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So What's Neoliberalism?

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4 hours ago, Delbow said:

I've by no means read the whole thread, but this jumped out at me as particularly obvious nonsense. It's become an article of faith on the economic Right that pay increases for workers are Bad because they Cause Inflation. Which is handy if you're one of the bosses, because that completely coincidentally means there's more money for you, and that is not Bad and does not Cause Inflation. The economic Right also think house price inflation is Good but can't explain why that's different to the Bad sort of inflation. If you're going to try to persuade people on a tenner an hour that it's for their own good and necessary for their ultimate boss to have net assets of $200bn and a $65m private jet, and that any alternative to that will be their downfall and lead to Bad Inflation and their own ruin, then you would need to be able to demonstrate that for each dollar or pence hourly increase in pay they get, they will lose the same amount in higher prices. Can you do that? I very much doubt you can.

 

That kind of half-baked thinking is predicated on the assumption that if wages go up then the cost of products and services must go up in line, because it would be impossible for executives and shareholders to take home less as a way of balancing out the overall costs of a business. But that is possible! It was the case not long ago in fact. Through most of the 1960s and 1970s, the wage share of GDP was up near 60%. The wage share is, unsurprisingly, the percentage of GDP that is paid in wages, as opposed to share dividends and executive pay. By 1996, the wage share of GDP was under 52%. The other end of that ratio is executive and shareholder 'pay', which goes up as the wage share goes down. But how horrifying for the goose if it's realised that what is good for it is also good for the gander! Better keep telling the gander that it's in his own interest to have smaller and smaller slices of the cake. Gotta watch that waistline! (said Mr Creosote)

Well said.

 

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We need to move to a high wage - high technology economy and prices will go up as a result but that’s no bad thing whilst inflation is so low.

As previous posters have highlighted most of the wage increases those at the bottom of the pay scale receive are spent and not saved, so that money is recycled and contributes to growth.

We also have a huge inefficiency problem in the UK, the amount produced per worker is not as high as it should be which acts as a drag on potential wage increases.

Covid not withstanding the lack of readily available cheap labour for semi-skilled roles will force businesses in the medium to long-term to address several key issues which they have been able to avoid for too long.
Firstly, as the labour pool shrinks they will have to pay higher wages to attract staff, this is already starting to happen in areas like transportation.

Secondly, they will have to get back to training and developing staff for the long-term instead of employing ready-made cheap alternatives. The drop in UK training investment in the last 15 years is staggering.

Thirdly, they will have to look at technology to become more efficient. People shouldn’t worry about this as it creates more wealth and ultimately higher paid jobs as people move from un-skilled roles into those that add more value.

 

There are a whole host of issues around delivering this, not least how the economy will look post-Covid and the need to re-train the current workforce and adjust the education system for those yet to come but it’s do-able.

 

The good news is that some of these things will and have started to happen regardless of the politicians, the labour market will drive issues for businesses that they can no longer avoid.

 

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14 hours ago, Westie1889 said:

We need to move to a high wage - high technology economy and prices will go up as a result but that’s no bad thing whilst inflation is so low.

As previous posters have highlighted most of the wage increases those at the bottom of the pay scale receive are spent and not saved, so that money is recycled and contributes to growth.

We also have a huge inefficiency problem in the UK, the amount produced per worker is not as high as it should be which acts as a drag on potential wage increases.

Covid not withstanding the lack of readily available cheap labour for semi-skilled roles will force businesses in the medium to long-term to address several key issues which they have been able to avoid for too long.
Firstly, as the labour pool shrinks they will have to pay higher wages to attract staff, this is already starting to happen in areas like transportation.

Secondly, they will have to get back to training and developing staff for the long-term instead of employing ready-made cheap alternatives. The drop in UK training investment in the last 15 years is staggering.

Thirdly, they will have to look at technology to become more efficient. People shouldn’t worry about this as it creates more wealth and ultimately higher paid jobs as people move from un-skilled roles into those that add more value.

