chris955

You have to take into account that the particular poster doesnt do positive, not about the UK anyway

chris955

http://www.bbc.co.uk/news/uk-england-26366794

roaringmouse

I haven't suggested that everyone should get richer year by year indefinitely. I linked to a news article showing that real wages are at 2002 levels, with a backdrop of sharply increasing costs. For example, electricity and gas rose by between 8% and 11% at the end of 2013 alone (one example).

For a person who has had a decrease in their pay of 14% or similar between 2009-2013 (i.e. no pay increases - figures from this post on another thread) the increases in living costs have been a huge ask for many many people. The cost of living crisis is getting worse still, with so many people in the UK suffering.

Giantaxe

So real wages are at 2002 levels. Was there a "cost of living crisis" then too?

dunroving

Where does that figure come from?

old.sparkles

post 1810 and a bbc report - http://www.bbc.com/news/business-26368388

dunroving

Thank you!

old.sparkles

No worries

bigglesworth

Point One - the survey is of Real wages - i.e. post inflation, post rising costs. To then add costs back in is comparing apples with pears.

Point Two this excludes tax changes - not least the above inflation increases in the basic rate tax threshold, which reverse the 8 percent drop.

Point Three - the figures are massively skewed by the expansion of the workforce, the overwhelming majority of which is either new entrants who were previously on benefits, or new immigrants. Both groups include few brain surgeons or accountants, so are overwhelmingly composed of lower income groups, dragging down the overall average.

Point four Reversal of the expansion of the public sector. As the public sector is paid significantly more than the private sector that too reduces the overall average.

Clearly the addition of large numbers of people to the workforce increases overall GDP (that is not to say that public sector do not contribute, of course they do and their services are absolutely invaluable. But if there are an additional 1 million people producing the same amount of services as 2.5 million did, then moving them in to the private sector increases overall GDP).

These then explain the unexpected (by many) sharp rise in growth in GDP, with outlier economists now forecasting growth for the next year in excess of 4 percent.

So, although I suspect it is not what you meant, the overall conclusion from your post is that things in the UK are indeed improving faster than anyone dared hope.

Thank you for pointing it out.

Bud the Wiser

Another interesting view of the growing economy from Jeremy Warner. Getting bigger does not mean getting better. Yes? No?

http://www.telegraph.co.uk/finance/e...ot-better.html

bigglesworth

Warner has been consistently downbeat, and I think is a bit aggrieved to discover himself in the wrong camp. His position (which I share to some extent) is that the damage done by Gordon Brown was so massive that it may never be repaired.
I think he errs in two respects.
First by not recognising the double whammy contribution of a growing workforce AND a declining number on benefits.
Second is that the knowledge economy perversely is taking a chunk OUT of Services GDP as it improves services themselves. Counterintuitive, I realise, but my obvious example would be the WhatsApp app. As it makes texts (and soon calls) essentially free, so the amount that was contributed by people paying for those services disappears from the GDP numbers.

An interesting contrast by a chap I have a lot of time for is David Smith in the Sunday Times (nearly as much as I like Hamish MCrae in the Independent) . I will post the link, but as there is a pay wall, you may only get it if you subscribe to the Times.
http://www.thesundaytimes.co.uk/sto/...cle1381610.ece

dunroving

I enjoy reading his column every week. I even understand most of it.

Pistolpete2

Found this:

http://www.economicsuk.com/blog/001997.html

for those who cannot access the Sunday Times - an excerpt instead

David Smith grew-up in West Bromwich, then Cardiff - can't be all bad!

Editha

I would not want to challenge the claim that many families in the UK are suffering a cost of living crisis. But...

If real wages now are at the same level as in 2002, and yet have dropped 14% since 2007, that implies that there were unsustainable pay rises between 2002 and 2007, at a point at which the UK economy was running on fumes, and all that has happened since then is just an inevitable correction.

bigglesworth

As I said, Pete, I do like David Smith

But I thoroughly recommend Hamish McRae.

When the Independent first came out, I thought it was the best paper ever.
Sadly, it is no longer even a pale reflection of its early glory, but Hamish has stuck it out since the beginning.

He is truly well worth reading, although he plainly struggles against the stupidity of his owner.