[QUOTE=SirJon;50783459]I'm making minimum wage and honestly I'm pretty comfortable. I imagine it's another story entirely when you're supporting a family though, I won't be in this position for long.[/QUOTE]
You're probably just living within your wage. I know a lot of people who claim to be poor but still have a £20k+ car (on finance) and the latest phones and clothes etc.
But then again I can easily see how people can't survive though, a room in a shit house costs £600 a month here and when you add on an extra 100 for bills I struggle to understand how people afford food and travel.
[QUOTE=FlashMarsh;50784442]Far too many people on the left somehow seem to forget the existence of economic growth, even very educated and intelligent people who then start talking about slices of a finite pie... I don't really understand it[/QUOTE]
We do not live in a society of unlimited resource. The "pie" can grow - but that doesn't mean that everyone will partake in the newly made slices. That's the entire point of this thread - rising income inequality.
[QUOTE=Mesothere;50784720]We do not live in a society of unlimited resource. The "pie" can grow - but that doesn't mean that everyone will partake in the newly made slices. That's the entire point of this thread - rising income inequality.[/QUOTE]
But it isn't rising. I just showed that. The key difference in the UK is a shift in earnings from the 9% to the 1%. Otherwise, it has remained steady since 1990.
[QUOTE=FlashMarsh;50784442]Far too many people on the left somehow seem to forget the existence of economic growth, even very educated and intelligent people who then start talking about slices of a finite pie... I don't really understand it[/QUOTE]
If the middle class are getting relatively poorer and the poor are still living below the poverty line while the pie is getting bigger one ought to question how the pie is being distributed or even if all people's slices are getting larger with the pie.
[QUOTE=mdeceiver79;50785265]If the middle class are getting relatively poorer and the poor are still living below the poverty line while the pie is getting bigger one ought to question how the pie is being distributed or even if all people's slices are getting larger with the pie.[/QUOTE]
(relative) Poverty in the UK is a measure of inequality, not of actual living standards. This is very rarely made clear in news articles and I think it is misleading. Of course people remain in 'poverty' if they are receiving more or less the same amount of income as before, but instead of from the government, they receive it from employers, because ultimately there is no net change in inequality. I would still argue that it is better that these people are employed, however, than are burdening the government at a time of high debt and deficit, though obviously we should try to push for an economy where there are as few of these extremely low-wage and precarious jobs as possible.
In regards to the rest of the article about the middle-class, this again is mostly linked to wealth, not income inequality. This wealth inequality, as I said earlier, is mostly caused by government policy, not by capitalism inherently. The lower middle-class are now renting because the average down payment on a mortgage has reached over £100k recently, with spiralling property prices and difficulty to borrow. Renting also serves as a black hole for money as unlike a mortgage, no asset is being received in this increasingly large part of expenditure for most households. I can't comment much on the benefits now being increasingly received by middle classes since this isn't an area I know that much about, but I suspect (drawing from the article) it is mostly linked to increasing numbers of households having two working parents, with one usually earning much less than the other and as such receiving tax credits as a top up.
[QUOTE=FlashMarsh;50785328](relative) Poverty in the UK is a measure of inequality, not of actual living standards. This is very rarely made clear in news articles and I think it is misleading. Of course people remain in 'poverty' if they are receiving more or less the same amount of income as before, but instead of from the government, they receive it from employers, because ultimately there is no net change in inequality. I would still argue that it is better that these people are employed, however, than are burdening the government at a time of high debt and deficit, though obviously we should try to push for an economy where there are as few of these extremely low-wage and precarious jobs as possible.[/quote]
I suspect there will be such low-wage jobs for a while even once the traditional low skill-low wage jobs disappear there will be such an abundance of available labour (assuming further automation of course) that wages will further be driven down or people will simply be jobless.
I say capitalism may have worked to drive up living standards historically but it and many of its principles are deeply flawed and will become less and less relevant in the coming decades. I suspect you also forsee a similar scenario where people relying on jobs for income/base standard of living is no longer feasible at which point the use of money as a means of distributing goods may become redundant.
Some issues with capitalism
The "modern" economics they teach in universities is very much redundant in an information economy.
Free market is debunked.
Thatcherism/reganism has lead to growing inequality and a general stagnation of wages and with people having less income to spend a slowing of the economy.
Peoples confidence in capitalism has been destroyed by periodic collapses from which the poor tend to suffer most
Business partake in unsustainable businesses practices environmentally and socially but also by extracting all wealth from an area, strangling competition and leaving once there is no local business left.
