I think that's their point, that if the jobs being taken by Brits are ones without anyone in the US able/willing to fill the position then the headline of "stealing jobs" is a bad one.
As an American, I've heard way more stories about endless application for white collar jobs going nowhere than white collar jobs not being able to be filled (unless we are talking about something specialized and niche.). American companies have no problem selling out their own citizens for their shareholders.
Would you mind also looking a bit further please, like on the main European continent? Our wages here are even lower than in London/UK and we also speak good English. You can hire a developer here for what you'd pay a barista at your San-Fran HQ. Thanks!
I've been a hiring manager, and while wages play a role, they do not significantly move the needle.
The main driver is talent base, ease of operations, and time zone overlaps.
The true value of offshoring comes from being able to essentially run 24/7 operations across a couple countries that have a strong talent base and relatively easy operations for us as a company (easy to fire, easy to hire, tax holidays, etc).
This is why Israel, India, Ireland, and parts of Eastern Europe like Romania, Poland, Belarus, and Ukraine became popular for software outsourcing.
>This is why Israel, India, and parts of Eastern Europe like Romania, Poland, Belarus, and Ukraine became popular for software outsourcing.
Not sure about the rest but it's definitely not easy to fire in Romania at all, and workers there get a lot of mandatory legal benefits like generous sick and parental leave. Unless you hire them B-2-B, which is quite common for high wage outsourcing jobs, then yeah.
No, you set up your own legal entity(company) based on the financial/legal framework in your country, and bill your foreign employer for the work you do, but you're not an employee so you have no right to sick days, firing protection, etc. and have to do your own taxes.
Note that if the employer is found to be engaging in "disguised employment" then, in some jurisdictions such as the UK, they may be found liable for these things anyway plus penalties.
I know, some countries like UK, Germany, Austria, etc have laws to discourage this, but in Eastern Europe(Poland, Romania, Bulgaria, etc) this is totally legal.
I've heard one reason the UK is so popular for European HQs is we can talk to India in the morning, Europe during the day, the East Coast in the afternoon and the West Coast as we sign off. Basically we cover the vast majority of the Western world plus the outsourcing giant that is India.
The time zone factor for meetings isn't significant, as Indian, Eastern European, and Israeli employees are fine taking meetings that accommodate American time zones because we pay 2-3x more than local competitors.
The reason UK is a base is because UK business law is extremely thorough and any flavor of contract dispute has been litigated multiple times in the UK.
This means it's easier for me to manage operations all over the EFTA and EU via the EU-UK TCA.
The English factor is a massive plus as well because that is the global language of commerce - not French or German. This is why Netherlands tries to treat English as a first class language similar to Dutch, because that is critical for businesses.
I think the accent has as much to do with it as anything. Americans are culturally wired to overestimate someone with even a mildly posh British accent.
Yes outsourcing to the UK where the average salary is ~$37,000 is I'm sure highly cost effective for US firms. Where we'd reach to say India for cheap labour the US now comes to us. I've seen US Interns get paid more than the vast majority of brits.
Even the average dev salary is only say, double that average. Not even accounting for taxes - which supposedly cover healthcare but almost none you can readily access.
>Even the average dev salary is only say, double that average.
Dev salary being double the average national salary is very good by western EU salaries. In Austria for example as a dev you earn just slightly above the national average income.
I think only in the US and cheap countries like Poland, Romania, SE-Asia, etc it's normal for devs to earn several times the average national income because they're hot markets for tech outsourcing and average national wages are on the low side for those not working in tech making the gap really big, but in western Europe dev wages tend to be around national wages out side of big-tech.
Also from Ireland. I think English language being their main strength, versus in non-English speaking EU countries where recruiters tend to only look locally where their native language gets spoken instead of venturing into foreign countries where they don't know the language and culture very well.
The other I think is how hungry and agresive the UK is for service sector opportunities, having always positioned it's economy as a middle-man. They have that US inspired go-getter mentality, that's lacking on the mainland.
It’s because inequality is brutal in the island, while the mainland is a bit more equalitarian. So was the UK up until Thatcher really. She released the Kraken of capitalism, and now the UK feels like a small version of the US, inequality wise. Thatcher’s reforms increased GDP and wealth but also massively grew the number of working poor.
Although she also massively increased the wealth of the working class by opening up more property ownership. UK wealth inequality is amongst the lowest in Europe.
You mean her political jiu jitsu of making council homes available for sale?
Yes it created a new owner class that was enamoured with her, but the end consequence of it is probably the housing crisis/asset bubble that the UK has been living with for 15 years or so.
