Spending more than we earn

Thrugelmir

lisyloo wrote: »

Aren't they still providing jobs and those people are paying income tax, national insurance and claiming fewer benefits?


What about the related companies such as delivery companies?

Wouldn't the same people be employed in retail outlets? Amazon benefits from paying far lower business rates operating out of big boxes. Giving it a commercial advantage over town based operations.

Pay and conditions spring to mind. As the recent Hermes court case illustrated.

lisyloo

Wouldn't the same people be employed in retail outlets?

ok, no issue with the business being replaces elsewhere especially with better terms and conditions.


No issue with the business being replaced, just saying that "just about manging" parts of the economy whether individual or business may still be keeping millions off benefits or reduced across the nation. So just because there is little profit doesn't mean it's not valuable.


Note: each of us is still entitled to drive to the garden center/retail store rather than use Amazon.
We all slate RyanAir, jdsports, hermes, yodel but as a nation buy their product in droves (personally I draw the line at Dan Dare and have/would NEVER use them).

Thrugelmir

ilovehouses wrote: »

There might be cultural reasons why savings rates differ across nations. Therefore you can't reasonably make such a comparison between countries so your conclusion about brexit, based on two single data points, has to be considered unproven.

Not a conclusion. Simply an observation. Germans are savers too. Prefering to spend cash than build up debt. More than likely it's cultural. One certainty is that in general other nations are in a much better place financially. With an ability to withstand financial shocks at a personal level.

thickasabrick

It's called "Financialization at the economy’s expense".

Michael Hudson's book "Killing the Host: How Financial Parasites and Debt Destroy the Global Economy" explains it in great detail.

It has the feel of an academic text but definitely worth a read.

http://michael-hudson.com/2015/09/killing-the-host-the-book/

Particularly the section titled "The Magic of Compound Interest vs. The Economy’s Ability to Pay!".

One paragraph struck me in particular.
"This scenario of productive lending does not typify the banking system as a whole. Instead of serving the economy’s production trends, the financial sector (as presently organized) makes the economy top-heavy, by transferring assets and income into the hands of an increasingly hereditary creditor class"

I can see a pfd version on this link but I purchased it a while ago in ebook format so not sure if it is viewable by others.
http://store.counterpunch.org/wp-content/uploads/2015/08/Killing-The-Host_PDF_V7.pdf

Graham_Devon wrote: »

Briton's, on average per household, spent £900 more than they earned in the same year, for the first time in 30 years last year.

As the article points out, even at the height of the credit boom, we still didn't spend more than we earnt on average.

So what's going on now? How can this possibly end up in any way positive?

https://www.bloomberg.com/news/articles/2018-07-25/indebted-britons-are-unprepared-for-retirement-lawmakers-warn

silverwhistle

Doesn't it also depend on what you spend your money on? Over a few years I spent on solar panels and subsequently a wood burner. I now pay my bills on receipt and even in winter don't have to worry as they're so small.

I could buy a new (newer, I don't like depreciation) car with my resources, but why bother when the current one serves my needs?

The issue isn't so much people like myself who can manage their money, or even those who can manage the payments for their PCP car. But as some of you may have heard in the news many families struggle to feed their kids adequately during the school holidays, and for most it isn't because they've got an iphone on contract.

Some people on here might use credit cards for utilities because they're stoozing, getting cash back or really mean on the cash flow, but for others it's a way of deferring debt for a month.

The problem with the concentration of wealth mentioned in thickasabrick's post, and even with multinationals like Amazon operating here is that much of that wealth leaves the country and doesn't help the local economy. But when you have idiots like Johnson saying '**** business', John Redwood recommending investing outside the UK, Rees-Mogg scuttling to get assets to be controlled in Ireland, Sir Jim Ratcliffe off to Monaco and Nigel Lawson pontificating from his French chateau I don't hold out much hope for the rest of us.

westernpromise

ilovehouses wrote: »

No, there would be more people employed. Amazon can shift more stuff per person than a retail equivalent.

If there were more people employed to sell and deliver the same quantum of stuff, then the price of the stuff would have to go up.

The impact of Amazon et al is that what would have cost £10 costs £9, but of course we still go and spend the £1 saved anyway. On more stuff. Same money, more stuff.

There is an argument that the new jobs are lower skilled, but this has always been the case and is short term. Driving a car is lower skilled than driving a team of horses; shooting a crossbow is lower skilled than shooting a longbow; taking a motor yacht to the Isle of Wight is lower skilled than sailing there; satnavs require less skill than map-reading; overseeing a mechanical loom is less skilful than being a weaver. People with the requisite greater skills don't end up in perpetual penury - they migrate to jobs that require their IQ.

kabayiri

Amazon is interesting. I was chatting to a friend's son who worked there. The combination of a workplace difficult to get to without a car, combined with unsociable hours pushed up the work costs, and didn't leave a great deal spare.

This might be short lived though. Amazon do have plans to automate more of the warehousing side. That might result in some higher value implementation roles, but I suspect they will be short contract.