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Big, serious but accessible 74 page report on many of the issues that get discussed here every day,

http://www.resolutionfoundation.org/media/media/downloads/Growth_without_gain_-_Web.pdf

If you've got the time it's an excellent read, if you haven't here are some of the topics covered,

1. What constitutes low to middle income in Britain today? Excluding the bottom 10% relying on benefits low to middle income is defined as £12-30k a year for a couple with no children and £19.2-48.5k a year for a couple with three children.

2. American workers at the median income level have seen no improvement in their real living standards from 1973 to date. German and Canadian workers at the median level have seen no improvement since 1990. And British workers at the median level have seen no improvement since 2003. In other words this growing trend of wage stagnation for low and middle earners was well established even before the 2008/9 recession, and is likely to continue when and if recovery comes.

3. Technology in the second half of the 20th Century drive up middle incomes, today it's displacing middle income jobs and polarising wages. A growing economy is no longer any guarantee that middle and low earners will be better off.

4. As you might expect there's clear evidence that the very top earners are earning more. But I was surprised at two things. Firstly the extent to which today the very wealthiest are dependent on high wages rather than ownership of capital. And secondly how much the "middle and upper middle class" has grown. In 2008/9 there were over a million people in the UK earning wages of over £60k, back in 1983, after adjusting for inflation, there were less than 100k.

5. The gap between the median income group and the "affluent" (defined as the 90th percentile income) is growing. In constant 2009 prices that gap was £11.6k in 1980, it rose to £20.7k in 1995, and today is up to £28.6k. So "affluence" is moving further and further away from the middle.

6. Immigration does seem to drive down the wages of the very poorest, but not by much. It was calculated that a 1% increase in the share of migrants in the UK working age population drove down the wages of the poorest 5% by 0.6%.

7. Low to middle earners are increasingly being forced out of home ownership. In 1988 58% of low to middle earners owned, 14% were private renters, and 27% were in public rented property. Twenty years later in 2008 home ownership amongst low to middle earners was down from 58% to 29%, private renting was up from 14% to 41%, and public renting was marginally up from 27% to 30%.

8. The report has a powerful analysis (on page 53), it asks how many years does a low to middle earner have to save to get a house deposit under prevailing mortgage conditions? For someone saving 10% of their income it would have taken between four and ten years anytime during the quarter century from 1976 to 2000, but today it would take 23 years. And for a low to middle earner saving 5% of their income, they could have saved a deposit in eight years in 1996, or in just under ten years in the very early 80's, but today it would take them 47 years of saving.

9. The report concludes that in 1978, in terms of access to home ownership, the low to middle income earner group didn't look that different from high earners. But today they look more like the benefit reliant.

10. Despite home ownership becoming more elusive, home ownership aspirations are as strong as ever. In 2011 86% of under 30's identified home ownership as a key life goal, and 90% said they would not be happy with a lifetime of renting.

Seems to me we're living in the west through an era of crushed hopes. Flatlining wages, falling middle class, growing inequality, and home ownership becoming a receding dream.

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I read somewhere that the second half of the 20th century was an aberation in terms of economics in that we would revert to the Victorian model of Mill owner (capital and ability to get clients) and artisan (skilled builder, car mechanic, chef, IT worker etc) and there wouldn't be much in between. The squeezed middle in all reality are in fact the middle band in this and it is disappearing. Technology has hastened it's demise but I think it is more structural than that.

You had to be a bit gormless not to see this coming twenty years ago let alone 10.

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The middle was built from the service industry, financial industry and debt...take that away what have you got not a lot. ;)

Not really the middle and middle class existed long before that it started with Taylorism in the 1920's in the Ford Factories. In fact most financial services company are more Victorian lots of IFA's relatively flat management heirachy.

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Not really the middle and middle class existed long before that it started with Taylorism in the 1920's in the Ford Factories. In fact most financial services company are more Victorian lots of IFA's relatively flat management heirachy.

What does that mean? ;)

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I read somewhere that the second half of the 20th century was an aberation in terms of economics in that we would revert to the Victorian model of Mill owner (capital and ability to get clients) and artisan (skilled builder, car mechanic, chef, IT worker etc) and there wouldn't be much in between. The squeezed middle in all reality are in fact the middle band in this and it is disappearing. Technology has hastened it's demise but I think it is more structural than that.

