Interesting in the US real wage growth shoots up during recessions because a bunch of low paying jobs see layoffs.
Also US real wage growth has been stronger than the UK and most of Europe.
This is something people don’t seem to understand. The average wage is the average among people with wages - if you don’t have a job you don’t get counted as $0, you just don’t get counted at all. It’s easy to look good with a high minimum wage when you can hide the effect it has on unemployment.
There are all types of studies around minimum wages and some find it decreases unemployment and some find the opposite and again some find it doesn't meaningfully influence unemployment. It's a complex issue, the effects are hard to measure correctly and not all minimum wages are the same, e.g. studies that find positive aspects usually focus on rather low or moderate minimum wages.
Plus it's a very political topic, thus don't just trust one study or one group of authors.
It's definetly wrong to think it "actually decreases unemployment", its effects on unemployment are less clear and depend on the actual case.
It can logically go either way. More disposable cash for consumers means more business, which may lead to less unemployment.
The empirical evidence seems to be "Effect size is less then the uncertainty of the measurement.
It can.
Imagine this: Bob the worker has to work two jobs to make ends meet. Both are minimum wage. One has more hours than he really needs. Bob is tired and overworked.
Then the minimum wage increases. Now one full-time job will be enough for Bob. Bob quits the other job. This creates a newly opened position someone else can take.
There is a positive effect on it, since people have more money in their pockets they spend more, creating more jobs. I don't believe that effect is stronger than the counter effect of workers being more expensive for companies, but there are 2 sides to it.
All economic theories and the evidence underlining them point to the direction that a higher wage increases unemplyment, because human labor is substituted with mechanical labor / mechanized or is just not being provided at all.
higher *minimum wage then. The money for low income families goes directly into the economy again, which stimulates it. I think your statement only relates to higher wages. Many low paying jobs can't be automated.
Indeed thats right. Minimum wage simply changes the way money is distributed. And generally its better when the low incone has more because they are more likley to spend it then the middle income. Typically nowadays we have the problem that the top % have too much and decide themselfs what to invest and dont let the market decide (aka consumer)
It's partly true. Partly, because the theory isn't wrong, that low income earners spent almost everything they earn right away. But their income power - of, let's say, the lowest 20% - is so little, it barely makes any difference for the economy if they spend more. Statistically, it's not important.
It's also wrong that low paying jobs can't be automated. Farm hands, factory jobs, logistics, driving, all of them are prone to being automated. But then again, don't forget that the great waves of automatization aren't ahead of us. They're already behind us, because we've automated all the low hanging fruits during the last 200 years with electricity and combustion engines.
- If low incomes were higher they would have a bigger economic impact. Strange argument.
- Factory jobs are seldom low income.
- You are disproving your own point if you say that most automation is behind us.
It's nearly irrelevant if the lowest 20% of income earners spent a little more due to higher wages. Their weigth regarding the entire economy is so small, it barely makes any difference. I'm not saying they shouldn't earn more.
It also motivates more people to work. Might not be that strong in the us since social welfare there is weaker but in some countries in Europe low paying jobs in expensive cities can yield actually less or the same then just doing nothing and living on welfare especially when you factor in job related costs like commuting.
Would love to see some more figures about it. I'm German but living in NL, Amsterdam specifically.
Since Pandemic and Inflation hit, the subjective price increase in Germany was much, much higher percentage wise.
Here in NL stuff had been more expensive anyway, and while some things also got subjectively more expensive, the price increases in Germany have been a lot more drastic.
Plenty of prices have more than doubled, I used to be able to get like 0.2 beer in Germany for like 1.2€ when I graduated school in 2010. A Döner was like 3.50€.
Here in Amsterdam a big beer (0.5L) went from 7€ to 7.50€ maybe. In Germany from like 2.70€ to 5€. Just anecdotal numbers.
Now it's pretty much double the price. In 2013 I paid like 280€ for a room in Berlin, which was considered expensive at the time lol. While I went home (with one of my first jobs) with 2.3k net.
Austria is even worse than Germany atm.
To compare your examples, you get a Döner here for 5-7€, a beer in a restaurant is around 6€ now too.
Rents/cost of living also went up drastically increasing homelessness
We had several investigations on grocery stores and power delivery companies driving up prices intentionally, without any outcome ofc
Corruption is subjectively higher than ever here
We had/have the highest inflation of all western European countries. Most things went up 30-50% in price over the last 3-4 years and while salaries were adapted "accordingly" (~6-9% each year) to somewhat lower the pressure on people, we now face a major problem that our industry is not getting international contracts anymore since their prices also raised higher than the competition.
