[HN Gopher] Job vacancies surge past one million in new record
___________________________________________________________________
Job vacancies surge past one million in new record
Author : gixo
Score : 187 points
Date : 2021-09-14 09:38 UTC (13 hours ago)
(HTM) web link (www.bbc.co.uk)
(TXT) w3m dump (www.bbc.co.uk)
| durnygbur wrote:
| > Ali had to turn to specialist recruitment firms and has brought
| in seasonal workers from Poland
|
| I ain't no picking anything! Sent your daughters over here, now
| we want some easy sex for free! (after charging half of their
| salary for staying in a moldy hut).
| dbetteridge wrote:
| Related discussion happening on reddit about this, personally
| i've already noticed an uptick in wages for Software Engineers in
| London and an increase in remote roles.
|
| https://www.reddit.com/r/unitedkingdom/comments/pivruo/the_1...
| GordonS wrote:
| I've noticed a big uptick in availability of senior roles (e.g.
| Architect) recently, but also a big uptick in salary - I've had
| several recruiters contacting me over the past month for senior
| roles in the range of PS80-95k, and every one was OK with
| remote work too. Never seen anything like it.
| dbetteridge wrote:
| Yep exactly the same here, non-stop recruiter mail on
| linkedin since Nov 2020 (when I moved to my current role from
| one of these).
|
| Senior roles in the 80-100k range, a few 'team lead' and
| fintech's looking around 140-160k (these were much more
| office focused though).
| stayfrosty420 wrote:
| this is good for wages but I am concerned about the resulting
| inflationary pressure.
| question002 wrote:
| Why?
| sgt wrote:
| Why not?
| jansan wrote:
| You are both right.
| yunohn wrote:
| I think this illustrates the problem with the modern
| capitalistic society we've built for ourselves:
|
| "I'm happy wages are going up, but I'm sad it'll mean my
| spending power will go down"
| mensetmanusman wrote:
| There is always some inflationary pressure when inequality is
| reduced. For example, very few can support nannies and home
| servants like they could in the past (and like in India now),
| when poor people's wages were so low that they would give up
| their life to support anyone that owned land.
|
| The only way to prevent inflation is with technology and
| productivity, for example, people today could have home
| servants in the form of robots if that technology existed, but
| it currently does not, because the problem is currently
| extremely difficult given humanity's existing tool set.
| artificialLimbs wrote:
| Eliminating minimum wage would also prevent inflation.
| mensetmanusman wrote:
| Not when you run out of children to employ :)
| fergie wrote:
| Yes, but in practical terms the opposite of wage inflation is
| asset inflation, and this has probably been the defining
| problem of the UK for the last 20 years.
| PragmaticPulp wrote:
| When a few companies or industries can't find enough labor, the
| solution is simple: Raise wages to attract a larger percentage of
| the labor pool.
|
| When _every_ company and industry is struggling to hire, raising
| wages is still necessary but it no longer fixes the bigger
| problem. Those higher wages aren't producing more labor, they're
| just convincing employees with jobs to switch to other jobs.
| Switching jobs creates a vacancy in the old position. One job
| opening filled, one job opening created. Net zero.
|
| The pandemic shook a lot of people out of the labor market.
| Everything from people who were on the verge of retirement anyway
| to people who were forced to stay home with the kids because
| schools and daycares were closed. Until labor market
| participation returns to pre-pandemic levels, the labor shortages
| will continue.
|
| Employees win in the short term as companies have no choice but
| to raise wages to fill positions. The flip side is that inflation
| will certainly follow as rising wages give people more money to
| spend (demand up) while labor shortages drive supply down. Demand
| up, supply down means prices go up.
|
| Which ironically could be the impetus that gives people who left
| the labor market no choice but to return to work: When everything
| is getting more expensive, people may have no choice but to
| return to the labor market to earn enough to support their
| families. It's going to be interesting to see this settle.
| [deleted]
| EGreg wrote:
| Labor shortages don't necessarily drive supply down -- this is
| going to lead to a boom in automation. Those automated jobs
| aren't coming back. We need to phase in a UBI even if it $1 a
| month for now.
| s0rce wrote:
| Many companies don't have sufficient margins to raise wages.
| Hopefully this isn't confused as me endorsing subpar wages,
| simply that those business can't be sustained or will just
| endlessly be looking for someone willing to work for cheap
| because hiring someone for more will actually cost them money.
| They may be better of turning away some customers vs. hiring
| someone for a higher wage to support more demand.
| nostrademons wrote:
| One effect of inflation is to reshuffle the economy toward
| bigger, higher-margin firms. The companies without sufficient
| margins to raise wages will simply go bankrupt. This reduces
| competition in their industry, which gives surviving firms
| more power to raise prices and pay those higher wages.
| GordonS wrote:
| Many of the businesses pleading poverty have execs making
| millions a year - funny how there is never any issue awarding
| huge bonuses for the top brass, but the cupboard is always
| bare for employees.
| effingwewt wrote:
| Seriously if we stopped letting a dew parasites at the top
| leech all the money out of businesses we wouldn't have this
| problem. We have entire C Suites getting overpaid while the
| people who do the actual work can't even afford to live
| where they work.
