advertisement


Average UK worker would be £200 a week better off if real wages had grown at pre-crisis rate

There is going to be no growth in the UK. Welcome to a world of Labour austerity and the resulting downward spiral of gloom and failure.​

Posted on May 2 2024

As the Guardian notes this morning:
The UK's economic outlook has worsened this year as high interest rates and the lingering effects of last year's surge in inflation take a bigger toll on growth than previously expected, according to the Organisation for Economic Cooperation and Development (OECD).
Click to expand...
It added:
In a downbeat assessment of the potential for the economy to expand in 2024, the Paris-based thinktank downgraded its forecast for UK growth this year from last November's forecast of 0.7% to 0.4%.
It predicts a modest bounce back in 2025 with growth of 1% – a rate of growth half that projected by the Treasury's independent forecaster, the Office for Budget Responsibility (OBR).
Click to expand...
Three things. First, the OECD economics department is currently headed by a profoundly neoliberal ex-UK Treasury person who is headed soon to be a deputy governor at the Bank of England. If they could find a downside now, especially on the impact of UK wage rises, they could - and claim they have. Apparently giving people the power to spend more reduces growth according to this analysis, which is a very weird claim.

Second, if this is true, the whole basis for Labour's plans is shot through. There will be no growth of any significance, it is claimed. In that case Labour will claim there can be no additional government spending if its iron-clad fiscal rules are to be followed.

Third, we are locked in a downward economic death spiral in that case.
And all of that is because the people in charge are dedicated to an outdated economic mantra that demands that the world must be adapted to behave in accordance with their thinking, rather than believing that economic thinking should be adapted so that it can work out real world solutions for the people of this country and planet.
As definitions of intellectual failure go, that is unambiguous.

www.taxresearch.org.uk

There is going to be no growth in the UK. Welcome to a world of Labour austerity and the resulting downward spiral of gloom and failure.

As the Guardian notes this morning: The UK’s economic outlook has worsened this year as high interest rates and the lingering effects of last year’s surge in inflation take a bigger toll on growth than previously expected, according to the Organisation for Economic Cooperation and Development...
www.taxresearch.org.uk
 
Welcome to a world of Labour austerity and a downward spiral of gloom and failure.

Could this be the point where we say "come back Liz Truss all is forgiven" 🤔
 
misterdog said:
Interesting, Thatcher is still current but Scargill isn't.
Click to expand...
Of course Thatcherism is relevant to the topic. Inequality came down after WW2 and started growing again in 1979 and has continued to do so since because of the economic changes she implemented.

Inequality is not an economic necessity, it is a political choice made for right wing ideological reasons.
 
ks.234 said:
Of course Thatcher is relevant to the topic. Inequality came down after WW2 and started growing again in 1979 and has continued to do so since because of the economic changes she implemented.

Inequality is not an economic necessity, it is a political choice made for right wing ideological reasons.
Click to expand...

Though I personally know two people who were brought up in back to back terraced houses in Sheffield, both of who became multi millionaires.

So I'm not sure how these people fit into your conspiracy theory.
 
misterdog said:
Though I personally know two people who were brought up in back to back terraced houses in Sheffield, both of who became multi millionaires.

So I'm not sure how these people fit into your conspiracy theory.
Click to expand...

Great anecdotal irrelevant information there.
 
Mick P said:
I don't care how and what you spend your money on, the point I am making is some people may be strapped but there are others who are doing ok. It has always been thus. I really do think that we criticise our country too much
Click to expand...
The numbers who are “doing okay” are way less than at any time in the past 70 years. In work poverty exceeded out of work poverty some time ago but it doesn’t matter because you’ve done okay so your gut feeling is that that must apply more generally. Ever thought it might be a good idea to check your gut feelings against the hard facts? Christ knows there is enough hard data out there.

Mick P said:
The UK has a low level of productivity so it needs to work harder. I worked hard, I am not boasting as I did work hard and got rewarded accordingly and everyone else can do the same.
Click to expand...
This is ideology disconnected from reality writ large. Who specifically do you think could work harder? What is your evidence base for that? What specifically could they do? Nice little example here of howsuch glib rhetoric gets thrown about and yet has no evidence base.


