Why is the UK Economy Always in Crisis?
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- Опубликовано: 28 май 2024
- TLDR Daily: / tldrdaily
Recent headlines suggest that the UK is in a constant state of economic crisis, but why is this? In this video, we explain why Britain's productivity problems, the ongoing housing crisis and Brexit have kept the country locked in an economic perma-crisis.
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1 - www.ft.com/content/6008afa9-e...
2 - www.ons.gov.uk/employmentandl...
3 - www.mckinsey.com/~/media/mcki...
4 - www.ft.com/content/51868f10-5...
5 - www.economicshelp.org/blog/55...
6 - www.schroders.com/en-gb/uk/in...
7 - www.economicshelp.org/blog/15...
00:00 Introduction
00:44 Two Disclaimers
01:33 Productivity
03:11 Housing
06:24 Brexit
07:49 Daily Briefing
Some economists have projected that both the U.S. and parts of Europe could slip into a recession for a portion of 2023. A global recession, defined as a contraction in annual global per capita income, is more rare because China and emerging markets often grow faster than more developed economies. Essentially the world economy is considered to be in recession if economic growth falls behind population growth.
My main concern now is how can we generate more revenue during quantitative times? I can't afford to see my savings crumble to dust.
It's a delicate season now, so you can do little or nothing on your own. Hence I’ll suggest you get yourself a financial expert that can provide you with valuable financial information and assistance
Very true! I've been able to scale from $50K to $189k in this red season because my Financial Advisor figured out Defensive strategies which help portfolios be less vulnerable to market downturns
How can I reach this adviser of yours? because I'm seeking for a more effective investment approach on my savings?
My consultant is ‘’Catherine Morrison Evans’’ I found her on a CNBC interview where she was featured and reached out to her afterwards. She has since provide entry and exit points on the securities I focus on. You can look her up online if you care supervision. I basically follow her trade pattern and haven't regretted doing so.
Every crash/collapse brings with it an equivalent market chance if you are very well informed and equipped. I've seen folks amass up to £800K amid crisis, and even pull it off easily in an unfavourable economy. Unequivocally, the bubble/collapse is getting somebody somewhere rich.
I agree that there are strategies that could be put in place for solid gains regardless of economy or market condition, but such executions are usually carried out by investment experts or advisors with experience since the 08' crash
The effects of the British pounds' increase or fall on investments, in my opinion, are complex, but it has never been simpler to learn how to build your money than it is right now, when you may discover and experience a genuinely broad market passively by working with a successful Financial Consultant
That does make a lot of sense, unlike us, you seem to have the Market figured out. Who is this consultant?
CATHERINE MORRISON EVANS is my financial advisor. After finding her on a Kiyosaki interview in which she was mentioned, I contacted her. She later offered entry and exit points for the securities I concentrate on. If you feel the need to reach out, you can conduct a fast online search using her name. I practically copy her market strategies, and I haven't felt bad about it.
Thank you for this tip. It was easy to find your coach's webpage by looking up her name online. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her resume.
The housing crisis is the everything crisis
Yes, because it replaced the manufacturing sector. Well done Maggie! But, an added bonus, is you can borrow against the equity in your house, you couldn't borrow against the equity in your factory job. Commodifying housing just pushed the legacy of trickle down economics down the road, a bit.
@@joew9608 Glad you got it
The north of the country is still reeling from her destruction of livelihoods. Her policies are still felt today for most people in the country.
Yeah, but every time the council cancel for any reason a new development, everybody cheers complaining that there are already too many houses in their town or city.
@@juangomezfuentes8825that sort of NiMBYism is also a *big* part of why housing costs are *so* high in California.
1 The mortgage lenders were lending 105% of property value so the companies were over stretched causing a financial crisis. We have never recovered since.
2 Thatcher almost abandoning manufacturing industry and praising financial services so all the good jobs are now in London and the rest is a wasteland.
3 Manufacturers only looking at short term investment because of aggressive takeovers by other companies and asset stripping.
This.
I think we do need to have a serious discussion over what the economy actually is, because right now there are two economies: that we all understand, the goods driven cash in cash out of living your daily life, and that of the financial industry, which is all contained in the stock market and buying out assets to strip and use that stolen capital to move on to the next business to do the same with.
One of them is doing very well and the other one isn't, but unfortunately those with the vested interests in the one doing well also control much of the media, who like to portray the ravaged everyday economy in terms of the growing financial one by pretending that they're one and the same thing.
nothing will change until the city of london starts to suffer, the rest of the country may as well not exist as far as the government cares
It’s worse than that. In 2006 mortgage companies were offering 125% mortgages with effectively zero deposit, and of course interest-only buy to let mortgages. And a big problem is that increased house prices increase GDP - looking like growth, but housing costs are underrepresented in inflation indices, which are often used to set pay rises. A perfect storm where governments can claim success through GDP growth at the same time as the cost of living is rising at a higher rate than inflation. The financial crisis was inevitable as soon as house prices became unaffordable in 2001.
In the netherlands we face a similar issue rather than the greater london area being the only place for good income and job opportunities it is the large urban sector called the randstad with all the major urban centers
Your Number 2 talking about abandoning manufacturing and trying to make the UK a service receiver will ultimately cripple the UK.
Having the average house price being basically a decade of salary without spending a penny is nuts
An insanity to which you obviously have to add the interests paid on top of the sum borrowed.
And don't forget that its a gross salary multiplier, in net terms is 1.4 times higher.
Hmm i wonder why that is. Look through history and you will understand ✡️
And then once the decade has passed, the price has doubled 😂
@@ferskenmjam252what does this mean? What am I meant to look up? (Genuinely curious to find answers)
Most interesting to me here is the productivity difference between London and the rest of the UK. I'd enjoy an in-depth video on why this is, and how it could be improved. Infrastructure and public transport investment seems like a huge opportunity for other major cities and large towns in the country imo
Over centralisation of decision making. The government want the south east and london, to have a monopoly on high productivity. Lack of infrastructure in the north and midlands, for decades, has intentionally caused this.
The financial services sector in London is completely out of scale to the country and causes it’s own type of “Dutch Disease” in the U.K. economy. Basically it is a magnet for all the best workers in the country and starves other industries of talent.
I remember seeing on the news that government investment in transport was 80 times higher per person in London than it was somewhere in the North. London has an unfair advantage.
London doesn't get nearly as much investment as everyone seems to think it does. It receives a bit more government spending (per capita) than most other regions of the UK, but not all, and its economy massively outperforms those which receive more (such as Scotland). It likewise contributes far more in tax revenue than is spent on it, but also requires more funding than other regions to deliver the same quality of public services because everything from land values to wages are the most expensive in the country. Then there's public transport, which is important everywhere, but especially so in London where the roads physically can't accommodate more cars. There are inherent economic advantages to a city the size of London, while some of the benefits can be replicated elsewhere it doesn't all come down to funding.
There are no surprises. London, being the capitol, has more established businesses and infrastructure and a higher labour pool with a variety of skills to choose from. Other regions lay grossly lagging as a result of earlier government policies with plant and labour under utilised or abandoned. There are only so many productivity improvements that can be made in a restaurant kitchen, or at a coffee machine.
A further element in the Housing Theory of Everything arises out of the mortgage/income metric. At some point in the 1990's, this became modally based on two incomes, not one. So as income x 4 crept up towards income x 8, sharing the mortgage brought it back down to income x 4 for each income. Because both incomes are then absolutely needed, both partners have to prioritise career over family. This is a huge brake on the national fertility rate.
Is it really the fertility rate or actually the birth rate? Women may be as fertile as ever, but using more contraception or simply abstaining because they don't want to have children (or so many children).
@@DavidWilliams-DSW558 Yes, I meant birth rate.