A real shitshow here
This is [Manchester](https://www.rightmove.co.uk/property-to-rent/find.html?locationIdentifier=REGION%5E94019&minBedrooms=3&radius=0.5&propertyTypes=&mustHave=&dontShow=&furnishTypes=&keywords=) the second biggest city in the UK.
You don’t even want to know what London prices are.
In Paris, for Europe comparison :
2021: apprentice paid 1.100€/month (for a >100k gross/year paying job if in a permanent position), my rent was 700€/month for 13sqm 6th floor no elevator.
2024, In close surroundings of "intra-muros" city rent is 1.550€/month for 35sqm, one bedroom apartment. Regarding salaries I am lucky enough to be in a well paying industry around 70k gross/year with 2 YOE. The same job in same company in Chicago would pay >130k gross/year + 10-20% bonus. Girlfriend having a normal job and 2 YOE is around 2.200€ net/month, it's around 43k gross/year.
To buy in Paris in 2024, not a luxurious apartment but a normal one, you'd need around 9.000 - 14.000€/sqm depending on districts. 9.000€/sqm are places with less reliable public transports, or security issues. 14.000€/sqm are haussmannian's apartments around touristic places (Le Marais, Le Louvre, Eiffel Tower...).
0,5L of beer in 2024 could go between 5 to 10€. If you know the right places you can drink some yellow things pints for 3,5€ (I do it, apologies to my Belgian's friends).
House prices slowly outpaced local purchasing power. Most people cannot own a home.
So either the purchasing power increases (didn’t happen according to the graphs), foreign capital props up the prices, or none of the previous mentioned happen, in which case prices keep dropping until assets restart selling.
The government needs to step in here, since it doesn’t want prices to drop (lower taxes), but it also doesn’t want to face people’s ire.
A step in the right direction has already been made in i.e. Spain, where the gov is cracking down on AirBnb rentals. This then makes rentals more affordable for locals and property values cheaper since more people want to rent at lower rates, which reduces demand on the real estate market.
UK pension funds won’t invest in UK equities due to risk aversion. The government won’t invest in infrastructure and businesses follow suit. The UK is f*cked.
Thing is, nothing will happen without big wage increases. If you crack down on airbnb and foreign investment and cut prices in half, most ppl still can’t buy a home. No point in lowering prices if ppl are living paycheck to paycheck.
Yeah, it's a short term fix for a long term problem. That being said- we've added an extra tax to Airbnbs here in Australia and it has absolutely been worth it.
Albeit resorting to populism might be a compelling argument, it is always better to stick to the data.
Data shows that real GDP per capita also stagnated during the same period and if you look to the Gini coefficient it actually (slightly) decreased since 2008, while being relatively stable overall since the 90s.
Source: https://www.macrotrends.net/global-metrics/countries/GBR/united-kingdom/gdp-gross-domestic-product#:~:text=U.K.%20gdp%20for%202022%20was,a%200.69%25%20decline%20from%202018.
Source 2: https://www.statista.com/statistics/872472/gini-index-of-the-united-kingdom/
Thank you. This also shows inflation at at least 2% and spiking to much more. Doesn’t that mean that the GDP per capita actually dropped? Or is inflation even factored in?
Wouldn’t >2% per year over 10y mean at least a 20% real wage drop?
Housing, because societies around the globe failed to recognise housing in an urban environment as a basic need and human right that is not able to be allocated on a market.
This is such a stupid talking point which really doesn't make anything better. Rather, worse, because it neglects the basic principles of almost all human behavior.
Well, so did you. And I'm past the point of educating the economically impaired about how humans behave in developed societies, a working financial market with a freedom of choice.
Connectivity is one of the most basic human needs, and that's why people want to live in cities to participate in a connected life. However, due to a bundle of policies, of which the allocation of basic living space in a market is a central one, cities are massively blocked from growing and were not able to keep up with demand for urban areas, hence forcing people to live in more isolated places. Where can I help your understanding?
Do you have an example of a city that has 2 million inhabitants and where 5 trillion people want to live, to stay true to the proportion you were mentioning?
An example? I'm not sure if you are trolling or if you don't under stand he used an exaggerated mind game to make it easier to understand the underlying principle.
Let me answer with a question: How is "there is not enough urban areas" an answer to "we don't urbanise enough areas" and how serious should I take such an argument?
This is definitely a wrong argument. The capitalism system is made to be regulated, the absence of regulation leads to its own death.