Buying a council home did make a lot of new owners rich, but it's likely it harmed the long term prospects for the whole country. That was a lot of Thatcher. Deindustrialization annihilated the working middle class. In Germany industry was never destroyed for the sake of the service sector.
I don't disagree at all, and I never said I didn't. That said, I do think the UK is quite well placed to export services as opposed to goods - English-speaking, favourable timezone, strong body of corporate law, and a very good tertiary education system all favour services over goods.
I'd also say the UK is more comparable to France, which deindustrialised to a similar degree.
>In Germany industry was never destroyed for the sake of the service sector.
Until they ran out of cheap Russian gas.
Germany also has a high level of wealth inequality. Buying a home there is a luxury for the rich now. Yeah, rent protections and what not, but good luck to the average German affording rent and utilities in 30 year on a pension.
The fact that you think Germany is anywhere near as deindustrialised as the UK, because of the increasing cost of energy, is a bit funny to me. The UK was brutally deindustrialised.
Absolutely Germany is the outlier. That's reason I mentioned it. From visiting and talking to people, it's one of the healthiest economies I've ever seen.
"This paper concentrates on the 1% richest households in the UK in a comparison with the other four large Western European countries: Germany, France, Italy and Spain. In the European context the UK is an outlier of extreme inequality. "
"The UK sits half way between the USA and mainland Europe in economic space. The UK levels of inequality are now huge by normal European standards, but not so huge when compared to the average levels of economic inequality experienced within the USA."
No it isn't - I'm well aware UK income inequality is high, whereas wealth inequality is quite low. That's why I said "wealth inequality", and that Thatcher improved it. Right-to-Buy basically made home ownership vastly more accessible to the working class in a way that hadn't happened before. It's bad that it coincided with an economic reworked that we're still recovering from, but I can't discuss everything in every comment.
I'm not sure how much the right to buy directly increased wealth vs. the lack of subsequent council house construction which changed supply vs. demand and drove up the market prices for all houses.
To me, house price inflation feels like all other inflation: the number may be going up, but people aren't actually better off for it.
Pretty much. Right to Buy made her popular, and made a single generation of people richer, but at the cost of destroying the housing market in the long term.
In the link you shared according to 2022 Gini wealth inequality[1] the UK is right in the middle, not too high, not too low. Who's the one cherry picking statistics? The highest wealth inequality according to that, is in Sweden.
Yes, totally agree. I really wish they would disaggregate GDP by Geography and Income bracket. If you factor out London's GDP the rest of the UK has a GDP/capita similar to Mississippi, the State with the lowest GDP in the USA.
The anglosphere may have high GDP/capita but if you factor by Income bracket, that GDP is heavily concentrated in the top income brackets.
I’ve wondered this too. One theory I have is that in the UK doing an undergraduate degree is a humanities subject has much higher social status than the US. This leads more of the “top” high school students to do these degrees. When they graduate they obviously need a job and recruiting works week due to needing good language and soft skills. Maybe a bs theory though :)
> in the UK doing an undergraduate degree is a humanities subject has much higher social status than the US
I'm not really sure there's much of a difference between any subjects in the UK. Like, maybe stuff like Physics is seen as better? There's a big thing against "Micky Mouse degrees", that aren't seeing as leading to a job.
Recruiters themselves are seen as one step above estate agents, which is _not_ a high status.
I have a pretty low opinion of estate agents; but my opinion of recruiters is much lower. I'd put them in a class alongside - I dunno, politicians, maybe.
Yes, I can agree and I think that the corona lockdowns at least here in Europe accelerated this impression. Before 2021 it was very rare, that I would talk to a recruiter from UK, mainly those from Facebook, after 2021 it was the new normal.
During the mid phase of corona, let’s call it the Work from Home aka ZOOM phase, big tech hired massive amounts of developers all over the world and English was and is the lingua franca in everything Computer Science related.
I guess that the internationalization and corona together with English being the common denominator played a huge part here as well as cultural considerations. People from UK are tight to the main markets like USA, Canada, EU and India.
The UK recruitment industry is extremely competitive/aggressive. After Covid, they realised they could even outcompete the Americans on their home turf.
UK estate agents are also expanding abroad at an increasing pace.
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.
In 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?"
You'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.
It 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.
>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.
I 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.
Unsuitable 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.
Worth 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.
Thatcher 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.
Thatcher 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.
Thatcher was able to pay for her tax cuts without hitting social programs by using the Oil revenues. That's gone now. Lizz Truss tried to do a Thatcher with tax cuts but there was no Oil revenues to pay for it. The govt debt was going to balloon, so the market reacted very unfavorably. That was the end of that.
