These two charts come from the appendix to a speech by Andy Haldane of the Bank of England in port Talbot on 30 June that has just been published.
The speech is well worth reading. The charts are invaluable:
The message is clear: those with wealth have done well in the UK over the last few years.
Those who have to work to survive have not: for them the last decade has been 'lost', in the economic jargon.
It's s story of a deeply divided Britain.
And you wonder why people are angry?
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A damning indictment of Osbornomics and the evidence of the devestating effects on the majority of people in the real world versus the non-sensical hyperbole from those living on another planet entirely.
I have some hope for Haldane, unlike most central bankers he has not yet fallen under the spell of the “veil of untruths”. Of course for that reason he is unlikely to ever make Governor as the truth is a mere inconvenience to be avoided at all costs.
Amongst the many interesting nuggets in this report, I found this one especially interesting.
“The highest per capita income region in the UK is London, where the average person earned £24,000 per year in 2014. At the bottom of the per capita income league table was Northern Ireland, where the average person earned £15,000 per year in 2014. Yet when it comes to measures of life satisfaction, the tables are completely turned. London ranks at the bottom of the regional league table of happiness, while Northern
Ireland occupies (by some distance) pole position.”
See Ha Joon Chang video…
I don’t think there’s been any doubt in the mind of anyone who follows such matters. We live in a world of ‘Alice Through the Looking Glass’ where right-wing dialectic is the opposite of reality and its advocates are in a permanent state of denial or ignorance or both. Trickle-down economics means siphon up. But, as we’ve stated many times with boring repetition, until the parasitic neo-liberal ideology is finally discredited as the economic route to sustainable, shared prosperity, nothing will change. Either it will take another global financial collapse or when the middle-classes really start feeling the pain. Like you, I want to be optimistic but it’s becoming ever more challenging.
“Trickle-down economics means siphon up”
That’s a good line. Very quotable.
Interesting as well – if most of the wealth increase is down to house prices, then people are likely to feel very little ‘utility’ or satisfaction from that wealth as it is largely unrealisable except if they downsize (except if they are specifically using property as an asset). In fact it could be argued if their children are being excluded from the housing market then their satisfaction is going doing.
Adam,
your observation is entirely correct but only with respect to owner-occupiers, in which case it is known (in economic jargon) as “illusory wealth”.
The “winners” in the property bubble game are the landlord speculators. People that buy investment properties (often several) with a view to making a windfall gain when selling them.
Your still right though, for the most part, because a large proportion of the wealth depicted in that chart is illusory, owner-occupier equity.
Thanks Richard – an economist doing his job. Awfully truthful. I scanned all the graphs — great data to speak to. And a famous surname – Haldane. [2]
The game is up on austerity the Tories know their recent fairy tale is exposed and that is why the new PM has stolen the left’s pledges. Of course this is the same tactic as Cameron employed when he was freshly anointed to lead UK Plc. Cameron and Osborne sold headline policies but delivered the opposite.
I have to admit it is all rather brilliant, and difficult to ever counter [1] with the media etc. on their side. Haldane’s charts clearly shows the game is exposed; convert the assets of the majority (state assets and the lower orders) into new assets of the wealthy and widely sow debt into the population, thus creating new assets for the extractive financial extractive of City of London to deliver to their paymasters.
The population has been mesmerized to applaud these cunning thieves! T. May et al will continue in the extractive industry but modulate their methodology and thus the required propaganda.
I see pensions of ordinary people as the next target, from Haldane’s chart 9, for asset conversion, but they need financial instability or crashes to destroy ordinary person pensions and thus justify haircuts, lets hope not a blunt razor.
Also the debt, low wages, no-wealth and work till you drop [3] for our children is stark and will be gifted back as a political and societal problem for the future.
T. May’s demotion of climate change already shows she is an extreme ideologue.
[1] “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens”, Martin Gilens and Benjamin I. Page, https://scholar.princeton.edu/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf
or if you have access DOI: http://dx.doi.org/10.1017/S1537592714001595
[2] I read JB Haldane (borrowed from a local Miner’s library) as a teenager; he inspired me to study science and politics.