Keynes predicated much of his work on the assumption that wages would remain linked with productivity, they no longer are and this means automation is removing jobs without increasing labour.
[quote]
In regards to the rest of the article about the middle-class, this again is mostly linked to wealth, not income inequality.[/quote]
wealth inequality and income inequality are both connected imo. You can be rich without a high income but odds are if you are at the top end of the income scale you are also near the top end of the wealth scale. Higher wealth also gives you a greater means for creating more wealth ie potential for higher income.
[quote]This wealth inequality, as I said earlier, is mostly caused by government policy, not by capitalism inherently.[/quote]
Capitalism causes deeper inequality. Inequality has always been there and probably always will be but in a system where people need money to make more money the rich tend to get richer (consider I have a great idea, I need capital to get that idea to market and due to economy of scale a larger company could use their greater amount of capital to outproduce me or even sell at a loss with the intention of crushing competition to later hold a monopoly, patents help but they are now used as weapons and generally they cover a specific design not an idea. CEOs earn more per year than some of their workers will earn over the course of their lifetimes, this continues to get worse.
[quote]
The lower middle-class are now renting because the average down payment on a mortgage has reached over £100k recently, with spiralling property prices and difficulty to borrow.[/quote] Yeah the housing bubble is awful. I don't think I'll ever earn a house to a similar standard that my dad did.
[quote]Renting also serves as a black hole for money as unlike a mortgage, no asset is being received in this increasingly large part of expenditure for most households.[/quote] Agreed, [sp]though a savvy investor might be able to use the deposit, fees and money not paid as interest on the mortage to make a return. Thats what I've heard anyway personally think it smells like bs[/sp]
[quote]I can't comment much on the benefits now being increasingly received by middle classes since this isn't an area I know that much about, but I suspect (drawing from the article) it is mostly linked to increasing numbers of households having two working parents, with one usually earning much less than the other and as such receiving tax credits as a top up.[/QUOTE]
If both are working and getting benefits then surely they should have higher "living standards" the study in op has this paragraph
[quote]There had been strong growth in incomes during 2014-15, the thinktank said, which had finally taken living standards for the median household 2% above their pre-crisis levels. But this was due to higher incomes for the elderly, with no increase for workers aged 31-59 and a 7% decline for those aged between 22 and 30. The IFS said it was “highly unusual” to see no growth in working-age incomes over a seven-year period.[/quote]
It suggests there is no increased living standards for people between 31 and 59, and a drop in living standards for under 31s, these groups, which comprise the majority of the working population, have seen no increase in living standard, despite (as you say and the article also suggests) more people in the household are working.
More people working but living standard decreasing suggests the majority of the working population aren't really benefiting all that much from the so called recovery.
[editline]27th July 2016[/editline]
Flashmarsh and Sobotnik assume the pie grows indefinitely.
We have seen it collapse periodically and the poor are invariable the ones who suffer most from it. When the pie shrinks its they who get hungry.
I don't think the pie should be shared entirely equally but when someone makes in a year more than most of us will make in our lifetimes there is a serious issue.
[editline]27th July 2016[/editline]
[QUOTE=FlashMarsh;50784069]Most people won't be on minimum wage forever. People often neglect to mention is that people move between deciles over their lifetime. When smoothed out across a lifetime, inequality falls a lot:
[/QUOTE]
Our generation is predicted to be the first since ???? to be worse off than our parents are every stage of life.
[url]http://www.bbc.co.uk/news/business-34858997[/url]
[url]https://www.theguardian.com/society/2013/oct/12/middle-class-young-people-future-worse-parents[/url]
Its generally assumed the younger generation will always do better than their parents, if its a system where things get worse over time then isn't that an issue? Doesn't that suggest that capitalism, a system whos main defence is the general increase of quality of life, has perhaps reached the point where it can no longer deliver what it used to?
The debt we're saddled with is the debt we'll pay off through increased taxes and less public spending, is the money spent on unwanted wars, bank bailouts, chinese nuclear plants, nuclear missiles, Phillip greens luxury yachts, fleets of unneeded jets and our parents pensions. I feel like we've been ripped of a bit tbh.
The people who decide we need to pay for university are the people who got free education.
The people who decide we don't need welfare are the people who get paid £100,000s and use expenses to pay for their own houses and houses for their pet ducks.
The people who don't cap energy bills are the same people who never have to worry about having the money to pay for those bills.
The people who decide tax enforcement policy are the same people who directly benefit from tax loopholes.
