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Low Wage Britain

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Let me think......is it cheaper to outsource many public sector jobs to agencies on zero hour contracts, training is provided, or pay people with safe jobs and good benefits overtime?......all good for the unemployment figures and saves money at the same time. ;)

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This doesn't go back far enough.If you take it right back say 20 years and take in not only inflation,but also job security,the price of food and fuel etc the position is much worse for at least the bottom 60-70%.

The value of a days work has been destroyed.On the other side the rentiers have made sure we didn't get a deflation to go with it to protect themselves and their friends.

Although shocking its also incredible that they have been able to steal so much money,and ruin so many lives and get away with it.

Nothing looks like changing and the march of the 0 hours contract seems to be the final act.0 hours,NMW,no holiday pay,no sick pay,high inflation and shelter costs is about as bad as it can get.

For young people they need to really think about leaving the UK.Unless things change in a massive way there doesn't look to be much of a life to be had here.

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The way things are going......not only will working people be forced out of the buying market they will also be forced out of the rental markets......what is there left, sofa surfing?...then they will be forced out of the buying renting and working markets...no fixed abode, no nothing, no hope. ;)

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The way things are going......not only will working people be forced out of the buying market they will also be forced out of the rental markets......what is there left, sofa surfing?...then they will be forced out of the buying renting and working markets...no fixed abode, no nothing, no hope. ;)

they can become cats

or

http://www.youtube.com/watch?v=6wzBvE222io?showinfo=0

Raccoons

Edited by Maria Gorski

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If only these people would quit relying on benefits and get a job......

Of course, the point to remember is that the asset ponzi is still propped up on borrowed money (even if it is manufactured via QE) that has to be paid back out of future earnings. If wages are declining then that forward earnings stream is shrinking so you are going to need more than ZIRP to keep the debts paid and the bubble inflated. It is only a matter of time until we are back in 2008 style crisis again.

Edited by stormymonday_2011

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The sheeple want it this way. They are either property owners under the illusion their shoebox flat being worth 50% more FIATS than when they bought it makes them some kind of astute businessman, or else dont own property but are in some kind of hypnotic thrall to property porn, like a moth to a light.

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And still the CBI calls for further deregulation of employment as the panacea that will 'save' the economy.

The question that puzzles me is this one- if the only way to ensure a successful UK economy is for the majority of the population to accept declining wages, declining employment rights leading to zero job security and the running down of the welfare and healthcare systems....

Who exactly is this 'successful' economy benefiting?

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http://www.independent.co.uk/news/uk/politics/fall-in-wages-puts-britain-in-europes-bottom-four-8755957.html

Basically anything to maintain the pretense of employment so the books look good. All kept going through endless immigration from Eastern Europe.

"New figures collated by the House of Commons Library show a 5.5 per cent drop in wages after inflation since 2010" which still makes them far higher than 90% of the worlds working population.

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"New figures collated by the House of Commons Library show a 5.5 per cent drop in wages after inflation since 2010" which still makes them far higher than 90% of the worlds working population.

90% of the worlds working population do not have to put up with the costs of living in the UK rentier paradise .

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OMG

I've been thinking about UK wage inflation.

During the boom years, how much wage inflation was a product of the boom, plain and simple? For example, what led public sector wage inflation, which was rampant, was Brown's profligacy ('justified' during the boom by denying that there was an unsustainable credit boom and claiming that it was sharing out the spoils of sustainable and organic economic growth, yeah right! ;) ).

And to what extent was some private sector wage inflation actually driven by public sector wage inflation as private employers had to compete public sector profligacy? And to what extent did other components of private sector wage inflation actually stem purely from HEW/MEW financed consumption?

And what happens when all of that goes into reverse at the same time?

As I've admitted before I've been sojourning as a public sector parasite for a while, Leftie Indoctrination Division, (that's 'teacher' to you lot, I did some non-non-jobs for a while beforehand), and what strikes me is how the wage inflation machine only switches off gradually. As people will recall, a number of public sector pay increases approved before the Financial Crisis were honoured after the crisis. However, there was then a pay freeze (fair enough, I am absolutely not complaining about any of this) and now the government has removed the components of the national pay frameworks that meant that young teachers got a pay rise every year in the first 7 years of their career automatically. (Again, I'm not interested in the rights or wrongs of that). What I am interested in is that this turns off a non-trivial component of wage inflation and it turns it off way too slowly for the attention span of the mainstream media to be interested in it. What I'm interested in is how solid is the assumption that wage inflation will return, and on what basis is anyone assuming that it will return?

Edited by ChairmanOfTheBored

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Wage growth in post-bubble periods: Japan and the UK

00150313_GL_wages.jpg

Source: UK inflation: Why wages matter

Was it much different before 2007?

Strip out population growth and it turns out Japans GDP (per capita) was higher in their 'lost decade' than either the US or Eurozone.

Japan_per_capita_gdp.gif

Adding more people is all we can do to maintain the illusion of growth. Big companies love it, more consumers...but the average brit keeps getting poorer.

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90% of the worlds working population do not have to put up with the costs of living in the UK rentier paradise .

The "global economy" doesn't care how much it's workers have to spend to support Britain's rentier society. It just wants to make products for the lowest possible cost which includes the lowest level of quality a customer will accept.

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What I'm interested in is how solid is the assumption that wage inflation will return, and on what basis is anyone assuming that it will return?

I have no idea whether wage inflation will return or not. However, if there is no pick up in earnings then that fact alone is going to have a massive knock on effect to the rest of the economy particularly with regard to the future servicing of the existing debt. To fund the ponzi economic model beloved of our politicians you at the very least need to generate enough money to meet the next round of interest payments. Even with the BOE following ZIRP that reality is going to catch up with them sooner or later.

Edited by stormymonday_2011

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Was it much different before 2007?

It's been slowing down for a while.

Using this source data (http://www.measuringworth.com/ukearncpi/) you can see that over the last 40 UK nominal earnings compound at about 7% YoY, over the last 20 years that's only 4% and over the last 10 that's 3% and over the last couple of years its 1%-2%.

Edit - insertion of nominal

Edited by ChairmanOfTheBored

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...However, if there is no pick up in earnings not then that fact is going to have a massive knock on effect to the rest of the economy particularly with regard to the future servicing of the existing debt. ...

Which is the elephant in the room. In a globalised world where you have the highest salaries it's near on impossible to increase them by a nominal let alone real terms amount. Meanwhile inflation puts the price of your everyday essentials up and that debt just won't reduce because you have no wage inflation.

I've seen how the "average" person lives in China, India and Brazil to name but 3. All I can say is that if globalisation really does play out then this country has a big shock coming to it which hasn't even started yet.

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The "global economy" doesn't care how much it's workers have to spend to support Britain's rentier society. It just wants to make products for the lowest possible cost which includes the lowest level of quality a customer will accept.

No doubt true but that is a reality which is eventually going to have a huge impact all the rent seekers in the UK be they corporate utilities or individual landowners and BTL parasites who fix their prices on the basis that there is a rising stream of earnings that can be milked until eternity.

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This is Real UK Earnings back to 2000 (source):

130505-2.jpg

Interesting...but i note they always use 'average' rather than 'median'.

How much of that increase was driven by London and its environs FIRE based types?

And i wonder how inflation was calculated...Brown removed housing in 2003 IIRC.

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