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thedebtisreal

Wages And The City

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Last week I was out in the pub with a friend of mine who is the head of compensation for the front office at a major investment bank. After assuring me that house prices cannot go down in his green posh area of the home counties :rolleyes: he moved onto what was happening in his job.

For those who don't know, major investment banks share data on compensation through a company called McLagan. This gives them a market price for every job in the city, so the banks can decide what is the correct level of pay for a certain employee. Normally this becomes a bidding war with deep pocket banks throwing money around trying to attract the best talent.

This year however that has changed.

Banks are now colluding together bring the wages of their business down significantly. As it stands anyone working for an investment bank right now is likely to have a wage freeze this year. New compensation ideas are being drawn up which mean getting rid of annual cash bonuses. This will affect not only front office, but middle office and back office too. For the first time questions are being asked about whether there is a good reason to pay its staff so well. Is a trader really worth the money they are paid? Could slashing the big bonuses actually make the business more profitable? How much of this wealth do they really need to share with their workers? Are there too many city boys now, making the demand for their skills far less? With competition for all of these jobs from India, China and the middle east, do London city workers deserve the high wages? The tightened economy has forced our generous banks to start considering this seriously. As its biggest expense so far, the future of city wages is number one on the agenda.

The quote of the night that stuck with me was the phrase "right now, all our city salaries are artifically inflated, the city sees its job over the next few years as to bring them down". Its seems as if market forces of increased efficiency have finally come home to the city.

On related note, does anyone here see unionised jobs pushing through higher wages while the larger unregulated city sees them fall heavily and meet somewhere in the middle?

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Last week I was out in the pub with a friend of mine who is the head of compensation for the front office at a major investment bank. After assuring me that house prices cannot go down in his green posh area of the home counties :rolleyes: he moved onto what was happening in his job.

For those who don't know, major investment banks share data on compensation through a company called McLagan. This gives them a market price for every job in the city, so the banks can decide what is the correct level of pay for a certain employee. Normally this becomes a bidding war with deep pocket banks throwing money around trying to attract the best talent.

This year however that has changed.

Banks are now colluding together bring the wages of their business down significantly. As it stands anyone working for an investment bank right now is likely to have a wage freeze this year. New compensation ideas are being drawn up which mean getting rid of annual cash bonuses. This will affect not only front office, but middle office and back office too. For the first time questions are being asked about whether there is a good reason to pay its staff so well. Is a trader really worth the money they are paid? Could slashing the big bonuses actually make the business more profitable? How much of this wealth do they really need to share with their workers? Are there too many city boys now, making the demand for their skills far less? With competition for all of these jobs from India, China and the middle east, do London city workers deserve the high wages? The tightened economy has forced our generous banks to start considering this seriously. As its biggest expense so far, the future of city wages is number one on the agenda.

The quote of the night that stuck with me was the phrase "right now, all our city salaries are artifically inflated, the city sees its job over the next few years as to bring them down". Its seems as if market forces of increased efficiency have finally come home to the city.

On related note, does anyone here see unionised jobs pushing through higher wages while the larger unregulated city sees them fall heavily and meet somewhere in the middle?

NO unions are not nearly as strong as they were years ago. People are in fear of losing their jobs so in the end will put up with wadges that are not keeping up with costs in order to keep their jobs.

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no,.lower wages all round.we are nowhere near full employment.unionds have little powere except where they can hold the nation to ransom eg the shell drivers

I'm thinking more about policeman, teachers and nurses. Those who can strike and do real damage to the government.

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I'm thinking more about policeman, teachers and nurses. Those who can strike and do real damage to the government.

How can they damage anyone or anything? They are all doing irrelevant non-jobs according to most posters here.

They could strike for a year and nobody would notice (apparently).

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I'm thinking more about policeman, teachers and nurses. Those who can strike and do real damage to the government.

I see what you mean , but the government has no money and I find that anyone under 40 has a very different view to striking ect. than people had in the seventies the hard union leaders are gone and jo public with bills to pay is very frightened . I worked in manufacturing for a very rich company and people just looked to next weeks pay packet. They would moan like mad with work mates but never even open their mouths to managment never mind voting for a strike. However Yes I do see some industrial strife happening.

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On related note, does anyone here see unionised jobs pushing through higher wages while the larger unregulated city sees them fall heavily and meet somewhere in the middle?

Christ. Workers jobs would have to rise 10000% and city jobs would have to fall 10000% for them to meet

some where in the middle. The fact is its the workers that are creating the wealth that the city boys are living

high on the hogg off. They are skimming the wealth off what should be going to ordinary workers.

Its just that there is less wealth to skim off in a recession, that the city boys were instrumental in creating due

to their greed.

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How can they damage anyone or anything? They are all doing irrelevant non-jobs according to most posters here.