The people who decide to cut funding for green energy are the same people who won't be around to care in 20-40 years
People repeatedly vote against their own interest because private media has a vested interest in misleading them. You could write this in a book and it would seem like some dystopian parable.
I'll respond in more detail if I have time, but I think you're overestimating the speed at which we reach automation, and underestimating the amount of jobs the vanity of wealthy people can create.
[QUOTE]Our generation is predicted to be the first since ???? to be worse off than our parents are every stage of life.[/QUOTE]
Looking that up in my economic history book it appears the last extended period of GDP per capita decline was 1620 - 1650
[QUOTE]Flashmarsh and Sobotnik assume the pie grows indefinitely.
We have seen it collapse periodically and the poor are invariable the ones who suffer most from it. When the pie shrinks its they who get hungry.
I don't think the pie should be shared entirely equally but when someone makes in a year more than most of us will make in our lifetimes there is a serious issue.[/QUOTE]
This isn't quite accurate. The wealthiest in most recessions typically see the sharpest falls in income, but all see declines. This is why in bust there is typically a decline in equality, whilst in boom there is an [URL="http://equalitytrust.cnd.io/sites/default/files/Gini%20Coefficient%201977%202013.jpg"]increase[/URL]. However, the wealthiest are starting at a much higher point, so whilst their declines make them a little sad, the poor, while losing proportionally less, face much harsher consequences.
[QUOTE]If both are working and getting benefits then surely they should have higher "living standards" the study in op has this paragraph[/QUOTE]
What I'm saying is that there are increased incentives to work, and increasing costs for wealthier families, so there is more incentive for two parents to work, as this may be required just to maintain living standards due to the current state of the housing market in particular.
[QUOTE]wealth inequality and income inequality are both connected imo. You can be rich without a high income but odds are if you are at the top end of the income scale you are also near the top end of the wealth scale. Higher wealth also gives you a greater means for creating more wealth ie potential for higher income.[/QUOTE]
They are, but the gaps are much larger, and eventually, when the gaps become large enough, we will start seeing a disconnect between the two, as more and more people don't earn enough to purchase incredibly expensive assets.
[QUOTE]wealth inequality and income inequality are both connected imo. You can be rich without a high income but odds are if you are at the top end of the income scale you are also near the top end of the wealth scale. Higher wealth also gives you a greater means for creating more wealth ie potential for higher income.[/QUOTE]
You are forgetting the role of borrowing in capitalism, which is a way of acquiring the necessary money to purchase capital and gain your own returns on capital. However, this has become more difficult in recent years due to how hard it is to borrow for anything.
[QUOTE]The debt we're saddled with is the debt we'll pay off through increased taxes and less public spending, is the money spent on unwanted wars, bank bailouts, chinese nuclear plants, nuclear missiles, fleets of unneeded jets and our parents pensions. I feel like we've been ripped of a bit tbh.
The people who decide we need to pay for university are the people who got free education.
The people who decide we don't need welfare are the people who get paid £100,000s and use expenses to pay for their own houses and houses for their pet ducks.
The people who don't cap energy bills are the same people who never have to worry about having the money to pay for those bills.
The people who decide tax enforcement policy are the same people who directly benefit from tax loopholes.
The people who decide to cut funding for green energy are the same people who won't be around to care in 20-40 years
People repeatedly vote against their own interest because private media has a vested interest in misleading them. You could write this in a book and it would seem like some dystopian parable.
[/QUOTE]
This is primarily the fault of the fact that the youth vote is inherently worth less than the vote of the elderly due to differential turnout. If I was a politician, I certainly wouldn't focus on the youth vote. It's a waste of time because they can't be bothered to vote.
Some of these problems are inherent. You are never going to attract people into politics if you don't pay them enough at least to buy their family a home and achieve a middle class standard of living. I think that's only reasonable. The tax loopholes bit is also unfair given that Cameron and Osborne's government did more to close tax loopholes than pretty much any government for at least three decades, but the reality is that closing tax loopholes is hard in an age of mobile capital with the most complicated tax code in the world.
And you've read my posts before, and as I have said, I think there is very little evidence that the media is very powerful or manipulative.
[QUOTE=karlosfandango;50784144]The housing bubble must burst soon, it's at a point that it's not going to be attracting 1st time buyers, this in turn will stagnate the market.
