gopijags

Dear UK Leavers

I am just curious - are the salaries in the UK really that low, compared to America and Canada?

How come then the Pound is still such a Powerful Currency and still going strong? Doesn't the Exchange Rate 1GBP = 2.3 $CAD = 1.5 USD, indicate the higher Purchasing Power of the British Pound. The Strength of a currency is measured by its Exchange Rate which equates to Buying Power (Principle of Economics).

So the only conclusion that I can infer from this, is that even though you have a Strong Sterling, but the UK Employers Pay Abysmally Low Salaries and the Cost of Living is disproportionately high, compared to the Salaries one gets in the UK.

Please Clarify.

Jags

Stuart Brook

gopijags wrote:
    > Dear UK Leavers
    > I am just curious - are the salaries in the UK really that low, compared
    > to America and Canada?
    > How come then the Pound is still such a Powerful Currency and still
    > going strong? Doesn't the Exchange Rate 1GBP = 2.3 $CAD = 1.5 USD,
    > indicate the higher Purchasing Power of the British Pound. The Strength
    > of a currency is measured by its Exchange Rate which equates to Buying
    > Power (Principle of Economics).
    > So the only conclusion that I can infer from this, is that even though
    > you have a Strong Sterling, but the UK Employers Pay Abysmally Low
    > Salaries and the Cost of Living is disproportionately high, compared to
    > the Salaries one gets in the UK.
    > Please Clarify.
    > Jags

There's a lot more to the exchange rate than simply that. Buying power
does not have to be equal around the world.

Moreover you have to remember that the standard of living is
significantly different too. English society is far less consumer
oriented.

Tim

Err thats just plain daft (about far less consumer oriented).

The reason why the British pound doesn't have as much buying power IN THE
UK, perhaps for some things at leat, it because the price of goods and
services has increased to match it, It's called inflation. People will
charge the max that people are prepared to spend. House prices in some parts
of the UK are rediculous. However unemployment is very low and the money is
quite good. I can't comment about other industries, but IT definately pays
much better (sginificantly better) than Canada, can't speak for the US.
Probably better than the difference between the cost of living makes up for.

Tim


"Stuart Brook" wrote in
message news:3D984ECF.-
[email protected]...
    > gopijags wrote:
    > >
    > > Dear UK Leavers
    > >
    > > I am just curious - are the salaries in the UK really that low, compared
    > > to America and Canada?
    > >
    > > How come then the Pound is still such a Powerful Currency and still
    > > going strong? Doesn't the Exchange Rate 1GBP = 2.3 $CAD = 1.5 USD,
    > > indicate the higher Purchasing Power of the British Pound. The Strength
    > > of a currency is measured by its Exchange Rate which equates to Buying
    > > Power (Principle of Economics).
    > >
    > > So the only conclusion that I can infer from this, is that even though
    > > you have a Strong Sterling, but the UK Employers Pay Abysmally Low
    > > Salaries and the Cost of Living is disproportionately high, compared to
    > > the Salaries one gets in the UK.
    > >
    > > Please Clarify.
    > >
    > > Jags
    > There's a lot more to the exchange rate than simply that. Buying power
    > does not have to be equal around the world.
    > Moreover you have to remember that the standard of living is
    > significantly different too. English society is far less consumer
    > oriented.

Scott

    > The reason why the British pound doesn't have as much buying power IN THE
    > UK, perhaps for some things at leat, it because the price of goods and
    > services has increased to match it, It's called inflation. People will
    > charge the max that people are prepared to spend. House prices in some
parts
    > of the UK are rediculous. However unemployment is very low and the money
is
    > quite good. I can't comment about other industries, but IT definately pays
    > much better (sginificantly better) than Canada, can't speak for the US.
    > Probably better than the difference between the cost of living makes up
for.
    > Tim

There is also the (largely anecdotal) principle of 'rip-off Britain' to
consider as well. We pay substantially more
per unit for many products from branded toothpaste to cars...the
differentials can range from tiny to substantial sums.

Primarily noticeable in car manufacturing, the UK is seen as a
'cash-cow'...somewhere manufacturers can get a few more percentage point
profits over others in the european market.

Scott

Stuart Brook

Tim wrote:
    > Err thats just plain daft (about far less consumer oriented).

Uh huh ? Granted consumerism is spreading to the UK, but there is not
the same pressure to buy buy buy.

