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Uk Real Wages 5-Year Rate. Scatter Chart From Edmund Conway

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Not surprised. We have exported our future, ponzi housing economics has played a large part in giving it the final push, not least the cash gain on selling the remaining brownfield, let alone the higher all round costs in staying put.

I suspect the figures are worse than the chart shows - all parties involved in rate setting and inflation targeting have been rigging the numbers.

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Remember this is a 5 year average. There were some big drops in pay during the 2008-2010 period.

If

Charts real earnings 1864-2014. Lower now than ever before.

:rolleyes:

https://plot.ly/~edmundconway/24/uk-real-wages-five-year-rate-1864-2014/

The point is what happens next?

If that was a CAPE chart - labour would be a screaming generational 'buy'.

Which I believe it probably will turn out to be with the benefit of hindsight (or foresight if you're smart)

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If

The point is what happens next?

If that was a CAPE chart - labour would be a screaming generational 'buy'.

Which I believe it probably will turn out to be with the benefit of hindsight (or foresight if you're smart)

If improving returns on labour are genuine then there's no need to commit now, is there?

There will be better labour opportunities in the future so no point acting in haste...

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If

The point is what happens next?

If that was a CAPE chart - labour would be a screaming generational 'buy'.

Which I believe it probably will turn out to be with the benefit of hindsight (or foresight if you're smart)

Surely this needs to be mapped against labour supply. Supposing there's been a <waves finger in the air> net 40% increase in labour supply arising from increased female participation in the workplace in recent years. Then it's not surprising that the unit cost of labour will decline as the market reaches saturation.

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Surely this needs to be mapped against labour supply. Supposing there's been a <waves finger in the air> net 40% increase in labour supply arising from increased female participation in the workplace in recent years. Then it's not surprising that the unit cost of labour will decline as the market reaches saturation.

That- plus a billion Chinese plus India plus eastern europe plus automation and IT. In some ways it's surprising that wages in the west have held up as well as they have so far.

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:lol: Well yes. I was just extending your trading analogy.

i.e. best not to bet on a change in direction until it has happened. :rolleyes:

This is the catch 22 we find ourselves in. The recent cultural consensus of education and application is certainly not on trend (if it ever was) . The cultural consensus that asset prices always go up is on trend but that trend itself is very unhealthy to the latecomers.

So what do you do? Hedging a change in those trends at the moment would seem foolish.

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That- plus a billion Chinese plus India plus eastern europe plus automation and IT. In some ways it's surprising that wages in the west have held up as well as they have so far.

It made me chuckle the other day to see a 50 something IT bod who had effectively rode the IT wave merely hint that perhaps this wasn't going to be so easy nowadays.

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If improving returns on labour are genuine then there's no need to commit now, is there?

There will be better labour opportunities in the future so no point acting in haste...

It's already happening in China.

That chart is showing what has already occured. My point was people make similar errors with equity prices, commodity prices, bond prices, house prices, currency values, productivity falls, output, inflation etc etc and in every instance make a plausible case for the continuation of the trend, that's all. The precise timing of it (in this instance) is less relevant, especially if the chart's a 5 yr average.

'no need to commit now is there?'

'no point acting in haste'

Sorry but I don't get your point - it's a 5 yr chart of wages which has never before NOT bounced off these lows so to do so there must by definition be a 'new paradigm'. Not impossible, just not likely (imo). Wages to fall forever? Nah........

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it's a 5 yr chart of wages which has never before NOT bounced off these lows so to do so there must by definition be a 'new paradigm'. Not impossible, just not likely (imo). Wages to fall forever? Nah........

Perhaps not forever but then this situation is unprecedented so it ought not to surprise when unprecedented circumstances lead to unusual trends.

I think you're just scraping around for reasons to believe what you want to happen. When youve been accused of that in the past you claim you are simply examine the data. In this instance you're hoping the data changes to fit your existing view in the future. Confirmation bias, something to watch for.

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Buy the things you need now with cash as you may not be able to do so in future. But don't commit to debt that you can't afford because your next job is likely to have a lower income. IF we take the trend is your friend.

If left my job tomorrow and and rejoined, my new terms and conditions would be worse even if we ignored pay. Everyone used to get 5 weeks paid holiday but since 2008 everyone who joins gets 4 weeks, and the sunday rate is at basic rate, rather than double rate.

Edited by 200p

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We've been globalized into an economy with the worst overpopulation crisis the world has ever seen. The tragedy is that as the west gets poor our innovation that has kept the over-breeders alive will dry-up and billions will die. We're governed by retards.

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It's already happening in China.

That chart is showing what has already occured. My point was people make similar errors with equity prices, commodity prices, bond prices, house prices, currency values, productivity falls, output, inflation etc etc and in every instance make a plausible case for the continuation of the trend, that's all. The precise timing of it (in this instance) is less relevant, especially if the chart's a 5 yr average.

'no need to commit now is there?'

'no point acting in haste'

Sorry but I don't get your point - it's a 5 yr chart of wages which has never before NOT bounced off these lows so to do so there must by definition be a 'new paradigm'. Not impossible, just not likely (imo). Wages to fall forever? Nah........

But if you take previous lows there was a reason for a bounce back.

For example - late 1920s/inter war low - new industries and new technology offsetting coal and steel decline; similar thing in the early 1980s - but what now?

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This is the catch 22 we find ourselves in. The recent cultural consensus of education and application is certainly not on trend (if it ever was) . The cultural consensus that asset prices always go up is on trend but that trend itself is very unhealthy to the latecomers.