|
| Something's gotta give.
| UK-Al05 wrote:
| When a employee moves jobs, hopefully there moving to a higher
| productivity job though.
|
| And the low productivity jobs go unfulfilled.
| frankbreetz wrote:
| It isn't net zero people can join and leave the labor
| participation pool, which has been decreasing for awhile
| now[0]. Higher wages could convince people to join the labor
| market.
|
| https://www.bls.gov/charts/employment-situation/civilian-lab...
| retrac98 wrote:
| The UK really shat the bed since the 2008 financial crisis, huh.
| fallingfrog wrote:
| I'm not sure why none of the popular narratives are considering
| that this is just demographics- the boomers are aging out of the
| workforce. This pushes up the cost of labor due to supply and
| demand. Which is a good thing, if you're not a boomer. But it's
| going to constrain gdp growth.
| regularfry wrote:
| The baby boom was smaller in the UK, and a slightly odd shape.
| It did happen, but not to the same extent as in the US.
| have_faith wrote:
| There's a huge amount of people holidaying within the UK instead
| of going abroad. I wonder how many millions (billions?) are being
| captured in the internal market that would otherwise be spent
| elsewhere. Definitely part of the fuel driving the economic
| rebound, lots of people's holiday savings being released locally,
| and the middle class has generally been increasing their savings
| pots over the lockdowns.
| Clepsydra wrote:
| "lots of people's holiday savings being released locally"
|
| True. But the UK have missed out of millions of foreign
| tourists.
|
| https://www.ons.gov.uk/businessindustryandtrade/tourismindus...
| pbalau wrote:
| This is a very interesting topic and I feel very hard to make
| ends of.
|
| For example, you can compare local money (brits spending
| money in UK) vs foreign money (foreigners coming to UK for
| holidays) and get a part of the picture. On the other hand,
| local money are going to be spent in smaller towns, but the
| foreign money mostly go to large centres, London, Manchester,
| Liverpool, Glasgow etc. Then there are the amounts involved,
| 500gbp in London will buy say, a weekend for a couple,
| therefore employing not really that many people (cook,
| bartender, server, cleaner etc). The same amount will buy a
| weekend on the east coast for quite a few more people,
| therefore requiring more support personnel (hence, more
| jobs).
| stayfrosty420 wrote:
| Based on the extortionate cost of holidaying in the UK right
| now these stats are relatively surprising
| have_faith wrote:
| I haven't looked at the data but I imagine foreign tourists
| mostly go to London and a few venture out to nearby hotspots.
| People within the UK seem to be branching out to every half-
| beauty spot we have in every corner of the Isles.
| alistairSH wrote:
| Sample of 1 but my last 3 vacations in the UK have skipped
| London.
|
| My impression is anybody visiting for more than a week will
| likely do a few days in London then move on to someplace
| else (of my friends, that's usually Scotland for
| camping/hiking).
| retube wrote:
| Clearly you have never been to Oxford, Bath, York,
| Edinburgh, Lake District, Cornwall etc etc which are
| teeming with visitors from the US, China, Japan and many
| other countries during the summer...
| GordonS wrote:
| Don't forget the Scottish Highlands and Islands!
|
| We did the North Coast 500 this year (we live in NE
| Scotland, but obviously aren't going to get anywhere
| further afield for now!), and it was really difficult to
| find accommodation because so much was fully booked.
| have_faith wrote:
| I've been to most of them but teeming isn't a word I'd
| really use. They're also the most obvious hotspots
| outside London, I was mostly attempting to make a point
| about all the 2nd-tier and 3rd-tier locations that are
| currently very busy with UK staycationers.
| tonyedgecombe wrote:
| Not this year nor last. I live just outside Oxford and
| visit Bath regularly and both have been quiet compared to
| normal.
| EGreg wrote:
| The market for jobs isn't clearing.
|
| Jobs growth is weak and yet there are many vacancies.
|
| Does this mean people are finally holding out for higher pay? The
| goals of UBI have been demonstrated? And we have barely given out
| a UBI, only a few stimulus checks.
|
| Perhaps people got a taste of working from home and companies
| need to allow more remote work.
|
| Either way, I do not see this as a bad thing.
| tonyedgecombe wrote:
| >only a few stimulus checks
|
| The article is about the UK, there have been no stimulus
| cheques.
| elevenoh wrote:
| Salary increases are seriously lagging inflation.. (especially
| true if you use a more meaningful inflation metric than CPI)
|
| There's less & less incentive to be an employee in the
| traditional sense.
|
| What I'm hearing more & more: Pay me in crypto. Give me equity.
| Else I'm not interested.
| giantg2 wrote:
| Is there another metric?
| M2Ys4U wrote:
| There's RPI, I guess
| meheleventyone wrote:
| CPIH for example in the UK which nominally includes owner-
| occupier housing costs that aren't part of normal CPI but
| doesn't contain the elephant in the room which is the
| increase in house prices.
| IMTDb wrote:
| How does the currency you are paid with changes anything (apart
| from tax evasion) ?
