Jump to content
House Price Crash Forum
SarahBell

Why Austerity Cuts Need To Be Wage Cuts

Recommended Posts

Everyone agrees that the UK needs jobs.

We need to have more jobs. (Or you could argue less immigrants doing jobs our unemployed could do, but even thinking like that makes you a bigot)

So to have the massive cuts we need it's got to be wages that get cut.

If we bring all wages in the public sector down then there needn't be job cuts.

There's bound to be a simple algorithm for making the cuts...

Cap wages at the higher end to something sensible.

If people don't like it then they should be first on the list for redundency (After we cap the far too generous pay settlements going on)

By reducing the wage bill you also reduce the pensions bill - which is something that desperately needs doing too.

We also need to look at the outsourcing that goes on and stop that. If a private company can make a profit by screwing tax payer's money out of public sector then those jobs need to be bought in house again.

There was mention of max wage being 20X minimum wage but I think that should be 10x.

* £5.93 - the main rate for workers aged 21 and over

* £4.92 - the 18-20 rate

* £3.64 - the 16-17 rate for workers above school leaving age but under 18

* £2.50 - the apprentice rate, for apprentices under 19 or 19 or over and in the first year of their apprenticeship

Whether it's 10X adult wage or not is up for debate.

So max wage where apprentices are employed (and all councils etc could be made by law to employ them - £45500)

and where none are employed - only adults max wage is £107926 which still sounds a massive amount.

Share this post


Link to post
Share on other sites

cant public sector wages...theyd all leave to the private sector where their amazing skills would be put to use for the same conditions.

Share this post


Link to post
Share on other sites

cant public sector wages...theyd all leave to the private sector where their amazing skills would be put to use for the same conditions.

Ah that's fine. We have a couple of million on the dole who could easily take over the jobs ...

:)

Share this post


Link to post
Share on other sites

By reducing the wage bill you also reduce the pensions bill - which is something that desperately needs doing too.

If you reduce wages how do you make up the deficits that already exist? By reducing wages you'll also need to reduce the payments already being made to public sector workers.

Also if you cut wages you will also end up cutting tax revenues. Don't forget our brilliant politicians have already factored in increasing wages and taxes into their spending plans, but the wages and you are left with a giant hole. Of course this la la economic fantasy can't continue and clearly it needs to be addressed.

Lower wages only works if people are doing productive work. Equality officers etc... should be got rid they serve no useful productive purpose and are a luxury we cannot afford.

Share this post


Link to post
Share on other sites

It would be interesting to see if unions ever understand the problem. "Cut wages and not jobs" is not a slogan that I ever expect to see on a picket sign anywhere.

Share this post


Link to post
Share on other sites

Pay cuts or the loss of corporate communication officers, climate change officers, street scene mangers, diversity officers etc. I am a public sector employee and there is far too many unproductive jobs that in reality have no public benefit and far too many managers.

Efficiency saving and hence huge cost savings could be easily made if the management were not principally concerned with the protection of their little empires. After all, turkeys don't vote for Christmas.

Share this post


Link to post
Share on other sites

cant public sector wages...theyd all leave to the private sector where their amazing skills would be put to use for the same conditions.

personally i would also introduce multiple caps in the private sector aswell for any publically listed companies, the main cause of this crisis is wealth/debt disparity which is a guaranteed result of debt expansion, a minimum wage is completely pointless when the top remains infinite. i generally dont like interfering with the market but its been patently clear the last 10 years or so (and even before that if its understood that the main reason for stock price increases are always inflation of money / credit) that shareholders arent doing their job regarding salary constraint so the market is already compromised (no marks for guessing why that is)

Edited by Tamara De Lempicka

Share this post


Link to post
Share on other sites

In my opinion, the public sector should be restructured into not-for-profit basic service providers, independent from government and with a 'lean' customer-based structure. There would be no private contracting. Everything could be dumped other than essential services which make sense in the public sector, meaning nationalisation of water and possibly others.

Apart from a mostly free NHS (again only providing the basics), and some infrastructure, most services could be 'pay as you go', paid from a citizen's income (thereby bypassing government distribution). Citizen's income would be funded mainly by LVT.

Free market for everything else.

Edited by shipbuilder

Share this post


Link to post
Share on other sites

Wages are already being cut.

Its the second year in a row I have received 0.4% pay rise when inflation is 3-4%

Cant see getting any more next year.

All it means I have less to spend which means I have to cut back on buying products and services which is someone else's job at risk.

Its just dawning on me how tough next year is going to be.

Inflation is going up, oil is nearly $100 per barrel, vat is going up to 20% and interest rates will start going up and my wife has had a pay cut.

Share this post


Link to post
Share on other sites

Wage cuts are actually the worst way to do this.

