Economy crash =/= stock market crash?

phillw

MK62 said:
Higher wages without any increase in productivity might indeed lead to several years of higher inflation as that shakes through the system.....no point trying to argue otherwise really.

Where will the increase in productivity come from?

Higher wages for everyone just drives inflation permanently, higher wages for some causes division and resentment as it's an effective pay cut for those who don't get the higher wages. Which is the problem we faced in the 1970's.

phillw

Deleted_User said:
We will have to wait and see about that. The fact remains that the UK is an attractive country for people to move to, and many can still move here to work if they meet the criteria of high skill individuals. The government may also adjust the immigration rules to allow certain workers in, within a limit of requirements. The UK is, and will always be, a destination for many. As is America.

I'd say that was a British Exceptionalistic view.

We were a destination for many, what I'm hearing from UK born and trained junior doctors is that it's no longer where they plan to actually work. The brain drain has already started.

The majority of people who will come here are the ones who either have no idea what they are letting themselves in for, or those who have no other real choice.

Or maybe there are people who are happy going somewhere that doesn't want their culture, or to see too many brown faces & just wants to extract the maximum financial benefit they can from them.

Linton

phillw said:

MK62 said:
Higher wages without any increase in productivity might indeed lead to several years of higher inflation as that shakes through the system.....no point trying to argue otherwise really.

Where will the increase in productivity come from?

Higher wages for everyone just drives inflation permanently, higher wages for some causes division and resentment as it's an effective pay cut for those who don't get the higher wages. Which is the problem we faced in the 1970's.

Over the past 60 years there have been massive increases in productivity through increased autiomnation and improvements in technology.  This will only continue.

For example 60 years ago there were 500000 miners.  All those jobs have gone and a greater amount of energy is produced from oil, gas, nuclear, solar etc by far fewer people working in far better conditions.

[Deleted User]

phillw said:

Deleted_User said:
We will have to wait and see about that. The fact remains that the UK is an attractive country for people to move to, and many can still move here to work if they meet the criteria of high skill individuals. The government may also adjust the immigration rules to allow certain workers in, within a limit of requirements. The UK is, and will always be, a destination for many. As is America.

I'd say that was a British Exceptionalistic view.

We were a destination for many, what I'm hearing from UK born and trained junior doctors is that it's no longer where they plan to actually work. The brain drain has already started.

The majority of people who will come here are the ones who either have no idea what they are letting themselves in for, or those who have no other real choice.

Or maybe there are people who are happy going somewhere that doesn't want their culture, or to see too many brown faces & just wants to extract the maximum financial benefit they can from them.

In regards to the NHS that has been going on for some time. The NHS cannot compete with places like Australia. The fact remains the NHS offers good opportunities and many specialist areas which are not easily available elsewhere. The government clearly needs to look at retention.

I think that second paragraph is taking a very dim and negative view, people come to the UK for the opportunity it offers. They do not come here to look at our crooked smiles or drink tea. Now those that come will mostly be highly skilled. Yes they come here for work, but with those skills they could work in other countries. If they choose to come to the UK it is because we offer the best. That isn't the same as low skilled who purely need the money. I am not sure what you mean by "the ones who either have no idea what they are letting themselves in for".

Or indeed the third paragraph? Devalues your whole post I'm afraid and just sounds a bit silly. 

Michael121

aroominyork said:

MK62 said:

aroominyork said:

You make it sound like everything will be OK once the economy rebalances. I'm not denying the economy will find its balance - my point is it will be with a smaller economy, less skilled, a lower tax take, worse public services and more deprivation. I am not interested in saying "Yes, but at least it will be balanced ".

I didn't say it would all be OK.....that's something of a relative term.....it will be a bit different though.
Quite how increasing pay for some workers leads to a smaller economy, a less skilled workforce, lower tax takeworse public services and increased deprivation, I'm really not sure I follow that argument......getting more people into work at decent pay levels might just make things a bit better in the long run.........

The short answer is because migrant workers add to economic activity, pay taxes and generally do not use large amounts of public services. So we will have less economic activity, a lower tax take (nb talexuser's comment about higher wages without increased productivity) but not much reduction in demand for public services.

I'm confused. You say migrants do not use large amounts of public services, but then say there won't be much reduction in demand for services.

Won't there be more demand for public services if brits were payed more.

Why is there a lower tax take?

More people earning more money equals more tax paid. People earning higher wages would mean less going to the rich and finding ways around paying taxes.

