The right wing media, and even the Chancellor, are totally confused about how to report this morning's news from the Office for National Statistics on the latest wage data.
The Sun's headline is:
The angry AGAIN makes it sound as if this is terrible news - which of course is exactly what the Bank of England and the Chancellor want us to think it is.
But then they have to admit:
In other words, there was no real wage rise at all, which completely undermines the Bank of England's claim that it is wages that are driving inflation.
For the record, price rises are driving inflation and it is profiteering and the increasing cost of borrowing that are driving them up, which the Sun fails to mention.
They do however note:
They add:
Which is quite amusing because this really makes no sense whatsoever.
Falling job vacancies implies reduced wage pressure, not an increase. People are taking jobs at the pay rate on offer is what the data implies. How that can be inflationary is hard to see, most especially when the whole purpose of raising rates is to reduce the number of employment opportunities in the economy by creating a recessionary environment, which is exactly what seems to be happening. But it might be a bit much for our Chancellor to get his head around that.
But what is really interesting is that the right wing media has now lost the ability to frame what the Bank of England is doing precisely because it is so illogical that even they can't work it out.
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We all know that Hunt is the ‘Tim Nice But Dim’ of British politics – he’ll just do what the Neo-liberal sleeper agents in the civil service will tell him to do.
As for the BoE they also are just doing as they are told by people with the money power to do so.
I and a number of my fellow public sector workers have just been given honorariums (short term pay increases that do not contribute to our pensions) without asking because our employer is trying to stem the tide of resignations to the private sector and because we’ve had to take on work of people who have left for that sector. I’ll take the money but its still lower than the private sector and not pensionable either – it’s still sticking the finger in the dyke hoping for the best again.
It’s chaos out here in the building industry in the Midlands. I can’t speak for London, but up here firms are literally robbing each other of staff – staff turnovers are constant, there is a shortage of skills, works are disrupted and the worker goes where the money is.
This must be an anathema to capitalist-pig Tories everywhere including the BoE yet there is NO culpability whatsoever by government for what has happened – austerity, Covid mismanagement, BREXIT, Truss & Kwarteng and ‘regulated’ utilities that are the real cause of the problem.
So, this has created a market for workers in various sectors. We are told that you can’t buck the market, yet it is that market – the deity that all Tories and Neo-libs all worship apparently – that is now dictating labour costs – NOT workers. It is EMPLOYERS paying more because they need staff!! But the workers still get the blame. And the private sector wages rises are still below headline inflation but above the public sector.
All of this tells us one thing. That there is no truth in anything they say. They adopt what suits them at the time but what should be evident to you is that one of the oldest class fights is going on right before you – that of capital against the worker.
And the worker can never be in the right – can they, eh?
@ Pilgrim Slight Return I like your use of the word “culpability.” In this country “culpability is for the birds” with so many people trying to evade it not just politicians!
Hi PSR,
Clearly the duty of a hardworking worker (we’re all “hardworking” with families, right?) is not to accept the offered salary but to negotiate it down for the good of the economy. Only by punishing ourselves will the BoE be able to stop punishing us and take control of inflation. Or something.
“there is a shortage of skills, works are disrupted and the worker goes where the money is.”
Almost as if the vile-tories (& the B.Liar admin) had engineered such a shortage…….oh err, hang on, they did didn’t they.
Look what happened to Tech colleages and the willingness of large orgs to train people. When I was trained by the electricity board, it had its own training centre for craftsmen – and typically took on each year 20 odd apprecitices and 10 or so student engineers. This was typical of the 13 elec boards. It all stopped when they were privatised. Polish plumbers? direct result of a total failure to train craftsmen. But this is not limited to the UK.
Belgium faces similar problems. The plumber that services our gas boiler (more a computer than a gas boiler) is a father and son team. He supplies/installes boilers, heatpumsp, fuel cells, solar thermal etc etc. He turns over Euro1 million per year. 50% is capital expenditure, 50% labour. UK attitude: oh but that’s manual labour! (the Sicilian roofer that does work for us owns a……big catamaran FFS!!). The UK urgently needs to thermally renovate its building stock – there is – as PSR shows a vast absence of skilled labour – the result of decades of failure by governments or all stripes. 33 years of TOTAL FAILURE, TOTAL. A fool could have made a better fist of it.
& the foolishness seems to extend to arselikan journos who spount garbage in the Sun. One can only hope that their boilers fail when it is cold and then spend weeks waiting for it to be fixed, oh I do sincerley hope so. & that the plumbers charge them a fortune.