Mick P said:
This is where I get confused. Later today I will be popping out to the local shopping centre. I know that when I get out of my car in the car park, I will see lots of nice shiny cars. Twenty years ago half of them would have been rusty but today the cars tend to be bigger and better. The people walking to the shops will be dressed smart, they will walk into shops and buy goodies, they will pay for them and will appear to be happy, so it paints a picture of things going ok.
Click to expand...
This is fabulous stuff Mick. It just hasn’t occurred to you that all that’s happened is that many people who could just about afford to run a rust bucket can no longer do so and this all that’s left is car parks full of the well off.

Mick P said:
People are allowed different views to yours and it's called democracy.
Click to expand...
Are people “allowed” views that fly in the face of hard evidence? I call that “stupidity”.

For the record Mick I’m not some raving lefty. The ideology of the left can be as odious and clueless as that of the right. What I do like though are facts and evidence based policy making. You are entities to your opinion and sadly people do get dragged into attacking the opinion and person without reference to facts but, if you’re going to spout such obvious nonsense that numbers of people on here profoundly disagree with you then why don’t you, instead of just retreating into “I’m entitled to my opinion” back it up with something?
 
misterdog said:
According to Ks's theory the two people I quoted should have been forced to remain on the factory floor -
Click to expand...
What are you talking about? Nobody mentioned forcing anyone to remain on the factory floor. You mentioned the 70’s, then separately you mentioned Scargill in the 2000’s. You’re the one now trying to juxtapose the two for reasons that are not at all clear.

I was not talking about people, I was talking about Thatcherism.

Thatcherism is relevant to the topic, the socialist party is not.
 
I'm a bit disappointed nobody piled on to my Truss suggestion.

As for the productivity question. How does working harder fix that?
If you are making widgets there is a limit to how many you can make without updating the machinery.
Librarians, ticket collectors, teachers etc can work as hard as they like but the measurement of their output bears little relation.
 
Mick P said:
The UK has a low level of productivity so it needs to work harder. I worked hard, I am not boasting as I did work hard and got rewarded accordingly and everyone else can do the same.
Click to expand...
Alien territory for me but I got up to put the TV off and happened upon tonight’s Question Time and Joseph Stieglitz explaining how productivity is a function of investment and not the ability to “work harder“ e.g. of you invest in the NHS then you have more people working; less people ill and thus active in the economy. etc. That and the small matter of raising income by paying people more whether that is a salary or benefits. Simple stuff which evades so many.
ks.234 said:
  1. Real wages still below 2008 level in 212 out of 340 UK local authorities
  2. TUC says longest pay squeeze in modern era is a “damning indictment” of the Conservatives’ economic record
  3. Wage performance in every corner of Britain is well below historic trends, analysis shows
  4. Average UK worker would be £200 a week better off if real wages had grown at pre-crisis rate
Click to expand...
To be fair I should also say take fundamental issue with the original post here. 2008 is a convenient starting point but nothing to the point really. If you weren’t working in 2008 then the date means nothing. The more relevant data is how much any salary has fallen behind since someone in one job for a period started that job. If you started a role 3 years ago then you have no interest in 2008 just as if you started 40 years ago it’s an irrelevant date. Now sure the logic is because that date was seen as a point at which wages were depressed but most economists accept that it’s the picture over a much longer period which shows the pattern better. I don’t care how much my wages are in comparison to 2008. The date for me would be 1992. Only people who started their role in 2008 will care and people on internet forums I guess.

The only research of this type which I’m aware of - comparing wages and inflation from start to end date of role whether 1 year or 40 years - was done in S. America and Germany. A few British universities have done the same but largely kept the results in house.

FWIW. My salary has been below inflation for 29 of the last 32 years. Had it just matched I estimate I’d be earning around £25,000 more than I’m actually on.
 
Mike Hughes said:
Alien territory for me but I got up to put the TV off and happened upon tonight’s Question Time and Joseph Stieglitz explaining how productivity is a function of investment and not the ability to “work harder“ e.g. of you invest in the NHS then you have more people working; less people ill and thus active in the economy. etc. That and the small matter of raising income by paying people more whether that is a salary or benefits. Simple stuff which evades so many.