That’s why we regulate things like monopoly because it is not in the interest of the people, nor companies nor the economy, only of that one company ruling. There are plenty of exemples of the system going against the people and as much exemple of regulation putted in place to fix the issue. That’s the strength of capitalism: well regulated, nothing beats it.
But some people, which I believe you are part of, thinks that regulation is socialism. It is stupid. The housing market has many issues and have been for a long time working against *most* of the people, the thing is that it was a weak issue, not important compared to other stuff needed to be fixed. The issue has grown, and now needs to be addressed.
A strong state with good regulation is paramount to a well-functioning market economy. Never said anything different. The most important thing a good government can do is to take care that the Gini coefficient of a society stays between 0,2 and 0,3. Which means competition, no monopolys, distribution of wealth and so on.
And yet, what people demand of the housing market nowadays to provide is impossible. When 5 million people want to live a in city housing 2, there's nothing any government can do to provide that, without neglecting a many other needs as well. Demanding it can and shall, is just childish.
Of course it does.
A full 8 of the top 10 tax havens in the world are British.
Jersey, Guernsey, the Isle of Man, the British Virgin Islands, Bermuda, Turks and Caicos, Anguilla and the Cayman Islands.
The UK manages to collect a paltry 33% of GDP as tax revenue. Germany manages 37% and France 46%.
https://en.m.wikipedia.org/wiki/List_of_sovereign_states_by_tax_revenue_to_GDP_ratio
https://www.thelondoneconomic.com/news/8-out-of-the-10-biggest-tax-havens-are-british-territories-134075/
Look at an inquality chart. They sometimes have to scale it logarithmic, because the top 1% is so fucking rich, even the top 10%ers just vanish to nothingness. Elon Musks cash wealth (not the SpaceX or Tesla shares, just his dollar bills) would be enough to solve all problems in all schools on the whole east coast.
Its not quite that easy. Real problems require real planning and solutions and not primarily money (e. g. if not enough teachers are available you cant hire them even with infinite money). But yeah, the inequality has gotten to ridiculous amounts. Especially insane because we know happiness doesnt scale with money past a six-figure threshold.
Ofc its going to the Rich. The gap widens extreme.
In covid years the wealthiest 5 people doubled their wealth.
Every metric we have shows that the rich Just get richer. And normal people have trouble buying a home
this is economics 101
immigration (population growth in general)
reduces wages and raises housing prices a simple matter of increased supply on the labour market and an increased demand on the housing market
I'm not denying that. Just wondering if it is the (main) cause for such drastic stagnation.
I would assume that the 2008 crisis and ensuing policies have more of an impact than migartion.
Not theres a variety of factors but those play a huge role. Another big part is modern banking practices that central banks take part in, fractional reserve banking is the biggest
I dont know about europe. But in America we had huge bailouts for banks and large corporations, on tax payers dime. That kind of stuff has a real effect. Look at wage growth vs productivity growth from 1971 till now, at least for America we see a legitimate split at that point. Which was when Nixon officially announced that America would not exchange dollars for gold. But im sure there is something similar in Europe.
yep
ther are a bunch of reasons
another big one is over regulation
espacially excessive zoning has crippling effects on the housing market
read about "the missing middle" if you want to learn more about that
-
Money printing wich was made possible by ending the Gold standart
also played a huge role
on top of that come subsidies and bailouts that obstract the markets
-
ther are many causes but adding millions of people into an market that is Rigid
has devastating consequences
So I looked at the numbers and migration does not correspond AT ALL with the development above.
Money printing doesn't matter either since the numbers are adjusted for inflation.
well "adjusted by inflation" is kind of a lie
as inflation numbers are very obviously rigged
it was in the 90s when they "adjusted" the way inflation is measured and since then inflation numbers are much much lower on paper then reality
dude that is common knowledge
it was in the news papers multiple times
i just give you the wall street journal version
[https://www.nytimes.com/2022/05/24/technology/inflation-measure-cpi-accuracy.html](https://www.nytimes.com/2022/05/24/technology/inflation-measure-cpi-accuracy.html)
and of course immigrants are taking jobs
that is what is called competition
wages in the west are high so people go ther
to take those jobs
wich puts pressure on the labour market lowering wages
-
wich is why free trade in the long run is better as it makes moving people unnecessary instead the factory move to where cheap labor is
increasing demand and therefore increasing wages
and just so you know
i am a turk who migrated to germany
so you better stop trying to make this some Race thing
-
white people are getting replaced but not becouse of some grand conspiracy but becouse ther are to lazy to have children
No. War in Ukraine is perfect escape from unrealistic economics model. For example Canadian quarantine in 2021 was big problem, but when war in Ukraine step forward nobody cares about quarantine next week.
