Gap Between Rich And Poor 'keeps Growing'

[interestrateripoff]

http://www.bbc.co.uk/news/business-32824770

The gap between the rich and the poor keeps widening, the Organisation for Economic Cooperation and Development (OECD) says.

In its 34 member states, the richest 10% of the population earn 9.6 times the income of the poorest 10%.

There is no standard measure of inequality, but most indicators suggest it slowed or fell during the financial crisis and is now growing again.

The OECD warns that such inequality is a threat to economic growth.

The report says this is partly because there is a wider gap in education in the most unequal countries, which leads to a less effective workforce.

OECD member states include most of the European Union as well as developed economies such as the US, Canada, Australia and Japan.

Clearly the rich are hard working and the poor are just shirkers.

[roneik]

Where I live a good proportion of the populace dont want to do a lot of the jobs on offer. People have become insular , nobody sees or has any empathy for anybody. Being old is a like a disability. Drones walk the streets withn phones almost in their oraces

Meanwhile back at the ministry of plenty they love it

[Si1]

Where I live a good proportion of the populace dont want to do a lot of the jobs on offer. People have become insular , nobody sees or has any empathy for anybody.

That's possibly because in many cases work doesn't pay

Edited May 21, 2015 by Si1

[byron78]

That's possibly because in many cases work doesn't pay

Spot on (as usual).

That and there's zero job progression.

No one minds low wages and long hours if you can work hard and get promoted.

Nobody likes low wages and long hours if you've 50 years of low wages and low hours to look forward to because social mobility has died a death.

[Si1]

Spot on (as usual).

That and there's zero job progression.

No one minds low wages and long hours if you can work hard and get promoted.

Nobody likes low wages and long hours if you've 50 years of low wages and low hours to look forward to because social mobility has died a death.

Indeed

Then there the question of how social mobility died the death

Pickety says it's due to capital exploiting labour

The most convincing right wing counter to Pickett from a chap called Matthew Rognlie is that the only super returns on capital since the 1970s have been on real estate, which is more accessible to the rich then the poor for investment, and so any (likely) long term reverse of that trend relative to other asset classes will reverse the inequality in the long run

OK that's fine, you and I might disagree on which of those two we think is the culprit, perhaps, but the key point in the present is that the motivation simply isn't there for many of the younger generations to bother.

Edited May 21, 2015 by Si1

[Venger]

Is it any wonder? They want asset wealth to keep on massively hyperinflating, but only offer younger people without HPI families, who have to go out in the world to earn a living, cheap debt vs massive and increasing HPI.

And there's no anger. Just the HPI VI agreeing with it, and HPC softies wanting people to have access to mega-debt on flexible terms they can lower their repayments with circumstances on, or default on, and lender picks up the slack.

Draghi hits back at argument QE fuels inequality

Published: May 14, 2015

[...]While acknowledging “there are always distributional consequences to monetary policy decisions,” Draghi says it’s necessary to raise aggregate demand by encouraging firms and households to bring forward spending decisions.

He didn’t deny that quantitative easing boosts asset prices.

“It is true that our low policy rates, forward guidance and asset purchases raise the current market value of financial assets and thereby benefit the holders of those assets,” he said. “But what matters more is the exact mirror effect of this rise in asset prices, which is a lower cost of equity for entrepreneurs, a lower cost of finance for investors in real projects, and a lower cost of borrowing for consumers.”

“Financial assets are always, in the final analysis, a claim on the wealth generated by the productive part of the economy,” he added. “So it is in their interest that output growth remains on a robust path as this maximizes the likelihood that their claims are honored in full.”

“At the moment there is little indication that generalized financial imbalances are emerging. As a matter of fact, the two most important indicators of growing financial imbalances — real estate prices and credit growth — show only tentative signs of turning upwards,” he said.

http://www.marketwat...lity-2015-05-14

[Guest]

Twenty or thirty years ago one of those jobs nobody wants could fund a home and a family.

Now you need to be a footballer or win X factor to get a bedsit - and preferably you'd be a couple comprised of a footballer married to an X factor winner.

I don't blame anyone who decides not to bother.

