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As someone who lives in the UK it's pretty depressing that we somehow seem to have succeeded in mismanaging ourselves into being a low-wage economy. The 20% or
by seanhunter 3y ago
As someone who lives in the UK it's pretty depressing that we somehow seem to have succeeded in mismanaging ourselves into being a low-wage economy. The 20% or so depreciation in the pound as a result of brexit, and the subsequent futher devaluation as a result of the chaos of Boris -> Liz Truss -> Rishi Sunak definitely played a part in making the UK relatively attractive for firms from the US say, but there are also structural considerations such as years of real earnings decline and underinvestment in infrastructure, especially in the North of England, Wales and much of Scotland.
- stuaxo 3y agoIt's deliberate, if you read their document* from a few years ago "Britain Unchained" that was basically the plan. *I say document, it's written like it's by 6th formers who have just discovered Ayn Rand, but it is pretty short.
- ben_w 3y agoIn my head, a satire of a Brexit politician: "All those foreigners, coming here, taking our jobs; don't they know that's it's supposed to be us, going abroad, stealing their jobs?"
- seanhunter 3y agoYes and they come over here, steal our jobs and are simultaneously lazy and sponging off our welfare. They are Schrödinger’s immigrants
- KaiserPro 3y agoYou're assuming that it was a plan in reality it really wasn't the brexit vote went an unexpected way, and people had to actually figure out how to deliver the undeliverable policies that were promised. The problem being that the people doing the promising had never actually done anything of substance outside of talking bollocks for a living. The people doing the delivering _did_. However the probrexit side said "give me solutions not problems" followed by "no no, thats just propganda, you're the enemy of the people, I will find someone to put this moon on a stick" Thus we ended up with lord fucking frost. The anti brexit people wouldn't take anything less than full reversal meaning that we defaulted onto something utterly shite Now we are left with industrial quantities of diarrhoea smeared over everything, which is going to take years to clean up. The problem being that the next lot are promising not to use soap to clean up brexit. They are promising to shine it to a bright polish.
- ljf 3y agoIt is wild isn't it - I know it was a blip but when I went to Auz 25 years ago it was AU$2.50 to the pound, EU was 1.67 to the pound when I went on holidays to Greece in my 20s and then when I first went to the states (2008) it was $2.05 to the £. In 2008 was chatting to a lady in LA who couldn't believe (at that exchange rate) that we paid $7 for a Starbucks - she assumed we were all loaded, and for that trip it certainly felt that way. But now when I go to the EU or US I feel broke - my money barely goes as far as it used to. I know that my salary has barely kept pace with inflation the last few years, but life in Britain (even with a good job) feels hobbled.
- Rinzler89 3y ago>As someone who lives in the UK it's pretty depressing that we somehow seem to have succeeded in mismanaging ourselves into being a low-wage economy. Not sure where you got this from but the UK is far away from a low-wage economy. I once met a British engineer in a bar here in Austria and he was handing over industrial automation activates for relocation of a auto assembly from the UK to Austria, citing the much lower wages in Austria compared to UK.
- seanhunter 3y agoI got that from TFA where it quotes people like Jamie Dimon saying that JPMC is one of the largest employers in Scotland now because wages are so much lower than they would be for comparable employees in the US.
- Rinzler89 3y agoWell, if you cherry-pick to compare UK only to US, then yeah it's lower wages, but the US is the global outlier here, not the UK. Almost any other country in the EU mainland(barring maybe Switzerland and Norway) is low wage compared to US. If you do a more realistic comparison, like UK to EU, wages are not low at all.
- dukeyukey 3y agoThe UK still pays well by European standards, it's the US being the outlier here.
- lonelyasacloud 3y agoUnsuitable plant in Oxford, German owners, and the ability to sell cars in Europe post Brexit with fewer hurdles and lower duty likely played a bigger role in that decision.
- Rinzler89 3y agoThat was pre-Brexit though. And the UK plant was JLR afaik, so Indian not German owned.
- lmpdev 3y agoWasn’t that all set in motion by Thatcher? Especially the deteriorating economic situation for the entirety of the UK outside of London?
- schnitzelstoat 3y agoIn 2007 it was decent. I feel like we got hit hard by the 2008 crisis and never really recovered. Not just the UK either but most of Europe too. Back then the USA felt a little bit wealthier, now it feels light-years ahead.