That's the correct answer for low birth rates.
No 2 years maternity leave, and nursery cost of 1.5k Perry month makes it nierly impossible to have children.
We saved for 4 years to have a child, and no chance for a second one. Can't afford it.
@@DavidWilliams-DSW558 Yeah, it's a strange one. 'Fertility rate' in stats most often means 'Births per woman'. The wording is strange, I agree.
Ok, 4x and 8x are still cheap houses. In Portugal we have 10x, 12x or more since the 90's.
Who would have thought that decades of tory austerity that never ends would be so harmful for the country...expect every sane person.
More like every idiot who doesn't understand what a deficit is 😅
You are pathetic just so you know Pandemic and Ukraine war are the ones to blame not Tory, for Sunak is doing the best on our uk economy and today Fri 14/7/23 £ vs USD is $1.31 which is a massive boost on our £ rate if it was Labour in power it would be £ = 1cent USA
Pipe down. I'm on the street now but one day I'll be a billionaire so I'll vote tory.
This is exactly what happens when you open your borders to vile subhuman minorities.
@@50_Pencesanest tory
Invert the question, why would the UK economy go well? The UK:
- has extremely expensive housing
- just came out of the biggest trading block in the world. Even if Brexit it's a good idea it will take years to the companies to readapt to the new situation and take advantaje of it
- has and extremely unstable goverment. In less than 5 years we went from May, Johnson, Truss and Sunak. Despite being in the same goverment they are extremely different
Extremely different? Judging from afar, they've got a heck of a lot in common. They're all useless egotistical twits.
Plus the UK has always relied on external assistance (resources from colonies/empire, Marshall Plan grants from the USA, trade with the EU) to achieve any semblance of prosperity. Left to its own devices, it's hopeless.
@@pritapp788funny how not having an enormous empire to extract labor, resources, & wealth from leads to gradual economic irrelevance
@@shiny_teddiursawait till when Wales and Scotland leave. Then we can start building an actual economy, not this wonky table leg
@@pritapp788we can still trade with the EU, or anyone else for that matter. Thing is, we don’t really have anything to sell that people actually want
Couldn’t agree more with the theory that high housing costs directly link to many other issues
•No chance I could have kids, because I’d need my own home which I can’t afford
•No chance of a high skill, high income job because it would mean moving house which I can’t afford
•Very little money to spend out, because so much money goes towards rent
Multiply that by whole generations of people across the country plus many other issues (I’ve not even touched upon student debt or the decline of high skill industries in general) and there’s your crisis 🎉
Over financialisation of the economy. Rent seeking investments, instead of investing in infrastructure and productivity gains.
And for people who don't possess the skills for a high-skilled job, high house prices probably mean they can't afford the further education they need to get those skills. Oh, and high further education costs probably also contribute to that.
If you actually saw the birth rate in affordable housing districts that weren't mainly populated by immigrants, you would know that it is not feasible, people threw out all of history had a bunch of children in terrible conditions much poorer than we have now, even the couples who do have children in these areas usually have one or two, which is still below replacement, and that's just the ones who do, the whole housing costs solves everything is ridiculously over simplistic which is also the same reason why it's so popular.
@@ludbwkxthat was from a time when you had lots of kids, because family was the only way you'd be supported in old age
Now we don't let old people without family starve, that isn't an issue, but housing costs very much are
No. It's your real income declining. CPI is fake inflation. real inflation is property price inflation
They have completely wiped out middle class it’s either rich or working class
that was the plan, no more social mobility for you
@@NGRevenant Which is funny because its the middle class that drive innovation. The working class could do it, but their too busy working.
Owners and renters.
Sounds super cool, but what are you talking about?
Your solution if you were in power is?
@@abdell75roussos Have a competent cabinet
I love how the UK modelled the property market economy from America when the UK literally doesn't have the land mass to support it. In many ways Brexit has allowed the UK to become the "canary down the mine" if Peter Zeihan is to be believed (the end of globalisation, end of just-in-time from China etc)
America’s housing market isn’t even sustainable with its enormous land mass, so i can’t even imagine how the bad the UK’s crisis is rn when we’re dealing with a pretty bad one too,
funny how mass-suburbanization was artificially pushed right after the second WW and we’re already seeing massive housing issues, almost like people still prefer to live in/near cities instead of rural outbacks where the median income is $15k less than the nearest metro area
but we have so much sky to build up into
@@1qualitybaconbuilding upwards doesn’t mean anything if no one can afford it
@@Liquid278more housing leads to cheaper prices. Build up again and again and that will solve the housing crisis
It what way is the UK property market modelled after USA. Also less then 5% of Uk land mass is covered by human development and less then 2% by housing, so plenty of space to expand
I believe that growing wealth inequality is probably pretty bad news for economic stability; more people are vulnerable to being significantly impacted by even slight downturns in the economy, and more of a country's economic and political power ends up in the hands of an increasingly small and unaccountable minority of people whose economic interests don't align with the majority of the population.
If we want this chaos to end wealth inequality has to be put in check
But then the wealthy won't be able to buy their third house overseas, and the plebs won't work for peanuts if they have any economic security. Won't you please think of the poor billionaires and millionaires?
We need a return of fascism, the left and the right are the same, they both have the same goals and achieve nothing other than carrying on the status quo.
You forgot to mention that you are available to take the top spot. Your response is so knowledgeable that I definitely would vote for you.
@@ktool4855have you considered trying less capitalism, rather than calling for extra-authoritarian capitalism?
@markwelch3564
I don't believe in free market capitalism, I believe in the capitalism of my parents generation.
What concerns me is the fact that there are a small group of people using immigration as a ponzi scheme for fake GDP growth and insane profits at the expense of everyone else.
The UK is going to be a muslim majority country before the end of this century and no one is talking about it, it's absolutely fucking terrifying what we are condemning our future generations to.
Greediness and selfishness never ever ends of few people who are policymakers and stakeholders
Middle School level analysis
without greediness and selfishness there is no progression...
@@ludbwkx "Middle School level analysis" Why don't you provide us with the benefit of your insightful economic analysis then? Perhaps because you don't possess the ability to do that?
What? What you wrote is incomprehensible. The grammar is just terrible.
Sure, here’s one. Last year, graduates from high school were half as likely to go to the trades as their ancestors were40 years ago. Why are houses so expensive? There’s your answer.
One thing is the UK manufacturing-exporting economic sector: Thatcher made it anemic, and now Brexit finally killed it.... And the financial crisis + housing crisis + Fuel price just buried it six feet deep.
Add to that the fact that for decades manufacturers have woefully underinvested in tooling and technology that would help them to remain competitive in terms of efficiency and, critically, innovation.
That’s just not true.
the analogy is on point 😂
It is important to note the average salary is pushed higher from high earners. The most common modal salary is less than £25k, and note that half of the population earn less than that.
Source?
Much of the country are subsidised by tax credits. Gordon Brown helped introduce this new form of dependency on the state. Basically the state topping up a person's wages. Instead of trying to deal with the root cause. It's crazy that some people actually think he was a good economic steward.
That's median salary, not modal.
If only we had a common theme for the past 13 years that would explain this.
We do, a dysfunctional Tory government
you think it's only been 13 years since the tories got into power? it's been like this for the past 36 years both under labour and the tories
Where's all the magic immigrant money you leftists promised us?
Yep,it's been uninterrupted Thatcherism for decades, not just the last 13 years!
@@Anthony-xd1lj Making a big assumption from a single sentence posted to meme without substance.
FPTP and the freedom to not vote combined with a superiority complex. The common denominator being Rupert Murdoch.
As an Australian I feel obligated to apologise for Murdoch and his actions in the US, UK and other countries
Honestly… compulsory voting would worry me.
A lot of people don’t care about politics and being forced to vote they’d just vote for anyone random.
