Government, eight were given knighthoods, seven CBEs, four OBEs and four MBEs.

Masomnia

Caveat_Mortgagor wrote: »

Dont know about the others, but the GDP graph is nonsense.

Govt spending alone in 2010/11 was £690bn. Your graph suggests total GDP was little more than half the amount the govt spent.

It cannot be correct.

http://image.guardian.co.uk/sys-files/Guardian/documents/2011/11/08/Public_spending_2710.pdf

I'm guessing the graph shows quarterly numbers. Sounds about right to me if that's the case.

Thrugelmir

Not quite 50%.

In 2000-01, several years of government spending restraint combined with rising economic growth, saw government spending shrink to under 35% of GDP. Between 2001 and 2007-08, spending rose to over 40% of GDP due to sustained increases in spending on health, education and welfare spending.

Between 2008-09 and 2009-10, the UK saw a large drop in real GDP of 6%, but due to automatic stabilisers government spending increased (e.g. higher unemployment benefits). This caused government spending as % of GDP to rise to 47%.

wotsthat

Thrugelmir wrote: »

Who funded the Labour party?

Any co-incidence?

27 honours to bankers.........

There were clear indications that the conservatives were calling for less regulation of the banking sector rather than more in 2007. I rather suspect that the banking lobby didn't have to be quite so persuasive to get this message over to the conservatives.

As for labour giving 27 honours to bankers yes it's a joke.

Old_Slaphead

Radiantsoul wrote: »

Household incomes have been static for a decade. I am not sure why, but I suspect the cause is more complex than this or that government in power.

SMEs are biggest source of private employment. Many are struggling to make a half decent profit and need to continually invest to improve efficiency. Lots of businesses in my area have not been able to afford any pay rises for several years.

antrobus

wotsthat wrote: »

There were clear indications that the conservatives were calling for less regulation of the banking sector rather than more in 2007. I rather suspect that the banking lobby didn't have to be quite so persuasive to get this message over to the conservatives.....

The big problem with banking regulation is that people (including a great number of politicians) confuse it with consumer protection. That was the problem with the FSA as designed by New Labour; it expended all its efforts on 'regulating' the way banks did business with consumers and very little on actually 'regulating' the banks themselves. Thankfully the current administration appears to have understood this; hence the FCA and PRA.

Tancred

macaque wrote: »

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

What is unfortunately not mentioned is that wages really fell once employers started to abandon final salary pension schemes in the 1990s. My current employer jettisoned the final salary scheme in 1998 and now offers a meagre 12% contribution to a money purchase pot which is gambled on the stock market. The value of the final salary contribution could be assessed actuarially at around 30% of pay.

This means an effective pay cut of 18% for everyone who joined the company after 1998!

The small pay reductions as a result of the recession are peanuts in comparison. My employer froze pay last year but awarded a 15% bonus to (almost) everyone as a sweetner - the standard yearly bonus is 8-9%. I'm not concerned.

Loughton_Monkey

Tancred wrote: »

What is unfortunately not mentioned is that wages really fell once employers started to abandon final salary pension schemes in the 1990s. My current employer jettisoned the final salary scheme in 1998 and now offers a meagre 12% contribution to a money purchase pot which is gambled on the stock market. The value of the final salary contribution could be assessed actuarially at around 30% of pay.

This means an effective pay cut of 18% for everyone who joined the company after 1998!

The small pay reductions as a result of the recession are peanuts in comparison. My employer froze pay last year but awarded a 15% bonus to (almost) everyone as a sweetner - the standard yearly bonus is 8-9%. I'm not concerned.

I generally agree the thrust of what you say, but I think it needs to be taken into a bit more context...

First of all, let's not assume that UK employers have always been 'savvy' and consciously fix their overall remuneration package scientifically. The early FS schemes were not 'costing' the employers anything like 30% at the time. Any actuaries around here might be able to give accurate figures, but I would guess that employers were funding at around 12%/15% max at the time [up to the 1980's, early 90's]. It was only later that they cottoned onto improved mortality, and lower interest rates...

Sadly, by the time it was all noticed and properly assumed in calculations that the bill becomes attributable to the current workforce whereas a lot of the extra liability is down to ex employees/retirees.

Also, the extra mobility of employees kept down the cost. Work for 4 employers for 10 years - each with the same FS scheme - and your pension of 40/60ths will be nothing like that of a similar employee who has been in the same scheme 40 years.

I would also remark that employers (these days) have to cope with a lot of extra cost. NI is massive. Bonuses have become the norm. Compliance with all the 'Nanny State' rules of equal opportunities/sex discrimination/maternity leave/Health & Safety comes at a non-trivial cost.....

grizzly1911

ILW wrote: »

I would suspect the whole financial sector is a bit over most labour politicians heads. None of them seem to have ever done a proper job.

Same goes for a good many in the other parties too. Just remind me what proper jobs those in the leadership team have done.