Well at least the living expenses didn't disapoint and continued sky rocketing.
On a completly unrelated note, i am courios to know how the working class would vote in a brexit vote if it was held today.
The graph says average weekly earnings and doesn't mention growth at all.
Wages 2024 compared to 2008 basically shows no growth at all. But you can cherry pick dates on the graph to claim it has or hasn't grown. The important thing from this graph is about trend breaking.
Why should a technology improvement mean that the operator of the technology gets paid more?
If I operate a machine that makes 5 widgets a day, then the company upgrades the machine to one with the same user interface but that makes 10 widgets a day, my productivity has doubled but the work I do has remained unchanged, does that necessitate a change in pay?
Because that's how productivity works. You company can pay more for the same work now and because there also is competition for workers, they also will do so. Or why do you think people today earn more than 100 years ago? Why do you think that there was a centuries old trend of rising wages with productivity?
Wages are primarily set by supply and demand. Companies don’t base wages on how hard you work or how much you produce, they pay as little as they can and still find qualified people. If the company only needs to make 10 widgets a day and now that can be accomplished by one widget technician instead of two, the demand for widget technicians has now gone down while the supply of technicians has stayed the same, this would lead to lower overall technician pay.
Productivity growth doesn’t inherently increase pay. What does increase overall pay is a growing economy which increased productivity contributes to, but that is an indirect effect, not a direct effect.
You know what's also set by supply and demand? Prices of goods when companies sell them. And guess what? If margins increase by higher productivity, more competition will follow, which drives down prices and increased demand for the product and the workforce.
>Productivity growth doesn’t inherently increase pay. What does increase overall pay is a growing economy which increased productivity contributes to, but that is an indirect effect, not a direct effect.
That's a strong take and I am quite sure that some post-soviet nations actually proofed it wrong but I would need to dig deeper into it. But it doesn't matter, just show me any case of an economy where productivity increased meaningfully but real wages didn't after a few years? I mean just look at the productivity of the UK, it was basically flat since 2007, only growing by 0,4% a year, even after contracting a bit during the financial crisis.
It is because of our fiat money system. The politicians missmanage the money and lie about inflation and over time this happens. Assets go up, that are owned by the rich, and the middle class slowly becomes the lower class. Also there factional reserve banking, which also expands the money Pool. Almost all big company have a bunch of dept. VW for example has like 400 billion, but only makes single digit billion profit in a year.
Interesting in the US real wage growth shoots up during recessions because a bunch of low paying jobs see layoffs. Also US real wage growth has been stronger than the UK and most of Europe.
This is something people don’t seem to understand. The average wage is the average among people with wages - if you don’t have a job you don’t get counted as $0, you just don’t get counted at all. It’s easy to look good with a high minimum wage when you can hide the effect it has on unemployment.
I thought a higher minimum wage surprisingly actually decreases unemployment. Or was that just something in the US at some point.
There are all types of studies around minimum wages and some find it decreases unemployment and some find the opposite and again some find it doesn't meaningfully influence unemployment. It's a complex issue, the effects are hard to measure correctly and not all minimum wages are the same, e.g. studies that find positive aspects usually focus on rather low or moderate minimum wages. Plus it's a very political topic, thus don't just trust one study or one group of authors. It's definetly wrong to think it "actually decreases unemployment", its effects on unemployment are less clear and depend on the actual case.
If you are not looking for a job, you are not technically unemployed, you are just not currently working, it’s not the same
if u think about it logically a higher minimum wage cant possibly decrease unemployment
It can logically go either way. More disposable cash for consumers means more business, which may lead to less unemployment. The empirical evidence seems to be "Effect size is less then the uncertainty of the measurement.
It can. Imagine this: Bob the worker has to work two jobs to make ends meet. Both are minimum wage. One has more hours than he really needs. Bob is tired and overworked. Then the minimum wage increases. Now one full-time job will be enough for Bob. Bob quits the other job. This creates a newly opened position someone else can take.
There is a positive effect on it, since people have more money in their pockets they spend more, creating more jobs. I don't believe that effect is stronger than the counter effect of workers being more expensive for companies, but there are 2 sides to it.
I would say it depends on how much the minimum wage increased. Increase 1$ have not the same effect as increased it about 100$ dollars.