@@TheSucram729as you probably should. He’s up there with trump for damage done to global society. Speaking of, I apologize for trump
Saudi Arabia produced Bin laden. Australia produced Rupert Murdoch.
@@adblocker276Murdoch is a thousand times more damaging to the world than bin Laden ever could be. Likewise, the failed war on terror is directly the fault of Bush and Blair, not bin Laden. Having said that, I’m grateful to Obama for taking care of the man in the end. Even if, by that point, he was almost harmless.
Note: UK has 20% more BILLIONAIRES since the first lockdown. And their money isn't in the economy circulation.
Are most in Golders Green type?
Yes that’s key. As a nation we are so selfish that once you have wealth, you spend it outside of the UK economy to get better value.
Look also at what Dyson did? Asked for Brexit then moved out to Asia lol.
@@RemofRenaissance UK too exoensive to manuafacture
if they’re taxes more it will be even less haha, taxation is the only reason they’re here, not like the UK is cool
@@slothsarecool they claim the non-dom hehe
Last year, I was working full time, budgeting groceries, unable to afford date nights, and missing time with my kids. Now I learned how to make money online. Now am a SAHM, homeschooling, and making profits every week.
If you don't find a means of multiplying your money, you will wake up one day and realize that the money you thought you had, had been exhausted. Investment is a ladder to climb the financial wall.
@@kingbush9328 True 💯
@@kingbush9328 Am looking for something to venture into on a short term basis, I really need to create an alternate source of income, what do you think I should be buying?
@@maxiecharles2842 cryptocurrency investment, but you will need a professional guide on that.
Facebook 👇
I would expect effects from Brexit, pandemic, general poor policy practices, overvalued assets, and possibly just the legacy from Thatcher economics. Oh, and possibly the most British thing of all: blaming everyone but themselves.
Why are we running out of houses since around 1997 it's like something happened then...
Maybe just MAYBE INSTEAD OF ALL THESE COMPLICATED REASONS ITS YOUR FAULT!
@@SaintGerbilUKit’s a real mystery, where’s all the demand coming from
Thatcherism improved Britains relative position
@@Trecesolotienesdos Thatcherism was the equivalent to sell your family silverware to live beyond your means for a few years. If there is something most voters get wrong about economic politics is that their ripple effects are usually something that takes years to come, a long time after the government that implemented is gone. Then voters blame the current person in charge for every single malady that appears in their life because they have no clue how old actions are responsible for it.
Am on the average wage, living in a 300sq/ft apartment, don't drive a car and still struggle to make ends meet or even have somewhat of a social life. I'd love to start a family now that I am in my thirties but I am at the cusp of accepting that it won't happen for me unfortunately. It's sad to see how fast wage inequality is changing in the last decade
It might happen under a Labour Government, but still…
@@unconventionalideas5683Labour will open the floodgates on immigration even more than the tories, thereby exacerbating the housing crisis.
I also highly doubt they’ll do anything bold on housing. Maybe pass that Renters Reform Bill, restart Help to Buy. Give it 4 years and as their failure become obvious they’ll probably just start leaning heavily into woke issues a la New Zealand/Canada/California to distract ppl
Could you please write in square meters? 😂
@@xtian2010 +- 30sq/m
I was advised to diversify my portfolio among several assets such as stocks and bonds since this can protect my portfolio for retirement. I'm seeking to invest $200K across markets but don't know where to start.
For a successful long-term strategy you have to seek guidance from a broker or financial advisor.
With the help of an investing advisor, I diversified my $400K portfolio across markets, and I was able to earn over $900k in net profit from high dividend yielding equities, ETFs, and bonds.
Please who is the consultant that assist you with your investment and if you don't mind, how do I get in touch with them?
My consultant is NICOLE DESIREE SIMON She has since provide entry and exit points on the securities I focus on. You can look her up online if you care for supervision.
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
Productivity has two areas that could be tackled. First, excessive hours. The long hours worked in the UK result in fatigue and a drop off in productivity over about 40 hours. This actually starts to reduce weekly output and an even bigger effect on productivity (also overheads/hour). Secondly a lack of automation. The UK looks for fast returns, often under a year, not so most of the EU. Also we have a skills shortage, the skills needed to implement, run and maintain that automation.
And the skills shortage can be attributed to our abysmal and failing education system, which fails to get children engaged with subjects and get them interested. I personally found that the workload and stress of A-levels killed my enjoyment of learning and made me not want to go to university.
When I was leaving at the end of 6th form my teacher was talking about how compared to when I started secondary school, pupils now get noticeably less time doing computer science compared to the current first years. When I did computer science pre-gcse, I got approximately one computer science lesson a week in place of a maths timetable slot, and my school started gcses in year 9. this meant that I got 72 computer science lessons before I chose my subjects for gcses and decided that I wanted to commit to computer science - plenty of time to become fascinated with computational thinking. The new year 7s at the time of me leaving had computer science was part of the “technology” subject rotation, where for two terms pupils did the subject and got two lessons a week, for a total of 52 computer science lessons. There is a clear issue to me that the government does not properly incentivise students learning about subjects like comp sci that are essential to the future of our country.
I do think that part of this is caused by the IT classes that kids are given in primary school, where they essentially just get to dick around with a computer and play random (kid appropriate) games, so schools see that kids dick around in computer science in secondary school and see it as a low priority subject.
I agree, law of diminishing returns - the more you do work, eventually the less return on investment comes out of it.
Also no one was made to sit at a desk doing the SAME THING for 40h a week or more. This is why everybody hates their jobs for the most part.
The more you do the less you'll get out of it, and if nobody truly wants to do it, even less‼️
@@rhymesandvibes Source - Gov. White Paper - "The Productive Working Week" dated 1915. Some lessons are hard to learn.
@@0xD15EA5E Also the English snobbery against any practical skills. A "Gentleman" does not need them, he employs the lower orders." In Germany "Engineer" is a legally protected title, in England a mere tradesman.
Lack of automation is down to lack of investment. When it is cheaper to employ more people to do low paid jobs than it is to modernise, companies will do the former.
The UK does not have high standards of living by Western European standards. In fact, it has the lowest GNI per capita in all of NW Europe. The Scandinavian countries, for example, now have a GNI per capita that is around 50% higher. The video focuses on that last few years, but to get to the bottom of this you want to look at the lack of public investment over many, many years - not least in infrastructure and education.
Public investment!?! How are the shareholders gonna extract money from that?
So much stuff got sold off that has no business being privatised.
We've literally only just got to pre-2008 levels of standard of living last year....
Tories cut skin, fat, flesh and hit bone. And instead of stopping, they pulled out a hacksaw to take the bone as well. There's a reason they're called Tories. It comes from the Irish word for 'criminal' in particular, a robber. The morons that pushed for Brexit took a sledgehammer to our economy. And the only good that gave us was that it revealed not only did we take our position for granted. That we also relied far too much on others.
Mind Begs the Question:
Hitler - blamed Nations Failures on Religious Minority
If Politicians/Govts - blame Nations Failures on Vulnerable/Immigrants
Practicing Hitlers Mein Kampf,no?
And a poverty rate at 20% the highest in Western Europe…
You clearly don't know what "high standards" mean do you?
It's almost as if leaving one of the world's biggest trading block is a bad idea
6:00 my biggest nightmare, I'm 30, really want kids...but I 100% feel priced out to even being close to thinking about it.
Yes the costs of having a child in UK atleast is quite high. Scandinavian countries are better I think in that aspect.
Don't forget that the fact that due to Brexit only true believers could become ministers in the Brexit government. There is no chance that under normal circumstances Nadine Dories, Therese Coffee or JRM would have become ministers in any sane government.