Ultimately what is needed is shift of workers from the public to the private sector in new enterprises/activities. Wage cuts will just cause grim entrenchment and mean that the economy takes longer to adjust than if people had the short sharp shock of redundancy.

That said, there ought to be wage cuts at the top of the public sector, no public sector worker (including the banks) should earn more than the prime minister - I am happy to see a few quango chiefs leaving and having to apply their "highly vauable skills that could earn far more in the private sector" applied elsewhere. But generally the top is only a tiny fraction of the issue, there needs to be a much broader adjustment.

BTW - did anyone notice the Conservative created a new Quango the other day?

Edited by Mikhail Liebenstein

Share this post


Link to post
Share on other sites
If we bring all wages in the public sector down then there needn't be job cuts.

You don't think this would suck demand out of the economy and lead to job cuts?

Also it's hard to see the unions agreeing to this in a world of rising inflation and billon pound bonus's for bankers- even if it would save jobs.

Share this post


Link to post
Share on other sites
It would be interesting to see if unions ever understand the problem. "Cut wages and not jobs" is not a slogan that I ever expect to see on a picket sign anywhere.

That's exactly what a pension scheme is, isn't it?

Share this post


Link to post
Share on other sites

We could certainly do with dragging down the top end salaries in the PS, although I don't see why hospital porters etc on £16k should take a pay cut.

Although I hope they don't impose surrogate pay cuts on the private sector (via tax rises etc), in order to protect the jobs of diversity officers and pointless middle managers in the public sector.

Share this post


Link to post
Share on other sites
So to have the massive cuts we need it's got to be wages that get cut.

The real problem is that we're all handcuffed to the corpse of a nationwide monetary union which does little to discourage rentiers (and much to encourage them) leaving us railing against those who can write a spread distinctly to their own advantage every time some radical attempts to rebias the system from stock to flow or vice versa.

(if the choice is "wage or job" then I naturally enough choose "equity please")

Edited by ParticleMan

Share this post


Link to post
Share on other sites

Everyone agrees that the UK needs jobs.

We need to have more jobs.

Steady, I don't!

Just as you can ask,"what's the economy for?", you can also ask "what are jobs for".

Surely they are to provide for ourselves by getting done the stuff that needs to be done.

Many jobs are beyond pointless, they are actively wastefull and obstructive. Thousands are first to the office, to fix breakfast

whilst racking up the overtime. We clearly have more than enough pretend work already.

What we need is a three day week. 24 solid hours of the actual nasty, followed by four days off.

No-one should be unemployed. There's enough work to be done, even if it wasn't all dumped on the essential 20% of the population.

Share this post


Link to post
Share on other sites

If you reduce wages how do you make up the deficits that already exist? By reducing wages you'll also need to reduce the payments already being made to public sector workers.

Also if you cut wages you will also end up cutting tax revenues. Don't forget our brilliant politicians have already factored in increasing wages and taxes into their spending plans, but the wages and you are left with a giant hole. Of course this la la economic fantasy can't continue and clearly it needs to be addressed.

Lower wages only works if people are doing productive work. Equality officers etc... should be got rid they serve no useful productive purpose and are a luxury we cannot afford.

If you look at the ballooning of the UK government deficit since 2008 the major factor has not been a huge increase in expenditure but a collapse in tax revenues.

This where the government finds itself in a dilemma.

It can cut public spending to balance the budget but this cosy assumption rather relies on the private sector providing sufficient well paid jobs to continue generating a sufficient tax yield. This is where the argument about how deeply and swiftly the cuts should be made is crucial. Get it wroing and you could wind up with both lower expenditure and taxes which means the deficit may not actually come down much in relative terms since you are attempting to pay off a lower debt from reduced tax yields (ie the debt may be just as unsustainable as when you started).

In fact cutting expenditure is the easy bit and any idiot cahencellor can do it given the political will. getting the rest of the equation to balance is not so easy and I am far from convinced that Osbourne or Cameron know how to achieve it.

Share this post


Link to post
Share on other sites

If you look at the ballooning of the UK government deficit since 2008 the major factor has not been a huge increase in expenditure but a collapse in tax revenues.

This where the government finds itself in a dilemma.

It can cut public spending to balance the budget but this cosy assumption rather relies on the private sector providing sufficient well paid jobs to continue generating a sufficient tax yield. This is where the argument about how deeply and swiftly the cuts should be made is crucial. Get it wroing and you could wind up with both lower expenditure and taxes which means the deficit may not actually come down much in relative terms since you are attempting to pay off a lower debt from reduced tax yields (ie the debt may be just as unsustainable as when you started).

In fact cutting expenditure is the easy bit and any idiot cahencellor can do it given the political will. getting the rest of the equation to balance is not so easy and I am far from convinced that Osbourne or Cameron know how to achieve it.