| elevenoh wrote:
| Being paid in fiat means my default income stream is a
| depreciating one.
|
| I'd prefer to be paid in an evolving currency, one emerging
| out of maximal open-competition. Why? Nothing breeds a better
| result.
| quickthrower2 wrote:
| How you get paid doesn't matter. Convert it all to crypto
| if you want on payday.
| radiator wrote:
| But that would be only half the solution. If the value of
| fiat decreases daily, then you should also negotiate a
| salary raise every month? Most people do not get raises
| more than once per year.
| quickthrower2 wrote:
| Cryptoo is too volatile vs. goods and services.
|
| If you negotiate a 2 BTC/y salary for example you could
| be rich or flat broke next year depending on factors such
| as if Elon Musk is pro-dog-based-coin or pro-original-
| coin
|
| You'd quit if the monthly 1/6 BTC salt was worthless so
| the job is effectively a call option on BTC
| _dain_ wrote:
| And how is your employer going to pay you in the same
| amount of crypto each month, if that crypto is mooning? The
| company's revenue stream is still in fiat, which they must
| use to buy that crypto to give to you, so eventually you
| will become too expensive to employ.
| jcbrand wrote:
| So you're willing to be paid in Venezuelan Bolivars?
| neilwilson wrote:
| There are 1.034 million vacancies and 3.277 million people
| without work that want it.
|
| There isn't a shortage of labour. There is a shortage of decent
| pay and conditions.
|
| Firms are going to have to get over their cheap labour obsession
| or close and leave the market to those firms that can.
| culopatin wrote:
| That and maybe a lack of people with the training needed.
| dazc wrote:
| Because you can get away with not training people so long as
| there is a sizeable pool of people who've already been
| trained at someone else's expense.
| dazc wrote:
| Not just base rate pay but, also, the motivation to do a low-
| skilled job isn't just to earn enough money to survive but also
| to improve one's life over the long term.
|
| It used to be the case you could do a labouring job where there
| would be regular overtime, often paid at a premium. I had one
| such job many years ago and could double my regular pay by
| working a few extra hours each day. Then employers realised
| instead of paying premium overtime rates they could just hire
| another person at basic rate.
|
| Not sure what the situation is now but back then it became
| normal for jobs to advertised at 16 hours a week. In effect,
| these employers were employing 3 or 4 people where they would
| previously employ one and they could do this because 16 hours
| turned out to be the optimum amount someone receiving benefits
| could work and receive a top-up to get a survivable amount of
| money each month.
| dv_dt wrote:
| It's also a unwillingness to train or risk anything but a
| perfect fit resume. Imho it might take a little investment but
| employees you train into what you want are usually a win win
| for the employee and the business on multiple counts.
| luckylion wrote:
| I have a neighbor who is quite happy with what the government
| pays him while he's not working. I'm sure he could be motivated
| to work by offering larger salaries, but they'd have to be
| raised by at least 100% to convince him to go from 0 hours/week
| to 40 hours/week.
|
| I'm not sure there are 3.277 million people without work who
| _want_ it.
| tonyedgecombe wrote:
| He must be particularly frugal then as the government doesn't
| pay you much to sit on your backside.
|
| https://www.gov.uk/jobseekers-allowance
| luckylion wrote:
| I'm in Germany, but it's a similar amount (+ rent,
| internet, utilities, health insurance etc). He has the
| basics like a cell phone, flat screen and playstation and
| seems to be content with it.
| effingwewt wrote:
| There will always be people willing to accept the bare
| minimum. That doesn't have anything to do with the fact
| that those who _do_ work are still in poverty, with no
| way out.
|
| Also many have never had a single vacation in their
| lives. Some just needed the break.
|
| e-spells
| oliwarner wrote:
| If only it were that simple.
|
| Firstly these vacancies cover all jobs. Including seasonal Jobs
| which were traditionally filled by EU workers. Lots of farms
| struggling to hire this year. There are also lots of part time
| roles to fill in around furloughed workers.
|
| In a broader sense, jobs need to be in the same places as the
| people. The UK housing market is such that moving (even to
| rent) is very slow and expensive. Commuting in both overcrowded
| and extortionately expensive. If we want poor people to work in
| our overpriced cities, we _have to_ subsidise comfortable and
| fast public transport.
|
| Two hours of childcare for one child costs one hour of minimum
| wage work. Families with more than one child literally can't
| afford to work. It's also hard to find childcare! More
| employers could get involved here but it would be more
| efficient to make 1yo+ childcare free for 30 hours, means
| assessed.
|
| So yes, higher pay helps, but there are many things that block
| people from returning to work.
| [deleted]
| WhompingWindows wrote:
| How does the global job vacancy market look? Here in the US, a
| lot of local restaurants and retail stores are hiring;
| practically every place you enter has a NOW HIRING sign out
| front.
|
| I'd say immigration would be a huge boon to many of these small
| businesses, but when I spoke to one restaurant owner, he bemoaned
| the labor shortage and a $15 minimum wage. It'd kill his prices,
| he'd lose customers. Then, in other rants, he's using all the Fox
| News lines about stealing our jobs, keep them out of our country,
| caravans, ugh.