The UK is synonymous with peaking and troughing periodically in the housing market.[/QUOTE]
if we keep on saying it we're bound to get it right
[QUOTE=rampageturke 2;50786109]if we keep on saying it we're bound to get it right[/QUOTE]
[url]http://www.adamsmith.org/blog/economics/bubbles-and-balloons[/url]
Not even a real bubble anyway - requires government action to burst as it was government action which created it. 'The policy might be crazy, but the market's reaction isn't'. The value is [I]real[/I] value, not speculative value caused by irrational decision making or easy money, but instead created by insane government policy.
[IMG]http://static1.squarespace.com/static/56eddde762cd9413e151ac92/t/5748519e356fb0de6ebc2e51/1464357281304/?format=750w[/IMG]
[QUOTE]Clearly, prices were above trend in the 2000s and then fell after 2008, but compared to the early 1990s prices are still extremely high. I'm willing to believe that quite a bit of that rise was a type-1 or type-2 bubble, but unless you think we're still in the midst of that kind of bubble (which could pop at any time), it's not the whole story and doesn't even seem to be most of the story. (As some commenters have pointed out, some aspects of this price increase were likely attributable to foolish financial wizardry, probably driven by regulation.)
More likely, that rise in house prices since the 1990s, since it is still high, is a type-3 bubble — a sensible reaction by markets to foolish government policies constraining the construction of new homes. I can't explain why this rise only took place in the 1990s (population growth and decreases in household sizes may explain this, but I don't know), but unless you're saying that right now markets are wrong and you know better, that rise doesn't seem like the sort of unsustainable bubble that leads to sudden crashes.
Type-3 bubbles are different to type-1 and -2 bubbles in that they do not run the risk of sudden crashes. A type-3 bubble is created by government fiat and it can only be undone by government fiat. This difference is sufficiently great that I suggest a new term for type-3 bubbles: "balloons". A term like that might communicate the fact that prices have been blown up by human agency and, unlike bubbles, require an active popping or disinflating before they go away.[/QUOTE]
The worst part of it is that your average man won't recognise it and blame shitty times on things like "BLOODY FOREIGNERS" and "FUGGIN GIPPOS N SCROUNGERS ON BENEFITS" because they believe everything told to them by the Conservative media. Really looking forward to the day Murdoch chokes it - he's long since due for his time to come.
[QUOTE=GordonZombie;50788294]The worst part of it is that your average man won't recognise it and blame shitty times on things like "BLOODY FOREIGNERS" and "FUGGIN GIPPOS N SCROUNGERS ON BENEFITS" because they believe everything told to them by the Conservative media. Really looking forward to the day Murdoch chokes it - he's long since due for his time to come.[/QUOTE]
[QUOTE=Steam-Pixie;50784241]Most of the time, it's rich people paying rich people to tell Middle-class people to blame poor people.
[/QUOTE]
[editline]28th July 2016[/editline]
[QUOTE=FlashMarsh;50786122][url]http://www.adamsmith.org/blog/economics/bubbles-and-balloons[/url]
Not even a real bubble anyway - requires government action to burst as it was government action which created it. 'The policy might be crazy, but the market's reaction isn't'. The value is [I]real[/I] value, not speculative value caused by irrational decision making or easy money, but instead created by insane government policy.
[/QUOTE]
Maybe the case in most of the UK but in london it is certainly a bubble where property is bought with the assumption that price will go up, which in turn drives prices up further. London property price is a real bubble.
Are the family in the OP piccy rich or middle class? having a go-pro Hero in your fridge means you must have a lot of disposable income.
[QUOTE=GordonZombie;50788294]The worst part of it is that your average man won't recognise it and blame shitty times on things like "BLOODY FOREIGNERS" and "FUGGIN GIPPOS N SCROUNGERS ON BENEFITS" because they believe everything told to them by the Conservative media. Really looking forward to the day Murdoch chokes it - he's long since due for his time to come.[/QUOTE]
Actually a lot of studies show that the overall effect of the media is debatable. I had a friend who did a module on it for his politics degree and it seems that people more go to the media to get their preexisting opinions validated rather than actually being told what to think by the media.
[QUOTE=FlashMarsh;50785891]I'll respond in more detail if I have time, but I think you're overestimating the speed at which we reach automation, and underestimating the amount of jobs the vanity of wealthy people can create.
[/quote]
Thanks for the great reply, I won't address it all since I agree with most of it.
Ah yes and I am probably overestimating the speech we reahc full automation but its happening already, companies strive to automate more while governments strive to make people rely more on jobs.