- dukeyukey 3y agoWorth remembering it's quite natural for the US to be wealthier. It has the resources of a continent, functionally infinite land, massive energy resources, the thousands of miles and an ocean away from any threats. Like, of course a country like that is gonna be rich.
- ben_w 3y agoIf it's natural for those specific reasons… Why didn't Russia get rich after the fall of the USSR made them no longer (at the time) the natural enemies of everyone around them? And why is the EU (a union if not a nation) still chasing the US on GDP/capita?
- doix 3y agoThatcher left office in the early 90's, right? I remember it was sometime around the 2008 financial crash that the pound just started tanking and never recovered. Every subsequent crisis, the pound falls more vs the dollar/euro and never really recovers. At least that's how it feels to me as someone that gets paid in pounds. Every year I feel like my money goes less and less far.
- KaiserPro 3y agoThatcher set out some reforms and flogged off a lot of state run things. One of the big things she did was de-regulate some of the financial markets (a-la big bang) The shutting down of the mines was the thing that she was most vilified for. However she left office in 1990, there were 7 more years of conservative rule after her. However, much as its fun to piss on her grave (no judgement) the stuff she did was/is pretty tame and almost left wing compared to the present government.
- rayiner 3y agoWhat’s Brexit got to do with anything? If you look at a graph of the devaluation of the pound, it’s a pretty linear decline from 2014 onward. That was two years before the referendum. The UK actually seems to be stuck in more or less the same malaise that’s hit Italy and France, which is failure to recover from the 2008 crash. If you look at a graph of GDP per capita, all three countries have been totally stagnant on that measure since 2008. It’s similar to the stagnation Japan has experienced since its crash in the mid 1990s. The US has in theory continued to grow GDP per capita wise, but the growth seems fake. If you take out a handful of global knowledge worker hubs like the Bay Area and NYC, people probably aren’t any better off since then.
- emptyfile 3y ago[dead]
- zarzavat 3y ago2014 was the Scottish independence referendum threatening to cleave the country in half. Then 2015 was the run up to Brexit.
- rayiner 3y ago[flagged]
- ben_w 3y agoThere was a sharp change to the exchange rates the moment the markets reopened after the result was announced: https://www.wolframalpha.com/input?i=pound+dollar+exchange+rate+2016 https://www.wolframalpha.com/input?i=pound+dollar+exchange+r... If you compare this to the two surrounding 6 year periods, each in isolation seems unremarkable: https://www.wolframalpha.com/input?i=pound+dollar+exchange+rate+2010+to+2015 https://www.wolframalpha.com/input?i=pound+dollar+exchange+r... https://www.wolframalpha.com/input?i=pound+dollar+exchange+rate+2017+to+2022 https://www.wolframalpha.com/input?i=pound+dollar+exchange+r... I agree that the deeper issue is the failure to recover from 2008; I've also seen the similarities with Japan: one lost decade turning into two lost decades…
- 3y ago
- mike_hearn 3y agoBrexit isn't really a part of the story, regardless of what the punditry may wish. Look at GBP/USD long term to see: https://finance.yahoo.com/chart/GBPUSD%3DX?showOptin=1#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 https://finance.yahoo.com/chart/GBPUSD%3DX?showOptin=1#eyJpb... The big shock was 2008. Then things were stable for a few years but starting in 2014 the value of the currency went into a long period of decline. Brexit in 2016 spooked a bunch of traders who were terrified of the readily apparent insanity visible in the (Remainer) government - talks of massive emergency tax rises and so on clearly had an impact - but then once Cameron/Osborne were booted out and the massive recession the "experts" had promised failed to materialize, the currency regained its value vs the USD until by 2018 it was back at the same level it had been at the start of 2016. Then the currency got weaker with time until a recovery around COVID, then the decline set in again. So as you can see Brexit had a temporary effect due to the, uh, "broken promises" about the costs of leaving made by the Remain campaign. But within 18 months that had been unwound. The real story here is a macroeconomic one: the UK economy was permanently damaged by the (American triggered!) financial crisis and never really recovered in the same way the USA itself did. Growth stopped around that time, and it was then dragged down even further by Eurozone weakness starting around 2012-2014 era. The 2010s were a lost decade for the UK economically. The 2020s will be no better given the way things are going politically. Brexit has little to do with it though, except in the sense that it would enable a hypothetical capitalist/libertarian party that doesn't currently exist to liberalize the economy to US standards and restart growth. There's no appetite to do that in the UK political mainstream at the moment.