Probably because id say its impossible, it might have been possible if the problem was Govt debt alone, but the problem in the UK is personal debt, Houdini the chancellor cant escape peak debt and its implications for an economy entirely reliant on debt expansion

Share this post


Link to post
Share on other sites

Probably because id say its impossible, it might have been possible if the problem was Govt debt alone, but the problem in the UK is personal debt, Houdini the chancellor cant escape peak debt and its implications for an economy entirely reliant on debt expansion

Agreed.

And much of that debt was run up on the back of the housing boom and is a time bomb sitting on the banks books waiting to explode

Personal debt defaults will not just mean the much lower house prices that so many on here dream about. It is potentially going to cause the banking system to implode taking a lot of bond holders and savers with it.

I find it ironic given the nature of this site that so many people still do not get it. They seem to assume that it is a rerun of the government debt crises of the past just on a bigger scale which can be fixed by the usual budget tightening . In fact it is a completely different beast.

The issues have been identified by many people but are neatly summarised by this Reuteurs article from 2009

http://uk.reuters.com/article/idUKLJ5576720090119

Share this post


Link to post
Share on other sites

If you look at the ballooning of the UK government deficit since 2008 the major factor has not been a huge increase in expenditure but a collapse in tax revenues.

This where the government finds itself in a dilemma.

It can cut public spending to balance the budget but this cosy assumption rather relies on the private sector providing sufficient well paid jobs to continue generating a sufficient tax yield. This is where the argument about how deeply and swiftly the cuts should be made is crucial. Get it wroing and you could wind up with both lower expenditure and taxes which means the deficit may not actually come down much in relative terms since you are attempting to pay off a lower debt from reduced tax yields (ie the debt may be just as unsustainable as when you started).

In fact cutting expenditure is the easy bit and any idiot cahencellor can do it given the political will. getting the rest of the equation to balance is not so easy and I am far from convinced that Osbourne or Cameron know how to achieve it.

lets see...cut 50 100K manager jobsworths in public sector saves £5000000, and thats a direct saving in the need for taxes.

Keep the 50 on, and all thats happened is that the £5,000,000 is not saved, but the recirculation of tax moneys to pay for this is maintained and inefficient, and the wealth creating tax payer has had HIS choice of spend reduced so that someone else CAN have a choice of spend....also reduced by taxation...double taxation on the spend..

then theres the pension, company cars, probably the nicest offices money can buy...and so on.

Austerity needs to see public servants in a World of Black and White, so the UK can get back in full Technicolor.

Share this post


Link to post
Share on other sites

Money printing, creating inflation and a falling £ will create the real wage cuts needed to restore UK international competitiveness.

It's a lot easier to improve international competitiveness via a falling exchange rate, rather than cutting nominal wages

Share this post


Link to post
Share on other sites
Everyone agrees that the UK needs jobs.

We need to have more jobs. (Or you could argue less immigrants doing jobs our unemployed could do, but even thinking like that makes you a bigot)

So to have the massive cuts we need it's got to be wages that get cut.

If we bring all wages in the public sector down then there needn't be job cuts.

There's bound to be a simple algorithm for making the cuts...

Cap wages at the higher end to something sensible.

If people don't like it then they should be first on the list for redundency (After we cap the far too generous pay settlements going on)

By reducing the wage bill you also reduce the pensions bill - which is something that desperately needs doing too.

We also need to look at the outsourcing that goes on and stop that. If a private company can make a profit by screwing tax payer's money out of public sector then those jobs need to be bought in house again.

There was mention of max wage being 20X minimum wage but I think that should be 10x.

* £5.93 - the main rate for workers aged 21 and over

* £4.92 - the 18-20 rate

* £3.64 - the 16-17 rate for workers above school leaving age but under 18

* £2.50 - the apprentice rate, for apprentices under 19 or 19 or over and in the first year of their apprenticeship

Whether it's 10X adult wage or not is up for debate.

So max wage where apprentices are employed (and all councils etc could be made by law to employ them - £45500)

and where none are employed - only adults max wage is £107926 which still sounds a massive amount.

The problem is MOST of the staff earn crap wages, with the top 10% earning far too much, and the top 10% are the ones who get to call the shots, and turkeys don't vote for christmas.

Share this post


Link to post
Share on other sites

In fact cutting expenditure is the easy bit and any idiot cahencellor can do it given the political will. getting the rest of the equation to balance is not so easy and I am far from convinced that Osbourne or Cameron know how to achieve it.

You're saying the public sector generate wealth? Pull the other one? The problem with this is that the money to pay them was stolen from me in the first place thus the public sector type has not generated or paid any taxes at all job or no job.

Share this post


Link to post
Share on other sites

I am all for job sharing, sharing excessive wages between two, less hours, more quality time to do other things....two heads are better than one, even the government are up to it. ;)

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.