The Guardian has published this map this morning:
It's a depressing tale of why the UK is in an effective recession and full marks to the GMB for presenting its case so well.
The reality is that, as Larry Elliott argues this morning, there will be no real recovery in the UK without real wage increases.
Even John Cridland at the CBI now agrees. It's good to see that he does. It's a case that the TUC has been arguing for some time. It so happens to be the basis for Ed Miliband's whole pre-election strategy.
And it's right. Long ago Henry Ford realised that he would not sell cars in the mass market if his own workers could not afford to buy them. Now I suspect we have supermarket workers dependent on food banks whilst profits go on rising.
If 2014 is to deliver prosperity for all then the GMB, Larry Elliott, the CBI, TUC and Labour are right: Britain needs a wage rise. That is the economic cry for 2014.
I'm not expecting Osborne to adopt it.
PS If Labour is serious it has to end its suggested cap on public sector pay rises which sends out all the wrong messages now.
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Good to have you back, Richard -I’m sure you are raring to go after the break!
My son bought me Thom hartmann’s ‘The Crash of 2016’ as a Christmas present. he makes a clear case from American economic history that austerity NEVER works and is always based on oligarchic wealth syphoning.
With the run up to the election we will see the Tories hammering welfare claimants and banging the anti- immigration drum for all it’s worth. It won’t be pleasant. They want us all ‘financialized’ which means in tow to the corrupt banks and real estate rip-off. As long as the poor in work and poor out of work/ill are at loggerheads the Tories will be happy they have diverted attention from the real causation. Expect worse in the new year.
My new year predictions tomorrow…..
Agreed. especially re public sector wages.
We also need:
An increase in National Minimum Wage.
A statutory, enforceable living wage.
This should cover the public sector, including all the outsourced and privatised areas and sub contractors.
All labour providers, gangmasters and employment businesses.
The biggest (FTSE?) corporations.
Boris Johnson has an article about this today. He and you are on the same page.
As grannie used to say you cannot have everything. If you have high migration the result is to depress wages in lower income occupations. If you have high debt levels to spur consumption sooner or later a squeeze will occur. If you have a lot of spending on projects with little or no rate of return in investment you may have a short term boost but with a longer term deficit liability. So what is human capital? A graduate unfamiliar with real work demands or a shipwright with a large bag of tools and skills?
I don’t believe for one minute Cridland has let the season of goodwill change his conventional view of workers as a cost rather than an asset to a business. This is a purely political move by the business wing of the Tory party. Businesses calling on other businesses to raise wages is more palatable to both business and the government. David Cameron doesn’t want to be seen lecturing to business so he gets the CBI to do his bidding. This is all about giving the employed a short-term uplift in time to engineer a Tory win at the next election.
There is nothing wrong with a Tory win in 2015. Look at the levels of debt left by Labour during their time in office. Even worse the NHS was a disaster.
The Tories have borrowed more than Labour did in 13 years in the last 3.5 years
And to claim the NHS was a disaster is to straightforwardly lie
Once again you are wrong Richard.
You are ignoring all the (vastly expensive) borrowing that Labour did through PFI
Funny you highlight that the Tories have borrowed a lot in the last 3.5 years but fail to acknowledge the huge structural deficit that was inherited.
Further, you frequently bemoan the (minimal) ‘cuts’ that have been made.
Given the above, perhaps you might explain how you expect the current government (Coalition, not Tory, by the way) to have borrowed less…?
🙁
And you are ignoring the fact that Labour ran surpluses for more years than Thatcher or Major
And that PFI, whilst wrong, is pretty immaterial to the totals
And as to the structural deficit – the reality is that after alowing for inflation there almost certainly wasn’t one, if we could anyway define what it was
So all your analysis is wrong
Why not just have a minimum wage people can live on without claiming benefits and tax credits to make ends meet. We reckon this would be about £10 per hour for a 40 hour week. But few can get a 40 hour week job once they are out of work so we need to address zero hours and `self employed` work as well. The coalition is failing to make work pay and swapping unemployment for underemployment.
How would you deal with the self employed being underpaid.
We need to better regulate self employment so that disguised under-paid employment is eliminated
Its been under paid for the past 15 years. Owners of small companies are also affected.