They could strike for a year and nobody would notice (apparently).

All these groups could do real damage. If teachers went on strike, the immediate result is that aprents would have to stay at home, instaed of going out to work. If health workers went on strike, operations cancelled. The police are an interesting case. They are in a foul mood after NuLabour's treatment of them recently. They are not allowed to strike, but I can imagine the stupidity of this government pushing them into one.

And just think of all the damge that could be inflicted if bins weren't emptied, graves weren't dug, firemen on strike, traindrivers, lorry drivers . . . .

If enough people get really angry something will happen. No more Mr Nice Guy.

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On related note, does anyone here see unionised jobs pushing through higher wages while the larger unregulated city sees them fall heavily and meet somewhere in the middle?

No, not a chance, especially so as unemployment starts to take off. It's one thing to band together and strike when you know there's little chance of replacements being found easily, but something else entirely when there's a bit of a pool of willing-ready-and-able-to-work manpower out there. Furthermore, given that most Britons now work in totally non-unionised environments, I can't imagine there being the sort of public sympathy required for those who do work in unionised environments to "get away with it". And, as a final crowning glory, public sector unions are likely to be having to deal with someone in a blue tie who's on a very tight budget within two years, not a red one with seemingly unlimited wallet capacity.

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Last week I was out in the pub with a friend of mine who is the head of compensation for the front office at a major investment bank. After assuring me that house prices cannot go down in his green posh area of the home counties :rolleyes: he moved onto what was happening in his job.

For those who don't know, major investment banks share data on compensation through a company called McLagan. This gives them a market price for every job in the city, so the banks can decide what is the correct level of pay for a certain employee. Normally this becomes a bidding war with deep pocket banks throwing money around trying to attract the best talent.

This year however that has changed.

Banks are now colluding together bring the wages of their business down significantly. As it stands anyone working for an investment bank right now is likely to have a wage freeze this year. New compensation ideas are being drawn up which mean getting rid of annual cash bonuses. This will affect not only front office, but middle office and back office too. For the first time questions are being asked about whether there is a good reason to pay its staff so well. Is a trader really worth the money they are paid? Could slashing the big bonuses actually make the business more profitable? How much of this wealth do they really need to share with their workers? Are there too many city boys now, making the demand for their skills far less? With competition for all of these jobs from India, China and the middle east, do London city workers deserve the high wages? The tightened economy has forced our generous banks to start considering this seriously. As its biggest expense so far, the future of city wages is number one on the agenda.

The quote of the night that stuck with me was the phrase "right now, all our city salaries are artifically inflated, the city sees its job over the next few years as to bring them down". Its seems as if market forces of increased efficiency have finally come home to the city.

On related note, does anyone here see unionised jobs pushing through higher wages while the larger unregulated city sees them fall heavily and meet somewhere in the middle?

"For those who don't know, major investment banks share data on compensation through a company called McLagan"

There are a couple of others also

"New compensation ideas are being drawn up which mean getting rid of annual cash bonuses"

Does this not happen to a large degree in banks already? Banks tend to pay up to a certain amount in case, and the rest in stock

"This will affect not only front office, but middle office and back office too"

I tend to disagree - for the reason given above

Are there too many city boys now, making the demand for their skills far less

Not for the in demand - specialised areas - of course, this is continuously changing

"With competition for all of these jobs from India, China and the middle east, do London city workers deserve the high wages"

So you think there is a chance all the trading desks will be exported?

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I watched a 1970's episode of Steptoe and Son yesterday. Harold did a mock up news report and spoke of rising Inflation, Fuel costs strikes and unemployment sounded a bit like now!!!

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Bin men have the most power.

If rubbish is left around you have a huge public health nightmare.

So people in the City are going to have to learn to live with lower wages???

true. look at that Naples shithole

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So people in the City are going to have to learn to live with lower wages???

Well, yes. That was the point of my post. The huge free market drive for increased productivity being turned on the financial services sector.

I can see a day where an investment bank slashes the bonus of a bond trader by 75%. The trader, scandalised, leaves to go to Goldman Sachs and finds the same situation there. He goes to a hedge fund and finds the situation no better. All the best paying jobs are moving to Asia where all the rich clients are. The city is full of high earners just desperate to find a living.

It seems as if this is what is being planned.

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So you think there is a chance all the trading desks will be exported?

No not all. But Asia is where all the capital and clients are. I think the free market is going to push in that direction.

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Last week I was out in the pub with a friend of mine who is the head of compensation for the front office at a major investment bank. After assuring me that house prices cannot go down in his green posh area of the home counties :rolleyes: he moved onto what was happening in his job.

T0sser.

