So what’s so wrong with labour shortages driving up low wages?

[hilts]

This thread exists because of Brexit. As a country, we have chronically underinvested in everything, from skills to health, to education to social care. Our solution for our ‘problems’ was to torch relations with our nearest neighbours which has led to even less private and public investment, particularly to poorer regions. I mean, bravo, that was bright.

So we set fire to everything, and you’re moaning about people trying to put out the fire? What did you expect to happen? Certainly wasn't to address any of the core issues in a competent manner because we gave the job to an idiot and a party that created the fucking core issues in the first place.

Sometimes, a country gets what it voted for. Enjoy it.

I didn't put any idiot in power and you ain't putting out any fires. You are a random obsessed poster on a football forum. I agree decades of poor government voted in by the public under a terrible voting system has led us here. Its happened and we are where we are. If people keep voting for this system then what can we do. I presume you have participated in this by voting Labour.

You are right the country gets what it voted for and that includes you so enjoy it.

As you are all about the green then you're enjoyment is going to be somewhat false. I have constantly stated the economy isn't my main concern so I ain't particular perturbed. I'm glad things are going as they are but it's ultimately a losing battle.

If some of you are lighter in the pocket I couldn't care less. You and your parties apathy gives you no sympathy I'm afraid.

Now if you would like to trot off back to your no fair sniff thread that would be nice.

 

[metalblue]

Happy to. First, some history. Germany struggled during the nineties and the early 2000’s. Why? Primarily the unification of West and East Germany.

“The shock of absorbing an economy with 16m people, thousands of outdated smokestack factories and a 50-year legacy of central planning would have brought any economy to its knees,”

Wage growth was flat during the 2000’s, even dipped in 2007, but inflation was low too.

During the 2000’s East European countries started joining the EU, but Germany exercised a brake on FoM for several years, in part because they were still absorbing East Germany.

So wage growth from 2000 to 2010 was flat - 36,125 to 37,291. After 2010, and during the global financial crisis, the problems of reunification had worked their way through the system, the brakes were removed on East European migration and the economy grew (despite the financial crisis). Wage levels increased from 37,291 to 42,828 against average annual inflation of just over 1%. A big difference to the previous ten years.

You will note I used 2010 as a cut off point earlier, because I cut the Germans a break in absorbing East Germany which was a broken state at the time and done at a huge cost to the economy overall. What is is interesting is that the last decade of wage growth, above the rate of inflation, was done when German had full FoM with Eastern Europe. This easily accessible labour was a boon to productivity and GDP, and also wage growth in real terms.

Certainly reunification cast a long shadow into the 2000s probably up until 2005 or so - it was a huge driver for tax increases which you would have hoped were met with offsetting gross pay rises but they weren’t.

So let’s take 2010 as our starting point as we analyse this German high wage high immigration claim.

2010 real wages fell

2011 real wages fell

2012 real wages fell

2013 real wages fell

2014 year on year real wages went up by 5 euros a week, still lower than in 2010

2015 ok here we go. Real wages went up by 13.80 euros a week and …drum roll… people were now being paid more than 5 years previously with an extra 10.20 euros a week in their pay packets

2016 another bumper year for workers who receive a further 7.42 euros a week bringing their total compared to 2010 of an eye watering 17.70 euros a week - the champagne must have been flowing

2017 oh dear clouds on the horizon as real wages fell again year on year, starting to erode into that 17.70 euros which is now only 14.57 euros a week better off than in 2010. Always next year eh?

2018 Sadly not. Real wages fell again year on year and now workers are back to drinking mentholated spirits as they get poorer and their pay sits a whole 12.40 euros a week above what they were getting in 2010. Always next year eh? (No wonder the dippers like having a German in charge with this “always next year” positivity)

2019 the rot has finally stopped wages went stagnated in real terms, but at least they’ve stopped going down.

So your evidence to support that immigration/FoM does not suppress wages really boils down to German workers had 2 years between 2015-2016 where they saw their pay increase by 20 euros a week in total? Well I’m sold, what to the IMF know eh?

And let’s just check take home pay shall we? Ah bugger. That’s actually gone down between 2010 and 2019 so workers are worse off to the tune of 4.80 euros a week than they were in 2010. Always next year I suppose.