Yes and when not arguing about brexit they’re doing a lucrative 2nd job
In the specific case of Nadine Dorries, the voters were largely irrelevant. Bedfordshire would return a goldfish to Westminster if the Conservative party endorsed it. I sometimes wonder if the people who choose Bedfordshire candidates were drunk and playing a game of 'just how far can we push it?'.
Don't forget the fact that it's only because of the remoaners who wouldn't accept the referendum result in the first place that someone like Boris Johnson could get to power by promising to finally leave the EU and bringing that mad period of deadlocks to an end.
Well Labour has David Lammy and the "gobby labour MP" ("That's what I typed into Google search!") Jess Phillips, among others, so you pays your money and takes yer choice, but bear in mind how disastrous Liz Truss was and Labour will be worse with their Leader (A lawyer) and the Shadow Chancellor of the Exchequer who is anonymous, the pound is currently at 1.31 to the USD and going up, the best thing is to reduce the conservative majority and get 30 far right wing MP's in, hopefully just temporarily to solve the immigration problem!?!
@@thomasherrin6798 Do you have any idea why the pound is actually at this high rate? It's because the interest rates are higher than in the US and in Europe. The same interest rates that increase your mortgages or your rents and that make borrowing for companies and the government costlier. This will reduce investment into the real economy because the investors are preferring to take the "safe" interest instead of risking it in business. At the same time it will become more difficult to sell UK products outside the UK due to the higher prices what is cooling down the economy even more. So the high pound is only semi good news. If the government is not very careful the result will be an even deepened recession.
Well Jeremy Hunt also has no financial background so what's the difference.
The idea to bring in even more right wing MPs is not worth even talking about the result of the taking over of the Tories by the right wing can be seen every day and more right wingers will make it just worse.
The simple fact is that if you want to grow the economy you either need more people or a higher productivity and the UK setup and infrastructure is not permitting to increase the productivity drastically. You can not undo the mistakes of 50 years in 5 years especially after 13 years of uninspired government led by a bunch of donkeys (this is maybe insulting the donkeys). Without immigration and without higher productivity the economy can only shrink until a new balance is reached and believe me this will be really painful.
In simple words the UK is totally f*cked.
After thirteen years of austerity half the high street is empty and homelessness has skyrocketed while the choice of austerity was promoted as the only option by much of the media including the BBC. That and a level of incompetence on the part of the Tories that I could describe as almost impressive.
Austerity, (in a country where people will near drown themselves to reach), where everythoing you need in life is free, is to try and reduce national debt.
As usual, you wilol blame the tories, but what would labour do, and what is the answer?
I agree, that rents for these shops are so damaging, but i dont have all the facts about this.
@@abdell75roussos Only two countries adopted it as a response to the financial crisis, the UK and Greece, and makes even less sense as a debt reduction measure when combined with tax cuts.
@@abdell75roussoscould have done what the US , China and all of Western Europe did seems to have worked out better for them then us
@@jimpaddy79 I am not an economist, but anym party who ever they are has to try and give a population who have grown used too, and demand more and more every year in a world where other countries are competing.
In a country where many demand to stop oil; the lifeblood of any economy, where education standards are falling, where people refuse to do jobs they dont like the sound of. Where the population can enjoy a free life including pension. Where you can change your sex if you feel like it for free.
Nobody expected the Ukraine war which has to be paid for,. Increased spending on MI5, and Mi6, police.
With increasing national debt that nobody sane wants.
Not sure what it is you expect from anyone, and all parties have the same issues, only Labour tends to print money and give it away.
With illegal immigration, the cost will continue to increase, and Labour has no plans to stop it either.
The UK has to earn its keep ie bring in more thanj it spends, and this is a problem for any party and no magic bullet.
Labour just make promises they cant keep.
@@abdell75roussos I will restrict my answer to austerity as you raised a lot of other points.
It is standard economic thinking that in a recession Governments need to increase spending to support the rest of the economy regardless of the national debt (the hope is that this can be paid off later when times are better) This is what the US, China and most of the EU did and while all those economies have problems broadly they are performing much better then the UK.
People make the mistake of think about national debt like household debt while in fact it much more like business debt. I will give an example and I would love to know if you agree or not. There is a recession and to balance its books the business lays of half its staff, sells half its machinery and stops it R&D and emerges at the end of the recession with balance books but only half its oringal capacity. Its competitor by contrast borrows heavily to support itself and emerges with full capacity. As long the second business can service the debt it took on it will crush the business that balanced it books in the post-recession period. That’s broadly what happened to the UK because of austerity.
From an Irish perspective, thanks for all the Brexit business 🇮🇪😂😂🇮🇪
From a ‘neutral’ perspective, the UK had an uncanny ability to bounce back from any crisis. Don’t be too pessimistic 📈
your welcome we have some 700 year potatoes would you like to buy them back , 😂😂😂😂
Massive financial skulduggery is the one thing the Tories are good at...
I was born in uk to irish parents i havean irish passport. Your full of s. Ive lived in ireland its beautiful but thats it. Geographical iys the worst pkace to have a buisness as it costs more to froght or haulage every where. Thepkace is now ruined withmass immigration and in about 40 yeats Irish will be minority. The main export from ireland is farming with meat, veg, cheese ect. And 91 percent of irleands economy is based and sold to uk. So how on gods green earth are you up on uk when uk are basically your pay masters. As sending something from ireland to mainland eu woukd cost a fortune......
Good lads the Irish.
Is Ireland good place to live now? As a east European Union citizen I would like to live in Ireland or UK
Bad government, simply bad government! Problem is opposition is even worse.
Controlled opposition.
Labour being worse is a lie told to you by David Cameron post-2008 economic crisis. Obviously the modern husk of a labour party is pretty depressing but by no means is the party worse than people who are actively opportunistic liars like the conservatives
How is the opposition even worse? It’s the same lazy argument. The tortes have decimated public services, not delivered on any of their pledges, have failed social care, caused the deaths of over 100k people due to austerity, increased food banks significantly all while nearing in meaningless culture wars that ppl like you engage in because you’d rather blame others for your poor voting choices
i'd also chuck in another housing related reason for poor productivity growth, all that money that poured into BTLs and property flipping was investment companies didn't have access to. We've invested in unproductive assets and wondered why our productivity growth is poor.
The citizens of many developed countries are going to look back in 50 years at what we've done with housing and ask, "what the fuck were they thinking?". Not least because demographically, they will make modern day Japan look youthful.
This might be controversial but without a major trade block like the empire or EU Britain is just not that much of a viable and competitive economy.
Well Britain turned on the Commonwealth and then the EU, which is about as spectacularly stupid as anyone can be.
@@seanlander9321We didn’t turn on the EU, as shown with the Ukraine War, we are still politically tied
@@dylanmurphy9389 NATO is not the EU.
@@seanlander9321 I know that, most of the NATO countries are part of the EU
If it flatlined since 2008 and there's been record amounts of immigration since then it essentially means the UK's core economy has been running on life support for 15 years.
Yeah, it's pretty bleak. Declining demographics, rise in the cost of living, successive crisis, austerity and falling wages will do that.
@@Espiritu_de_Obiwon I feel like "Conservative rule will do that" is less words to say the same thing
@@TheOmegaXicor Exacto
You realise the immigration has actually been a lifeline. The immigrants are all young working age people who contribute more than they take out.
It takes about 20 years for a native born person to start being productive. That's hugely "costly". Also many of those immigrants leave so they don't spend their old age here which is also a very expensive time. Immigration is not a significant factor in this crisis.
@@IshtarNike preaching to the choir, that's basically what the OP was saying
Exactly the video I wanted today, thus Channel is great!
We need a General Election and vote these Con's OUT ASAP
yes but the reds are worse
you need to stop barking and start working ASAP!
... and replace them with who?
