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> Social mobility stagnated in both countries as the winners from the Thatcher and Reagan revolutions consolidated their gains. But Britain is trying much harde

> Social mobility stagnated in both countries as the winners from the Thatcher and Reagan revolutions consolidated their gains. But Britain is trying much harder than America to get it going once again. A combination of British angst and American complacency may be the beginning of a great reversal: Britain is becoming more meritocratic, even as America becomes less so. Doesn't matter. Britain does not have better economic mobility for the middle class. This article offers nothing of substance. Wages have diverged further from assets (namely real estate) in the UK than in the US. Tuitions have been going up. The quality of the healthcare system has declined. In fact it could be argued Britain is less meritocratic, because the system holds back the working class and wage earners far more than the United States. You're taxed at excessive levels, while real estate is extraordinarily expensive. The economic systems are the same. Just as the rest of the world you're rewarded for the assets you hold. Not the "work" you do. For many years house prices in London increased faster than the median salary. You made more holding real estate than working. The United States need to fix its healthcare system immediately. It's too far drawn out and a major strain the entire economy. Then it needs to invest in infrastructure. Then reorganize its institutions, the judicial system, etc.

foldr 5y ago
> You're taxed at excessive levels I agree with much of the rest of your post, but the UK doesn’t have particularly high taxes. If you compare take home pay in typical scenarios, the differences between the US and UK are not huge.
- jstx1 5y ago
  This doesn't sound right. A full analysis would be quite complex and time consuming but the UK seems much higher to me from checking some quick online calculators and comparing it to California let alone a state with lower or no state income tax. And keep in mind that in the UK you also contribute around 12% to National Insurance on top of the existing tax rates (https://www.gov.uk/income-tax-rates https://www.gov.uk/income-tax-rates). This is a calculator for take-home pay in the UK - https://listentotaxman.com/ https://listentotaxman.com/. Maybe some US people can share how it compares to the taxes they pay.
  - foldr 5y ago
    The UK tax calculator you linked to includes NI. I’ve worked in both countries (DC and MA in the US) and the percentage of my pay that I kept was about the same as in the UK - especially if you include health insurance in the equation.
    - jstx1 5y ago
      Yes, like I said - it calculates take-home pay. I specifically mentioned NI because it's easy to forget about it if you only look up the tax brackets.
      - foldr 5y ago
        There's not much difference with California, as far as I can see. I used https://smartasset.com/taxes/california-tax-calculator#uV2HgkEBKN https://smartasset.com/taxes/california-tax-calculator#uV2Hg... to compare a $100,000 salary in California to £80,000 in the UK. You get to keep approximately 70% of your pay in both cases (and that's ignoring health insurance costs). Taxes are a bit higher in the UK, especially once you get up to higher pay brackets. However, there seems to be a persistent myth on HN that the UK has much higher taxes than the US. (Perhaps it just gets lumped in with the rest of Europe in people's minds?) Another poster mentions VAT. It's worth noting that unlike with a sales tax, VAT does not apply to every purchase. But certainly it does make some things more expensive in the UK than in the US.
        KaiserPro 5y ago
        > and that's ignoring health insurance costs which is a huge chunk of change in the US to get comprehensive cover similar to the UK which is included in general taxation.
  - zz865 5y ago
    I've worked in both and most taxes in NYC were higher than London, but VAT means its probably the same. The biggest difference is in the US you get very little for it except 13 aircraft carriers where the UK you get a decent safety net and free healthcare. Its very complicated * Property taxes in many states of the USA are so high most of the world are shocked when they hear about them * I didn't even pay NYC city tax which pushes income taxes over 50% in top brackets * VAT in UK is much higher than the random sales taxes in the US. * There are two UK National Insurance taxes - there is one the employer pays that most people dont even know about
iamstupidsimple 5y ago
> For many years house prices in London increased faster than the median salary. The solution is to try and get out of London. Unless you're ultra wealthy, buying a house there is just a pipe dream. Things like remote working from countryside towns may tip the scales in the right direction again.
- jen20 5y ago
  This may be true north of the M4, but in the south west of England things are even more out of whack. The average salary in Bath (used as an example because it’s the last place in the UK I lived), for example, does not come close to allowing even tech workers to buy a house by normal mortgage lending parameters.
  - deleted 5y ago
    [deleted]
- pharmakom 5y ago