 

[inbetween]

I didn't put any idiot in power and you ain't putting out any fires. You are a random obsessed poster on a football forum. I agree decades of poor government voted in by the public under a terrible voting system has led us here. Its happened and we are where we are. If people keep voting for this system then what can we do. I presume you have participated in this by voting Labour.

You are right the country gets what it voted for and that includes you so enjoy it.

As you are all about the green then you're enjoyment is going to be somewhat false. I have constantly stated the economy isn't my main concern so I ain't particular perturbed. I'm glad things are going as they are but it's ultimately a losing battle.

If some of you are lighter in the pocket I couldn't care less. You and your parties apathy gives you no sympathy I'm afraid.

Now if you would like to trot off back to your no fair sniff thread that would be nice.

The problems we face as a country are not being caused by the electorate or anything else, they're being caused by us being represented by the worst political class we've perhaps ever seen. That's a political class that will take advantage, lie and say anything to get ahead of the opposition but forget running the country, that's secondary. Labour still today months and years on from Corbyn have no policies of note so what are they campaigning and fighting for?

The principled stalwarts who stand up for their constituents and their values have all been pushed out in favour of a yes-man culture where the party and party leader reigns supreme. It's endemic in the Tories and it's no different at all in Labour depending on who the leader is at the moment. Competence, values and integrity have all but gone out of the window for just one thing and that's loyalty.

This culture is being precipitated by the war on social media, a war that each party tries to win daily but actually is of total irrelevance to most of the country. This forum represents it fully, we have a lot of folk who jump on any chance to attack the government or Labour and opposing posters but both abjectly fail to meet in the middle and they cannot find any form of criticism of themselves or the things they support. We've been conditioned to support absolutely nothing and we'll die fighting for it....

I voted Tory until Boris came in and I'm able to say that I will never do that again with the Tories in their current form. I accepted them under Cameron and May in the absence of a strong enough opposition however I cannot vote for what they stand for now. Where does that leave me?

Basically we're screwed! There's a saying that you get what you vote for but never has that statement been so untrue in the absence of anything whatsoever worth voting for.

 

[hilts]

The problems we face as a country are not being caused by the electorate or anything else, they're being caused by us being represented by the worst political class we've perhaps ever seen. That's a political class that will take advantage, lie and say anything to get ahead of the opposition but forget running the country, that's secondary. Labour still today months and years on from Corbyn have no policies of note so what are they campaigning and fighting for?

The principled stalwarts who stand up for their constituents and their values have all been pushed out in favour of a yes-man culture where the party and party leader reigns supreme. It's endemic in the Tories and it's no different at all in Labour depending on who the leader is at the moment. Competence, values and integrity have all but gone out of the window for just one thing and that's loyalty.

This culture is being precipitated by the war on social media, a war that each party tries to win daily but actually is of total irrelevance to most of the country. This forum represents it fully, we have a lot of folk who jump on any chance to attack the government or Labour and opposing posters but both abjectly fail to meet in the middle and they cannot find any form of criticism of themselves or the things they support. We've been conditioned to support absolutely nothing and we'll die fighting for it....

I voted Tory until Boris came in and I'm able to say that I will never do that again with the Tories in their current form. I accepted them under Cameron and May in the absence of a strong enough opposition however I cannot vote for what they stand for now. Where does that leave me?

Basically we're screwed! There's a saying that you get what you vote for but never has that statement been so untrue in the absence of anything whatsoever worth voting for.

The system dictates that you get two sides and and a whole raft of people that may as well wipe their arse with the ballot paper. If people keep participating in this it will not change. That is the electorates fault or should I say those who vote Labour or Tory. I have no sympathy for anyone who votes for these parties. They do indeed get what they deserve.

If people want as close to true democracy as possible and a long term vision for the U.K. they must get rid of how governments are elected and run. We have temporarily got rid of one fucked system by leaving but the other is going to be difficult in fact impossible because of people like you.

 

[inbetween]

The system dictates that you get two sides and and a whole raft of people that may as well wipe their arse with the ballot paper. If people keep participating in this it will not change. That is the electorates fault or should I say those who vote Labour or Tory. I have no sympathy for anyone who votes for these parties. They do indeed get what they deserve.