    > The reason why the British pound doesn't have as much buying power IN THE
    > UK, perhaps for some things at leat, it because the price of goods and
    > services has increased to match it,

Pardon ? The UK Pound has not had the buying power of the American or
Canadian dollar in over 40 years that I can remember. Well before the
roaring inflation of the 1970s.

    > It's called inflation. People will
    > charge the max that people are prepared to spend. House prices in some parts
    > of the UK are rediculous. However unemployment is very low and the money is
    > quite good. I can't comment about other industries, but IT definately pays
    > much better (sginificantly better) than Canada, can't speak for the US.
    > Probably better than the difference between the cost of living makes up for.

I certainly agree that house prices are crazy. I can't imagine a 3 br
terrace in the SW that we sold in 1981 for 20,000 pounds now being on
the market for 180,000

A house my parents bought in 1966 for 5,000 pounds is recently on the
market for 240,000.

The real difference in buying power in the UK (excluding housing) is
clearly not due to profiteering (i.e. selling for what the market can
bear) ... but rather due to the high cost of employment. It has
historically cost employers very high amounts to employ someone outside
of just their salary, with benefits and so on (4 and 5 and more weeks
paid vacation is a significant cost to an employer).

I may not have attended LSE, but I've lived in enough places to know you
don't know what you're talking about!

Stuart

Tim

See comments below:

"Stuart Brook" wrote in
message news:3D988394.-
[email protected]...
    > Tim wrote:
    > >
    > > Err thats just plain daft (about far less consumer oriented).
    > Uh huh ? Granted consumerism is spreading to the UK, but there is not
    > the same pressure to buy buy buy.

I personaly don't agree with this. UK consumer spending has been keeping the
UK out of recession recently (as reported by BBC World News not me). If
there is a reason that people don't own as much "stuff" in the UK (compared
with Canada not the US) its probably because they can't afford it. I don't
know about the US but in my opinion Canada is if anything less cunsumer
oriented. You only have to look at the type of cars driving around the
blurbs in Toronto (I have noted this recently). My impression is people seem
to own their car for longer as there seem to be many more people driving
older cars. The SW England is chock full of Mercs, BMW's and Audi.

    > > The reason why the British pound doesn't have as much buying power IN
THE
    > > UK, perhaps for some things at leat, it because the price of goods and
    > > services has increased to match it,
    > Pardon ? The UK Pound has not had the buying power of the American or
    > Canadian dollar in over 40 years that I can remember. Well before the
    > roaring inflation of the 1970s.

I meant that you can buy more in Canada using a Canadian dollar than you can
in the UK with the British pound, day to day. If you take the British pound
over to Canada however you can buy lots more, I know, I just moved all my
savings. I may have misunderstood what's meant as UK pounds buying power but
it certainly has a lot more over in Canada than in the UK.

    > The real difference in buying power in the UK (excluding housing) is
    > clearly not due to profiteering (i.e. selling for what the market can
    > bear) ... but rather due to the high cost of employment. It has
    > historically cost employers very high amounts to employ someone outside
    > of just their salary, with benefits and so on (4 and 5 and more weeks
    > paid vacation is a significant cost to an employer).

Well, if you consider the last petrol strike, there was a lot of talk in the
media about how the government will tax Petrol (as well as cigarettes and
alcohol) the maximum until people complain.This was also mentioned WRT car
prices.

Sounds to me your talking about Canadians buying stuff in the UK, which is
more expensive, because it costs more to make it for the reasons you give.
But the reason for things costing more money to make them is due to
inflationary pressures caused by people spending more. Stuff doesn't cost
more to make in the UK just because it does. People don't get higher wages
just because they do (obviously).

As prices rise so they need larger salaries to pay for these goods, and so
salaries increase until it tops out i.e. spending stops and wage increases
level out. Then as we all know stuff tends to fall in a heap as exports
decrease, imports increase and inward investment drops as jobs are lost.
Consumer spending drops suddenly causing more jobs to go and off you go in a
out-of-control spiral crashing into the ground - the boom and bust scenario.

    > I may not have attended LSE, but I've lived in enough places to know you
    > don't know what you're talking about!

Yes well, whatever. It's just my opinion take it or leave it. No need to
spit ya dummy though.

    > Stuart

Tim