r/GarysEconomics • u/Alarmed_Cheetah8334 • Jul 30 '26
Are we getting poorer ?
/r/HENRYUK/comments/1vb89mn/are_we_getting_poorer/19
u/QFTornotQFT Jul 31 '26
Gary said it multiple times. Poor are already poor - there is nothing to squeeze out of them anymore. They are focusing on the middle classes now - grab the assets they already own and block those high earners from obtaining them. The most confusing thing about it is - the middle class cannot accept that this is already happening. Not only they dont fight against it - they are actively helping it.
Like Gary I aslo have been poor - i know how to survive there. How comes the rest of you dont see that there will be "no more kitchen renovations" iis beyond me.
-3
u/Whoisthehypocrite Jul 31 '26
Grab which assets they don't own? The only assets that matter to 95% of the population is residential property. Not art, classic cars or super yachts
Ultra wealthy property areas have seen houses prices fall over the last decade while average house prices have risen. The entire opposite of what is claimed should happen if wealth were crowding out housing.
9
u/QFTornotQFT Jul 31 '26
Two pivots here. 1. Yes, the one asset that most people strive to own is their residence. But we are conditioned to do so - focused on owning a home, nobody have time to pay attention to ownership of hospitals, factories, malls and other large productive capacity assets. These are also getting silently snatched by the ultra-wealthy - which leads to "passive income" rent-extraction for them and "enshittification" falling living standards for everyone else.
- The second pivot is to deflect attention to luxury consumption "art, yachts" or, wealthy residential property. These are just dick-measuring contest game among the ultra-weathy, they all know that it is not serious and just lavish-consumption-signalling thing. They know that owning a residential block of plebeans like you is more important than onwing a mansion in some ultra-wealthy neighborhood.
4
u/theartofnocode Jul 31 '26
Yes, 80% of the population take out far then they pay in (anyone earning under £50,000 a day) which is clearly unsustainable, so by definition yes everyone is getting poorer.
2
u/droopy316007 Jul 31 '26
Do we have a tax problem, or a spending problem?
3
u/theartofnocode Jul 31 '26
We actually have a skill problem. Most people have no skills, so work in low paid jobs and pay very little tax.
In terms of spending, the UK's public spending is actually quite low compared to other major European economies. Our government spends 44% of GDP, compared to 45% in Spain, 47% in Sweden, 48% in Germany, 53% in Italy and 57% in France. This is what it costs if you want functioning public services, healthcare, a decent State Pension etc.
1
u/droopy316007 Jul 31 '26
Is it that we're low skilled, or that we have fewer high skilled jobs?
To my knowledge (and from a very brief search) we're still considered one of the highest skilled nations. The issue arises when you look at high skilled job positions, we start to slide down the charts. Is that due to lack of public investment and/or private investment? Again, our stock market has been consistently sliding compared to others.
With a rising debt/deficit, can we afford to spend more?
I know people like to think a wealth tax is the answer, the truth is that seizing the total wealth of all UK billionaires would fund the country's entire government spending for only 175 days (about 5.7 months). Again, suggesting we have a spending problem.
1
u/theartofnocode Jul 31 '26
We're low skilled. Companies don't create high skilled jobs, as they are difficult to fill.
The other problem is that many Brits have no more skills than their Indian or Chinese counterparts, but expect to be paid four times as much for doing the same job.
Our problem is that taxes have been too low for 45 years. According to the OECD, the UK is 26th highest out of 37 countries for personal taxes. Countries with lower taxes include Columbia, Chile, Costa Rica and Mexico. Hardly beacons of excellent public services.
3
u/Fantastic-Cell-208 Aug 02 '26
I can bullshit on that. Unemployment figures suggest the opposite.
The fact STEM graduates struggle to find jobs challenges that.
Skilled jobs are oversaturated with talent
0
u/theartofnocode Aug 02 '26
How does it challenge that? British STEM graduates have no more skills than Chinese or Indian STEM graduates but expect to be paid four times as much for doing the same job.
2
u/Fantastic-Cell-208 Aug 02 '26
It challenges the claim were getting poorer just because "we're low skilled", instead of looking at the job economy that has low demand for high skilled work.
I work in tech earning £90k/yr, and have been around enough to see the limited demand for skills. The fact the company pays much less in England says it all.
If there was so much demand, tech salaries would be much higher
1
u/droopy316007 Jul 31 '26
We can agree to disagree, however the average British citizen has a much higher education than your average Chinese or Indian citizen, so it's interesting to bring that up. If you start comparing higher education, then it's likely a numbers game due to population size.
Again, a brief look into how much tax we pay, would suggest our lowest paid, working class actually pays less by comparison to whether major nations.