 

There are a whole host of issues around delivering this, not least how the economy will look post-Covid and the need to re-train the current workforce and adjust the education system for those yet to come but it’s do-able.

 

The good news is that some of these things will and have started to happen regardless of the politicians, the labour market will drive issues for businesses that they can no longer avoid.

 

Lack of cheap labour? We currently have 5 million unemployed, and a further 5 million on furlough, who may well have no jobs to return to once the pandemic is over. We also have a shortage of jobs. So I don't think employers are going to be too worried any time soon. I agree that the investment in UK training is abysmal and has been for a long time, I can't see it improving either apart from a few specialists. If past experience is anything to go by, many employers would rather just take the money and run rather than investing their profits in the future.

For a long time many new jobs have been low paid, low skilled and insecure.

 

Sad to say I believe technology is going to be our undoing rather than our saviour. Tech, automation and AI is going to drastically reduce jobs - that is the whole point of them. We may be forced into leisure time (unemployment,) but the money to pay for it will not follow.  

Take as an example Jeff Bezos, owner of Amazon. Certainly he has invested millions and employs many thousands, but in generally low minimum wage, insecure work. And at the cost of how many thousands of jobs on the high street? The High street has been decimated and is unlikely to return so we will all be forced into online shopping.

 

Now Bezos is not about to use his £188 Billion to up his workers pay and improve their lives - no he's using it to invest in more high tech, in this case intelligent automated pickers which will put the many human workers he currently employs out to grass. (I saw this featured on a tv programme called 'Click' which was demonstrating the prototypes.) 

 

The aim of technology seems to be to do away with those pesky, troublesome workers altogether. Machines do the job better, quicker and cheaper. This is no industrial revolution where increased supply meant more jobs. This is a revolution unlike anything we've seen before. There's no precedent for it. A few will prosper, the majority won't.

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1 hour ago, Anna B said:

Lack of cheap labour? We currently have 5 million unemployed, and a further 5 million on furlough, who may well have no jobs to return to once the pandemic is over. We also have a shortage of jobs. So I don't think employers are going to be too worried any time soon. I agree that the investment in UK training is abysmal and has been for a long time, I can't see it improving either apart from a few specialists. If past experience is anything to go by, many employers would rather just take the money and run rather than investing their profits in the future.

For a long time many new jobs have been low paid, low skilled and insecure.

 

Sad to say I believe technology is going to be our undoing rather than our saviour. Tech, automation and AI is going to drastically reduce jobs - that is the whole point of them. We may be forced into leisure time (unemployment,) but the money to pay for it will not follow.  

Take as an example Jeff Bezos, owner of Amazon. Certainly he has invested millions and employs many thousands, but in generally low minimum wage, insecure work. And at the cost of how many thousands of jobs on the high street? The High street has been decimated and is unlikely to return so we will all be forced into online shopping.

 

Now Bezos is not about to use his £188 Billion to up his workers pay and improve their lives - no he's using it to invest in more high tech, in this case intelligent automated pickers which will put the many human workers he currently employs out to grass. (I saw this featured on a tv programme called 'Click' which was demonstrating the prototypes.) 

 

The aim of technology seems to be to do away with those pesky, troublesome workers altogether. Machines do the job better, quicker and cheaper. This is no industrial revolution where increased supply meant more jobs. This is a revolution unlike anything we've seen before. There's no precedent for it. A few will prosper, the majority won't.

There are  1.724m unemployed in the UK as of November 2020 and yes many are on furlough.
 

Pre-Covid we had virtually full employment, yes Covid has changed the situation  but this structural change is a long-term shift and will still happen although it will take a little longer.

Without wanting to get into the (very tiresome) Brexit debate, it’s effect on the UK labour market will be significant on the the bottom 30% of earners as that pool of labour will shrink.

 

Also fear of technology is misplaced, Germany has the most production robots in the world, they’re not doing too badly on wages and living conditions It has driven efficiencies and allowed people to be employed in other areas of those businesses that add more value and in turn pay higher wages as a result.