[longgone]

I don't blame anyone who decides not to bother.

thanks mate

[South Lorne]

http://www.bbc.co.uk/news/business-32824770

Clearly the rich are hard working and the poor are just shirkers.

...where is the incentive in this country at the lower end of the scale with tax credits ...the Labour elites plan to keep the poor .., poor ...but reliant on them . the elite to hand out the scraps while they sipped their leftie in power champagne ...a socialist state ...arise Gordo ..and Tonio...long way to turn this economic sickness around.....

[byron78]

...where is the incentive in this country at the lower end of the scale with tax credits ...the Labour elites plan to keep the poor .., poor ...but reliant on them . the elite to hand out the scraps while they sipped their leftie in power champagne ...a socialist state ...arise Gordo ..and Tonio...long way to turn this economic sickness around.....

Tax credits came in 2003.

House price inflation was rampant long before that of course.

And as a Tory I actually think benefit culture suits us far better than it does Labour. Not only has it helped quash the working class (as a political force it's really taken the labour element out of Labour) it's also conveniently demonised them.

Win win.

The incentive to work in this country should be good wages, job security, job progression, and the ability to own your own home at a reasonable price.

[South Lorne]

Tax credits came in 2003.

House price inflation was rampant long before that of course.

And as a Tory I actually think benefit culture suits us far better than it does Labour. Not only has it helped quash the working class (as a political force it's really taken the labour element out of Labour) it's also conveniently demonised them.

Win win.

The incentive to work in this country should be good wages, job security, job progression, and the ability to own your own home at a reasonable price.

...yes HPC was rampant...but wages were rising up to 2003 ....once tax credits came in, it all went into reverse ...HPC continued..wages went down ..and crashed after 2007.....the only way to get rid of tax credits is to increase wages ..i.e. companies pay the gap not the government ...business demands cheap labour from Europe ...they don't wish to raise their costs, while they make money out of the taxpayer, who subsidises these low labour costs for the profits paid to company share shareholders in dividends or in the case of many overseas companies paying virtually no tax here, their offshore profits.in tax shelters. ...for many immigrants they are earning 4x what they might earn in their own country ..and therefore wages will continue to be driven down until they are level throughout Europe ..which all helps to solidify the economic reunification of Germany ,,,Merkels high level strategy for Germany and Europe...

..from 2010..."

"Germany's Disappointing Reunification: How the East Was Lost" http://www.spiegel.de/international/germany/germany-s-disappointing-reunification-how-the-east-was-lost-a-703802.html Edited May 22, 2015 by South Lorne

[byron78]

...yes HPC was rampant...but wages were rising up to 2003 ....once tax credits came in, it all went into reverse ...HPC continued..wages went down ..and crashed after 2007.....

I think it's a massive stretch to blame tax credits for wages collapsing during the economic crisis in 2008 (and not recovering since) myself. In fact they actually got better between 2003 and 2008!

This is a global trend - it's not just limited to the UK and tax credity countries.

Which to me implies there is far more than subsidised wages going on and people are being a bit simplistic.

As an employer I still need someone to do the 40hrs a week work for me a job entails.

If you think I benefit from having 3 members of part-time staff instead of 1 full time member you're sort of right - it means I can have more staff each with different skill sets. Be it doesn't actually save me any money. My workforce is state subsidised, but I don't benefit financially.

If wages had to go up I probably couldn't afford to pay X amount of staff and would just lay people off.

Why?

Because my business is competing with global businesses who can pay people 30p an hour (or less) basically.

If I was just trading against other UK businesses of course wages would need to rise - and they could - because the same rules would apply to everyone.

But the same rules don't apply to everyone.

I can't avoid taxes like a big company can. I can't out source my workforce to pay them 30p an hour instead of £6.50 or more.

I think you're being a bit myopic personally.

Globalisation is driving working wages down more than anything else. It's a race to the bottom. Out source or be damned.

You're sort of right about most things - about why migrants come here (low wages at home) and about big companies avoiding tax, but you're just missing the bigger picture slightly I feel.

This is basically developed economies who have gutted their labour markets for massive short term growth between 1980-2000ish suddenly not having any idea what to do with their indigenous workforce. So they're dividing up the remaining low paid jobs into chunks (because in a globalised market you can't create more when you're wages are 20 times what they are abroad).