[3] An Irish friend of mine says “If work is so wonderful then the rich would have grabbed it all by now”.
You may well be right
Tony_B the pensions grab has already started immediately after Osborne opened up pensions to speculative attack.
http://www.bbc.co.uk/iplayer/episode/b07kxp7g/panorama-pension-rip-offs-exposed
I’m still waiting to see if legislation to allow creditors to access pensions after bankruptcy gets back onto the Tory’s agenda (it seems even Osborne was fainthearted at this one as he realised the additional cost to the public purse of picking up the pieces of all those thrown out on the street with little or no retirement income).
If it ever got passed (which I still think it might with some nasty little tricks to minimise the cost to the public purse), then you can kiss goodbye to your pension as well as your home if you ever get into financial trouble with any creditor who chooses bankruptcy as their route to recover their supposed losses (as if debt created out of thin air is really a loss to anyone when losing your ability to fund yourself in retirement or have a roof over your head is a very real loss).
Keith, Yes agreed, Osborne had his crow-black eyes on the money. Pensions funds are talking to the needy-greedy to be grabbed, you cite just one method. Other attacks on pensions are low wages, debt and even employers expecting workers to participate into their late 60s and beyond. I know someone whose line manager stated in the annual performance review “you can’t retire…!”. Older workers are in employment at the expense of good jobs for the young. The age you feel [financially] able to retire is rising. Society is getting used to working till you drop, not just in old age but jobs in general demand 24/7 connection, expanding management metrics (KPIs) that sweat the work force into despair with increased “mandatory” duties, non-targeted online training across the board, expanding reporting structures and assessments/surveying/statements-of-need/visions/feedback/360 etc. This is remote control by management. Some only have time to do their work when exhausted.
Tony_B
Much good stuff said in very few words – but please change your name!!
@PSR – It is my actual name, abbreviated. I’m not mocking Mr Tony_B[lair].
Fair enough – but the cognitive dissonance created by the name versus the well chosen words attributed to it is rather significant.
Not to worry.
A pact was made in the Blair years, that inequality was to be encouraged but taxed and spent in the public sector. Away from the metropole the economy may lack opportunity, but here have a public sector job… This pact was broken by Cameron with austerity leaving despair.
It’s good that Haldane is meeting different groups on his travels:
‘I began by speaking about the UK’s economic recovery. I never got as far as the improvement in the jobs
market or surging confidence. I was stopped in my tracks by a forest of furrowed brows and a phalanx of
probing questions, not all of them gentle. “What exactly do you mean by recovery?” one asked. “My charity
is dealing with 50% more homeless people than three years ago.” Every other charity in the room had
similar stories to tell. Whether it was food banks, mental health problems or drug addiction, all of the
numbers were up. The language of “recovery” simply did not fit their facts’
I thought that was appropriate too
Yes – they are angry because things have got worse for most (and I’m one of them).
But they have also been manipulated and wound up too by an unaccountable right wing press. This does not help do anything but to misdirect their anger and that is very dangerous indeed and will resonate amongst us for a long time.
Today at a station in the Midlands I bumped into of all people Patrick Mcloughlin on his way down to London (I was going to Birmingham). I recognised him straight away and gave him my best withering stare when he made eye contact with me (he sort of smiled and lowered his head a bit and then looked at the coffee menu to his right instead ‘You’ve not important here Patrick’ my eyes said). I really did want to tell him what I thought of him but I held back. My other ‘blow’ for the oppressed was when I made a point of getting in front of this rather corpulent Tory in the queue for the coffee – Ha Ha!
At least he had to run out onto Platform 6 to catch the London train – 1st class of course.
Haldane’s speech is a gem.
I suppose it would be passe to note that a lot of that is illusory wealth, the owner-occupier ‘gains’ in housing value most particularly – and that a lot of it is unsustainable asset-price inflation (bubble fluff), which is why the rise in wealth bears almost no relation to GDP.