Incidental, people seem to forget that Lizz Truss was the number one pick by the Conservative Party membership for leader. That tells you all you need to know about the judgement of the Conservative Party membership.
What’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.
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…
Not sure which graph you are looking at but Google Finance shows 2008, the Brexit referendum and Liz Truss giving the Pound/Dollar exchange rate a good kicking, after each of those events it didn't recover. This is the reason UK has been attractive for US and Canadian investors.
Maybe we should we all have a go at reading a story into the wiggly line? There was a sharp drop in 2008, back to where it was pre-2002 and seems to be pretty much on trend for the data set overall.
There isn't anything to see in this exchange rate data. Even the apparent blip from 2016 probably wouldn't pass a good statistical test of being evidence of change.
Exchange rates aren't even a good measure of how economies are doing relative to each other, or what the investment opportunities look like.
I’m looking at that graph. The Brexit referendum was in June 2016 and people expected it would fail. There was steep decline from May 2014 to December 2016. Since then it’s kind of been in the same range. It just seems to have nothing to do with Brexit.
It just seems weird to me as a 90s kid that people are trying to connect Brexit to what seems to be a larger structural decline caused by globalism in the first place. (Of course if globalism is anyone’s fault it’s the British’s, so there’s that.)
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.
Of course there's no appetite for that. Can't really imagine people looking at what's going on in Argentina and saying "Where do we sign up?"
The big story in first-world politics in the next 50 years is finding a way to stop the slippage in quality of life for the bottom 90%. No amount of 12% paper GDP growth, cheaper tech products, or dousing the economy in credit will paper over this problem forever. It might not even be about "liberalize the economy to restart growth"-- it could come from massive tax-and-spend projects (the UK has plenty of crumbling infrastructure to deal with) that actually get real salaries rising.
The UK has tried that. Infrastructure mostly means transport when it comes to government, but can occasionally mean airports or sewers. Anything that involves forcing people off land in order to dig it up, basically.
Crossrail, Thames Tideway and HS2 are all attempts at creating wealth through infrastructure spending. The link between these things and wealth is very weak. There's been no noticeable uplift from Crossrail, HS2 is semi-stalled and Heathrow Runway 3 has been stalled for decades, because the incredible costs can't really be justified even with very optimistic modeling.
The other issue is these are invariably funded by borrowing. Even the current levels of taxation aren't sufficient to pay day to day costs, so capital projects definitely can't be. So it just leads to a vicious cycle in which the infrastructure crumbles today thanks to the borrowing of yesterday consuming all the taxes.
I'm an American software dev that has been in London for ~11 years now after working in Silicon Valley for years. The lower dev salaries are definitely a thing here. But I personally don't see much evidence of US jobs coming here to get filled on the cheap. Certainly not from A-list/exciting companies any way. Maybe it's a growing trend, but it's not something that many people here are taking note of.
Same here, work for a FAANG in London. They don't move more jobs to the UK despite the far lower wages because they don't want to deal with the complexities of managing across time zones.
There's quite a bit of slippy argumentation in this article.
The anecdote about the filming of Barbie is misleading. The UK has been strongly competing with Hollywood for filming for years, as it's one of the few places in the world that has the local high-end moviemaking infrastructure to compete with Hollywood, but without the militant unions. This isn't a new phenomenon and the unions factor is mentioned near the end of the article, even though movies are presented as a new trend at the start.
Then the article goes off on a big Brexit-related hit job. They say "Sterling has lost 15% of its value against the dollar since the 2016 Brexit referendum", "For the stagnating post-Brexit UK economy..." and "The pound’s sharp drop in value". For the real currency story see my other comment but briefly the currency had been in decline since 2014, but reached its pre-referendum value about 18 months after the vote when it became clear the promised 800,000 job losses and "emergency taxes" weren't going to happen. The actual leaving of the EU had little apparent effect either, with GBP/USD being the same now as in 2020.
That makes sense because the UK economy is services-heavy and the EU single market only did anything for goods trading, not services. That's why the UK has always exported more services to the USA than the EU and why leaving didn't actually impact UK/EU trade despite what the article claims. There's a Parliamentary report that shows a graph of long term UK/EU trade (in slow decline due to the falling size of the EU relative to rest of the world) and you can't actually see Brexit on it at all, because the effect was too temporary to show up.
The WSJ also tries to blame inflation on Brexit but again, a quick check of the real charts shows that this isn't the case:
Inflation wandered around between the 0%-2% band that the central bank was targeting up until the economically disastrous lockdowns and associated money printing to pay for things like furlough and eat-out-to-help-out (which the US wisely did not copy). The GFC had a much bigger impact on inflation than Brexit.