  Nonsense. Most of the well paying jobs are clustered in the South East and London. Few jobs are fully remote: you still need to be able commute in a somewhat reasonable time. Housing demand is concentrated in London and the commuter belt, but it’s better to accept insane prices than not have a good income. Your solution only applies to a handful of full-remote workers, local service workers (doctors, teachers, etc) and retirees. I would like to see the government cease inflating the housing market at the expense of salaried workers. Do it gradually so pension funds have time to adjust.
- pydry 5y ago
  If you can't find work -> go to London, there are tons of jobs. If you can't afford property -> what you really need to do is leave London. It's a never ending cycle. We used to build council housing to fix this "not enough homes" problem but councils lost all their power and money under thatcher.
anovikov 5y ago
Well, overall amount of money made from real estate appreciation is still exceedingly tiny compared to the overall amount made in wages right? And, ownership of residential real estate is extremely egalitarian - distributed not just more evenly than ownership of financial assets, but even more evenly than wages (for the simple reason that the richer the person is, the smaller fraction of their income they spend on housing, housing is a struggle for the poor but not for the rich).
- mjburgess 5y ago
  Yes, this comment is just one long series of distribution fallacies. Take, for example, the cost of university education. In 1990, c. <=10% when to "free" university, this generation, 55% do; paying c. £35k to do so (1x the median salary). What are we to conclude from this? That the "middle class" is being ripped off? Or that a massive amount of the population has entered the middle/lower-middle class via university that would have otherwise not been there. This likewise applies to basically all these points. The logic is, "I identify with a 5%er middle class person of the 80s, and I DONT GET WHAT THEY GOT!!" -- despite, now, actually being part of the 55% of the country which has /much/ of "what they had" (-- due to massive wealth increases).
  - mola 5y ago
    You mean they believed the fake crap US media brainwashed them to believe on how life works, while turning them to irrational actors which are easy to take advantage of. I can understand their rage, even if it seems silly, they've been lied to their entire life, for profit. So yeah, their angry about reality, because they still they believe the lies.
- pydry 5y ago
  >Well, overall amount of money made from real estate appreciation is still exceedingly tiny compared to the overall amount made in wages right? And, ownership of residential real estate is extremely egalitarian No. Literally none of that is true.
  - 5y ago
WalterBright 5y ago
Education and healthcare in the US have one thing in common - the US government has gotten heavily involved in them trying to reduce its cost, and the result is those costs rise ever higher. You can trace the beginning of that acceleration in costs to when the government got involved. Think about industries in the US with pretty much zero government involvement - like software. Software is essentially free. Maybe the problems are caused by government involvement, and more such involvement is not the answer.
KaiserPro 5y ago
> Britain does not have better economic mobility for the middle class. This article offers nothing of substance. I think that is not the case. The middle classes in the USA have been hollowed out, mostly down to decreasing wage and increasing costs of healthcare, property and education. The UK only has one of those problems: property costs. University is funded by an (unfair) tax, which is transparently aimed at the middle income earner. We are fixated on calling it a loan, when its not. Unlike the USA its not going to bankrupt you. Healthcare is funded by taxation, and is for the average person significantly more comprehensive than the USA. In the UK, if you are middle class, then you are most likely alright. if you are working class, then you're fucked, because your jobs don't matter, and the safety net that once existed acts as a 100% tax for single mums with jobs (universal credit).
- padthai 5y ago
  > The UK only has one of those problems: property costs. University education in UK (sans Scotland) has gone from zero to GDP 9k a year in fees, the average debt per student is GDP 35k. I know that this quantity and the associated conditions for Americans, or London IT people, sounds like a joke. But AFAIK the average pre-tax graduate job salaries in about GDP 24k.
  - padthai 5y ago
    Too late cannot edit. Where I put GDP, please read GBP.
  - inops 5y ago
    The £9k a year figure is mostly smoke and mirrors though. All British citizens are eligible for a tuition "loan" that covers it. That "loan" (and the maintenance loan too) is the equivalent of a graduate tax, as it's a percentage (9% for the current lot of students) charged on income made past a certain amount (above £25,000 for this lot). The loan is wiped 30 years after graduation (this what will happen for the majority of students).
  - KaiserPro 5y ago
    I get that its sold as a "loan" but its not. Its a ~9% tax that only kicks in after ~25k and disappears at 55(or thereabouts) the American system are actual loans at commercial rates and terms[1]. apart from you can't bankrupt your self out of them. [1]well its more complex.