[quote]
This isn't quite accurate. The wealthiest in most recessions typically see the sharpest falls in income, but all see declines. This is why in bust there is typically a decline in equality, whilst in boom there is an [URL="http://equalitytrust.cnd.io/sites/default/files/Gini%20Coefficient%201977%202013.jpg"]increase[/URL]. However, the wealthiest are starting at a much higher point, so whilst their declines make them a little sad, the poor, while losing proportionally less, face much harsher consequences.
[/quote]
Perhaps instead of sharing burden by wealth it sohuld be shared by standard of living. The super rich won't notice any decline in standard of living if they lose a few million, the poor will have a marked decline in standard of living if they lose the benefits they depend on or are left so poor that they have to rely on charity food banks to eat.
[quote]
What I'm saying is that there are increased incentives to work, and increasing costs for wealthier families, so there is more incentive for two parents to work, as this may be required just to maintain living standards due to the current state of the housing market in particular.
[/quote]
Its not just house prices though, if 2 people in the family are working then high rent alone can't be the only reason for a decline in standard of living. I would argue that cost of living has gone up faster than wages have.
[quote]
You are forgetting the role of borrowing in capitalism, which is a way of acquiring the necessary money to purchase capital and gain your own returns on capital. However, this has become more difficult in recent years due to how hard it is to borrow for anything.[/quote]
I must admit I did plan to talk about borrowing, as you say its gotten harder but also the more wealth/capital you have the easier it is to borrow larger amount. Also if you have that large wealth/capital you can be the person lending the money and taking a share of the proceeds of the work done by others, purely by the virtue that you started with more money, there are obviously opportunity costs and risks involved in investing but you can collect debt and strip assets from debtors.
[quote]
This is primarily the fault of the fact that the youth vote is inherently worth less than the vote of the elderly due to differential turnout. If I was a politician, I certainly wouldn't focus on the youth vote. It's a waste of time because they can't be bothered to vote.
Some of these problems are inherent. You are never going to attract people into politics if you don't pay them enough at least to buy their family a home and achieve a middle class standard of living. I think that's only reasonable.[/quote]
I do wish my generation would be more active, spoke to a girl on a national express a year or so ago, she was full of opinions about the country and government and was adamant that things needed to change yet she hadn't voted, I was dumbfounded.
That said the governments job should be to serve the people, not just the people who voted for it and the people in the disputed areas. Not an issue with capitalism but certainly an issue we face in our country (and I think a problem faced by many)
[quote]
The tax loopholes bit is also unfair given that Cameron and Osborne's government did more to close tax loopholes than pretty much any government for at least three decades, but the reality is that closing tax loopholes is hard in an age of mobile capital with the most complicated tax code in the world.
[/quote]
I'm not arguing that people before them were any better, Cameron had to do something because he had to reduce the deficit, if people continued to face austerity while corporations continued to pay minimal taxes there would be mutiny people were angry and still were angry. I think part of it was lip service, more of a "look what we're doing" than any serious attempt to enact change (see google's tax paying)
[quote]
And you've read my posts before, and as I have said, I think there is very little evidence that the media is very powerful or manipulative.[/QUOTE]
[url]http://www.bbc.co.uk/news/election-2015-32673439[/url]
[quote]
38% were influenced by the debates, 23% by TV news coverage and 10% by party political broadcasts.
...
TV wielded far more power on those surveyed than newspapers at 25%, websites at 17%, radio at 14%, and speaking to family and friends at 14%.
...
Of those who said they were most influenced by what they read on websites, 61% said they had read their political information on the BBC News website, [b]followed by newspaper websites at 31%[/b] and Sky News at 25%.
...
Of the 740 respondents (25% of the overall survey group) who claimed to be influenced most by newspapers, 30% said the Daily Mail had been most influential in shaping their opinion.[/quote]
Some of the figures will overlap I think the poll was regarding what influenced people most so those who claim to have been influenced most by debates or family and friends will also have been influenced, to a lesser degree, by the media.
23% (news coverage) + 25% (news papers) + ~8% (news websites + sky) = ~56% of people think news media was the biggest influence on their decision to vote.
Assuming the poll took a representative sample of people and assuming people were honest.
The media (and the internet look into google's and facebook's potential power to influence elections) has a pretty big effect on voting patterns.
[editline]28th July 2016[/editline]
[QUOTE=karlosfandango;50788420]Are the family in the OP piccy rich or middle class? having a go-pro Hero in your fridge means you must have a lot of disposable income.[/QUOTE]
Stock photo models so probably middle class.
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