If people want as close to true democracy as possible and a long term vision for the U.K. they must get rid of how governments are elected and run. We have temporarily got rid of one fucked system by leaving but the other is going to be difficult in fact impossible because of people like you.

But how do you propose to get rid of the system? You can't vote with your feet because that is self-defeating as the end result doesn't change unless quite literally nobody votes. This won't happen though because of the activism that exists on either side. Many people still vote Tory or Labour purely because of allegiances.

There's a big difference between the activists of Tory/Labour supporters and those who support democracy. Activists would certainly delete democracy to get their party into power and that's why some continue to this day to call the British electorate thick for their poor choices (as if there has ever been an intelligent one on offer).

Brexit was the biggest example of that, you still have some people on here who ironically cry for PR to get their fringe party into power but they'd cancel the Brexit referendum in a heartbeat if they could have.

I agree with you that the system is broken but you cannot blame that on the electorate. We currently have a system now where the majority of people do not like the PM and did not vote for him, yet still he's PM. That isn't the fault of the people, it's the fault of the system and the people who want to preserve that system purely to preserve themselves.

 

[BobKowalski]

Certainly reunification cast a long shadow into the 2000s probably up until 2005 or so - it was a huge driver for tax increases which you would have hoped were met with offsetting gross pay rises but they weren’t.

So let’s take 2010 as our starting point as we analyse this German high wage high immigration claim.

2010 real wages fell

2011 real wages fell

2012 real wages fell

2013 real wages fell

2014 year on year real wages went up by 5 euros a week, still lower than in 2010

2015 ok here we go. Real wages went up by 13.80 euros a week and …drum roll… people were now being paid more than 5 years previously with an extra 10.20 euros a week in their pay packets

2016 another bumper year for workers who receive a further 7.42 euros a week bringing their total compared to 2010 of an eye watering 17.70 euros a week - the champagne must have been flowing

2017 oh dear clouds on the horizon as real wages fell again year on year, starting to erode into that 17.70 euros which is now only 14.57 euros a week better off than in 2010. Always next year eh?

2018 Sadly not. Real wages fell again year on year and now workers are back to drinking mentholated spirits as they get poorer and their pay sits a whole 12.40 euros a week above what they were getting in 2010. Always next year eh? (No wonder the dippers like having a German in charge with this “always next year” positivity)

2019 the rot has finally stopped wages went stagnated in real terms, but at least they’ve stopped going down.

So your evidence to support that immigration/FoM does not suppress wages really boils down to German workers had 2 years between 2015-2016 where they saw their pay increase by 20 euros a week in total? Well I’m sold, what to the IMF know eh?

And let’s just check take home pay shall we? Ah bugger. That’s actually gone down between 2010 and 2019 so workers are worse off to the tune of 4.80 euros a week than they were in 2010. Always next year I suppose.

I used the link below. You can chart wage growth over 3, 10, and 25 years. From 2010 German wage growth has been positive bar two years where one was neutral and one was negative.

Then compare it to the UK by using the drop down indicators. You will see that the peaks and troughs mirror the German figures, but whereas the German line is above zero, ours is below zero for the entire decade. The UK never once showed positive real wage growth during the entire decade.

The purpose of your argument is to show that FoM/immigration has suppressed our wage growth, yet you have two countries with FoM with one showing positive wage growth across the decade and one showing negative wage growth therefore other factors other than FoM must be in play to account for the difference in wage growth, or in our case lack of it.

On a side note this year's Nobel prize for economics went to David Card for his work on showing increased unskilled migration had no impact on unskilled wages and that increasing the minimum wage did not cost jobs.

Germany Real Wage Growth YoY

Wages in Germany increased 3.80 percent in March of 2024 over the same month in the previous year. This page provides the latest reported value for - Germany Wage Growth - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey...

tradingeconomics.com

 

[metalblue]

I used the link below. You can chart wage growth over 3, 10, and 25 years. From 2010 German wage growth has been positive bar two years where one was neutral and one was negative.

Then compare it to the UK by using the drop down indicators. You will see that the peaks and troughs mirror the German figures, but whereas the German line is above zero, ours is below zero for the entire decade. The UK never once showed positive real wage growth during the entire decade.