Edited May 22, 2015 by byron78

[interestrateripoff]

http://www.oecd.org/social/reducing-gender-gaps-and-poor-job-quality-essential-to-tackle-growing-inequality.htm

Watch the press conference

21/05/2015 - Income inequality has reached record highs in most OECD countries and remains at even higher levels in many emerging economies. The richest 10 per cent of the population in the OECD now earn 9.6 times the income of the poorest 10 per cent, up from 7:1 in the 1980s and 9:1 in the 2000s, according to a new OECD report.

In It Together: Why Less Inequality Benefits All also shows that wealth is even more concentrated at the top than income, exacerbating the overall disadvantage of low-income households. In 2012, the bottom 40% owned only 3% of total household wealth in the 18 OECD countries with comparable data. By contrast, the top 10% controlled half of all total household wealth and the wealthiest 1% owned 18%.

Edited May 22, 2015 by interestrateripoff

[Guest]

Because my business is competing with global businesses who can pay people 30p an hour (or less).

Yes, I agree. Ultimately globalisation means the UK is now competing with countries with a far lower cost of living (never mind the actual relative living standards).

Which means it's a race to the bottom. Either UK living standards have to fall (which is happening), the government has to make up the difference (still borrowing 100 billion a year?), or the cost of living in the UK has to fall (which is 'deflation' or a 'crash' and bad and must apparently never be allowed to happen).

I for one would rather the UK didn't become a third world country.

The fantasy of the UK providing 'high value work' or the 'knowledge economy' only works for a small proportion of people - and fewer of those all the time as the cost of living explodes. We're not as good at it as government hubris would have it. I'm still shocked that we can no longer design our own nuclear reactors - who on earth let those skills die out?

Most of the self-employment we've seen recently has been on the level of selling each other homemade jam or underwear with poems printed on.

Which leaves our financial stranglehold the only 'asset' the UK has left. Should have been a banker.

[Hairy1305]

I think it's a massive stretch to blame tax credits for wages collapsing during the economic crisis in 2008 (and not recovering since) myself. In fact they actually got better between 2003 and 2008!

This is a global trend - it's not just limited to the UK and tax credity countries.

Which to me implies there is far more than subsidised wages going on and people are being a bit simplistic.

As an employer I still need someone to do the 40hrs a week work for me a job entails.

If you think I benefit from having 3 members of part-time staff instead of 1 full time member you're sort of right - it means I can have more staff each with different skill sets. Be it doesn't actually save me any money. My workforce is state subsidised, but I don't benefit financially.

If wages had to go up I probably couldn't afford to pay X amount of staff and would just lay people off.

Why?

Because my business is competing with global businesses who can pay people 30p an hour (or less) basically.

If I was just trading against other UK businesses of course wages would need to rise - and they could - because the same rules would apply to everyone.

But the same rules don't apply to everyone.

I can't avoid taxes like a big company can. I can't out source my workforce to pay them 30p an hour instead of £6.50 or more.

I think you're being a bit myopic personally.

Globalisation is driving working wages down more than anything else. It's a race to the bottom. Out source or be damned.

You're sort of right about most things - about why migrants come here (low wages at home) and about big companies avoiding tax, but you're just missing the bigger picture slightly I feel.

This is basically developed economies who have gutted their labour markets for massive short term growth between 1980-2000ish suddenly not having any idea what to do with their indigenous workforce. So they're dividing up the remaining low paid jobs into chunks (because in a globalised market you can't create more when you're wages are 20 times what they are abroad).

If you employ 3 people to do the 1 persons 40 hours, do you not pay much less Employers NI?

[byron78]

If you employ 3 people to do the 1 persons 40 hours, do you not pay much less Employers NI?

It's honestly negligible.

I'd have to scale up massively to even consider that as making much of a difference.

And I won't be doing that at my age.

[winkie]

Look around and it is clear to see countries where much of their population is poor or doing jobs where there is no hope for advancement, jobs where however hard they work there is no upward mobility....countries where land has been confiscated and then the people are forced to work on the land that was once their own, no stake in the community, only there to make others rich via their hard work, little choice no freedom.......these countries so often the hierarchy are dripping in gold, live in palaces, what for nothing and exploit the ones that got them to the position they hold.....not prosperous lands, prosperous lands and prosperous businesses have prosperous people with a small gap between those with the most and those with the least......