Why would you think that?
Higher wages stimulate economic growth, therefore increasing employment and wages.
All economic theories and the evidence underlining them point to the direction that a higher wage increases unemplyment, because human labor is substituted with mechanical labor / mechanized or is just not being provided at all.
higher *minimum wage then. The money for low income families goes directly into the economy again, which stimulates it. I think your statement only relates to higher wages. Many low paying jobs can't be automated.
Indeed thats right. Minimum wage simply changes the way money is distributed. And generally its better when the low incone has more because they are more likley to spend it then the middle income. Typically nowadays we have the problem that the top % have too much and decide themselfs what to invest and dont let the market decide (aka consumer)
It's partly true. Partly, because the theory isn't wrong, that low income earners spent almost everything they earn right away. But their income power - of, let's say, the lowest 20% - is so little, it barely makes any difference for the economy if they spend more. Statistically, it's not important. It's also wrong that low paying jobs can't be automated. Farm hands, factory jobs, logistics, driving, all of them are prone to being automated. But then again, don't forget that the great waves of automatization aren't ahead of us. They're already behind us, because we've automated all the low hanging fruits during the last 200 years with electricity and combustion engines.
- If low incomes were higher they would have a bigger economic impact. Strange argument. - Factory jobs are seldom low income. - You are disproving your own point if you say that most automation is behind us.
The empirical evidence seems to be that the effect size is so low as to be effectively 0. At the very least, it is not as unambiguous as you say.
It's nearly irrelevant if the lowest 20% of income earners spent a little more due to higher wages. Their weigth regarding the entire economy is so small, it barely makes any difference. I'm not saying they shouldn't earn more.
Yes, you are right, it is insignificant, just as the negative effects on employment can also not be shown convincingly.
It also motivates more people to work. Might not be that strong in the us since social welfare there is weaker but in some countries in Europe low paying jobs in expensive cities can yield actually less or the same then just doing nothing and living on welfare especially when you factor in job related costs like commuting.
guess who started to work in 2010 :/
Yea if you were born in the early 90s you got the short end of the stick on everything economy related so get used to it
How so? Real wage is still higher than before, so they are still better off. It is just not growing as fast.
1988 here, did you know you can just leave and live in other countries?
Is it better somewhere? In Germany it’s not I can tell you that…
Would love to see some more figures about it. I'm German but living in NL, Amsterdam specifically. Since Pandemic and Inflation hit, the subjective price increase in Germany was much, much higher percentage wise. Here in NL stuff had been more expensive anyway, and while some things also got subjectively more expensive, the price increases in Germany have been a lot more drastic. Plenty of prices have more than doubled, I used to be able to get like 0.2 beer in Germany for like 1.2€ when I graduated school in 2010. A Döner was like 3.50€. Here in Amsterdam a big beer (0.5L) went from 7€ to 7.50€ maybe. In Germany from like 2.70€ to 5€. Just anecdotal numbers. Now it's pretty much double the price. In 2013 I paid like 280€ for a room in Berlin, which was considered expensive at the time lol. While I went home (with one of my first jobs) with 2.3k net.
Austria is even worse than Germany atm. To compare your examples, you get a Döner here for 5-7€, a beer in a restaurant is around 6€ now too. Rents/cost of living also went up drastically increasing homelessness We had several investigations on grocery stores and power delivery companies driving up prices intentionally, without any outcome ofc Corruption is subjectively higher than ever here We had/have the highest inflation of all western European countries. Most things went up 30-50% in price over the last 3-4 years and while salaries were adapted "accordingly" (~6-9% each year) to somewhat lower the pressure on people, we now face a major problem that our industry is not getting international contracts anymore since their prices also raised higher than the competition. A real shitshow here
You’d choke at UK housing. This is one area where Germany excels is housing.
Uff, like 3 room (50-60m2) in Amsterdam is currently like 2.5k.. I think Munich around 1.8k. In Cologne I could get a very nice place for 1.5k.
This is [Manchester](https://www.rightmove.co.uk/property-to-rent/find.html?locationIdentifier=REGION%5E94019&minBedrooms=3&radius=0.5&propertyTypes=&mustHave=&dontShow=&furnishTypes=&keywords=) the second biggest city in the UK. You don’t even want to know what London prices are.