So what do you do? Hedging a change in those trends at the moment would seem foolish.

About stocks, last night watched some US financial video, perhaps CNBC.. bankster guy saying low rates on savings, what else you going to do [other than buy stocks]? To my surprise the young woman back in the studio said she gets scared when people say that, everyone doing the same, and "shouldn't we be asking if there's something else to it." Another video thereafter saying shorters been badly hurt by prolonged reflation, and bears are scared now, few about willing to go against this market. If not shorting it, another option for houses is not to be a latecomer top end of peak buyer, just before a crash.

When the change happens, market changes, may occur suddenly, and house sellers stuck with no buyers. Remember Phil Spencer admittting as much on 2006/07 Tonight Show, "Interest rates doubled in a a couple of weeks, so the crash effectively happened in a couple of weeks too." Buyers fell away, and the buyers who remained, found sellers willing to accept a lot less, bringing down other owners house prices with it. Buyers can also fall away without interest rate rises now, eg full taper.

I'd like to argue the wage inflation, but just so happens two people I know got bumper payrises recently, dammit. Although their incomes still goes nowhere against house prices, unless they stretch for a 2 bed terrace house with no parking, and would probably then never have any money to ever trade up, and just barely enough to live a life when mortgage rates go up, when in top flight careers.

Awful story of that Chinese regional television small-star/news presenter (or something) woman thrown off a bridge to her death a couple of days ago, Daily Mail showing pics too of her body down below. Muggers disappointed she only had equivilent of 50p in her handbag.

cybernoid, didn't you know the modern past, including a super-long-wave of HPI and 70 years of post atomic bomb inflation, with just a few minor recessions, (economy always had regular inflation-to-deflation states previously, shake outs for new entrants and rebalancing) always points way to the future?

Edited by Venger

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We've been globalized into an economy with the worst overpopulation crisis the world has ever seen. The tragedy is that as the west gets poor our innovation that has kept the over-breeders alive will dry-up and billions will die. We're governed by retards WOLVES.

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My sprogs have weekend and summer jobs and I was a bit miffed at their pay rate. So I spent a bit of time researching. And found that the youngster minimum wage hourly rate is not far off the rate I was paid in my late 1980s summer jobs. I had to concede that at £5 an hour my 15 year old is practically in the 1%.

And middle/lower senior management pay seems pretty grim these days. Unless you want to sell your soul and life and manage to make the leap into big-company C-suite hyperspace.

I was looking around as I feel a "re-structuring" is on the horizon (heck, it's what I'd do) and came to the conclusion that I'm very, very fortunate where I am just now and would probably struggle to find a similar billet. Fortunately, I've been whacking the wonga away over the years and will more likely head to the beach than the job centre should the axe fall in my direction.

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It's already happening in China.

That chart is showing what has already occured. My point was people make similar errors with equity prices, commodity prices, bond prices, house prices, currency values, productivity falls, output, inflation etc etc and in every instance make a plausible case for the continuation of the trend, that's all. The precise timing of it (in this instance) is less relevant, especially if the chart's a 5 yr average.

'no need to commit now is there?'

'no point acting in haste'

Sorry but I don't get your point - it's a 5 yr chart of wages which has never before NOT bounced off these lows so to do so there must by definition be a 'new paradigm'. Not impossible, just not likely (imo). Wages to fall forever? Nah........

Do you remember what it is like to be on a promise? Only to wake up the next day buried in the friendzone and your balls aching?

We're going to need a bit more than a nudge and a wink to start lubing up.

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Do you remember what it is like to be on a promise? Only to wake up the next day buried in the friendzone and your balls aching?

We're going to need a bit more than a nudge and a wink to start lubing up.

'We'?

We're talking about the future. There are no promises only a range of probabilities and cycles.

Cycles are your friend. Whethere you accept their friendship is up to you. I couldn't care less.

Edited by R K

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'We'?

We're talking about the future. There are no promises only a range of probabilities and cycles.

Cycles are your friend. Whethere you accept their friendship is up to you. I couldn't care less.

It's nothing personal but I wouldn't include you in that particular 'we'.

You and I are certainly assigning different chances on the range of possibilities and in your terms I'm definitely acting irrationally but I suppose I can afford to.

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It's nothing personal but I wouldn't include you in that particular 'we'.

You and I are certainly assigning different chances on the range of possibilities and in your terms I'm definitely acting irrationally but I suppose I can afford to.

It's only the macro which is of interest, not the personal.

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Sorry but I don't get your point - it's a 5 yr chart of wages which has never before NOT bounced off these lows so to do so there must by definition be a 'new paradigm'. Not impossible, just not likely (imo). Wages to fall forever? Nah........

Chart has probably already failed to bounce. Based on unprecedented levels of infltion data manipualtion and changing the goalposts.

Salaries in many sectors are no more than they were 20 years. We are in a situation that is already unprecendented on many comparisons.

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Chart has probably already failed to bounce. Based on unprecedented levels of infltion data manipualtion and changing the goalposts.

Salaries in many sectors are no more than they were 20 years. We are in a situation that is already unprecendented on many comparisons.

We're in the dog days of a 30+yr ponzi scheme. Osborne's managed to hold the economy up temporarily by borrowing and spending like Hugo Chavez and re-igniting hpi in London and the SE, but the bubble jobs and bubble wages that vanished in 2008 haven't come back. When this second echo bubble collapses we're likely to see wage inflation fall decisively again.

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