100% agree. I'm deeply anti-Brexit, but out of all the EU countries, we were probably the best places to make a go at it. We export mostly services, speak the global lingua-franca (lingua-anglo?), have a great geographic position, and unlike almost every other EU country, our biggest trading partner is not in Europe.
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[ 3.1 ms ] story [ 110 ms ] threadstaff shortages in the U.S.
You mean the white-collar jobs Americans can't find anyone to do?
The main driver is talent base, ease of operations, and time zone overlaps.
The true value of offshoring comes from being able to essentially run 24/7 operations across a couple countries that have a strong talent base and relatively easy operations for us as a company (easy to fire, easy to hire, tax holidays, etc).
This is why Israel, India, Ireland, and parts of Eastern Europe like Romania, Poland, Belarus, and Ukraine became popular for software outsourcing.
Not sure about the rest but it's definitely not easy to fire in Romania at all, and workers there get a lot of mandatory legal benefits like generous sick and parental leave. Unless you hire them B-2-B, which is quite common for high wage outsourcing jobs, then yeah.
That another business is liable to pay them
This is what my previous employer did
The reason UK is a base is because UK business law is extremely thorough and any flavor of contract dispute has been litigated multiple times in the UK.
This means it's easier for me to manage operations all over the EFTA and EU via the EU-UK TCA.
The English factor is a massive plus as well because that is the global language of commerce - not French or German. This is why Netherlands tries to treat English as a first class language similar to Dutch, because that is critical for businesses.
I think the accent has as much to do with it as anything. Americans are culturally wired to overestimate someone with even a mildly posh British accent.
Even the average dev salary is only say, double that average. Not even accounting for taxes - which supposedly cover healthcare but almost none you can readily access.
Dev salary being double the average national salary is very good by western EU salaries. In Austria for example as a dev you earn just slightly above the national average income.
I think only in the US and cheap countries like Poland, Romania, SE-Asia, etc it's normal for devs to earn several times the average national income because they're hot markets for tech outsourcing and average national wages are on the low side for those not working in tech making the gap really big, but in western Europe dev wages tend to be around national wages out side of big-tech.
The other I think is how hungry and agresive the UK is for service sector opportunities, having always positioned it's economy as a middle-man. They have that US inspired go-getter mentality, that's lacking on the mainland.
Yes it created a new owner class that was enamoured with her, but the end consequence of it is probably the housing crisis/asset bubble that the UK has been living with for 15 years or so.
Buying a council home did make a lot of new owners rich, but it's likely it harmed the long term prospects for the whole country. That was a lot of Thatcher. Deindustrialization annihilated the working middle class. In Germany industry was never destroyed for the sake of the service sector.
I'd also say the UK is more comparable to France, which deindustrialised to a similar degree.
Until they ran out of cheap Russian gas.
Germany also has a high level of wealth inequality. Buying a home there is a luxury for the rich now. Yeah, rent protections and what not, but good luck to the average German affording rent and utilities in 30 year on a pension.
The UK manufacturing output is 8.69% of GDP. https://www.macrotrends.net/global-metrics/countries/GBR/uni...
German manufacturing output is 18% of GDP in 2022. That's over twice the UK. https://data.worldbank.org/indicator/NV.IND.MANF.ZS?location...
Look at data, stop reading sensationalistic news articles. I doubt that Germany has lost over half its industrial capacity since 2022.
https://www.sciencedirect.com/science/article/abs/pii/S01436...
"This paper concentrates on the 1% richest households in the UK in a comparison with the other four large Western European countries: Germany, France, Italy and Spain. In the European context the UK is an outlier of extreme inequality. "
"The UK sits half way between the USA and mainland Europe in economic space. The UK levels of inequality are now huge by normal European standards, but not so huge when compared to the average levels of economic inequality experienced within the USA."
https://equalitytrust.org.uk/scale-economic-inequality-uk
So the wealth gini coefficient is indeed lower I expected.
The income gini coefficient however is among the highest in Europe, just as I expected.
Is it possible you're cherry picking statistics?
To me, house price inflation feels like all other inflation: the number may be going up, but people aren't actually better off for it.
[1] https://equalitytrust.org.uk/sites/default/files/images/hero...
The anglosphere may have high GDP/capita but if you factor by Income bracket, that GDP is heavily concentrated in the top income brackets.
I'm not really sure there's much of a difference between any subjects in the UK. Like, maybe stuff like Physics is seen as better? There's a big thing against "Micky Mouse degrees", that aren't seeing as leading to a job.
