Reply to: Britain and the US are poor societies with some very rich people.

[BlasterBates]

https://leftfootforward.org/2022/07/uk-workers-set-for-worst-pay-squeeze-in-g7-warns-tuc/

Britain sits at the bottom of the league for pay growth among the world’s seven advanced economies.

Pay growth in Germany, France and Italy is higher than in the UK.

[BlasterBates]

ah that would be mean not median then?

https://migrationobservatory.ox.ac.u...f-immigration/

The statistic I showed was the mean but median earnings have risen in a similar way.

https://www.ons.gov.uk/employmentand...ngs/2013-12-12

It doesn't really make much difference.

[jamesbrown]

There's an element of truth to this, of course, the tails are quite far away from the fat portion of the distribution in the US. However, he somewhat undermines his own analysis with that headline, given he's showing that the median (i.e., the number above/below which 50% of people fall) income in the US is basically ahead of everywhere except Norway and Switzerland.

[vetran]

Wage growth didn't slow down after 2004, as you can see here. The wage growth accelerated slightly after 2004 and slowed down after the financial crisis.

ah that would be mean not median then?

https://migrationobservatory.ox.ac.u...f-immigration/

As with the impacts on employment and unemployment, several studies have found that effects are different for high vs. low skilled/paid workers. For example, Dustmann et al (2013) find positive effects for most workers but negative effects for the lower paid; they found that a 1 percentage point increase in the ratio of migrants to non-migrants leads to a 0.6% decrease in wages for workers at the 5th earnings percentile and a 0.5% decrease at the 10th percentile. Another study focusing on wage effects at the occupational level found that, in the unskilled and semi-skilled service sector, a 1 percentage point rise in the share of migrants reduced average wages in that occupation by about 0.2% (Nickell and Salaheen 2015).

The MAC (2018) estimated that an increase in the number of EU migrants corresponding to 1% of the UK-born working-age population resulted in a 0.8% decrease in UK-born wages at the 5th and 10th percentiles (i.e. people in the bottom 5-10% of earners), and a 0.6% increase at the 90th percentile (i.e. high earners). In practice, this means that between 1993 and 2017, the total effect of EU migration on the wages of UK-born workers was estimated to be a 4.9% reduction in wages for those at the 10th earnings percentile, a 1.6% reduction at the 25th percentile, a 1.6% increase at the 50th percentile, and a 4.4% increase at the 90th percentile. The calculation of the total impact should be interpreted with caution, however, because the model estimates the short-run response to migration, which is expected to disappear over time (MAC, 2018: 32).

Finally, research suggests that any adverse wage effects of immigration are likely to be greatest for resident workers who are themselves migrants. This is because the skills of new migrants are likely to be closer substitutes for the skills of migrants already employed in the UK than for those of UK-born workers. Manacorda, Manning and Wadsworth (2012) analyse data from 1975-2005 and conclude that the main impact of increased immigration is on the wages of migrants already in the UK.

[BlasterBates]

As predicted. How were employers keeping pay down since 2004? Oh yes importing cheap workers and not training UK ones, the first part seems to be slowing (note we can expect the government to open the flood gates when the multinationals start complaining).

Wage growth didn't slow down after 2004, as you can see here. The wage growth accelerated slightly after 2004 and slowed down after the financial crisis.

[vetran]

UK - sometimes yes, sometimes no, what happened to the prostitute/shoe-cleaner ring that used to do all the banks?

You pay for polishing either way?

[hugebrain]

The benchmark I use is whether I clean my own shoes. If a contractor has to shine his own shoes then something is very wrong and he needs to move somewhere with a better GINI score.

USA - fine, you never have to clean your own shoes
Switzerland - terrible, you always have to clean your shoes
UK - sometimes yes, sometimes no, what happened to the prostitute/shoe-cleaner ring that used to do all the banks?

[vetran]

Oh I forgot the NHS is already doing it with foreign nurses - https://www.theguardian.com/society/...t-to-quit-jobs

YEP but if you say anything you are marked as a racist.

We have being stealing the third world's nurses for years. Scumbags are doing this type of tulip on top!

[SueEllen]

They are going to have to indenture their workers otherwise they will get here and want to leave within a year.

Oh I forgot the NHS is already doing it with foreign nurses - https://www.theguardian.com/society/...t-to-quit-jobs

[Protagoras]

Lack of training is I think a big problem in the UK. Employers seem to want their employees to be 'day 1' productive and in the absence of cheap imported labour will end up having to pay more to hire experienced people. Maybe it would be more sensible to train existing employees, often older ones, who are settled and would not move on.