I don't see why goods will have to increase to meet the wage increase, just comes out of the pockets up top, they make enough. If they try to increase the price, you don't buy it and prices come down again.

aroominyork

MK62 said:

aroominyork said:

MK62 said:

aroominyork said:

You make it sound like everything will be OK once the economy rebalances. I'm not denying the economy will find its balance - my point is it will be with a smaller economy, less skilled, a lower tax take, worse public services and more deprivation. I am not interested in saying "Yes, but at least it will be balanced ".

I didn't say it would all be OK.....that's something of a relative term.....it will be a bit different though.
Quite how increasing pay for some workers leads to a smaller economy, a less skilled workforce, lower tax takeworse public services and increased deprivation, I'm really not sure I follow that argument......getting more people into work at decent pay levels might just make things a bit better in the long run.........

The short answer is because migrant workers add to economic activity, pay taxes and generally do not use large amounts of public services. So we will have less economic activity, a lower tax take (nb talexuser's comment about higher wages without increased productivity) but not much reduction in demand for public services.

...and a better paid resident worker (not necessarily a "Brit")

Yes, quite right. Awkward shorthand on my part.

MK62 said:

aroominyork said:

MK62 said:

aroominyork said:

You make it sound like everything will be OK once the economy rebalances. I'm not denying the economy will find its balance - my point is it will be with a smaller economy, less skilled, a lower tax take, worse public services and more deprivation. I am not interested in saying "Yes, but at least it will be balanced ".

I didn't say it would all be OK.....that's something of a relative term.....it will be a bit different though.
Quite how increasing pay for some workers leads to a smaller economy, a less skilled workforce, lower tax takeworse public services and increased deprivation, I'm really not sure I follow that argument......getting more people into work at decent pay levels might just make things a bit better in the long run.........

The short answer is because migrant workers add to economic activity, pay taxes and generally do not use large amounts of public services. So we will have less economic activity, a lower tax take (nb talexuser's comment about higher wages without increased productivity) but not much reduction in demand for public services.

  I'm not sure about the public services bit.....you'd have to explain what you mean by that.

Migrant workers use proprotionately fewer public services so a slightly lower demand for public services has to be paid for by a disproportionately high reduction in tax receipts.

Linton said:

phillw said:

MK62 said:
Higher wages without any increase in productivity might indeed lead to several years of higher inflation as that shakes through the system.....no point trying to argue otherwise really.

Where will the increase in productivity come from?

Higher wages for everyone just drives inflation permanently, higher wages for some causes division and resentment as it's an effective pay cut for those who don't get the higher wages. Which is the problem we faced in the 1970's.

Over the past 60 years there have been massive increases in productivity through increased autiomnation and improvements in technology.  This will only continue.

Yes, it will continue, but there will not be one-off increase in productivity to pay for the one-off spike in wage inflation.

aroominyork

Michael121 said:

aroominyork said:

MK62 said:

aroominyork said:

You make it sound like everything will be OK once the economy rebalances. I'm not denying the economy will find its balance - my point is it will be with a smaller economy, less skilled, a lower tax take, worse public services and more deprivation. I am not interested in saying "Yes, but at least it will be balanced ".

I didn't say it would all be OK.....that's something of a relative term.....it will be a bit different though.
Quite how increasing pay for some workers leads to a smaller economy, a less skilled workforce, lower tax takeworse public services and increased deprivation, I'm really not sure I follow that argument......getting more people into work at decent pay levels might just make things a bit better in the long run.........

The short answer is because migrant workers add to economic activity, pay taxes and generally do not use large amounts of public services. So we will have less economic activity, a lower tax take (nb talexuser's comment about higher wages without increased productivity) but not much reduction in demand for public services.

I'm confused. You say migrants do not use large amounts of public services, but then say there won't be much reduction in demand for services.

Migrant workers are generally younger and healthier than the general population so, for example, they need the NHS less. Hence their absence will not greatly reduce the demand for services because, using the NHS example again, the 'sicker' British/resident worker population will still need healthcare.

Michael121 said:

aroominyork said:

MK62 said:

aroominyork said:

You make it sound like everything will be OK once the economy rebalances. I'm not denying the economy will find its balance - my point is it will be with a smaller economy, less skilled, a lower tax take, worse public services and more deprivation. I am not interested in saying "Yes, but at least it will be balanced ".