To be fair I should also say take fundamental issue with the original post here. 2008 is a convenient starting point but nothing to the point really. If you weren’t working in 2008 then the date means nothing. The more relevant data is how much any salary has fallen behind since someone in one job for a period started that job. If you started a role 3 years ago then you have no interest in 2008 just as if you started 40 years ago it’s an irrelevant date. Now sure the logic is because that date was seen as a point at which wages were depressed but most economists accept that it’s the picture over a much longer period which shows the pattern better. I don’t care how much my wages are in comparison to 2008. The date for me would be 1992. Only people who started their role in 2008 will care and people on internet forums I guess.

The only research of this type which I’m aware of - comparing wages and inflation from start to end date of role whether 1 year or 40 years - was done in S. America and Germany. A few British universities have done the same but largely kept the results in house.

FWIW. My salary has been below inflation for 29 of the last 32 years. Had it just matched I estimate I’d be earning around £25,000 more than I’m actually on.
Click to expand...
Stigliz would disagree. He would argue that you can and should spend your way out of a recession, as opposed to our current insanity that advocates austerity. An insanity turno boosted by the GFC.

2008 was the Global Financial Crash, so a significant point, if not the actual starting point. It was the point when austerity became a policy tool and a tool, the one and only tool, that is brought out of the toolbox whenever the economy dives. (As it inevitably does because we only ever use the wrong tool). Inequality, poverty and other economic and social markers have been on decline since the 70’s but 2008 was the biggest marker possible of the failure of that economic ideology we have been following since Thatcher. (Though it should be noted that it was Callaghan who explicitly turned his back on the idea of investment and adopted monetarism before Thatcher. Callaghan was Thatcherite before Thatcher).

It was George Osbourne‘s Austerity madness that froze public sector pay with it’s knock on effect on wages and investment more generally.

2008 was the crystallisation, the coming together, of the inevitable (according to one of the few economists to predict 2008, Hyman Minsky) consequences of an economics based on privatisation, deregulation and spending cuts.

Investment in public services was on decline before 2008, but 2008 was, for the more criminally deranged at least, the signal to double down on cuts to investment. (Overall spending has still increased, but that is merely a sign that our current economic orthodoxy has failed, not just for ordinary people, but even on it’s own terms).

Our current ideology based on privatisation, deregulation and spending cuts and maintained by the various false narratives about debts, deficits, and there being no money, is the problem. As Stiglitz says, we need to move away from the idea that government spending is bad for the economy, to the idea that government investment in public ends is good for the economy, good for people, and good for the environment.
 
ks.234 said:
Stigliz would disagree. He would argue that you can and should spend your way out of a recession, as opposed to our current insanity that advocates austerity. An insanity turno boosted by the GFC.

2008 was the Global Financial Crash, so a significant point, if not the actual starting point. It was the point when austerity became a policy tool and a tool, the one and only tool, that is brought out of the toolbox whenever the economy dives. (As it inevitably does because we only ever use the wrong tool). Inequality, poverty and other economic and social markers have been on decline since the 70’s but 2008 was the biggest marker possible of the failure of that economic ideology we have been following since Thatcher. (Though it should be noted that it was Callaghan who explicitly turned his back on the idea of investment and adopted monetarism before Thatcher. Callaghan was Thatcherite before Thatcher).

It was George Osbourne‘s Austerity madness that froze public sector pay with it’s knock on effect on wages and investment more generally.

2008 was the crystallisation, the coming together, of the inevitable (according to one of the few economists to predict 2008, Hyman Minsky) consequences of an economics based on privatisation, deregulation and spending cuts.

Investment in public services was on decline before 2008, but 2008 was, for the more criminally deranged at least, the signal to double down on cuts to investment. (Overall spending has still increased, but that is merely a sign that our current economic orthodoxy has failed, not just for ordinary people, but even on it’s own terms).

Our current ideology based on privatisation, deregulation and spending cuts and maintained by the various false narratives about debts, deficits, and there being no money, is the problem. As Stiglitz says, we need to move away from the idea that government spending is bad for the economy, to the idea that government investment in public ends is good for the economy, good for people, and good for the environment.
Click to expand...
Have you not figured out yet that I’ve zero interest in your self-righteous lectures? See if you can write a post which doesn‘t pose a question that only you have the right answer to. Better still, try music and audio.
 
You must log in or register to reply here.


advertisement


Back
Top