foldr 5y ago

> You're taxed at excessive levels I agree with much of the rest of your post, but the UK doesn’t have particularly high taxes. If you compare take home pay in typical scenarios, the differences between the US and UK are not huge.

jstx1 5y ago
This doesn't sound right. A full analysis would be quite complex and time consuming but the UK seems much higher to me from checking some quick online calculators and comparing it to California let alone a state with lower or no state income tax. And keep in mind that in the UK you also contribute around 12% to National Insurance on top of the existing tax rates (https://www.gov.uk/income-tax-rates https://www.gov.uk/income-tax-rates). This is a calculator for take-home pay in the UK - https://listentotaxman.com/ https://listentotaxman.com/. Maybe some US people can share how it compares to the taxes they pay.
- foldr 5y ago
  The UK tax calculator you linked to includes NI. I’ve worked in both countries (DC and MA in the US) and the percentage of my pay that I kept was about the same as in the UK - especially if you include health insurance in the equation.
  - jstx1 5y ago
    Yes, like I said - it calculates take-home pay. I specifically mentioned NI because it's easy to forget about it if you only look up the tax brackets.
    - foldr 5y ago
      There's not much difference with California, as far as I can see. I used https://smartasset.com/taxes/california-tax-calculator#uV2HgkEBKN https://smartasset.com/taxes/california-tax-calculator#uV2Hg... to compare a $100,000 salary in California to £80,000 in the UK. You get to keep approximately 70% of your pay in both cases (and that's ignoring health insurance costs). Taxes are a bit higher in the UK, especially once you get up to higher pay brackets. However, there seems to be a persistent myth on HN that the UK has much higher taxes than the US. (Perhaps it just gets lumped in with the rest of Europe in people's minds?) Another poster mentions VAT. It's worth noting that unlike with a sales tax, VAT does not apply to every purchase. But certainly it does make some things more expensive in the UK than in the US.
      - KaiserPro 5y ago
        > and that's ignoring health insurance costs which is a huge chunk of change in the US to get comprehensive cover similar to the UK which is included in general taxation.
- zz865 5y ago
  I've worked in both and most taxes in NYC were higher than London, but VAT means its probably the same. The biggest difference is in the US you get very little for it except 13 aircraft carriers where the UK you get a decent safety net and free healthcare. Its very complicated * Property taxes in many states of the USA are so high most of the world are shocked when they hear about them * I didn't even pay NYC city tax which pushes income taxes over 50% in top brackets * VAT in UK is much higher than the random sales taxes in the US. * There are two UK National Insurance taxes - there is one the employer pays that most people dont even know about

iamstupidsimple 5y ago

> For many years house prices in London increased faster than the median salary. The solution is to try and get out of London. Unless you're ultra wealthy, buying a house there is just a pipe dream. Things like remote working from countryside towns may tip the scales in the right direction again.

jen20 5y ago
This may be true north of the M4, but in the south west of England things are even more out of whack. The average salary in Bath (used as an example because it’s the last place in the UK I lived), for example, does not come close to allowing even tech workers to buy a house by normal mortgage lending parameters.
- deleted 5y ago
  [deleted]
pharmakom 5y ago
Nonsense. Most of the well paying jobs are clustered in the South East and London. Few jobs are fully remote: you still need to be able commute in a somewhat reasonable time. Housing demand is concentrated in London and the commuter belt, but it’s better to accept insane prices than not have a good income. Your solution only applies to a handful of full-remote workers, local service workers (doctors, teachers, etc) and retirees. I would like to see the government cease inflating the housing market at the expense of salaried workers. Do it gradually so pension funds have time to adjust.
pydry 5y ago
If you can't find work -> go to London, there are tons of jobs. If you can't afford property -> what you really need to do is leave London. It's a never ending cycle. We used to build council housing to fix this "not enough homes" problem but councils lost all their power and money under thatcher.