I didn't say it would all be OK.....that's something of a relative term.....it will be a bit different though.
Quite how increasing pay for some workers leads to a smaller economy, a less skilled workforce, lower tax takeworse public services and increased deprivation, I'm really not sure I follow that argument......getting more people into work at decent pay levels might just make things a bit better in the long run.........

The short answer is because migrant workers add to economic activity, pay taxes and generally do not use large amounts of public services. So we will have less economic activity, a lower tax take (nb talexuser's comment about higher wages without increased productivity) but not much reduction in demand for public services.

Won't there be more demand for public services if brits were payed more.

Why would better paid Brits lead to more demand for healthcare, schools, police etc.?

Michael121 said:

aroominyork said:

MK62 said:

aroominyork said:

You make it sound like everything will be OK once the economy rebalances. I'm not denying the economy will find its balance - my point is it will be with a smaller economy, less skilled, a lower tax take, worse public services and more deprivation. I am not interested in saying "Yes, but at least it will be balanced ".

I didn't say it would all be OK.....that's something of a relative term.....it will be a bit different though.
Quite how increasing pay for some workers leads to a smaller economy, a less skilled workforce, lower tax takeworse public services and increased deprivation, I'm really not sure I follow that argument......getting more people into work at decent pay levels might just make things a bit better in the long run.........

The short answer is because migrant workers add to economic activity, pay taxes and generally do not use large amounts of public services. So we will have less economic activity, a lower tax take (nb talexuser's comment about higher wages without increased productivity) but not much reduction in demand for public services.

Why is there a lower tax take?

Because the absence of migrant workers paying tax is unlikely to be compensated for by the marginal extra amounts paid for by better paid Brits/resident workers.

Michael121 said:

More people earning more money equals more tax paid. People earning higher wages would mean less going to the rich and finding ways around paying taxes.

But there will be fewer people paying tax.

Michael121 said:

I don't see why goods will have to increase to meet the wage increase, just comes out of the pockets up top, they make enough. If they try to increase the price, you don't buy it and prices come down again.

Read Economics 101. Demand will exceed supply. Prices will go up.

Thrugelmir

Linton said:

phillw said:

MK62 said:
Higher wages without any increase in productivity might indeed lead to several years of higher inflation as that shakes through the system.....no point trying to argue otherwise really.

Where will the increase in productivity come from?

Higher wages for everyone just drives inflation permanently, higher wages for some causes division and resentment as it's an effective pay cut for those who don't get the higher wages. Which is the problem we faced in the 1970's.

Over the past 60 years there have been massive increases in productivity through increased autiomnation and improvements in technology.  This will only continue.

For example 60 years ago there were 500000 miners.  All those jobs have gone and a greater amount of energy is produced from oil, gas, nuclear, solar etc by far fewer people working in far better conditions.

Very few fast food restaurants though. Fewer public servants, couriers, delivery drivers, retail operatives, air cabin crew. 

Michael121

aroominyork said:

Why would better paid Brits lead to more demand for healthcare, schools, police etc.?

I mean if people are earning more money maybe they are more likely to go uni, plenty of people don't try to get better career because they are in debt up to their eyeballs. Im not really sure why that matters though clearly your looking at a bigger picture than me.

Because the absence of migrant workers paying tax is unlikely to be compensated for by the marginal extra amounts paid for by better paid Brits/resident workers.

I don't follow, won't we get more people getting a job to replace those migrants that were currently not working at all, or part timing it. I don't know but if i was earning pittance i wouldn't bother grafting either, id do the bare minimum as well, the reason i work hard is because i can see by the end of it i might be able to put my feet up and not have to worry about money when i retire. 

Read Economics 101. Demand will exceed supply. Prices will go up.

I understand that but how will demand go up, just because people have a little more money? doesn't necessarily mean they want to buy more goods, if i want something i wait for it to come down in price, sooner or later i get a bargain.

I just feel like some don't get paid well enough, especially carers. Plus its annoying how prices just keep going up over the years whilst some jobs haven't that used to pay well. I think anyone working 40 hour plus weeks should have some money left over, not watching it evaporate every month into thin air before they even spent on something non essential.

sevenhills

Michael121 said:

 I think anyone working 40 hour plus weeks should have some money left over, not watching it evaporate every month into thin air before they even spent on something non essential.

Compared to 50 years ago, people now have much higher living standards. When my Dad used to work 40+ hours, we didn't have a garden or inside toilet, no central heating and could not afford a dog, mobile phone or car.