Zionist Labour would be much worse... more borrowing... more debt... more cheap imported labour... more demand for housing... higher cost of living...
Just to have yet another crisis during the new administration. 🤡
Politicians are all the same.
Great video as always. As someone who lives in Northern Ireland, I'd love to see you do a video comparing the economies of the UK and Ireland. It's often said that Ireland's GDP pc is inflated due to the large corporations located there. But it would be interesting to compare those two economies since 2008 to see the contrasts in how they have fared.
No comment on the collapse of manufacturing in the UK. The UK, like the US, imports way more than it produces. This makes a decline in living standards inevitable.
I have recently moved to the UK from India and something's struck me here which are a bit odd . Let me write them down .
1. Where is the industry , manufacturing, factories . Great Britain practically started the industrial age , where is the industry ?
2. Who pays for the furlough and who sanctioned that the already back breaking taxed middle class will foot the bill .
3. Why are there so many managers in the NHS and so few doctors and nurses . Why isn't there a shortage of managers in any department and a shortage of doctors everywhere ?
4. Why are UK citizens paying for the illegal immigrants? Why aren't the immigrants paying their bills by working at minimum wage ?
6. Why is one of the smallest and least polluting countries in the world so keen to go net zero and destroy its own economy and its own middle class . Why is the UK the world leader in net zero ?
7. Why do many white people resent the fact that the browns and blacks have so many kids . What is stopping the white folk to have kids themselves , as many as they want ?
8. Name one single British politician who is not a self serving imbecile . One ? Then what is the point of democracy if all that the British people do is elect corrupt leaders , to what end ?
I am a bit confused but I thought I would pen this down.
Go back
Well, England, once the seat of a strong union and a mighty empire, has been on a long slow bumpy downward spiral since WW1. During that period the country has been offered two olive branches, North Sea oil and the EU - both opportunities have been squandered. I'd say the England has a ways to go yet but, by all accounts, there is no reverse gear and the nation appears to be heading inextricably towards a rather rocky bottom. There is no empire left, and soon no union.
Britain has had enough of experts™
Democracy is the rule of the people, but the people are retarded
The solution isn't more people into London it's invest into the rest of the country like we do with London
Yeah its weird because the UKs small, you’d think we’d develop outside the main cities also 😅
@@luff675 The problem is in the Green Belt, house builders are allowed a certain amount of construction in the Green Belt, but industries are not. Which has led to industries being set up mainly well outside of the cities, leading to long supply chains, increased costs etc.
@@wolfen210959 interesting!
@@wolfen210959 that's a factor but imagine if instead of hs2 Manchester Leeds Sheffield and Liverpool all had their own London underground, it would cover the same amount of space and would skyrocket investment connecting nearly every major northern city.
£400 is put into London rails versus £100 outside of London I think
The answer is 13 years of Tory rule and plunder
well lets see labour sort everything out when they get in next. I wont hold my breath.
@@LjMeleed let me guess you’re a Tory voter? Regardless I didn’t mention Labour or whether I think they’ll be good, but that doesn’t stop me point out the diabolical Tory rule
@@harrybacon419 i dont care, i dont vote they all piss in the same pot and only a total fool thinks otherwise
Oligarchic, shareholder capitalism. Causing low productivity. Causing the housing crisis.
I think its a bit more complicated than that. If you live in the UK, in the 21st century you are indeed insanely lucky. Everything is for free!? Lifev expectancy? I think you are comparing what with what?
I would say that low productivity is partly to do with the workers in the UK, most are addicted to phones which doesnt help. Many can and do refuse to do jobs they dont like too eg fruit picking.
I would say that poor mobility because of housing costs are too high though; i agree there.
It is a shame that some or many people are so greedy, but still, nothing changes in that way.
@@abdell75roussos fruit picking is a low wage, seasonal job. you've been fooled by tory propaganda. also lol what the fuck "people are too busy on their phones to be working"? yeah just like people in the 70s and 80s were too busy on their tvs to be working or how people in the 20s were too busy listening to their radio to be working. if you're advocating for people to be forced into work that they don't want to do then congratulations, you're an authoritarian.
This country is basically a giant city state with a huge deprived suburb
The entire south-east is a giant commuter belt. And now HS2 is being built to allow workers to commute in from further north.
There are nice places to live and good jobs in the suburb. Just gotta look outside entry-level office jobs and retail work.
Gotta look for a niche field that pays well or lets you work infinite hours. Then sacrifice time for money if you are able to.
That was my strategy post-pointless uni degree. And its turned out ok.
Living near a huge port then helps as once burned out you can get a fairly paid unionised job.
Now selling up and moving abroad as if I am gonna be shafted economically I might as well suffer somewhere with mountains, forests, bears etc.
I would put it all down to modern hiring practices. Businesses want the best talent naturally, so they set up shop in big expensive cities. This means their workers spend a higher percentage of their income on rent/mortgage payments. They also have longer commutes hurting productivity. I also don’t think it benefits the business either. They see many more applicants than they can deal with so they put extra barriers up like number of years experience for a junior job or requiring a university degree when one isn’t really needed. This removes many good candidates, reduces peoples expenditure as some are going on student loans and reduces productivity again because their is less training available.
This is why I have started focussing on developing a side business. Companies today are a joke - they offer no training, low pay, no perks, no pay rise, no promotion. I’ve given up on them and long term plan is to escape altogether and be self employed f/t 🤞🏼🤞🏼 seriously f them - i still remember entering the grad market in 2011 and all that was on offer was unpaid, months long internships or minimum wage admin jobs. F the lot of them
The reason London has the most productivity is that it primarily based on financial services which is all electronic these days, and this is why productivity is flatlining in the UK. Our economy isn't production based thanks to Thatcher . Its petty hard to increase productivity when all you have to do is press a button.
19% of London's economy is financial services, vs 8% nationally. It doesn't all come down to financial services, it's a very important sector for the city but there are inherent economic benefits to any city of that size. Businesses operating only in London have easy access to more customers and job applicants than all of Scotland and Wales combined, that alone is great for productivity.
To suggest workers in financial services just push a button is about as simplistic as saying architects just draw a house, or developers just write some words. There is very little 'pushing a button' in financial services, the vast majority is research and compliance, but even if it was it can still be made more efficient like any other part of the economy.
This is exactly why the UK government needs to take leveling up seriously. At the moment the UK has all their eggs in one basket with only one major financial centre. If there was a financial centre in each of the 4 nations, or at least in the North of England, a lot more people would be able to have highly productive jobs, inceeasing GDP.
WEF bot. Next you will want to live in a pod in a 15 minute city. I wager you live near london or some underimportant backwater village just north of the city
For that to really happen, we would need high speed transport connections from London to other large cities. Maybe a few high speed rail projects would do it. Too many people protest things like that though.
@@Essentially_Nobody "Levelling up" the country. like its a game, are you so braindead to not see how insulting of an idea that is especially to a country with no actual production. You realise the UK is a financial services hub and failing bigtime. There is nothing to "expand" because people are too willing to sell off their businesses to foreign investors. So who can you hold accountable to that? clearly you're his handler/bf so you can answer
@@piraterubberduck6056 That's why the HS2 is a big deal and why they are Improving a lot of rail links. Up north anyway
@@ArCher11-iq9co ...and where do *you* live?
Because the Tories see the problem but time and time again go about solving it in the wrong way. Just to keep themselves in a job for a few more years.
its more that when the problems are caused by wealth inequality and market failures due to lack of regulation the torys cant do anything. Because they get elected to support wealth inequality and leave the markets alone. They cant solve problems caused by those things because they exist to promote them
@@WhichDoctor1 well said
They just don't believe in helping people who don't already own houses.