|
| He doesn't connect the dots and see how pivotal immigration is to
| the economy. Either you have more babies, increase productivity,
| increase efficiency, or you allow immigrants in to make up the
| gap in the babies we're not having anymore. But no, the color of
| their skin, the difference of their culture, is enough to make
| economics less important than identity to the right wing in the
| USA.
| [deleted]
| nly wrote:
| Housing is anything from a third to 50% of the average UK earners
| take home income. Median house price to median income ratios are
| at historically high levels[0], and rents are now also rising[1]
|
| Either wages need to rise or house prices need to fall.
|
| [0] If you look at somewhere mundane like Essex the median
| 'affordability ratio', as measured by the Office of National
| Statistics ( https://tinyurl.com/x5jatcx8 ), was 4.5 in 2000 but
| is now north of 10. And yes, low interest rates help with monthly
| affordability but house prices have gone up ~4 fold in the last
| 20 years while the multiple of your income banks will lend has
| not, and peoples capacity to save a deposit that is 4x bigger has
| not.
|
| [1]
| https://www.thisismoney.co.uk/money/buytolet/article-9969349...
| Veen wrote:
| It's why I'm contemplating moving from the South West to the
| North East. I work remotely, so it doesn't matter much where I
| am. Rental costs in the North East are dramatically lower than
| where I am now (a location that attracts Londoners wanting a
| place in the country, significantly increasing house prices).
| moreira wrote:
| I did exactly that this year - went from PS1050/mo for a
| 2-bedroom flat in the south to PS375/mo for a 2-bedroom house
| with a back yard, in the North East.
|
| You can get anything you need delivered these days, including
| groceries, and I'm within walking distance of a train station
| if I need to head to an airport or go anywhere bigger.
|
| It's seriously worth considering.
| Veen wrote:
| I was looking at rental prices in County Durham and
| Northumberland, largely because that's where I lived when I
| was a young kid. My partner was initially convinced they
| were some sort of scam because houses are so much cheaper
| than we are paying down south. We could rent a three-
| bedroom detached with a decent chunk of land for less than
| we pay now for a two-bedroom end terrace with no garden.
| moreira wrote:
| Oh the house prices. I've gone from looking at PS250+K
| houses and thinking I'll never be able to afford one on
| my own to "I'm buying a house in the next 12 months".
| PS5K deposit (not even joking), a 3 year mortgage (which
| will end up costing about the same as my rent down south)
| and I'll be set.
|
| I looked at Durham as well, and when it comes to buying,
| if I spot a good one there, that's where I'll go for
| sure.
|
| The town I live in is nice, quiet, the people are super
| friendly, there's literally no downside if you're a
| remote worker.
|
| These places aren't a scam, they just don't have high
| paying jobs available, but that isn't a problem if you
| come with your own job.
| disgruntledphd2 wrote:
| It's only a problem when you need to _change_ job (this
| is why I haven 't done this).
| moreira wrote:
| Even if your next job requires you to move somewhere
| else, you'll still have had 12-24 months (or however
| long) of cheap living, and you get to save all that
| money.
|
| For me at least, between rent, bills, and not having
| access to the same expensive habits as in a big city
| (Uber Eats and ease of going out), means that this year I
| stand to save about PS20K compared to the previous year.
| Even if it was just rent+council tax I'd still be saving
| about PS10K.
|
| That makes a huge difference, especially when the move
| itself was only about PS2K (moving company and a few
| other bits). Even if I had to move again next year I'd
| still be coming out ahead.
|
| Obviously it's not for everyone but the savings are too
| big to dismiss something like this, in my opinion.
| disgruntledphd2 wrote:
| I guess I was considering from a buying perspective,
| rather than renting.
|
| I agree that if you're not locked in to a well below
| market rent, then this would definitely make sense.
| tonyedgecombe wrote:
| Or your flexible employer changes its mind on working
| from home.
| jseliger wrote:
| The housing theory of everything:
| https://www.worksinprogress.co/issue/the-housing-theory-of-e...
| chooseaname wrote:
| > Either wages need to rise or house prices need to fall.
|
| Raising wages in not in the best interest of share holders.
| eptcyka wrote:
| Access to cheap loans is partly what's driving the prices up. I
| think a better solution would be to enact legislation that
| penalizes the use of residential real estate for capital gains
| or profit in general, including serial landlords and AirBnBs.
| xxpor wrote:
| The right way to do this is to tax the land in such a way
| that discourages rent seeking:
| https://en.wikipedia.org/wiki/Georgism
|
| The second thing to do are reforms to make it _much much_
| easier to build new housing, as demand far outstrips supply.
| ZeroGravitas wrote:
| Wage rises without solving the housing issue is only going to
| raise house prices further.
|
| There's a bunch of potential solutions, but no-one directly
| benefits from them in the short term.
|
| Any attempt to fix it will be met with sob stories about old
| ladies in multi-million dollar homes being "forced out of their
| homes".
|
| So we'll all just sit and watch as things slowly spin out of
| control.