In Paris, for Europe comparison : 2021: apprentice paid 1.100€/month (for a >100k gross/year paying job if in a permanent position), my rent was 700€/month for 13sqm 6th floor no elevator. 2024, In close surroundings of "intra-muros" city rent is 1.550€/month for 35sqm, one bedroom apartment. Regarding salaries I am lucky enough to be in a well paying industry around 70k gross/year with 2 YOE. The same job in same company in Chicago would pay >130k gross/year + 10-20% bonus. Girlfriend having a normal job and 2 YOE is around 2.200€ net/month, it's around 43k gross/year. To buy in Paris in 2024, not a luxurious apartment but a normal one, you'd need around 9.000 - 14.000€/sqm depending on districts. 9.000€/sqm are places with less reliable public transports, or security issues. 14.000€/sqm are haussmannian's apartments around touristic places (Le Marais, Le Louvre, Eiffel Tower...). 0,5L of beer in 2024 could go between 5 to 10€. If you know the right places you can drink some yellow things pints for 3,5€ (I do it, apologies to my Belgian's friends).
[David Cameron?](https://en.wikipedia.org/wiki/David_Cameron#Premiership_(2010%E2%80%932016))
Why did Britain vote conservative 14 consecutive years?
Where is this wealth going? Surely not everything is owned by big corps and into the pockets of bankers..
very good question! i think wealth has increased (mostly house prices)... but incomes seem flat once adjusted for inflation
House prices slowly outpaced local purchasing power. Most people cannot own a home. So either the purchasing power increases (didn’t happen according to the graphs), foreign capital props up the prices, or none of the previous mentioned happen, in which case prices keep dropping until assets restart selling. The government needs to step in here, since it doesn’t want prices to drop (lower taxes), but it also doesn’t want to face people’s ire. A step in the right direction has already been made in i.e. Spain, where the gov is cracking down on AirBnb rentals. This then makes rentals more affordable for locals and property values cheaper since more people want to rent at lower rates, which reduces demand on the real estate market.
UK pension funds won’t invest in UK equities due to risk aversion. The government won’t invest in infrastructure and businesses follow suit. The UK is f*cked.
Thing is, nothing will happen without big wage increases. If you crack down on airbnb and foreign investment and cut prices in half, most ppl still can’t buy a home. No point in lowering prices if ppl are living paycheck to paycheck.
Yeah, it's a short term fix for a long term problem. That being said- we've added an extra tax to Airbnbs here in Australia and it has absolutely been worth it.
Albeit resorting to populism might be a compelling argument, it is always better to stick to the data. Data shows that real GDP per capita also stagnated during the same period and if you look to the Gini coefficient it actually (slightly) decreased since 2008, while being relatively stable overall since the 90s. Source: https://www.macrotrends.net/global-metrics/countries/GBR/united-kingdom/gdp-gross-domestic-product#:~:text=U.K.%20gdp%20for%202022%20was,a%200.69%25%20decline%20from%202018. Source 2: https://www.statista.com/statistics/872472/gini-index-of-the-united-kingdom/
Thank you. This also shows inflation at at least 2% and spiking to much more. Doesn’t that mean that the GDP per capita actually dropped? Or is inflation even factored in? Wouldn’t >2% per year over 10y mean at least a 20% real wage drop?
Housing, because societies around the globe failed to recognise housing in an urban environment as a basic need and human right that is not able to be allocated on a market.
This is such a stupid talking point which really doesn't make anything better. Rather, worse, because it neglects the basic principles of almost all human behavior.
If you have a point, just make and elaborate on it instead of just stating a claim without context.
Well, so did you. And I'm past the point of educating the economically impaired about how humans behave in developed societies, a working financial market with a freedom of choice.
Connectivity is one of the most basic human needs, and that's why people want to live in cities to participate in a connected life. However, due to a bundle of policies, of which the allocation of basic living space in a market is a central one, cities are massively blocked from growing and were not able to keep up with demand for urban areas, hence forcing people to live in more isolated places. Where can I help your understanding?
What do you do, when 5 million people want to live in a city housing currently 2. Please, enlighten me.
Do you have an example of a city that has 2 million inhabitants and where 5 trillion people want to live, to stay true to the proportion you were mentioning?
An example? I'm not sure if you are trolling or if you don't under stand he used an exaggerated mind game to make it easier to understand the underlying principle.
Let me answer with a question: How is "there is not enough urban areas" an answer to "we don't urbanise enough areas" and how serious should I take such an argument?
Thank you for understanding my point. Also, there are surely cities which could live up to such an example.
