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Morganite

GDP (nominal) doesn't tell the whole story

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There was a thread recently about the UK being a confidence trick. BUT all the numbers say otherwise!

 

There is growth! Look at GDP + X% with retail (all on tick of course).

GDP is often vaunted as an important figure of growth, it doesn't paint a full picture. It's also badly flawed probably as flawed as CPI. Things such as imputed rent are make up over 100bn in UK GDP. I've been searching through figures and data for a couple of weeks now, just trying to glean some information from things. One figure really leapt out at me: the UK's level of disposable income, this is a pretty good indicator of how well-off the average people are doing in a measure, how much free cash they have.

The UK's disposable income has gone nowhere at all. For 10 years. Eurostat marks UK adjusted disposable income per household

2005: €23,115

2015: €23,646

A 2.3% increase over 10 years. Averages out at a measly 0.229% growth per year.

Comparatively Germany experienced.

2005: €21,732

2015: €28,231

A 29.9% increase over the same time period. Averaging to a near enough 3% growth / year.

Now this is an outlier as Germany benefits from economic geography factors as well as others, so I looked at other Western developed countries % increases over the same time period.

France: 22.7% increase

Belgium: 22.9% increase

Netherlands: 13.3% increase

Even the struggling economies in the south have seen better growth:

Spain: 10.05% increase

Italy: 11.09% increase

Portugal: 16.33% increase.

http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=tec00113&plugin=1

It's not the immigrants as Germany, France etc have had much higher levels of immigration legal and not legal. I can offer some guesses as to why they above happens to be.

That UK companies are short termist and simply don't train their staff where everything is becoming the gig economy. Plus the government doesn't allow tax relief for personal training that presumably will improve one's own job prospects, better training = higher salary = higher taxes paid so it's all a virtious circle S Korea allows you to deduct training expenses as do many East Asian nations.

 

The blagging culture. Whereby people simply never had the skills or qualifications in the first place.

 

 

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I read somewhere that you could increase GDP by paying lots of people to dig holes then fill them in again- so many of these metrics seem to exist purely to be gamed by politicans.

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55 minutes ago, Morganite said:

There was a thread recently about the UK being a confidence trick. BUT all the numbers say otherwise!

 

There is growth! Look at GDP + X% with retail (all on tick of course).

GDP is often vaunted as an important figure of growth, it doesn't paint a full picture. It's also badly flawed probably as flawed as CPI. Things such as imputed rent are make up over 100bn in UK GDP. I've been searching through figures and data for a couple of weeks now, just trying to glean some information from things. One figure really leapt out at me: the UK's level of disposable income, this is a pretty good indicator of how well-off the average people are doing in a measure, how much free cash they have.

The UK's disposable income has gone nowhere at all. For 10 years. Eurostat marks UK adjusted disposable income per household

2005: €23,115

2015: €23,646

A 2.3% increase over 10 years. Averages out at a measly 0.229% growth per year.

Comparatively Germany experienced.

2005: €21,732

2015: €28,231

A 29.9% increase over the same time period. Averaging to a near enough 3% growth / year.

Now this is an outlier as Germany benefits from economic geography factors as well as others, so I looked at other Western developed countries % increases over the same time period.

France: 22.7% increase

Belgium: 22.9% increase

Netherlands: 13.3% increase

Even the struggling economies in the south have seen better growth:

Spain: 10.05% increase

Italy: 11.09% increase

Portugal: 16.33% increase.

http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=tec00113&plugin=1

It's not the immigrants as Germany, France etc have had much higher levels of immigration legal and not legal. I can offer some guesses as to why they above happens to be.

That UK companies are short termist and simply don't train their staff where everything is becoming the gig economy. Plus the government doesn't allow tax relief for personal training that presumably will improve one's own job prospects, better training = higher salary = higher taxes paid so it's all a virtious circle S Korea allows you to deduct training expenses as do many East Asian nations.

 

The blagging culture. Whereby people simply never had the skills or qualifications in the first place.

 

 

Is it also partly because UK income for many people is significantly linked to the inflation indices (minimum wage, benefits, private pensions if you're lucky, state pension and tax credits etc).  So in real terms it's almost impossible to get ahead.

Edited by billybong

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1 hour ago, Morganite said:

 

It's not the immigrants as Germany, France etc have had much higher levels of immigration legal and not legal. I can offer some guesses as to why they above happens to be.

That UK companies are short termist and simply don't train their staff where everything is becoming the gig economy. Plus the government doesn't allow tax relief for personal training that presumably will improve one's own job prospects, better training = higher salary = higher taxes paid so it's all a virtious circle S Korea allows you to deduct training expenses as do many East Asian nations.

 

The blagging culture. Whereby people simply never had the skills or qualifications in the first place.

Your over thinking it, its just cost of living (mainly housing costs) soaking up any excess disposable income. Germany doesnt have this problem. We live in a rentier economy, as does the US, much of the rest of europe is more fortunate.

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2 hours ago, Morganite said:

There was a thread recently about the UK being a confidence trick. BUT all the numbers say otherwise!

 

There is growth! Look at GDP + X% with retail (all on tick of course).

 

There are various threads on the accuracy of our GDP.  Particularly as it includes imputed rent, illegal drug trade and prostitution.  

Basically, any time some one watches porn, our GDP grows.  Grows even more if they bought some viagra from internet.

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9 hours ago, Morganite said:

2005: €23,115

2015: €23,646

Why are you using Euros? The exchange rate changes makes you entire argument meaningless.

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16 hours ago, wonderpup said:

I read somewhere that you could increase GDP by paying lots of people to dig holes then fill them in again- so many of these metrics seem to exist purely to be gamed by politicans.

That is not productivity.....Lots of jobs that intentionally create work to fix, the work that was created that has to be fixed......Pay the those that break windows to pay those to fix the broken windows....;)

Edited by winkie

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That is not productivity.....Lots of jobs that intentionally create work to fix, the work that was created that has to be fixed......Pay the those that break windows to pay those to fix the broken windows...

OK- how about we put it this way- I read somewhere that you can increase GDP by having some people pay to have sex with other people.

Apparantly this activity does count as productivity, at least according to the ONS;

Quote

 

Britain's Office of National Statistics said prostitution and the import, manufacture and consumption of illegal drugs will be counted when making the government's quarterly calculations of gross domestic product.

The statistics agency said Friday some of these activities are legal in certain European Union countries, and comparable figures are needed. All member states need the same standard because they are used to assess a member state's contribution to the EU budget.

"As economies develop and evolve, so do the statistics we use to measure them," said Joe Grice, the ONS's chief economic adviser.

 

http://www.nbcnews.com/business/economy/drugs-prostitution-they-are-part-gdp-too-u-k-says-n118286

The whole thing is completely arbitrary anyway- for example the huge contribution to the economy made in the form of unpaid housework, childcare and elderly care ect is completely ignored in terms of the GDP.

 

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What is more productive?.....people that care for children or adults for free, people that create things but not for payment, people that mend things for no payment, people that work for others as volunteers for no payment?.....or someone that does all that all only for payment.

So someone with children works serving coffee for payment to pay a childminder the money they worked for.

Someone works pushing paper or undoing a wrongdoing to earn money to pay someone to mow their lawn and clean their home.

;)

 

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