True... Labour always end up cleaning up the mess, and then the Tory's blame them for spending too much money! 😂
@@shteak"spending too much money" is just Toryspeak for investing in the country rather than crony contracts for their chums!
I would argue that the UK being a well-developed economy is a moot point if the wealth divide in this country is vastly unequal. For me, the most developed economies are in Western Europe, because it manages to balance good productivity with a high standard of living for the vast majority. As people have pointed out, the perma-crisis volatility started when Thatcher started her big sell-off, and exposed us to outside shocks. Anyone who wants to cry "but 1970's, tho" should see that in the wider context of overall good postwar performance until then.
Exactly. Russia is a very rich country on paper (Gas, Oil, Coal, Metals, etc) but most people in Russia are 3rd world poor. All its wealth is concentrated in Moscow/ St Petersburg and the Oligarchs. England is not that bad, but is headed towards the same destination, a nation with a tiny % of wealthy Oligarchs and financial/ banking companies in 1 or 2 big cities and an impoverished majority everywhere else.
The *REAL REASON* is... The UK is still set up as a colonial power, with a very small upper class educated to rule the colonies.
(Nowadays this upper class is in London, laundering TRILLIONS of dollars from drug cartels and dictatorships thru their overseas territories like the Cayman islands).
_The government does not encourage entrepreneurship & the general public is too busy drinking at the nearest pub_
Another great video. I feel like these kinds of explanation of economics should be public service announcements.
Answer is simple but complicated as well,her currency is too valuable against the others. In addition, its economy is based on financial markets rather than production. By managing money, it is not possible to avoid a crisis in today's economic system due to inflationary effects. There is a gap between real sector and financial market activities in the UK.
Because it’s almost always being run by the Tories
It's not like Labour would do anything about it either, until recently they have been saying open borders.
Which means more people and less houses.
@@SaintGerbilUK Actually, if you mark the time-axis on a UK GDP graph with who's in office at that time, labour's times in office line up quite nicely with times when the UK's GDP grew, if you take into account, that policies usually take a couple of years to make an impact on GDP.
Tories have the borrowing for day to day spending at its highest since the war.
@@SaintGerbilUK Compare immigration numbers from 2015 (pre-Brexit) and from 2022 and come back to this conversation again.
@@Essentially_Nobody ok that's true but then what is the limiting factor. I want to live Englands green and pleasant land not Mega city 1
And every time that the council block new house everybody cheers. So maybe it is autoinflicted.
Productivity is a measure of innovation. Innovation is a direct result of investment in R&D. And wages, which had tracked productivity for 100 years, famously de-coupled in the late around 1980 despite the continued rise of productivity
As ever, we can thank a series of bad political decisions ranging from privatisation, Brexit, reliance on the service industry, and allowing almost any asset to be up for sale to anyone.
Bad decisions motivated by bad ideology. The country has long been ruled by neoliberalism, an ideology that believes in the power of the private sector, low taxation, and a government that gets out of the way and lets businesses perform to their best. An ideology that does not permit long-term investment or provision of more than the minimum of public services, and those services to be provided only through private-sector contractors.
@@vylbird8014taxes aren't low though. UK gives us the worst of both worlds. High taxes and a welfare state ran by private contractors who extract as much tax money as "profit" while providing shit services
I wish there was a channel like TLDR for Australia.
Same here. Probably wouldn’t be enough sustained viewers though
@@TheSucram729 Probably not no, but I can dream.
Australia who to many left wing newstations just the rest of the west has
I highly recommend Juice media for Austrian politics (more humorous though)
@@DavidCruickshank cool and normal 👍
What kicked all this off, was the massive hikes in energy prices! As soon as energy prices rocketed, everyone put up prices to compensate, clothing, food, all retail, absolutely everything was affected! Inflation started to rise rapidly, then, because of this, the demand for higher wages was sparked, extremely high energy costs, fuel inflation, its there for everyone to see!!
There seems to be a lot of talk about London taking most resources which is why the rest of the country suffers. This is completely stupid. I think the housing crisis is a wider crisis of infrastructure planning. This includes housing, Energy, transportation of people and goods. The really bad thing is that solving that issue is hard and unpopular. The cost is high and it takes multiple governments to start seeing results, provided that the reforms would stick.
Well, the full story would go back to pre-WW2, when a little girl named Margaret was born...
In a nutshell, Thatcher is the literal worst PM in UK history. Short term politics that have doomed future generations.
Right because state operated _coal mines_ have really proven to be the backbone of 21st century economies.
Neo-liberalism, not "short term" per se. We turned over everything, the economy, education, health, culture, to those whose only metric was quarterly increases in shareholder value
You think thatcher was bad? You wanna see the job the 2 or 3 blokes did before her.
They’re all shit, every one of them.
And still it goes on
I question some remarks... As productivity is output per hour worked. Bringing in foreign labour, generally lower paid, increases both output and hours worked, but the ratio decreases as the output is of lower value.
Productivity in London is higher because of over-centralisation and lack of investment in the rest of the country by a London-centric political class.
The reason productivity had stalled is that wages have not kept up with it. If you are more productive your wage will remain the same but your boss will earn more.
The productivity formula doesn't take into account how the wealth is distributed. However I think your point is valid particularly because there is zero incentive for someone to help improve their productivity if all the benefit goes to directors and shareholders. Every time someone improves their productivity they are given more work to do for the same pay. So what's the point?
What has torpedoed the British economy? Tories! Tories! Tories!
they bloody nuked it
I would say brexiteers
Because tories! Tories! Tories! = greed! Greed! Greed!
@@royfearn4345 It's stupid evil. They'd make more money if they managed the economy properly.
Again, a reply that sounds cool but what does it mean?
These replies are from people who simply dont have any other solutions to reduce national debt in a counrty where everything is free, and subsidized by those with a bit more money
What is your solution, and in the UK in the 21st century, what are you complaing about? People risk drowing to get to the UK, (costing the UK 5 millon a day, just for starters).
thank you for the disclaimer
Would be interesting to see a more detailed video on productivity. Examining why the UK has struggled to keep pace with some of our peers
Its not that interesting, its basically just underinvestment ,less new equipment, less staff training, less R&D then peer nations. At the end of the day you get what you pay for
Sure the economy crashed because of 2008, but I can't help feel that the lack of recovery is because the Tories have been in charge since 2010...
Wages have also stagnated in Germany, unless you look at the minimum wage, which has increased significantly, but that has probably lowered the overall average.
That's nonsense. Wages are rising here in Germany . Some unions achieved pay rises of more than 10 percent this year.
Thank you TLDR
My mortgage is up next April.
I genuinely have no idea as to how sending an extra £400ish a month to a giant building society instead of spending it helps the economy......especially when inflation has obviously not been driven by people like myself.
Robbing barstewards.
When we talk around pre 08 crisis productivity, I always wonder if because up until 05/06 highly leveraged mortgage products (CDO’s) we’re such a massive part of UK economic growth that when this was no longer a viable product, and the leverage wasn’t there it had essentially pulled 20 years of economic growth forward. And the UK over dependent on real estate as an asset class with high leverage is to blame for the majority of problems seen today. I think over time the UK returns to its long term growth trend.
This is a big part of the problem. For too long in the UK we have always opted for the quick and easy option, the proverbial paint over the cracks, rather than taking stock of and formulating long-term plans to address the worsening structural problems which blight our nation. There is no long-term strategy, there isn't even a medium-term strategy. We just bounce from crisis to crisis with our paint bucket.
The actual reason is deliberate conservative mismanagement, every time the economy is 'disrupted', more money is funneled up forever and the poor get a little bit poorer.
4:30 Well, Devolution and Remote Work and key elements to fix the problem. "Leveling-up"" has worked?
If a country is always in crisis no matter which side governs, then the people of that country is the biggest problem.
So well said and very true.