[TheCountOfNowhere]

http://www.bbc.co.uk/news/business-32824770

Clearly the rich are hard working and the poor are just shirkers.

What they mean is the gap between people with houses and people without.

Debt is wealth.

[Sandwiches33]

Twenty or thirty years ago one of those jobs nobody wants could fund a home and a family.

Now you need to be a footballer or win X factor to get a bedsit - and preferably you'd be a couple comprised of a footballer married to an X factor winner.

I don't blame anyone who decides not to bother.

Hell yeah

there really is no point just live for yourself. They could of sold us this work hard reap rewards crap a few years ago but there is no point now just enjoy yourself and good luck to anyone expecting to live off there 400k house. I aint buying shit I'm spending my money on videogames and beer.

[Venger]

Hell yeah

there really is no point just live for yourself. They could of sold us this work hard reap rewards crap a few years ago but there is no point now just enjoy yourself and good luck to anyone expecting to live off there 400k house. I aint buying shit I'm spending my money on videogames and beer.

Yeah. Wait until math and other market forces come along which want fresh debt on baby-boomer homes, even if it means hard hpc, imo.

Two posts which always cheer me up.

I wish I could remain magnanimous, humble but after years of being patronized by life winners racking up debt and EAs who had the people skills of a hand grenade I'm afraid I will now become a spectacular C**t as I strut around viewings with a large wad of cash or maybe even enough to be mortgage free.

When I do buy my cheap house in a year or so when it really bites I will behave like lex luther with a deposit. I am unsure yet as to if I will wear a victory cape but I will be an effing monster and they will rue the day..

Will I make an EA get down on all fours and bark like a dog to make a sale? If I do ill video it and put it on here.

This collapse will be beautiful, no sympathy, nobody forced them to rack up debt or load up BTL. Finally the theft from the young can stop, the sale of debt slavery can end, tv wont be full of ridiculous property shows and we can live in houses and work for a living.

– while the neighbours, who bought a similar house in 2011-2014, beg me to be allowed to nibble my hedges for sustenance. At which point, I’ll hit them on the head with my cane.

When the time comes I will thrash a boomer with a bottle of lambrini because I enjoy ironic violence.

I will then seize there house, I will create a defensive perimeter by setting fire to the quashqai and caravan

I will then weaponize the collection of exclusive royal doulton porcelain figurines in the 2nd spare room by chucking them at whomever comes to try and take my new house.

[Billy soy]

Dariszen, those posts are hilarious. Thanks for digging them up venger, I forgot how funny they were the first time around.

[Sandwiches33]

Thanks guys, I love this site its such a good place to rant.

Sometimes the UK is so ******ing stupid its nice to come here and see some intelligent debate. This is where the zookeepers meet.

I just do go off one one sometimes because I cannot fathom the level of stupidity in the UK anymore.

[Sandwiches33]

Oh and I do believe in a couple of thousand years post MEGA collapse when super intelligent monkeys succeed us they will uncover this site and realize not all humans were ******ing morons.

[Jeremy424]

Globalisation is driving working wages down more than anything else. It's a race to the bottom. Out source or be damned.

You're sort of right about most things - about why migrants come here (low wages at home) and about big companies avoiding tax, but you're just missing the bigger picture slightly I feel.

This is basically developed economies who have gutted their labour markets for massive short term growth between 1980-2000ish suddenly not having any idea what to do with their indigenous workforce. So they're dividing up the remaining low paid jobs into chunks (because in a globalised market you can't create more when you're wages are 20 times what they are abroad).

Excuse my ignorance of economics, but if that's the case then why are we trying to compete? Why can't we just ignore what they do elsewhere? There is no rule that says a business has to choose the cheapest option. When I walk into a shop I don't choose the cheapest on offer because nine times out of ten it's no good. Doesn't it boil down to a mindset and ideology?

[Errol]

This is where the zookeepers meet.

No, sadly we are still animals caged in the zoo. We're just the more enlightened animals who sit in the corner away from the rest (planning our escapes etc).

Edited May 22, 2015 by Errol