If we vote for Brexit what happens

davomcdave

Conrad wrote: »

As Brexit beds in and we thrive in our new found confidence and independence, the vast bulk of people will become comfortable with the new status quo, there will be no going back.

People are so hung up on the minor benefits of the SM. People trade, companies trade, a trade agreement is just a minor square of icing, and as Moody's have concluded, the City will thrive without Passporting, trade deal or no trade deal.

Those that seem to think the answer to everything is an endless tide of immigration suffer a lack of imagination and latteral thinking.

So how is our strawberry farmer going to pick his strawberries and still remain competitive with EU farms do you think as wages rise in the UK but productivity does not? Something, something farm-in-a-hole perhaps. Or maybe the Great British strawberry picker can summon up the D-Day/Blitz/1966 spirit and just bally well pick faster than Piotr and his chums. We're British and we can gather berries better than anyone else on this planet, dammit.

Fella

HAMISH_MCTAVISH wrote: »

We know.



That statement shows a fundamental misunderstanding of economics and the labour market.

How are businesses supposed to grow and expand without access to workers?

How are businesses supposed to replace and ageing and retiring staff without access to quality workers? (and when unemployment is 2% it's a safe bet those 2% are mostly unemployable)

Business needs a ready pool of labour to draw from - the UK is already mostly at full employment (economically speaking) as unemployment at 4.7% and wages over the last few years rising faster than inflation demonstrates.

A labour market much tighter than that is incredibly bad for the economy - for productivity - for business growth - and therefore for society.

High employment is incredibly bad for the economy? I think that's reaching just a tad......

Besides, there are plenty more people available to work in the UK, they are just stripped out of the stats which have systematically been frigged to spin employment figures in a kinder light.

Filo25

Fella wrote: »

High employment is incredibly bad for the economy? I think that's reaching just a tad......

Besides, there are plenty more people available to work in the UK, they are just stripped out of the stats which have systematically been frigged to spin employment figures in a kinder light.

I think Hamish's point is that you will always have some unemployment in an economy, people between jobs, people who are unfortunately almost unemployable, people who unfortunately live in the wrong areas and its uneconomic for them to move.

When unemployment gets too low you start to generally get stronger inflationary pressures on wage settlements, employees can push for higher increases knowing they can't easily be replaced, workers often move jobs for considerably higher wages as emplyers struggle to fill open positions.

Which all sounds great but those cost increases end up feeding through into inflation, which feeds through to even higher age demands, etc.

It hasn't really been an issue in recent memory but that is a relatively recent phenomenon from a historical perspective, its why targetting inflation was such a focus in the 80's and earlier, unfortunately once you reintroduce inflationary expectations into the system, they can be hard to get rid off.

My feeling on the UK economy at present, is that there is probably still some slack in there not so much through unemployment but perhaps more underemployment, of some people not working as many hours as they might like, the impact of that probably varies significantly by sector though.

mrginge

davomcdave wrote: »

I agree, increased wages pushes businesses to spend money on capital spending (capex) rather than wages.

I didn't say that.

For a business like strawberry farming picking capex can't replace labour as machines can't currently pick strawberries. As a result we see creative destruction happen instead: the strawberry farm sees increased costs which it can't pass on to the supermarkets. The strawberry farm goes bust and is replaced with a business or something else that can use the land more profitably under the new, changed circumstances. The strawberry farmers and their employees lose their jobs and perhaps can get new jobs with the new owners or perhaps not.

Your example is full of subjective criteria that purely acts to support your theory.
You assume that a machine is the alternative option.
You assume that appropriate machines do not exist.
You assume that costs cannot be passed on.
You assume that the farm / supermarket cannot support increased costs through lower margins.

The only valid bit of this story is that if strawberry farming becomes a cost prohibitive activity, we should use those resources to do something else instead.

Ultimately wages represent productivity and British productivity is low. I heard a comparison with France today which said that the average worker in France can spend Friday in bed and still produce more in a week than a British worker.

Are you saying that British workers are overpaid?

I mean that's a valid view, but the other side of that coin is that high consumer spending has kept the economy out of serious problems for a long time now.
Trampling down wages is all very well but eventually the consumer is going to feel the pinch and stop spending.

Blame it on Brexit if you want but the reality is that it's a problem that started over ten years ago.
That's why I said it's a societal issue. Sometimes there is a case for society to demand higher wages.

Do you have something in mind when you say Britain is over-reliant on a single industry?

No, because I didn't say that.