You had to be a bit gormless not to see this coming twenty years ago let alone 10.

I very much doubt this. Modern economies depend massively more on economies of scale and the willing compliance of their populations to function. The inputs needed for a modern chip foundry is for example breathtakingly large when compared to a victorian mill. And hence so is the economies of scale needed to make it viable.

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I very much doubt this. Modern economies depend massively more on economies of scale and the willing compliance of their populations to function. The inputs needed for a modern chip foundry is for example breathtakingly large when compared to a victorian mill. And hence so is the economies of scale needed to make it viable.

Do you think that it is the concentration of power and very strong bargaining position of the owners of capital that will lead to the continued (and perhaps perpetual) decline in the standard of living of the owners of labour (i.e. workers)?

Further, do you think that "globalisation" is merely a smokescreen behind which this shift is taking place and that the impact of technological advances outweigh the collapse of the importance of national boundaries?

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I read somewhere that the second half of the 20th century was an aberation in terms of economics in that we would revert to the Victorian model of Mill owner (capital and ability to get clients) and artisan (skilled builder, car mechanic, chef, IT worker etc) and there wouldn't be much in between. The squeezed middle in all reality are in fact the middle band in this and it is disappearing. Technology has hastened it's demise but I think it is more structural than that.

You had to be a bit gormless not to see this coming twenty years ago let alone 10.

What makes you think the Victorian/early 20th century economy wasn't itself an aberration? Income inequality was much lower in the Middle Ages.

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What makes you think the Victorian/early 20th century economy wasn't itself an aberration? Income inequality was much lower in the Middle Ages.

For one brief moment at the end of the black death it was, the late 1300's were a relatively good time to be a labourer, if you'd survived that is. It was the end of the 18th century before the working man once again enjoyed such high wages, good diet, and high life expectancy. Apart from that one interlude though it was an unremittingly bleak Malthusian existence.

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You had to be a bit gormless not to see this coming twenty years ago let alone 10.

I don't often agree with you : but you're bang on the nail there.

I very much doubt this. Modern economies depend massively more on economies of scale and the willing compliance of their populations to function. The inputs needed for a modern chip foundry is for example breathtakingly large when compared to a victorian mill. And hence so is the economies of scale needed to make it viable.

Doesn't that just emphasise those that have availability of capital are the winners and the artisans take far less of the remainder?

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Do you think that it is the concentration of power and very strong bargaining position of the owners of capital that will lead to the continued (and perhaps perpetual) decline in the standard of living of the owners of labour (i.e. workers)?

Further, do you think that "globalisation" is merely a smokescreen behind which this shift is taking place and that the impact of technological advances outweigh the collapse of the importance of national boundaries?

The power and bargaining position of capital has led to a decline in the standard of living of workers albiet one masked by increasing debt loads. The problem is that such an occurrence is not sustainable in a mass consumption mass production world as we are currently finding out. This is for two reasons.

First, there must necessarily be a critical mass in terms of production & consumption to keep the high tech basis of our societies functioning. Secondly, high tech societies need the willing compliance of the majority of the population to function because of the intensive nature of high tech capitial, and the ease with which high tech can be disrupted by a small number of disgruntled people.

High tech high inequality societies where worker living standards are declining will i expect, either rectify in terms of inequality or not remain high tech. They are just too fragile while also being too ripe for internal strife.

As for globalisation i would not call it a smokescreen but a very real way in which capital has increased its power vs labour. Though this was already happening due to technological advances creating a surplus in terms of labour needed to provide the fundamentals needed to survive, and goods which provide a large increase in quality of life.

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I don't often agree with you : but you're bang on the nail there.

Doesn't that just emphasise those that have availability of capital are the winners and the artisans take far less of the remainder?

No, what it shows is that your capital is in reality very very fragile. And that you really really dont want that capital to be surrounded by a mass of unhappy people.

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No, what it shows is that your capital is in reality very very fragile. And that you really really dont want that capital to be surrounded by a mass of unhappy people.

Just wanted to say what a great thread started by silver surfer. Forthright views lots of No's and this is how it is and everyone putting in some great points without taking umbrage. No trolls, troll accusers or celeb snippets from Twitter.

Perhaps thats why it is off the front page.... :)

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  • 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%



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