The quote of the night that stuck with me was the phrase "right now, all our city salaries are artifically inflated, the city sees its job over the next few years as to bring them down". Its seems as if market forces of increased efficiency have finally come home to the city.

Abso-blinkin'-lutely beautiful.

On related note, does anyone here see unionised jobs pushing through higher wages while the larger unregulated city sees them fall heavily and meet somewhere in the middle?

Absolutely. Monopolies such as tube, overgrounds, utilities, hairdressers (not exportable) etc will get more money or hold people/govt to ransom. All other jobs which can be exported, will be.

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Well, yes. That was the point of my post. The huge free market drive for increased productivity being turned on the financial services sector.

I can see a day where an investment bank slashes the bonus of a bond trader by 75%. The trader, scandalised, leaves to go to Goldman Sachs and finds the same situation there. He goes to a hedge fund and finds the situation no better. All the best paying jobs are moving to Asia where all the rich clients are. The city is full of high earners just desperate to find a living.

It seems as if this is what is being planned.

I think you are oversimplifying. Where you have a job such as an equity trader, it could be argued that this does not demand a great deal of skill and could be done by a computer, then I agree that wages may come down and I'm sure that has happened in the past. With a "hot area (was credit derivatives - I think it is now commodities), I don't see this happening

"All the best paying jobs are moving to Asia where all the rich clients are"

I do not see evidence of this. Maybe that will change.

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http://www.bloomberg.com/apps/news?pid=206...&refer=home

In Malaysia, Second Finance Minister Nor Mohamed Yakcop on June 24 said the central bank is ``not independent of the government'' and that inflation at a nine-year high doesn't pose a ``major challenge.''

``The prosperity story has been built so much on leverage and liquidity and they need growth to keep on rolling,'' says Anantha- Nageswaran, Julius Baer's Singapore-based head of research in Asia. ``They are so afraid that what they've built is not a house of bricks, but a house of cards. There is a lack of institutional maturity in Asia.''

Inflation-targeting systems have also had limited success. Turkey last month abandoned its price goal after missing it for two years; Russia is struggling to hit its own target while managing the ruble. Morgan Stanley says inflation exceeds targets in at least 19 emerging economies.

Asia isn't that secure.

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"All the best paying jobs are moving to Asia where all the rich clients are"

I do not see evidence of this. Maybe that will change.

Indeed. This is not necessarily what I think will happen, but it is clear banks want to really slash wages and are more determined than any time in the past. Will the free market let them?

We're about to find out.

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Asia isn't that secure.

Just so long as they don't go and do anything truly dumb, like investing their national savings^w^wsovereign wealth funds in financial stocks at the peak in lending and consumption. The ensuing destruction of citizen's capital might really tip the (political) balance.

Edited by ParticleMan

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Guest DissipatedYouthIsValuable

I have started a company of great social import, but nobody to know what it is, except me and the donkeys.

Who wants to invest?

******, I've given it away.

Edited by DissipatedYouthIsValuable

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How can they damage anyone or anything? They are all doing irrelevant non-jobs according to most posters here.

They could strike for a year and nobody would notice (apparently).

Maybe there are some who hold that view, but a more common and rational set of views espoused by many here are:

a) There are too many public servants, as a % of the working population

B) Their % take of GDP is too high

c) SOME of them are paid disproportionally high wages compared to what they would expect in the 'real economy'

d) There are too many Spanish Practices wasting money and pushing up the payroll and no incentives to trim (indeed, the incentive is the other way round)

e) Secondary benefits, such as gold plated pensions, are too expensive considering what people get in the real economy and a-d above.

Etc etc etc.

Nothing personal, most of my close family work for the glubberment, all doing jobs which have are easy to justify. Which kind of in and of itself takes us right back to point a above..... Just cause you can 'justify', doesnt mean we can afford it or we really need it...... Rule ~1 in the real economy.

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e) Secondary benefits, such as gold plated pensions, are too expensive considering what people get in the real economy and a-d above.

Etc etc etc.

Nothing personal, most of my close family work for the glubberment, all doing jobs which have are easy to justify. Which kind of in and of itself takes us right back to point a above..... Just cause you can 'justify', doesnt mean we can afford it or we really need it...... Rule ~1 in the real economy.

But surely the point is that the people of the UK have made a covenant with the public -sector -certainly going all the way back to the ` post-war concensus` that in response to the relatively low pay available in the public-sector ( nurses , firefighters , police and the like ) we will guarantee a decent pension - are yuo suggesting we go back on this promise ?

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I watched a 1970's episode of Steptoe and Son yesterday. Harold did a mock up news report and spoke of rising Inflation, Fuel costs strikes and unemployment sounded a bit like now!!!

Is that the one in which the Naval officer transporting them somewhere got a VC or something when they all drowned?

Peter.

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  • 399 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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