There will be more better paid jobs available, but people will need to ensure they have the skills to do them hence the need for education and training.

Technology opens as many doors as it closes - if not more, consider the luddites - should we have banned technological development from there-on in?

 

 

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6 hours ago, Westie1889 said:

There are  1.724m unemployed in the UK as of November 2020 and yes many are on furlough.
 

Pre-Covid we had virtually full employment, yes Covid has changed the situation  but this structural change is a long-term shift and will still happen although it will take a little longer.

Without wanting to get into the (very tiresome) Brexit debate, it’s effect on the UK labour market will be significant on the the bottom 30% of earners as that pool of labour will shrink.

 

Also fear of technology is misplaced, Germany has the most production robots in the world, they’re not doing too badly on wages and living conditions It has driven efficiencies and allowed people to be employed in other areas of those businesses that add more value and in turn pay higher wages as a result.

There will be more better paid jobs available, but people will need to ensure they have the skills to do them hence the need for education and training.

Technology opens as many doors as it closes - if not more, consider the luddites - should we have banned technological development from there-on in?

 

 

My mistake, it might have been 5 million on benefits, not unemployed and considering they now count pensions as benefits that may have distorted the figure. However, it's still a hell of a lot and growing. I am curious to know why the government has recently (pre-covid) referred to 'more people in employment than ever before' (which I doubt) but never give the unemployment figure. There are many people unemployed who are not on benefits as they do not qualify for Universal Credit for a multitude of reason, and these are not counted in the figures.

 

Nevertheless; I do not fear technology. If handled properly it should benefit everyone. But in a neoliberal economy I fear it won't. The advantages will not be shared out evenly, and it will simply enable the rich to get richer, and the poor poorer.

Germany is a very different country with a different ethos to Britain. They still have a strong manufacturing base which we to a large extent did away with, going instead for the soft skills of monetarism. We also have a strong underlying class system and a very distinct North - South divide. There are those in the North still not recovered from the closing of the manufacturing industries. They have never regained useful full time employment and have instead formed an underclass of permanently and rolling underprivileged and unemployed. Many of the jobs which replaced the old manufacturing jobs were service industry jobs,  and small self employed enterprises which have been the first to go to the wall in the pandemic, many of which are unlikely to return. 

 

This is nothing like the last industrial revolution which created jobs, this is a deindustrialisation which will destroy jobs. I'm afraid I don't share your optimism that all these people can all be accommodated in the digital skills world. I think the sort of jobs that will be created will require a certain skill set and a level of entrepreneurship and creativity not given to all. Those jobs may be well paid, but unfortunately few and far between. Sadly, neither do I think our current education system is up to it, still mired in an old fashioned curriculum and outdated thinking, it needs a radical overhaul and much investment, to better suit it to a very different future in a rapidly changing world.  

 

I do hope I'm wrong, but what I've seen so far doesn't fill me with hope. 

Edited by Anna B

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19 minutes ago, Anna B said:

My mistake, it might have been 5 million on benefits, not unemployed and considering they now count pensions as benefits that may have distorted the figure. However, it's still a hell of a lot and growing. I am curious to know why the government has recently (pre-covid) referred to 'more people in employment than ever before' (which I doubt) but never give the unemployment figure. There are many people unemployed who are not on benefits as they do not qualify for Universal Credit for a multitude of reason, and these are not counted in the figures.

 

Nevertheless; I do not fear technology. If handled properly it should benefit everyone. But in a neoliberal economy I fear it won't. The advantages will not be shared out evenly, and it will simply enable the rich to get richer, and the poor poorer.

Germany is a very different country with a different ethos to Britain. They still have a strong manufacturing base which we to a large extent did away with, going instead for the soft skills of monetarism. We also have a strong underlying class system and a very distinct North - South divide. There are those in the North still not recovered from the closing of the manufacturing industries. They have never regained useful full time employment and have instead formed an underclass of permanently and rolling underprivileged and unemployed. Many of the jobs which replaced the old manufacturing jobs were service industry jobs,  and small self employed enterprises which have been the first to go to the wall in the pandemic, many of which are unlikely to return. 