anovikov 5y ago

Well, overall amount of money made from real estate appreciation is still exceedingly tiny compared to the overall amount made in wages right? And, ownership of residential real estate is extremely egalitarian - distributed not just more evenly than ownership of financial assets, but even more evenly than wages (for the simple reason that the richer the person is, the smaller fraction of their income they spend on housing, housing is a struggle for the poor but not for the rich).

mjburgess 5y ago
Yes, this comment is just one long series of distribution fallacies. Take, for example, the cost of university education. In 1990, c. <=10% when to "free" university, this generation, 55% do; paying c. £35k to do so (1x the median salary). What are we to conclude from this? That the "middle class" is being ripped off? Or that a massive amount of the population has entered the middle/lower-middle class via university that would have otherwise not been there. This likewise applies to basically all these points. The logic is, "I identify with a 5%er middle class person of the 80s, and I DONT GET WHAT THEY GOT!!" -- despite, now, actually being part of the 55% of the country which has /much/ of "what they had" (-- due to massive wealth increases).
- mola 5y ago
  You mean they believed the fake crap US media brainwashed them to believe on how life works, while turning them to irrational actors which are easy to take advantage of. I can understand their rage, even if it seems silly, they've been lied to their entire life, for profit. So yeah, their angry about reality, because they still they believe the lies.
pydry 5y ago
>Well, overall amount of money made from real estate appreciation is still exceedingly tiny compared to the overall amount made in wages right? And, ownership of residential real estate is extremely egalitarian No. Literally none of that is true.
- 5y ago

WalterBright 5y ago

Education and healthcare in the US have one thing in common - the US government has gotten heavily involved in them trying to reduce its cost, and the result is those costs rise ever higher. You can trace the beginning of that acceleration in costs to when the government got involved. Think about industries in the US with pretty much zero government involvement - like software. Software is essentially free. Maybe the problems are caused by government involvement, and more such involvement is not the answer.

KaiserPro 5y ago

> Britain does not have better economic mobility for the middle class. This article offers nothing of substance. I think that is not the case. The middle classes in the USA have been hollowed out, mostly down to decreasing wage and increasing costs of healthcare, property and education. The UK only has one of those problems: property costs. University is funded by an (unfair) tax, which is transparently aimed at the middle income earner. We are fixated on calling it a loan, when its not. Unlike the USA its not going to bankrupt you. Healthcare is funded by taxation, and is for the average person significantly more comprehensive than the USA. In the UK, if you are middle class, then you are most likely alright. if you are working class, then you're fucked, because your jobs don't matter, and the safety net that once existed acts as a 100% tax for single mums with jobs (universal credit).

padthai 5y ago
> The UK only has one of those problems: property costs. University education in UK (sans Scotland) has gone from zero to GDP 9k a year in fees, the average debt per student is GDP 35k. I know that this quantity and the associated conditions for Americans, or London IT people, sounds like a joke. But AFAIK the average pre-tax graduate job salaries in about GDP 24k.
- padthai 5y ago
  Too late cannot edit. Where I put GDP, please read GBP.
- inops 5y ago
  The £9k a year figure is mostly smoke and mirrors though. All British citizens are eligible for a tuition "loan" that covers it. That "loan" (and the maintenance loan too) is the equivalent of a graduate tax, as it's a percentage (9% for the current lot of students) charged on income made past a certain amount (above £25,000 for this lot). The loan is wiped 30 years after graduation (this what will happen for the majority of students).
- KaiserPro 5y ago
  I get that its sold as a "loan" but its not. Its a ~9% tax that only kicks in after ~25k and disappears at 55(or thereabouts) the American system are actual loans at commercial rates and terms[1]. apart from you can't bankrupt your self out of them. [1]well its more complex.