| Reason077 wrote:
| > _" Wage rises without solving the housing issue is only
| going to raise house prices further."_
|
| House prices aren't that tightly linked to incomes. House
| prices are more strongly influenced by interest rates and
| availability of credit. And, of course, supply/demand
| fundamentals (ie: population change vs. number of housing
| units in an area).
| FartyMcFarter wrote:
| > House prices aren't that tightly linked to incomes. House
| prices are more strongly influenced by interest rates and
| availability of credit.
|
| I believe banks in the UK don't lend you more than 4.5x -
| 5.5x of your income, regardless of interest rates.
| notauser wrote:
| In the UK, lenders are resticted by the regulator - only
| 15% of their loans can be at greater than 4.5x income.
|
| As a result 5x and 6x income mortgages tend to be easier
| to get the more you earn.
| postingawayonhn wrote:
| Increased income means increased servicing ability and
| therefore banks granting higher loans.
| ZeroGravitas wrote:
| I wasn't making a claim about what impacted house prices
| the most.
|
| If I was, then I'd say a system where the government
| basically gives you free money/tax breaks if you buy a
| home, is the root cause behind the things you mentioned
| which then drives house prices.
|
| The point is, without fixing that issue, you can't solve it
| by wage rises.
|
| People who don't even want homes are buying them, either as
| outright investments that they can sit on for years, or as
| something they also live in, but need to treat as an
| investment, rather than a home.
| pjc50 wrote:
| > the government basically gives you free money/tax
| breaks if you buy a home
|
| Such as? MIRAS was abolished 20 years ago. Homes are
| arguably under-taxed (no US style property tax), but
| that's not really a "break".
| rjsw wrote:
| There is Help to Buy [1].
|
| [1] https://en.wikipedia.org/wiki/Help_to_Buy
| xyzzyz wrote:
| Which is not free money from the government. It's a loan.
| regularfry wrote:
| It's a loan for the buyer. It looks a lot like free money
| to the seller, which is where the problem is.
| Loughla wrote:
| Is availability of credit not linked to income?
| antattack wrote:
| Home prices could be linked to wages through renting. I
| have often seen mortgage loan monthly payment compared to
| monthly rent as a reason a buy instead of renting.
| onlyrealcuzzo wrote:
| Old ladies in multi-million dollar homes is largely a myth.
| Sure, there are some of them. But it's absurd to think this
| is anywhere near the majority. Short Term rentals make up <2%
| of the market (almost everywhere beside vacation towns) - and
| they are not a major cause of problems (outside of vacation
| towns). Multi-million dollar homes are <1% of the market
| (basically everywhere). Old ladies living in these homes is a
| fraction of the total homes.
|
| These are just excuses. These aren't real problems.
|
| The real problem is artificially low interest rates,
| artificial scarcity caused by NIMBYism, low downpayments
| (backed by Fannie & Freddie), tax breaks for home owners but
| not for renters, high income taxes, low property taxes,
| etc...
|
| The vast majority of homeowners are just everyday regular
| homeowners, almost twice as many as everyday regular
| landlords. Little old ladies and short term rental operators
| make up <3% of the market. You can only blame them for much.
| conductr wrote:
| I've come to believe flipping is a major problem, at least
| in my locale. A $300K house gets $50K of "improvements",
| then the investors needs $100K profit after commissions are
| covered and so we're in the $500K range for the next buyer
| and very little value was added. It's often the proverbial
| "lipstick on a pig" house after the renovations.
|
| There's little to no regulations on flippers. They can be
| DIY people that have never swung a hammer or people that
| cut every corner possible to squeeze out every cent of
| profit. Often, buyers of flipped properties are doing major
| repairs in the first 2 years as things behind the walls was
| not done correctly. It's a very common tale of people
| completely renovating their newly renovated bathrooms and
| kitchens (yes, the most expensive rooms in your house)
| because the flippers did not take the time to properly
| waterproof behind the tiles. Or they did not properly
| mortar the tiles for adhesion and they are now popping up.
| onlyrealcuzzo wrote:
| How is that the flipper's fault? Ultimately, a regular
| home owner is buying the finished product.
|
| If they are willing to pay more for better housing,
| what's the problem?
|
| Of course, they're not willing to "pay more". Interest
| rates get lowered, and they can keep the same payment and
| buy more house.
|
| The reason flipping is attractive is because Central
| Banks push up house prices - which flippers capture on
| leverage. If it weren't for house prices artificially
| appreciating so much (by constantly lower interest rates)
| - there wouldn't be any profits to be made flipping
| houses. Transaction costs are too high.
| JeremyNT wrote:
| Flippers have capital (or the ability to be extensively
| leveraged) and they can quickly gobble up the unimproved
| inventory such that there is very little "unimproved"
| inventory available for regular homebuyers. They even
| spam people with unsolicited offers and try to buy
| unimproved houses before they hit the market at all!
|
| The time that flippers spend "improving" a house is time
| that the house isn't on the market at all for a potential
| resident.
|
| Don't think of flippers as individual actors on small
| scales repairing and reselling a house here or there,
| think of companies that literally buy whole neighborhoods
| (hundreds of houses) and rent some of them out while they
| tear down or "improve" the rest. They can afford to keep
| the rental price high and/or let it sit vacant because
| the real money will be in the eventual sale.