One thing worth noting is the less striking but nonetheless deceptive ‘rise’ in employment.
A lot has been said about the dodgy definition of employment and the government encouraging unemployed people to redefine themselves as ‘self-employed’ for statistical purposes.
Haldane’s speech (on pages 6 & 7) notes a rise in temporary contracts, zero hours contracts, job insecurity and “the longest period of flat or falling real wages since at least the middle of the 19th century”.
I saw an interesting article by Greg Jericho in the Australian edition of The Guardian where he revealed that in Australia “the number of hours worked per adult in November 1993 when the unemployment rate was 10.7% is the same as now when (it) is 5.7%”.
https://www.theguardian.com/business/grogonomics/2016/jun/20/unemployment-figures-suit-turnbull-but-not-those-seeking-full-time-work
That is a really useful comparison. It cuts through the deceptive uniformity that treats all full and part-time jobs as equal units. Haldane’s take on UK employment is handy but it doesn’t include that type of measure. If it did, I think we could be quite confident that the UK figures would be comparable.
marco-Bill Mitchell has done a lot of work on the ’employment’ issue in Australia using a lot of sophisticated metrics to show how illusory are the claims of a jobs recovery.
When you say ‘the government encouraging unemployed people to redefine themselves ‘ I assume you use ‘encouraging to mean: ‘harassing’; ‘bullying’;’intimidating’; ‘harrying’.
during 2013-2014 there was concerted effort by the Tories to lower unemployment figures involving sanctions and enforcing spurious self-employment as well as bullying people so much they dropped off the register entirely (a significant phenomenon in the US). Even now, Job Centres are largely places where people are forced to go to three times a week and jump through, meaningless hoops all administered by stressed and poorly trained staff.
My long lasting impression of any so-called ‘recovery’ concerning jobs is that before the 2008 crash (and even at 2010 before full austerity from Cameron and Co) , my public sector colleagues and I could see wages for similar posts in the private sector at between £10-16K MORE per-year.
Now, when you look at those posts I’m seeing £10-12: p.a. LESS – and remember this is now below the lesser remuneration we were getting in the public sector. So although the jobs might be creeping back, the wages have not.
BTW – the wages we’ve been looking at are for project management roles – short term and long term.
Yes, I would include, ‘harassing’; ‘bullying’;’intimidating’ etc.
My point about the simple comparison, the measure that Jerico used, is that by using hours-worked (rather than “jobs” or people “employed”) it reveals the extent to which people have been pushed off the statistics as well as the real decline in employment.
If they currently have an official figure of 5.7% & we see that the number of hours worked per adult is the same as it was when unemployment was 10.7%, it may be fair to say their current figure is roughly 50% bollocks (because it ignores underemployment).
I’d be very interested to see the exact same (or very similar)comparison made in the case of the UK.
I pulled the stats for the UK from the OECD for average annual hours worked per year, and unemployment from ONS, and created a ratio. See https://montrealpythonblog.wordpress.com/2016/07/16/ratio-of-average-annual-hours-worked-per-of-unemployment/
Thanks
And your conclusion is?
(My brain is disengaged today)
Doesn’t support Marco Fante’s hypothesis, 2015 average annual hours worked have recovered to 2007 levels, the same for unemployment.
To be honest, the data is too abstract to be of much interest, i.e. a particular sector with exceptionally high average annual hours worked may pull up the overall average. It would be nice to get hands on data by sector.
….or by geography
Such a shame that Labour has not recognised this, which maybe shows how out of touch they are. It seems that it came as a shock to them that for the non-metropolitan working man, immigration, forced on him without consultation by Tony blairs labour, was an issue in voting out in the referendum. The Equality Trust gas been banging on about inequality for years. Come on labour wake up, smell the coffee, get out of your million pound London homes and get to know you core voters again and win them back. Stop treating those voters that are concerned with un restricted immigration as racists. Be concerned at hate crimes against foreigners, but what did you have to say in the 15 years when girls in Rotherham and other cities were being abused?