It's interesting how everything stagnated after the Tories took power.....
What was booming during new Labour times? House prices?? Resulting in a mini crash stopped by money printing.
So many people have been convinced that an ever-rising housing market is a place to save money. Reducing the overall market at this point would bring howls of rage from older voters.
It's all over Europe too. Denmark is feeling the pinch today.
The solutions:
1. Reduce taxes and thus increase capital investment.
2. Reduce regulation and planning, thus increasing the housing supply.
3. Invent a time machine.
There are also just the innate effects of an ageing society, this is not a problem unique to the UK but goes some way to explaining the relative economic overperformance of non-European western states like Australia, NZ and the US which have comparatively younger populations.
I'm in Australia. We have a problem with an aging population and low fertility rates. Mining and agriculture hide the deficits that our ridiculously over inflated housing sector doesn't.
And the NZ isn't in such good shape, either. They've been piling on immigration like a kid piles chocolate topping on ice cream in order to hide their problems.
@@davidbrayshaw3529 That's all true, but comparatively, your countries are outperforming that of the Europeans in most growth metrics even if there are major problems.
@@hpsauce1078 The fact that I can't argue with your contention is entirely depressing. My family is going alright, over here, but many around me are drowning.
Over the past 10-15 years, the cost of living has become out of control while wages have largely stagnated. And if you don't own a house... wow! Rents are outrageous, relative to income and the quality of the dwelling. I live adjacent to beautiful botanical gardens in my town. There are others that live in them. We mightn't get as cold as Britain, but it gets down around zero Celsius where I am at this time of year, and that's too cold to live under the tearoom veranda at the gardens, if you ask me.
But, just to top it off, we're allowing something like 400,000 immigrants in over the next 12 months. Yep, all while our rental vacancies are at around 1%, the average price of which is $415 pw. for a flat, and about $600 for a house (nation wide, not just in the capitals!) and the median income is a bit over $50,000 (Aud.) It's frightening.
@@davidbrayshaw3529 Well, if you want to go off of those metrics, here in the UK, my rent is 1500 pcm minus utility and council bills, luckily my partner has a good job in London and we're both working. I think the median income in the UK is somewhere around 27000 annually and every year around another 650,000 people arrive in the UK even though we have a population density about 93 times that of Australia. Over the last year, we've been making an effort not to use too much electricity so we don't tend to heat our home in the winter, luckily the residual heat from surrounding apartments is generally good enough to get by atm given our complex is well insulated.
@@hpsauce1078 Only the larger European economies are being outperformed the smaller more dynamic European countries are recording growth levels higher that those you have mentioned....ie Ireland, Denmark, Finland, Estonia, Austria etc these countries all have ageing populations but all are also very productive.
Earning wealth young is a great goal, but hopefully not so easily that you don’t attain a solid set of entrepreneurial, financial and life skills along the way. Getting lucky on an investment or having a rare easy win with a first business can actually be perilous for people, with the ego and social reinforcement forever blurring the line between skill and luck. If you make a few mill at 25 and plan on living until 85 it will be a serious endeavour to make that last..
You work for 38yrs to have $1m in your retirement, Meanwhile some people are putting just $10k in a meme coin for just few months and now they are multimillionaires.I pray that anyone who reads this will be successful in life
@@Karen.s989Forex/stock is the best investment anyone could get into. As it could make you rich in a blink of an eye.
@@danlightonI usually go with registered representatives. ''MRS AVA KIMBERLY'" for example has the best performance history (in my opinion) and does offers 1v1 consultation to her copiers which I think is amazing. I don’t know how many traders like that are there.>
I'm surprised at you, mentioning Mrs Ava Kimberly . Her trading strategies is so magical
Mrs Ava Kimberly is a lady who knows the lord. She's taking the level of trading from end goal of not just making money but really to be able to understand yourself and the money becoming the after - effect. Loaded with experience and maturity! She's blessed to be a blessing to all.
Also to point out, high house prices are the bane of employers.
Ultimately rentseeking and speculative activities are non productive and revenue consuming as employers who seek to gain an advantage from a supply of labour pay the costs of their employees to retain that labour, which includes the housing costs of said employees.
Prior to Brexit, the high cost of housing already made the UK an unattractive place for manufacturers to invest in this country and whilst cheaper housing in comparable countries in Europe has helped maintain a larger share of manufacturing as a percentage of their GDP over there.
This is a great point that never seems to be mentioned when the media is talking up house prices
The biggest problem facing the UK economy is everyone is talking about the wrong numbers. Forget the median average its incredibly misleading if taken at face value
Median averages do not fully show the reality of a great many workers actual incomes. The 'minimum' wage of £10.42 per hour is only for people over 23 and for those only 18-20 its £7.49 which over a 40 hour week and a 48 week pay year (standard) totals (pre tax) to £20,006 and £14,380 respectively.
A vast amount of employers pay these rates or very close to them for a range of essential jobs and salaries hiting that median total are almost exclusively for graduate or senior roles. For people working in retail a yearly income would likely fall in the £22-25k range as do most other jobs by volume.
People who look at the gap between median income and median house values are doing a sensible in theory calculation they are both median values after all but Median is the middle value of a data set which means nothing when it comes to understanding how much money people get payed. its an actual nonesence figure.
for example out of 10 data points that are: 1, 1, 1, 1, 7, 7, 1000, 1000, 9999, 9999 the median average is 7
If we makes those numbers income per hour the 'average' income per hour is £7 however 4 in 10 earn only £1 2 in 10 earn the 'average of £7 but the other data points are £1000 per hour and £9999 per hour.
The modal average or most common is 1
While this is taken to a bit of an extreme for illustration of point if you could find the MODAL average of UK income and believe me its not used in anything official I could find to quote it here (it was actually easier to give a maths lesson that find the value) from my observations of the jobs market outside london my hypothosis would be an avergae near £23K not £32K which makes a huge difference when it comes to paying a mortgage or more importantly rent. Unless modal income is raised significantly the UK is heading for collapse as people without housing are not productive. Its really simple and obvious why the UK has issues if you don't use the worthless numbers to base your assuptions off.
Productivity is a very flawed number. It is an important economic figure but it is very different from what ordinary people think. For example, if you just double the wage of nurses without changing anything else you would double their productivity. If they work twice the shifts without getting paid more you would have their productivity. So some high productivity areas are simply overpaid.
Good point
It might be useful to specify that productivity in this case is measure of output, output of the work you do. If you dig a trench by hand you will have higher productivity than if you dig a trench using an escavator.
makes no sense: if you remove machines from productivity you're left with nothing.
manual labour.
why would economy be interested in manual labour alone?
i'm more puzzled why would anyone think productivity can always be rising.
it's just silly. both people and machines they operate have their limits.
Thats completely wrong, its the market value of the work you do
@@ivok9846productivity should keep rising as technology develops, machinery with higher out put, and automation less workers producing the same value means higher productivity. The problem with the UK is in wont invest increasing productivity
@@jimpaddy79 i wouldn't say productivity is about who is producing (man or machine) but how fast you're producing, and in that aspect, why would you think production is not already optimized to the max? do capitalists prefer to lose money by not running as fast as possible?
also, which country has a productivity line that's constantly rising in last 10-20 years?
did they invent robots that can do everything faster than humans?
or are these robots mostly gimmicks, esp. when they attempt to move more than few meters?
have you ever worked in a factory, so you can see what robots can and can't do?
@@ivok9846 Productivity in the way its being discussed here simple mean the the market value of the product divide by the man hours required to create it. In this video it is being aggregated to the nation level. I think people are making the mistake of think of productivity at the individual level.
The robots dont have to do a better they just need to reduce the workforce required to do it. As that reduces the man hours and hence increases the ratio of value to man hours.