|
| You're right that they "gain" partly from inflation, but
| that's only one piece of the puzzle. It's a combination
| of large operations (and a large number of smaller
| operations) that essentially act as a cartel that
| effectively limits the supply of available homes for
| purchase.
| conductr wrote:
| I don't think it's anyone's "fault" but it does
| contribute to the affordability issue. It's basically
| introducing a middle man into the industry that needs his
| own markup. It's capitalism in it's purest form. But also
| a form that has detrimental consequences to average
| people wanting to purchase a home. And, that's where I
| start to believe it's a form of malicious compliance to
| accept it as status quo.
|
| However, the quality of work topic is a major issue and
| extremely common. It raises the cost of ownership going
| forward.
| onlyrealcuzzo wrote:
| How is this different from the middle man at the grocery
| store who makes pre-made salads and sandwiches and soups,
| so that you don't have to?
|
| People want to buy "nice" houses. But too many houses for
| sale need a lot of work done for them still. Enter
| flippers to make the market.
|
| The average person does not want to buy a house and
| renovate it for a year while living in it so that they
| can save $30k. Most people don't have the skills, time,
| risk appetite, or desire. Let alone all 4. With 2.75%
| 30-year fixed rates, it's only a savings of $120/m.
| conductr wrote:
| I feel like your stance is coming from a place of theory,
| like you're pointing out econ 101 and theory of supply
| and demand. From that perspective, you're correct.
| Flippers are filling a need/void in the market. I get all
| of that. What's out of whack is the flippers profit and
| how much market penetration they have and how they are
| not actually improving properties. Sure they look nice,
| but behind the walls they actually screwed a lot up in
| the process of making it "nice." Things that will cause
| major issues down the road. If this was known, the
| "value" calculation turns into a risk calculation very
| quick. (Home inspections are mostly a joke by the way).
|
| If capital is so cheap, why is there no convenient
| vehicle that allows the buyer to buy an ugly home and
| hire a contractor to fix it up before moving in?
| (Construction loans are a joke). The $300K house with
| $50K fixes now cost $350K which is the value that was
| added. The flipper added $100K of fake value. I don't see
| that as real value just because some sucker came and paid
| it. People overpay for houses even in hot markets, all,
| the, time. People are motivated by all kinds of things.
| They have time constraints, moving for a job, kids
| starting school, etc, etc and sometimes they just pay
| what they have to to get what they want. It doesn't mean
| it's right and having so much of people's income going
| towards a mortgage isn't good for anyone except the
| flipper. So while I understand they play a part of
| today's real estate industry construct, I feel like we'd
| collectively be better off without them.
|
| When flipping reaches a high level of market penetration
| (eg. a majority of listings are flipped homes) it gets
| more perverse. The pricing is completely made up,
| borderline or outright collusion is taking place, and the
| prices do not reflect value. Housing is a need, so
| somebody is paying the price and thus meeting your
| definition of "value add" but it's not real.
|
| > How is this different from the middle man at the
| grocery store who makes pre-made salads and sandwiches
| and soups, so that you don't have to?
|
| It's not. But his prices likely reflect something
| reasonable. And if not, I have infinite optionality.
| Without optionality, it turns into the ballpark where a
| hotdog cost $15
| jjav wrote:
| > I've come to believe flipping is a major problem, at
| least in my locale. A $300K house gets $50K of
| "improvements", then the investors needs $100K profit
| after commissions are covered and so we're in the $500K
| range for the next buyer and very little value was added.
|
| That's not quite how it works though. How much the
| investor spent in changes is not relevant. What matters
| is how much the next buyer values those changes.
|
| If the investor bought the place for 300K and spent 50K
| on giant pink flamingo statues all over the yard, the
| next buyer will likely offer less than 300K.
|
| Only if they spent 50K on improvements that the next
| buyer feels are worth it an increase the value, then
| they'll offer more. But in that case, value actually was
| added.
| conductr wrote:
| > What matters is how much the next buyer values those
| changes.
|
| The next buyer usually feels like the home is over
| priced. Because it is. They know it is, but they lack
| optionality because a majority of the active MLS listings
| are flipped homes. Think of it as they are forcing the
| next buyer to pay as much as they can possibly afford.
| Sure, low interest helps the "afford more" but it doesn't
| mean they are comfortable or happy spending that amount.
| It doesn't mean they necessarily value it either. They
| may have been happy with the original condition at $300K
| but they never saw that option. It was an off market
| transaction.
|
| > Only if they spent 50K on improvements that the next
| buyer feels are worth it an increase the value, then
| they'll offer more. But in that case, value actually was
| added.
|
| Sure they feel $50K was added. But not another $100K of
| profit for the flipper who only held the property for 8
| weeks before re-listing it. The $100K, 20% of the new
| "value", is completely intangible and not real. This is
| supposed to be _real_ estate after all.
| onlyrealcuzzo wrote:
| > What matters is how much the next buyer values those
| changes.
|
| Flipping doesn't really exist when appreciation is low.