[Paddy]

https://www.ft.com/content/ef265420-...-c951baa68945?


Where would you rather live? A society where the rich are extraordinarily rich and the poor are very poor, or one where the rich are merely very well off but even those on the lowest incomes also enjoy a decent standard of living?

For all but the most ardent free-market libertarians, the answer would be the latter. Research has consistently shown that while most people express a desire for some distance between top and bottom, they would rather live in considerably more equal societies than they do at present. Many would even opt for the more egalitarian society if the overall pie was smaller than in a less equal one.

On this basis, it follows that one good way to evaluate which countries are better places to live than others is to ask: is life good for everyone there, or is it only good for rich people?

To find the answer, we can look at how people at different points on the income distribution compare to their peers elsewhere. If you’re a proud Brit or American, you may want to look away now.

Starting at the top of the ladder, Britons enjoy very high living standards by virtually any benchmark. Last year the top-earning 3 per cent of UK households each took home about £84,000 after tax, equivalent to $125,000 after adjusting for price differences between countries. This puts Britain’s highest earners narrowly behind the wealthiest Germans and Norwegians and comfortably among the global elite.

So what happens when we move down the rungs? For Norway, it’s a consistently rosy picture. The top 10 per cent rank second for living standards among the top deciles in all countries; the median Norwegian household ranks second among all national averages, and all the way down at the other end, Norway’s poorest 5 per cent are the most prosperous bottom 5 per cent in the world. Norway is a good place to live, whether you are rich or poor.

Britain is a different story. While the top earners rank fifth, the average household ranks 12th and the poorest 5 per cent rank 15th. Far from simply losing touch with their western European peers, last year the lowest-earning bracket of British households had a standard of living that was 20 per cent weaker than their counterparts in Slovenia.


It’s a similar story in the middle. In 2007, the average UK household was 8 per cent worse off than its peers in north-western Europe, but the deficit has since ballooned to a record 20 per cent. On present trends, the average Slovenian household will be better off than its British counterpart by 2024, and the average Polish family will move ahead before the end of the decade. A country in desperate need of migrant labour may soon have to ask new arrivals to take a pay cut.

Across the Atlantic it’s the same story, only more so. The rich in the US are exceptionally rich — the top 10 per cent have the highest top-decile disposable incomes in the world, 50 per cent above their British counterparts. But the bottom decile struggle by with a standard of living that is worse than the poorest in 14 European countries including Slovenia.

To be clear, the US data show that both broad-based growth and the equal distribution of its proceeds matter for wellbeing. Five years of healthy pre-pandemic growth in US living standards across the distribution lifted all boats, a trend that was conspicuously absent in the UK.

But redistributing the gains more evenly would have a far more transformative impact on quality of life for millions. The growth spurt boosted incomes of the bottom decile of US households by roughly an extra 10 per cent. But transpose Norway’s inequality gradient on to the US, and the poorest decile of Americans would be a further 40 per cent better off while the top decile would remain richer than the top of almost every other country on the planet.

Our leaders are of course right to target economic growth, but to wave away concerns about the distribution of a decent standard of living — which is what income inequality essentially measures — is to be disinterested in the lives of millions. Until those gradients are made less steep, the UK and US will remain poor societies with pockets of rich people.

[email protected] @jburnmurdoch

What do you expect from a leftie woke newspaper?

[SueEllen]

As predicted. How were employers keeping pay down since 2004? Oh yes importing cheap workers and not training UK ones, the first part seems to be slowing (note we can expect the government to open the flood gates when the multinationals start complaining).

They are going to have to indenture their workers otherwise they will get here and want to leave within a year.

[vetran]

I was listening to the radio earlier. Lots of our young STEM professionals are getting their visas and moving to European countries so they can have a decent standard of living.

There is a European wide shortage of STEM skills, and a worldwide shortage of healthcare professionals.

The UK government can push to keep pay down but those with the skills are already leaving.

As predicted. How were employers keeping pay down since 2004? Oh yes importing cheap workers and not training UK ones, the first part seems to be slowing (note we can expect the government to open the flood gates when the multinationals start complaining).

[SueEllen]

I was listening to the radio earlier. Lots of our young STEM professionals are getting their visas and moving to European countries so they can have a decent standard of living.

There is a European wide shortage of STEM skills, and a worldwide shortage of healthcare professionals.

The UK government can push to keep pay down but those with the skills are already leaving.

[sadkingbilly]

https://www.youtube.com/watch?v=UK9hqBF9bMQ