I worked in FE when it was privatised. Swansea College (as was then) used to sweep the board in industry prizes for turning out engineers and craftspeople. By 1994 the department was destroyed, its charismatic head demoted and hounded to a heart attack, and no more accolades or skilled trades.
The chancers were swilling champagne, the Principals trebling their wages.
Put quite simply this is a country like many others where the overwhelmingly majority of people do not understand there’s a complicated relationship between promises (which is all that money is) and resources. Indeed hardly anybody understands the concept of money as a promise with most believing it to be a thing.
Certainly as far as the complicated relationship is concerned take but one example hardly anyone seems to understand that productivity is a process that bears down on inflation whilst an increase in trade can push in the opposite direction (unrestrained house mortgage lending perfectly illustrates this).
All told none of the UK’s political parties understand this complicated relationship and furthermore make no effort to understand it. They are essentially clown parties who take the lazy and simple-minded approach of the historical Quantity Theory of Money and turn this into Sado-Monetarism which we know as the imposition of Austerity to deal with inflation. This Sado-Monetarism as we’ve seen recently in the UK and US is to focus blame on the government (which must learn not to deficit spend even though that’s what private enterprise does when banks make loans to businesses) and the workforce where people must take a hit to their income or their jobs. We can do better than this primitive ideology!
Spread the pain….?
‘Cut inflation by raising taxes, economists say’
‘In an interview with the Financial Times, former MPC member Kate Barker said rate rises would not be enough to curb inflation because they only affected people remortgaging and renters.
‘The people who will suffer the pain early are the ones whose mortgages happen to come to an end early. There’s also pain in the rental market,’ she said. ‘
https://citywire.com/new-model-adviser/news/cut-inflation-by-raising-taxes-economists-say/a2421384?re=110787&ea=421272&utm_source=BulkEmail_NMA_Daily_EAM&utm_medium=BulkEmail_NMA_Daily_EAM&utm_campaign=BulkEmail_NMA_Daily_EAM
“Our chancellor really does not understand inflation.”
In the same vein, Murdoch does not understand climate change.
In 2015 he said: “In terms of the world’s temperature going up, the worst, the most alarmist thing, is it may be 3 degrees centigrade in a hundred years. At the very most, one of those would be man-made.” A 2012 report by the Union of Concerned Scientists found that Fox News’ representation of climate science was accurate just 7% of the time over a six-month study period. https://twitter.com/ByDonkeys/status/1671411228747464705/video/1
Imperial College physics Professor Bill McGuire wrote today ‘The global temperature record smashed again yesterday. The first four days this week were the hottest recorded for Planet Earth. I would say welcome to the future – except the future will be much hotter.’ https://twitter.com/weareyellowdot/status/1677708237402165249/photo/1
As you have written, Richard, ‘the right wing media has now lost the ability to frame what the Bank of England is doing precisely because it is so illogical that even they can’t work it out.’
With regard to the physics of the climate, the truth matters even more. The Sun and ignorant politicians are trying to misinform millions – surely with decreasing success.
Radio 4 is spending a whole week on an in depth alarmist analysis of migration – in line with the government’s desire to keep migration in the headlines .
But the Today progamme is perfectly happy with Irene Graham of the ‘Scaleup Institute’ welcoming of the Hunt’s Mansion House voluntary agreement to get 5% of pension fund investment in high tech startups by 2030.
She does not not really answer any specific question about how this all works – listing ‘investment zones’, reform of ‘stock market indices’, ‘banks’ , ‘angels’ , ‘overseas investors’ . Almost like ritual intonement of vaguely positive sounds.
She certainly doesn’t shed any light , as Richard so often does on here, the dominance of investment in purely financial assets vs real investment in productive activity / productive assets, and why this happens.
I doubt she would know the difference
Given that a great many of our transactions with each other take place using money the nation is really weird with very few people making any serious effort to understand how money works and especially the causes of inflation which are not straightforward. Very hard to understand the use of the phrase “world-beating” applied to the country it’s much more of a “we’re our own worst enemy clown country”!
Unemplyment has risen to 4% which will keep wages down as people accept lower pay rather than the dole.
“For the record, price rises are driving inflation and it is profiteering and the increasing cost of borrowing that are driving them up”
Yes, oligopoly profiteering that was originally masked by post-covid supply chain disruptions and is still preying upon the pool of savings that was put aside during lockdown.
PLUS! The value of the pound sterling relative to other currencies is still much lower that it was in pre-Brexit times – and that makes imports more expensive.
Lets not forget the Brexit factor (that was also hiding behind Covid disruption).
Don’t normalise it or ever let those bastards off the hook.
https://www.theguardian.com/money/2021/jun/30/covid-savings-britain-built-up-second-highest-level-on-record-in-early-2021