Automation isnt used in low cost labour manufacturing countries because labour is still cheaper then the cost of machinery .
I never worked in a factory but am a construction manager and see how new building systems and technology reduce the man hours to complete a projects
I worked in the NHS for a few years. Taught me why the British economic model is bound to fail. "Top" down. And at the "top" are those who failed in the real world.
There is a housing crisis in i think every western economy these days, so it far from unique to the UK. What is a bit more unique is that London is the sole center of the economy. This for UK was probably always the case to some degree, but was hugely intensified when the UK started to become post-industrial economy and abandoning manufacturing (which was not exclusively in the London area). This new focus made the Financial Services the core of the industry (and since financial market tend to be volatile also made the economy more volatile), and on the other side led to a decay of the other area (those area's then tended to favor the Brexit). As a further consequence housing in London became insane and there is no easy fix for this (not enough space for everybody to live in London). The Financial Services also work different than other parts in the economy, in that they don't really produce anything (of common value) but they extract rents other economic agents. Even if productivity would increase there (it is says as there simply is no output in goods) it would only mean somebody else lost something (it might non-UK agents, in which case it might still be an economic gain). I think overall this very difficult to reverse, as the damage is already done.
There's been a long standing lack of investment in new technology in a lot of British manufactoring starting in the early 2000's, about the same time that we started welcoming large numbers of Eastern European workers. Now I have nothing against those people, they were more often than not hard working people who did a lot of the work that uK workers just refused to do, but it feels like British industry started taking the easy route of employing more cheap labour than investing in better technology. A situation that is now coming back to bite us.
Yeah as a person with family in the UK and eastern Europe it's true. It's interesting how much more advanced countries like Poland, Czechia or even a lot of Balkan countries are now than they were 10-20 years ago. Mainly because the governments invested a lot of money in infrastructure, roads, railways, hospitals, schools and most importantly housebuilding. The average Polish person is lightyears better off economically than only 10 years ago. Meanwhile in UK the govt invested nothing, so the roads are full of potholes and the hospitals have months long waits. Most British people are worse off than 10 years ago. That's what happens when English people keep voting for same terrible political party. No one else to blame.
This video is of interest to me because I am considering whether or not to accept a job offer in London where there is a shortage of people in my profession. My salary would increase 40% but a friend who is normally switched on about things advised that after falling deeper into the 40% tax bracket and paying a large chunk of London owner-occupiers' mortgages in rent (circa £1000/ month for a spare room!!), my ability to save would increase at a rate less than inflation. Maybe this is the reason for the aforementioned shortage! A colleague of mine recently left for the US and he told me that my profession is in an even higher demand there. I wonder if the UK is going to see a brain drain of people who are tired of living under the burden of an unproductive economy.
I agree. I lived in London for 10 years and I wouldn't do it again if I had my time back. What matters is how much money you have left AFTER paying your bills, not what the salary you get is. The problem with London is that housing costs are so high, you may be worse off, even with a higher salary. I would calculate very carefully before even considering going there. Plus, it's so hard to get anywhere outside the city if you live there. Unless you have a car, but then that brings further costs and problems... 😆
It depends where you live right now. With my partner we are renting a one bedroom flat for £1375 + bills/month. We dont own a car because we dont need to drive anywhere since we can use the tube. Our life is rather busy with work and our salary is nothing crazy, which makes saving a bit more challenging. ( combined salary of about 65k/year.) We are looking to move to Italy in the near future where job and salary is more challenging but the lifestyle and weather is more to our liking.
In 2005 my ex got a job in London on £140k. It was not enough to have a high standard of living. She was better off on £60k in Yorkshire and gave the job up after about 18 months.
@@piccalillipit9211 Bloody hell. Yet according to the National Statistics graph cited in this video, Yorkshire is one of the least productive places in the UK.
Its a common practice to rent a room in shared accomodation in London. Even some politicians believe that its perfectly normal for their aids, however I suspect that it would be a struggle to find anything of the sort in central London for £700 inclusive.
This is also close to my conclusion
You know why the 1st graph of living standards is BS...
Norway/Denmark/uae/Switzerland all have higher levels of individual wealth and/or higher aspirational living standards/ quality of life expectations etc
This is why hs2 and rail network investment is so vital we need to invest more into connecting the country especially big hubs like Edinburgh Manchester Leeds Glasgow Cardiff etc and Levelling up needs to be taken way more seriously East Coast, North East, Northern Ireland etc and spending on real projects not vanity project like where I’m from they’ve spent it on a train station that was perfectly good
They're doing it backwards though..... London should be the FINAL part of the project, not the first. The North of England, Scotland, Wales, NI and midlands desperately need major investment in infrastructure far more urgently. Infrastructure in these areas is far less efficient and therefore a greater drag on productivity than London and its surrounding areas. Unfortunately, HS2 seems to me to be yet another London-centric project that will mostly benefit the capital by sucking more productivity out of the regions.
@@benghiskahn3673 your completely right and I live in a place than doesn’t even have trains from this side of 2000 but unfortunately the most profitable train link is between the largest cities Birmingham and London and then Manchester and eventually up to Edinburgh so it gotta pay for it self asap I will say tho it’s crazy that east coast, wales, southwest and north Scotland hasn’t had vast upgrades
And as always the South West is not mentioned. I’m convinced most people think England is made up of the South East, Midland, NE and NW 😉
Edit: I stand corrected. Get in @chazzerbox!
Everyone blames the "wealthy elites" for house prices when the reality is that they cost that much to build. I was surprised to find this out after doing some quick calculations as to what it would cost to buy a plot of land and build my own home. Materials and skilled labour is expensive...
There are two bedroom houses in London that cost over a million pounds
but isn't just the case that developers benefit from economies of scale? They buy in bulk, make standardised housing everywhere in the country.
70%+ of the cost of a new build is the land, its the wealthy elites who are invested in or benefit from the land banks
@@jimpaddy79 Sorry, I should have stated that my example was that of south eastern pricing not London. London's land prices are the result of being a very desirable place to live having the greatest job opportunities, cheapest transport network and the least available amount of free space.
@@SameerKhalid. Yes they do. Without this factor houses would be much more expensive. It is also why the standards for modern housing are so poor. A product that no one can afford is not a viable product. (At the moment some people can still afford it just)
Slice middle management and meetings to the bone, productivity will soar.
Productivity isn't just people are working more, its that people increase their productive output with more capital, machines, and energy/ power.
GDP is rising slower as the working population is rising slower (fewer working migrants)
In comparison to Germany, which is a production powerhouse, and the US which has focused on high value Fintech through targeted immigration , the UK has become a nation of middle managers with social science degrees, people that rely on benefits and then, the super monied rich.
Your video covered some easy topics but I feel the real answer is in:
Encouraging STEM education
Targeted skilled immigration
Encouraging companies to invest in equipment and training which will make their workers more effective
The problem is though that STEM doesn't pay. Especially in engineering. I have a master's in engineering from a top 10 university in the world (5 year programme), but the best graduate roles offered around £35k. A friend did a degree in classical civilisation and got offered £33.5k as a graduate, despite doing a 3 year long degree in what is essentially history.
@@wabba2344 that's really interesting. what would be the expected earnings of an engineer 5 years after qualifying, i thought it would be about 70k
@@RFXZ67966 a senior engineer could maybe expect to earn 50 - 60k. Although getting a role is the hard part at that stage. And by that point, the history graduate could be a middle manager on 50k anyway.
UK feels kinda familiar to us Japanese. We’re in a permanent dud for 3 decades now
I bought my flat in London (Battersea) in 2006 and its value has quadrupled since then.
Thank you finally, born in the UK lived in London most my life apart from when travelling started studying Economics at Uni 1994 then dropped for IT? Why why Sir? Big Thumbs Up.