The purpose of your argument is to show that FoM/immigration has suppressed our wage growth, yet you have two countries with FoM with one showing positive wage growth across the decade and one showing negative wage growth therefore other factors other than FoM must be in play to account for the difference in wage growth, or in our case lack of it.

On a side note this year's Nobel prize for economics went to David Card for his work on showing increased unskilled migration had no impact on unskilled wages and that increasing the minimum wage did not cost jobs.

Germany Real Wage Growth YoY

Wages in Germany increased 3.80 percent in March of 2024 over the same month in the previous year. This page provides the latest reported value for - Germany Wage Growth - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey...

tradingeconomics.com

German wage growth has been positive albeit the trend over the last decade has been decreasing wage growth (and that is shown in the link you provided) … but this wage growth has not routinely outperformed inflation and only in a couple of years in the past decade has it done so. So is it really growth if the money you earn today buys you less tomorrow? No of course it isn’t.

So my comparison was twofold; firstly using the raw data of wage rises versus inflation, as that is the only meaningful way of measuring wage growth. And secondly had I observed that had been offset by reduced tax obligations then I would have considered it a wage increase, but it hasn’t.

By two countries presume you mean Germany and Poland? Poland provides a net emigration of labour and wage increases have occurred in the skills most likely to experience emigration, Polish wages for low skilled workers has marginally declined in real terms, data for Poland is a little thin on the ground however Ukrainian emigration to Poland does appear to be rather unique. Typically an emigrating workforce will downgrade occupationally but that doesn’t seem to be reflected in Poland largely due to the gaps left my emigrating Poles making it less concentrated and more seamless.

As I’ve previously stated immigration also brings benefits to the wider economy and can be seen to have positive effects on the pay further up the scale which either creates further divide and/or results in an workforce unwilling to do the lower paid work. Immigration is good - if only we could send some of our feckless fuckers the other way.

I just read some of Cards research, he’s analysis is based on a limited number of Cuban immigrants arriving in Miami (about 125k) and how this was absorbed with no obvious impact on wages amongst the low skilled in Miami. My only comment is that limited immigration as a single shock event might not be directly comparable to long term impacts of steady FoM but I’ll certainly try and find the time to read his research.

 

[hilts]

But how do you propose to get rid of the system? You can't vote with your feet because that is self-defeating as the end result doesn't change unless quite literally nobody votes. This won't happen though because of the activism that exists on either side. Many people still vote Tory or Labour purely because of allegiances.

There's a big difference between the activists of Tory/Labour supporters and those who support democracy. Activists would certainly delete democracy to get their party into power and that's why some continue to this day to call the British electorate thick for their poor choices (as if there has ever been an intelligent one on offer).

Brexit was the biggest example of that, you still have some people on here who ironically cry for PR to get their fringe party into power but they'd cancel the Brexit referendum in a heartbeat if they could have.

I agree with you that the system is broken but you cannot blame that on the electorate. We currently have a system now where the majority of people do not like the PM and did not vote for him, yet still he's PM. That isn't the fault of the people, it's the fault of the system and the people who want to preserve that system purely to preserve themselves.

There is only one thing you can do vote for a party that would change the system

 

[BobKowalski]

After the OBR’s somewhat bleak assessment of the economy going forward, fairly grim news on wages from the BoE.

‘BoE forecasts post tax, post inflation wages and salaries are now forecast to fall over the next two years by 1.25% next year and 0.75% the year after. Pre financial crisis this grew on average for nearly two decades by 3.25% per year.

“Growth has been restrained by the disruption in supply chains… and also signs of weaker UK consumer spending” Governor Andrew Bailey says’

 

[MCFC1993]

After the OBR’s somewhat bleak assessment of the economy going forward, fairly grim news on wages from the BoE.

‘BoE forecasts post tax, post inflation wages and salaries are now forecast to fall over the next two years by 1.25% next year and 0.75% the year after. Pre financial crisis this grew on average for nearly two decades by 3.25% per year.

“Growth has been restrained by the disruption in supply chains… and also signs of weaker UK consumer spending” Governor Andrew Bailey says’

That on top of a predicted 5% inflation by April next year is a kick in the bollocks that this country won't be able to take.