 

This is nothing like the last industrial revolution which created jobs, this is a deindustrialisation which will destroy jobs. I'm afraid I don't share your optimism that all these people can all be accommodated in the digital skills world. I think the sort of jobs that will be created will require a certain skill set and a level of entrepreneurship and creativity not given to all. Those jobs may be well paid, but unfortunately few and far between. Sadly, neither do I think our current education system is up to it, still mired in an old fashioned curriculum and outdated thinking, it needs a radical overhaul and much investment, to better suit it to a very different future in a rapidly changing world.  

 

I do hope I'm wrong, but what I've seen so far doesn't fill me with hope. 

I don’t disagree with a lot of your comments Anna,

It will be difficult for some people if the education system doesn’t provide what they need. Germany is a good case in point as they have a good vocational education and training programme.

The manufacturing point is also an interesting one, Germany is famous for its manufacturing base but the figures show it has been in decline just like most Western economies.

Manufacturing was just over 19% of GDP in 2019, for the UK that figure was just over 17% so a surprisingly small difference taking into account successive UK governments disdain for the sector.

With a bit of creativity and government support I am sure we could grow to a level similar to Germany.

Germany is also a neoliberal country, I work there quite often as we have an office in Dusseldorf and really admire a lot of the things I see.

I think the big difference I’ve noticed compared to the UK is that everyone tries to do what’s best for the country.

They buy German products wherever possible, they hate ‘taking’ from the system (just an observation not making a personal point), and they also plan long-term for the economy.

I’m guessing this mindset was born out of the ashes of war when everyone had to work together to build the country.

The unions are also stronger but work very differently to those in the UK.
They get involved with driving efficiencies on the understanding that everyone will then benefit, and don’t seem to be out for the workers at any cost and to hell with the impact on the businesses future.
It just seems a more harmonious, sensible and beneficial set-up all round.

We could have that in the UK but the scars on both sides run very deep so maybe it’s too difficult.

 

Ultimately I do think jobs will be created, some will be in industries yet to be developed or even created so it’s hard to grasp that potential.

Just think of how much growth in jobs and industries the advent of the Web has brought as an example.

 

One thing is for sure though it will be a period of huge change and yes there will be winners and losers.

 

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Anna, do you not think there is a divide in Germany between the old East and West?  I thought there was.


Have you researched it or are you just making a sweeping statement to support your own argument?


Edit:  Oh look.  There is.

 

https://www.google.co.uk/amp/s/amp.theguardian.com/world/2020/sep/16/germany-east-west-gaps-persist-30-years-reunification

 

Edited by Arnold_Lane

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Post(s) have been removed because they could be considered to breach our Terms of Service or Forum Rules.

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On 29/01/2021 at 12:01, Anna B said:

Davos (the world meeting of the great and the good) last meeting (June 2020) was 'The Great Reset.'

Now I wonder what that could be....?

 

https://medium.com/metalstream/the-great-reset-the-death-of-currency-how-will-you-survive-it-96d355c0b88e

 

 

Announced in June 2020 the theme of the current World Economic Forum is "The Great Reset"

There has been considerable internet activity concerning "Great Reset" with  reported links with groups usually associated with "conspiracies", be careful!

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On 28/01/2021 at 13:23, Janus said:

The government has produced a list of 139 employers that have failed to pay the minimum wage. 

@Anna B

It's an up hill struggle Anna. 

https://www.gov.uk/government/news/rogue-employers-named-and-shamed-for-failing-to-pay-minimum-wage

139 out of 4.2Miilion companies registered with Companies house or 0.0033% of business? 

https://www.gov.uk/government/news/uk-company-statistics-2018-to-2019

I think as a barometer of companies adhering to the guidelines its not an uphill struggle at all when 99.9867% of companies or over 4.1 Million companies are paying the minimum wage.

 

Yes some companies will not be active on the register but even if you took 25% off then 139 is next to nothing in the grand scheme of things

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