“Long ago Henry Ford realised that he would not sell cars in the mass market if his own workers could not afford to buy them.”
Not so. That absolutely is not the reason he doubled wages to $5 a day. Rather, he had a turnover of 50,000 workers a year to have a permanent establishment of 13,000. By raising wages above what others were paying he was able to reduce his search and training costs.
Also worth noting that it was $2.50 a day in wages and $2.50 a day in bonus: as long as you lived the way that Ford thought you should live.
Quite apart from anything else the numbers just don’t stack up to back your claim. If all 13,000 workers had bought a Model T each and every year that would have been $7 million in revenue to the company. And the wage rise cost him $9 million.
The wage change did indeed increase profits: but not by increasing revenue but by decreasing costs, those search and training ones.
As ever Tim you wholly miss the point
The real issue is Housing, Housing and Housing. The real estate scam is set to become a global way of fleecing the life out of people and leaving them burnt out husks-think of the property scam building in countries like Nigeria. Unless housing crashes and LVT is introduced this global fleecing of the broad populace will reach unseen proportions with global finance pulling all the strings. Politicians don’t talk about it as it is politically taboo – not to mention that most of them will have their greasy fingers in the putrid pie!
I think Labour issued the wrong policy. When they came in they told the BOE to take over setting interest rates. This was wrong. This was like giving half the controls to someone else. They should have had more regulation on the property market and then prices wouldn’t have been allowed to spiral out of control.
¨There is nothing wrong with a Tory win in 2015. Look at the levels of debt left by Labour during their time in office. Even worse the NHS was a disaster¨
There was little debt left due to policy during the term, but a large level due to having to subsidise the corrupt financial industry after the 2008 banking/financial crimefest.
The PFI subsidy to private finance/construction, started by the previous conservative administration, was allowed/encouraged by the Blair administration (itself a reconstructed labour party in the conservative mould).
The NHS was also a victim to the top-down reconstruction, which ended not so much as a top-down but top-up construction!
It also had the largest increase in investment for decades, which led to nothing really, since it was also saddled with increasingly sluggish target-riddled administration.
The new conservative nhs is not really NATIONAL anymore, more a regional chase for rare funding…more and more people are being presented with a run-around to attract funding by being ¨referred¨for treatment to other facilities for the fee for referral. For instance, the local NHS hospital physiotherapy department now asks for self-referrals from people because GPs´ send the patient to ¨independent¨ physio (buy-one-get-one-free)(or better expressed as five-free-next-five-at £38/session).
Of course, many GP practices are now being run by private health services…like Virgin health….because doctors don´t really have the time to be financial administrators.
In the next few years, hopefully before 2015, the changes will become plainly visible as more and more people are made to pay for the changes….drug prescribing is already changing as GPs´ are faced with the reality of drug costs, which have been paid historically by the DoH but are now paid by local commissioning groups.
Your claims are absolutely ridiculous:
Look how much published debt increased (during a period of record tax income) prior to the financial crisis
Look how much debt was hidden off balance sheet through PFI
Look how much public sector final salary liabilities increased during the term of the Labour administration
Look how much money was actually spent bailing out banks which has not already been repaid (clue – a relatively small amount)
Since the financial crisis debt has increased, not due to ‘bailing out the financial industry’ but simply because the economy ghastly slowed down and Labour were running a large structural deficit, in the naive belief that they had abolished ‘boom and bust’.
That’s why credible economists support prudent management of the economy during the booms, setting aside funds to support the busts (not spending all the money and them borrowing more …)!!!
Data simply does not support your claims
I note you offer none, just hyperbole
The conservatives started PFI, and doubtless received large amounts in contributions from the companies involved.
Labour should have dumped it, but under Blair they were nothing more than conservatives in red.
Both parties are so mired in corruption they deserve to be relegated to a midden somewhere very cold and muddy with no roads! With bankers as bed-partners.
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Richard,
With regard to this IMF report:
http://www.telegraph.co.uk/finance/financialcrisis/10548104/IMF-paper-warns-of-savings-tax-and-mass-write-offs-as-Wests-debt-hits-200-year-high.html
It makes no mention of Tax Havens or Transfer Pricing, major causes of the fall in Government revenue and consequent Debt problems.