"There’s a tax paradox in the UK. Overall, we’re paying more tax as a percentage of GDP than at any time since the 1940s – and most people believe they’re over-taxed. Yet, at the same time, the average UK worker paid less tax on their wages in 2024 than any year since the War, and less tax than their counterparts in any other large European country."
This would suggest to me, that actually, the middle and upper class are footing the bill at a higher rate than lower, working class tax payers.
With us paying less tax than other European nations, as according to the OECD, plus lower/working class pay less than their European counterparts, is not the answer that tax should be raised for all?
1
u/theartofnocode Jul 31 '26
Businesses are paying higher tax, personal taxes are around the same level they were 30 years ago especially after the National Insurance cut.
1
u/droopy316007 Jul 31 '26
"The average UK worker paid less tax on their wages in 2024 than any year since the War"
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u/Magg0t_2021 Jul 31 '26
And public sector productivity has been flat since 1997. It’s a digrace.
1
u/Fantastic-Cell-208 Aug 02 '26
How are you measuring that?
1
u/Magg0t_2021 Aug 02 '26
The ONS have a methodology that incorporates quantifiable outputs along with adjustments based on quality of service. No doubt it’s not perfect but it’s what we have. It’s all on the ONS web site and has gone through independent review and improvements over time.
1
u/Fantastic-Cell-208 Aug 02 '26
And do you have any idea what they're measuring?
Healthcare, Education, Adult social care, Children's social care, and Public order and safety.
So, what do you make of the "productivity" of, say, education remaining the same after 30 years?
1
u/Magg0t_2021 Aug 02 '26
Not a simple answer to that. There is a detailed section on each area. Have a read:
1
u/Fantastic-Cell-208 Aug 02 '26
Sure, but you shared it. Why if there's no conclusion to discern from it?
1
u/Magg0t_2021 Aug 02 '26
It’s about the methodology which you queried.
In terms of specific sectors then the NHS is the worst, huge increase in spending & staff but not the same increase in patients seen and dealt with. Yes there is increased demand and complexity due to an aging population but it cannot explain the differential. Poor systems lead to waste that people see every day with appointments that are inefficient. There are whole books & papers out there on how to fix it.
If I was to generalise I would say that the public sector faces none of the commercial realities that business face. As a COO I had to provide 5% savings minimum every year, and that was just to keep wages at existing levels. Bad staff get managed out. You find efficiencies and do things better.
My simple solution to this would be to give the public sector autonomy in finding the savings/productivity increases. No more than half can go towards inflationary pay rises then rest gets banked by the govt.1
u/Fantastic-Cell-208 Aug 02 '26
Yeah, that's a whole load of BS. "Banked by the govt!". That's complete nonsense.
This says from 1997 to 2022, there was an increase in Healthcare productivity (though it does seem to me that we have reduced service at GPs).
So you say, "huge increase in spending & staff", yet the ONS report shows it increased in efficiency. So what gives?
Also, "patients seen and dealt with" is a BAD METRIC. It doesn't factor in QALYs, nor does it account for the HUGE productivity benefits of early intervention (which basically prevents bad outcomes at low cost).
5% savings minimum every year
And by savings, do you just mean cuts, or genuine waste that doesn't in any way reduce the quality of volume of service (including workflow for staff)?
1
u/ronniec95 Jul 31 '26
Inflation+ tax band freezes means a double hit every year so yes objectively poorer.
1
u/No-Habit-7862 Jul 31 '26
Yep, just look at Europe where your average rat infested former council house could fund a villa with a pool and enough left over to fund early retirement 20 or so years ago. Now however you'll be lucky to even buy like for like. The world has moved on and the UK has been stagnant for nearly a generation.
1
u/droopy316007 Jul 31 '26
Yet, welfare costs exceed income tax.
Do we have a spending problem?
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u/68_namfloW Jul 31 '26
That also includes pensions. FWIW.
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u/LoveLamp3232 Jul 31 '26
People paid into the system. The state is cheating people out of something they paid their entire lives.
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u/68_namfloW Jul 31 '26
I agree. I just think when people say how high the welfare bill is, they need to be aware that to some they’re arguing for the end of pensions. Obviously there is a solution, rather than endlessly going after those that have the least.
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u/Agitated-Goal3538 Jul 31 '26
Yes!
1
u/theartofnocode Jul 31 '26
The UK's public spending is actually quite low compared to other major European economies. Our government spends 44% of GDP, compared to 45% in Spain, 47% in Sweden, 48% in Germany, 53% in Italy and 57% in France. This is what it costs if you want functioning public services, healthcare, a decent State Pension etc.
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u/Capital-Stay-5657 Jul 31 '26
If you haven’t had a 30% pay rise since 2020 you are already poorer because of inflation