| Remember how no one was flipping houses in 2010? And then
| in 2012, suddenly everyone in their mom started flipping
| houses again?
|
| It only makes sense when asset appreciation is high.
| You'll find that most of the "value added" is simply them
| holding the house for 6 months and capturing appreciation
| (on leverage).
| conductr wrote:
| Why then is holding cost such a major concern of every
| flipper? Each market is different, maybe you've seen that
| level of unadultered appreciation, but I never have and I
| live in pretty high growth place my entire life.
|
| In my opinion, the "value added" is more correlated with
| what new construction on the similar land would cost. As
| lumber prices went up last year, existing homes went up
| too because the cost of building became higher.
| Essentially, a flipper wants you to feel like you have a
| new home at a discount and you'll pay the optimal amount
| for it.
| Tade0 wrote:
| > Old ladies in multi-million dollar homes is largely a
| myth.
|
| Oh they are real - it's just that 90% of them reside in
| Zurich, Switzerland.
| screye wrote:
| We see this time and again. Blame everyone else but the
| common man. Mobs are naturally susceptible to act in their
| own self interest and what we see today is a natural
| consequence of housing as an investment and your biggest
| asset.
|
| Nimbys are simply protecting an investment. In a
| captalistic society we have to change the incentives to
| drive action.
|
| Allow renters vote on local zoning regulation. Hell, remove
| stringent zoning regulations in general. At the same time,
| put limitations on what HOAs and local.commitees are
| allowed to impose.
|
| Remove the exorbidant costs/regulations towards building
| multi family homes. This has been driving the rise 'premium
| condos' because affordable housing isnt affordable to
| build.
|
| Impose larger taxes on rent collected on 3rd+ homes. Impose
| large taxes on vacant properties. Start gently discouraging
| additional housing as an investment.
|
| Lastly, I strongly support sensible gentrification. Give
| long term renters first dibs and zero-additional-cost
| pathways to home ownership.But after that, gentrify and
| gentrify heavily. A revitalization of innercities is the
| easiest way to solve the housing problem in our current
| political climate. (For those who complain that condos
| arent suburban single family homes.....thats how we got
| here in the first place)
|
| These are just some ideas .
| jjav wrote:
| > Allow renters vote on local zoning regulation.
|
| What does this mean? If any zoning regulation comes up
| for public vote, everyone elegible to vote gets to vote
| on it.
|
| Or are you suggesting renters should have special access
| to vote on these issues?
| hdhjebebeb wrote:
| Where do you get stats for short-term rentals? Anecdotally,
| our last landlady illegally evicted us, converted the house
| to an airbnb, and then bought the next-door house from the
| long-time owner to make it an airbnb as well. Not in a
| vacation town, just downtown in a second-tier city. It
| seems like a pretty common trend in our neighborhood, I'm
| wondering if short-term rentals are clustered in dense,
| walkable areas and the stats are skewed by exurban owner-
| occupied homes that are 30 minutes drive to everywhere.
| onlyrealcuzzo wrote:
| There's been a lot of research on this.
|
| Here's one of the papers: https://www.sciencedirect.com/s
| cience/article/abs/pii/S10511...
|
| It shows that AirBNBs do push up rents - but even in
| desirable parts of Boston with a lot of AirBNBs - it's
| /only/ responsible for a 0.4% increase.
|
| Keep in mind that rents have been increasing by >4% per
| year for 20 years in Boston. A .4% increase is 10% of
| that. General inflation is /at least/ 50% of it. The
| other ~40% is coming from elsewhere.
|
| Unless AirBNBs make up a substantial portion of new sales
| - it is hard to blame them for the majority of price
| increases.
| mateo411 wrote:
| Do Fannie and Freddie underwrite mortgages in the UK?
| onlyrealcuzzo wrote:
| No - but the problem is the same. You have 5%
| downpayments (instead of 3.5% in the US), and mortgage-
| backed securities.
|
| From my understanding, it appears there is NOT a
| government agency backing them, though. I don't think the
| 3.5% downpayment market be very big in the US if not for
| Fannie and Freddie (it basically doesn't exist outside of
| conventional loans Fannie & Freddie will buy).
|
| I don't know how big the market is in the UK - maybe it's
| not much of an issue?
|
| I'd love to hear from someone who knows more about this
| part of the UK market.
| Sanguinaire wrote:
| There is/was a UK government "Help to Buy" scheme aimed
| at people who can only afford a 5% deposit, where the gov
| basically took part of the equity and then charged you
| rent on the portion you don't own. Never seemed like a
| good idea to me; just skews purchases to more expensive
| areas (ie London) and leaves the taxpayer with an even
| bigger share of the risk in the event of a house price
| crash. The only upside is political - the government gets
| to say they are helping first-time buyers.
| carom wrote:
| I don't think the 3.5% down payment market is very big.
|
| >Between July 2019 and June 2020, the average down
| payment for a home amounted to 12% of the home value. In
| the first three months of 2021, 48% of home buyers made a
| down payment of at least 20% of the home value. 21% of
| home buyers in that same period made an all-cash
| purchase. [1]
|
| It sounds like 69% are >= 20% down or all cash. I don't
| think enabling lower income access to housing is hurting
| our housing market at all.