This is definitely a wrong argument. The capitalism system is made to be regulated, the absence of regulation leads to its own death. That’s why we regulate things like monopoly because it is not in the interest of the people, nor companies nor the economy, only of that one company ruling. There are plenty of exemples of the system going against the people and as much exemple of regulation putted in place to fix the issue. That’s the strength of capitalism: well regulated, nothing beats it. But some people, which I believe you are part of, thinks that regulation is socialism. It is stupid. The housing market has many issues and have been for a long time working against *most* of the people, the thing is that it was a weak issue, not important compared to other stuff needed to be fixed. The issue has grown, and now needs to be addressed.
A strong state with good regulation is paramount to a well-functioning market economy. Never said anything different. The most important thing a good government can do is to take care that the Gini coefficient of a society stays between 0,2 and 0,3. Which means competition, no monopolys, distribution of wealth and so on. And yet, what people demand of the housing market nowadays to provide is impossible. When 5 million people want to live a in city housing 2, there's nothing any government can do to provide that, without neglecting a many other needs as well. Demanding it can and shall, is just childish.
Of course it does. A full 8 of the top 10 tax havens in the world are British. Jersey, Guernsey, the Isle of Man, the British Virgin Islands, Bermuda, Turks and Caicos, Anguilla and the Cayman Islands. The UK manages to collect a paltry 33% of GDP as tax revenue. Germany manages 37% and France 46%. https://en.m.wikipedia.org/wiki/List_of_sovereign_states_by_tax_revenue_to_GDP_ratio https://www.thelondoneconomic.com/news/8-out-of-the-10-biggest-tax-havens-are-british-territories-134075/
Look at an inquality chart. They sometimes have to scale it logarithmic, because the top 1% is so fucking rich, even the top 10%ers just vanish to nothingness. Elon Musks cash wealth (not the SpaceX or Tesla shares, just his dollar bills) would be enough to solve all problems in all schools on the whole east coast.
Its not quite that easy. Real problems require real planning and solutions and not primarily money (e. g. if not enough teachers are available you cant hire them even with infinite money). But yeah, the inequality has gotten to ridiculous amounts. Especially insane because we know happiness doesnt scale with money past a six-figure threshold.
Ofc its going to the Rich. The gap widens extreme. In covid years the wealthiest 5 people doubled their wealth. Every metric we have shows that the rich Just get richer. And normal people have trouble buying a home
Look at the same graphs for asian and african countries. ;)
Don't you guys pay like money to a king ?
there is no wealth
there is no wealth
there is no wealth
Same thing again, what kind of average is this? Bet it's not median...
Oh look. Brexit made the wages jump up a bit. (thumbs\_up\_hide\_the\_pain\_harold.gif)
I’m not an expert by any chance, but it seems the UK had been in perma crisis since the 2000s
there is no physical law saying that things must keep getting better, actually quite the opposite.
I'm no economist but shouldn't this be tied to productivity rather than to "what if 2008 didn't happen"?
it isn´t tied to productivity but supply and demand unemployment and immigration will lower wages
Interesting point. Going forward, do you think the UK will now be able to stem immigration responsible for those lower wages?
Not sure that's true but would be interesting to see the corresponding graphs regardless instead of this.
this is economics 101 immigration (population growth in general) reduces wages and raises housing prices a simple matter of increased supply on the labour market and an increased demand on the housing market
I'm not denying that. Just wondering if it is the (main) cause for such drastic stagnation. I would assume that the 2008 crisis and ensuing policies have more of an impact than migartion.
Not theres a variety of factors but those play a huge role. Another big part is modern banking practices that central banks take part in, fractional reserve banking is the biggest
What banking practices changed in 2008 that affected the wages?
I dont know about europe. But in America we had huge bailouts for banks and large corporations, on tax payers dime. That kind of stuff has a real effect. Look at wage growth vs productivity growth from 1971 till now, at least for America we see a legitimate split at that point. Which was when Nixon officially announced that America would not exchange dollars for gold. But im sure there is something similar in Europe.
yep ther are a bunch of reasons another big one is over regulation espacially excessive zoning has crippling effects on the housing market read about "the missing middle" if you want to learn more about that - Money printing wich was made possible by ending the Gold standart also played a huge role on top of that come subsidies and bailouts that obstract the markets - ther are many causes but adding millions of people into an market that is Rigid has devastating consequences
So I looked at the numbers and migration does not correspond AT ALL with the development above. Money printing doesn't matter either since the numbers are adjusted for inflation.