Recruiters themselves are seen as one step above estate agents, which is _not_ a high status.
Still all useless AF though.
While completely ignoring that all I've ever worked as is a System Engineer/Linux Admin/Engineer.
During the mid phase of corona, let’s call it the Work from Home aka ZOOM phase, big tech hired massive amounts of developers all over the world and English was and is the lingua franca in everything Computer Science related.
I guess that the internationalization and corona together with English being the common denominator played a huge part here as well as cultural considerations. People from UK are tight to the main markets like USA, Canada, EU and India.
Just my 5 cents.
UK estate agents are also expanding abroad at an increasing pace.
*I say document, it's written like it's by 6th formers who have just discovered Ayn Rand, but it is pretty short.
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.
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.
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.
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.
Especially the deteriorating economic situation for the entirety of the UK outside of London?
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.
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?
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.
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.
Incidental, people seem to forget that Lizz Truss was the number one pick by the Conservative Party membership for leader. That tells you all you need to know about the judgement of the Conservative Party membership.
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.
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+r...
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…
https://www.google.com/finance/quote/GBP-USD?hl=en&window=MA...
The Euro for example has held it's value since the culmination of the debt crisis around 2014.
https://www.google.com/finance/quote/EUR-USD?hl=en&window=MA...
There isn't anything to see in this exchange rate data. Even the apparent blip from 2016 probably wouldn't pass a good statistical test of being evidence of change.
Exchange rates aren't even a good measure of how economies are doing relative to each other, or what the investment opportunities look like.
It just seems weird to me as a 90s kid that people are trying to connect Brexit to what seems to be a larger structural decline caused by globalism in the first place. (Of course if globalism is anyone’s fault it’s the British’s, so there’s that.)
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.
The big story in first-world politics in the next 50 years is finding a way to stop the slippage in quality of life for the bottom 90%. No amount of 12% paper GDP growth, cheaper tech products, or dousing the economy in credit will paper over this problem forever. It might not even be about "liberalize the economy to restart growth"-- it could come from massive tax-and-spend projects (the UK has plenty of crumbling infrastructure to deal with) that actually get real salaries rising.
Crossrail, Thames Tideway and HS2 are all attempts at creating wealth through infrastructure spending. The link between these things and wealth is very weak. There's been no noticeable uplift from Crossrail, HS2 is semi-stalled and Heathrow Runway 3 has been stalled for decades, because the incredible costs can't really be justified even with very optimistic modeling.
The other issue is these are invariably funded by borrowing. Even the current levels of taxation aren't sufficient to pay day to day costs, so capital projects definitely can't be. So it just leads to a vicious cycle in which the infrastructure crumbles today thanks to the borrowing of yesterday consuming all the taxes.
The anecdote about the filming of Barbie is misleading. The UK has been strongly competing with Hollywood for filming for years, as it's one of the few places in the world that has the local high-end moviemaking infrastructure to compete with Hollywood, but without the militant unions. This isn't a new phenomenon and the unions factor is mentioned near the end of the article, even though movies are presented as a new trend at the start.
Then the article goes off on a big Brexit-related hit job. They say "Sterling has lost 15% of its value against the dollar since the 2016 Brexit referendum", "For the stagnating post-Brexit UK economy..." and "The pound’s sharp drop in value". For the real currency story see my other comment but briefly the currency had been in decline since 2014, but reached its pre-referendum value about 18 months after the vote when it became clear the promised 800,000 job losses and "emergency taxes" weren't going to happen. The actual leaving of the EU had little apparent effect either, with GBP/USD being the same now as in 2020.
That makes sense because the UK economy is services-heavy and the EU single market only did anything for goods trading, not services. That's why the UK has always exported more services to the USA than the EU and why leaving didn't actually impact UK/EU trade despite what the article claims. There's a Parliamentary report that shows a graph of long term UK/EU trade (in slow decline due to the falling size of the EU relative to rest of the world) and you can't actually see Brexit on it at all, because the effect was too temporary to show up.
The WSJ also tries to blame inflation on Brexit but again, a quick check of the real charts shows that this isn't the case:
https://tradingeconomics.com/united-kingdom/inflation-cpi
Inflation wandered around between the 0%-2% band that the central bank was targeting up until the economically disastrous lockdowns and associated money printing to pay for things like furlough and eat-out-to-help-out (which the US wisely did not copy). The GFC had a much bigger impact on inflation than Brexit.
https://cc.bingj.com/cache.aspx?d=3118053273395&w=mX8eXvPdcg...