A_Medium_Size_Jock

davomcdave wrote: »

So how is our strawberry farmer going to pick his strawberries and still remain competitive with EU farms do you think as wages rise in the UK but productivity does not? Something, something farm-in-a-hole perhaps. Or maybe the Great British strawberry picker can summon up the D-Day/Blitz/1966 spirit and just bally well pick faster than Piotr and his chums. We're British and we can gather berries better than anyone else on this planet, dammit.

Look Dave, I'm a lover of strawberries.
But I'm not as fixated upon them or indeed by farming in general as you seem to be; have a read of the following for a sensible POV from a sensible organisation, the Sustainable Food Trust:
http://sustainablefoodtrust.org/articles/jobs-in-farming-post-brexit/
Why grow low-profit high-maintenance strawberries when it is possible to grow a more profitable and less labour-intensive crop which has a ready market?

As you allude to in your post, productivity though is indeed key.
I hate to do this but of strawberries, there are only so many that can be grown and picked here in the UK and (in comparative terms) the value of these is somewhat negligible.
As is the number of strawberry-pickers.
Again, comparatively.

Whereas productivity elsewhere CAN be increased, as seen by the current boost to exports (for whatever reason; if you want to go down that route is a different topic for debate.) which are helping our economy to stabilise.

Britain’s economy picked up pace in March as the powerful services sector performed strongly, raising hopes that the slowdown in the previous month could be a blip. Stronger demand from the US and other countries indicates that the weaker pound is helping exporters sell more goods and services abroad.

http://www.telegraph.co.uk/business/2017/04/05/growing-exports-help-uk-economy-stabilise/


The trouble is that most of our figures, the real hard data, regarding productivity are a year behind where we actually are today.
So for now we should perhaps use as a guide for example the UK Current Account Deficit, which is falling.

This narrowing was predominantly due to an increase in the exports of goods of £7.6 billion.

https://www.poundsterlinglive.com/economics/6493-uk-current-account-deficit-at-lowest-in-years

Is it possible to increase exports by such an amount without a corresponding increase in productivity?
Also, given that UK productivity has been historically low for so long does this not give an indication of the possibility of significant growth?
Think of what a 25% growth in productivity could do for our balance of payments,GDP and wages.

You may think such growth impossible; not so.
Unless you really believe that French and German workers are indeed somehow more capable than those of the UK?
That is certainly not the implication from recent inward investment.

kabayiri

davomcdave wrote: »

But if you do that you miss out on a point of Brexit which is to stop, or vastly reduce, low and unskilled migrant labour.
...

A reality check is needed here.

In a few short years/couple of decades max, we really will not need mass labour in many sectors of the economy.

Being IN or OUT of the EU will not stop the use of technology to improve the way we do things; to enable one person to do what ten previously did.

We have a choice. We either buy into a mass labour sweat shop type economy, or we try to become more productive than our competitors.

You can't have both.

cogito

Conrad wrote: »

As Brexit beds in and we thrive in our new found confidence and independence, the vast bulk of people will become comfortable with the new status quo, there will be no going back.

People are so hung up on the minor benefits of the SM. People trade, companies trade, a trade agreement is just a minor square of icing, and as Moody's have concluded, the City will thrive without Passporting, trade deal or no trade deal.

Those that seem to think the answer to everything is an endless tide of immigration suffer a lack of imagination and latteral thinking.

Agreed. There seems to be a myth that trade agreements between countries are a necessary part of doing business. They aren't.

Filo25

cogito wrote: »

Agreed. There seems to be a myth that trade agreements between countries are a necessary part of doing business. They aren't.

Of course we can trade with the EU without a trade agreement, I don't see anyone seriously claiming we can't.

There will just be less trade than there otherwise would be.

davomcdave

kabayiri wrote: »

We have a choice. We either buy into a mass labour sweat shop type economy, or we try to become more productive than our competitors.

You can't have both.

Why do we face a choice? We've had both since the industrial revolution started to replace labour with capital in a serious way in the brewing industry in 1750 and you could argue that it's been happening since the agricultural revolution started in the 17th Century. Every industrialised country has a mix of workers and available work.

What suddenly changed in 2017?

Conrad

davomcdave wrote: »

Why do we face a choice? We've had both since the industrial revolution started to replace labour with capital in a serious way in the brewing industry in 1750 and you could argue that it's been happening since the agricultural revolution started in the 17th Century. Every industrialised country has a mix of workers and available work.

What suddenly changed in 2017?

Many things determine the wellbeing of a society, to include quality of life, congestion, pollution, green spaces, ability to find a home etc


One side argues mass unlimited immigration is a good for society, others feel a better balance needs striking. Lets be a bit more imaginative than saying the solution to problems is 'lets import masses of people', it's so bereft.



Simply building ever more homes and roads solves nothing as you just attract more people and round and round we go.