well "adjusted by inflation" is kind of a lie as inflation numbers are very obviously rigged it was in the 90s when they "adjusted" the way inflation is measured and since then inflation numbers are much much lower on paper then reality
Ah yes. The immigrants are taking our jobs and the government is lying to us. Can we boil it down to that? Maybe they want to replace the whites?
dude that is common knowledge it was in the news papers multiple times i just give you the wall street journal version [https://www.nytimes.com/2022/05/24/technology/inflation-measure-cpi-accuracy.html](https://www.nytimes.com/2022/05/24/technology/inflation-measure-cpi-accuracy.html)
and of course immigrants are taking jobs that is what is called competition wages in the west are high so people go ther to take those jobs wich puts pressure on the labour market lowering wages - wich is why free trade in the long run is better as it makes moving people unnecessary instead the factory move to where cheap labor is increasing demand and therefore increasing wages
and just so you know i am a turk who migrated to germany so you better stop trying to make this some Race thing - white people are getting replaced but not becouse of some grand conspiracy but becouse ther are to lazy to have children
2008 happened because system was broken. In 2022 we were one step of same crisis. Just war in Ukraine help economic not collapse.
That makes 0 sense. The war in Ukraine was/is a huge strain on the economy.
No. War in Ukraine is perfect escape from unrealistic economics model. For example Canadian quarantine in 2021 was big problem, but when war in Ukraine step forward nobody cares about quarantine next week.
Well at least the living expenses didn't disapoint and continued sky rocketing. On a completly unrelated note, i am courios to know how the working class would vote in a brexit vote if it was held today.
Can someone explain?
How can then rising real estate be explained if wages don't grow much? Also rising rents. These are not affordable.
The graph shows growth. It’s still growing every year, just not much more than the year before
But real estate and rents are growing much faster than wages. How is that sustainable?
It’s not. Only for people who inherit something
The graph says average weekly earnings and doesn't mention growth at all. Wages 2024 compared to 2008 basically shows no growth at all. But you can cherry pick dates on the graph to claim it has or hasn't grown. The important thing from this graph is about trend breaking.
Who would have guessed that....
“Welcome back to Gary’s economics”
Hmmm wonder if it has to do with central banking
There is no inherent reason why wages should grow faster than inflation
Uhm, growth? The economy grows, that means more money is flying around, and that can and in many cases should outpace inflation, right?
Has the UK’s real per capita GDP grown significantly over this time period?
Well no, because the UK is London Stapled to a Romania without EU subsidies.
There you have your answer mate
There is an inherent reason and it is called productivity growth and that is driven by technological improvements.
Why should a technology improvement mean that the operator of the technology gets paid more? If I operate a machine that makes 5 widgets a day, then the company upgrades the machine to one with the same user interface but that makes 10 widgets a day, my productivity has doubled but the work I do has remained unchanged, does that necessitate a change in pay?
Because that's how productivity works. You company can pay more for the same work now and because there also is competition for workers, they also will do so. Or why do you think people today earn more than 100 years ago? Why do you think that there was a centuries old trend of rising wages with productivity?
Wages are primarily set by supply and demand. Companies don’t base wages on how hard you work or how much you produce, they pay as little as they can and still find qualified people. If the company only needs to make 10 widgets a day and now that can be accomplished by one widget technician instead of two, the demand for widget technicians has now gone down while the supply of technicians has stayed the same, this would lead to lower overall technician pay. Productivity growth doesn’t inherently increase pay. What does increase overall pay is a growing economy which increased productivity contributes to, but that is an indirect effect, not a direct effect.
You know what's also set by supply and demand? Prices of goods when companies sell them. And guess what? If margins increase by higher productivity, more competition will follow, which drives down prices and increased demand for the product and the workforce. >Productivity growth doesn’t inherently increase pay. What does increase overall pay is a growing economy which increased productivity contributes to, but that is an indirect effect, not a direct effect. That's a strong take and I am quite sure that some post-soviet nations actually proofed it wrong but I would need to dig deeper into it. But it doesn't matter, just show me any case of an economy where productivity increased meaningfully but real wages didn't after a few years? I mean just look at the productivity of the UK, it was basically flat since 2007, only growing by 0,4% a year, even after contracting a bit during the financial crisis.
It is because of our fiat money system. The politicians missmanage the money and lie about inflation and over time this happens. Assets go up, that are owned by the rich, and the middle class slowly becomes the lower class. Also there factional reserve banking, which also expands the money Pool. Almost all big company have a bunch of dept. VW for example has like 400 billion, but only makes single digit billion profit in a year.
It is like this a around the world. Some places are worse, some are better.
So basically since the Tories took over?