|
| 1. https://www.fool.com/the-ascent/research/average-down-
| paymen...
| lesuorac wrote:
| A 3% increase in vacancy rate caused a ~10% decrease in
| apartment pricing in NYC [1].
|
| Housing is very much at the margin and a small
| increase/decrease of demand will have an outsized effect
| on price. However, I'm not going to argue that everybody
| poorer than me shouldn't have access to a house just so I
| can get one at a cheaper price ...
|
| [1]: https://inhabit.corcoran.com/new-york-city-
| residential-renta...
| onlyrealcuzzo wrote:
| > However, I'm not going to argue that everybody poorer
| than me shouldn't have access to a house just so I can
| get one at a cheaper price ...
|
| What's wrong with renting? Why are poor people entitled
| to home ownership when most of the young middle class
| isn't? Why can't they rent?
|
| There would be no problem with rent if home-ownership
| wasn't a massive handout from the government by
| guaranteeing that home prices appreciate more than
| interest rates. This is extremely unfair to poor people
| as it is currently - because they can't get in line to
| get massive amounts of free money. Best they can get is
| SNAP.
|
| Meanwhile, your local millionaire is getting >$20k per
| year in asset subsidization.
|
| I don't think that even more manipulation is the solution
| to the problem. If the government could get out of the
| business of pumping up house prices while keeping
| benefits like SNAP, that would go a long way toward
| fixing inequality.
| Factorium wrote:
| If you permanently reduce immigration, including deporting
| unauthorised migrants, you can achieve both of those things.
|
| Given the cost of land and building, we should consider Western
| nations 'full' and only allow immigration 'swaps' from other
| highly developed countries.
| Workaccount2 wrote:
| The issue with this though is two fold:
|
| 1.) You cannot have a nation of college degree high skilled
| workers. At least until robots and AI are widespread. Being
| rich is a lot less fun when you cannot spend it anywhere,
| because none of those places have a staff.
|
| 2.) Since people aren't having kids, and we love to saddle
| the future with liabilities, someone has to fill that void.
|
| All the hot shot AI inventory management software in the
| world is useless without grunts actually executing it's
| guidance on the ground.
| Factorium wrote:
| 1) The ratio of people with a tertiary degree is probably
| too high. In past decades, only about the top 25% had
| university degrees:
|
| https://www.cedefop.europa.eu/files/images/graph_month-
| stat_...
|
| 2) Fertility is heavily influenced by the availability of
| housing. Without immigration, house prices will fall and
| wages will rise, providing a boost to fertility until the
| population equalises.
|
| https://www.nber.org/digest/feb12/impact-real-estate-
| market-...
|
| With mass immigration you shortcut that, and simply end up
| replacing the original population, probably with negative
| overall effects if the incoming population is not
| genetically (average IQ, predisposition to violence) or
| culturally (respect for women etc.) aligned.
| xxpor wrote:
| You do realize intra-country migration has the same
| effect right? In the US, the majority of counties are
| losing population, because people are moving to cities.
|
| You're advocating for internal passports and residency
| permits:
|
| https://en.wikipedia.org/wiki/Hukou
| snarf21 wrote:
| So your solution to inequity is to pull the ladder up behind
| you? What did you _DO_ to deserve to be born in a Western
| nation?
| 908B64B197 wrote:
| It's interesting we're thinking of it as "pulling the
| ladder". As if the only way to make it was to come to the
| west.
|
| Why do foreign countries not simply develop themselves
| instead? Build your own ladder, so to speak!
| [deleted]
| thelamest wrote:
| No place on Earth is remotely close to being "full", and the
| economy isn't a zero sum game. Migrants aren't different from
| newborns (and simply people in general) in the way they don't
| "take away" some fixed pie of jobs and homes, they're how new
| jobs become needed and new homes get built (cf.
| https://en.wikipedia.org/wiki/Lump_of_labour_fallacy).
| 908B64B197 wrote:
| You'll be downvoted, but it would be interesting to set a
| quota based on how attractive other countries are. IE, the UK
| can only allow in 2X the number of immigrants from country Y
| if country Y allowed in 1X immigrant in the past year.
| outside1234 wrote:
| You'll also have nobody to work in the hospitals or pick food
| for you :)
| [deleted]
| AuryGlenz wrote:
| Until they raise their wages, which is the entire point.
| Wages have been kept artificially low in the west because
| of migration for decades and it's coming to a head.
| pibechorro wrote:
| Inflation will make any increase in wages meaningless. It will
| also further drive investment into housing to escape the free
| falling cash.
|
| The answer is no lockdowns, no bailouts, and no quantitative
| money printing to oblivion.
|
| Let the everything bubble pop and start over with sound first
| principles. We will get there, but not before politicians make
| it worse and delay the inevitable defaults.
| nly wrote:
| - Boris Johnson (the British Prime Minister) sold his London
| family home in 2019 for PS3.75M after having rented it out
| for PS2000/week (just under 4x the national average income)
| while living in his Government provided accommodation in his
| role as Foreign Secretary (2016-2018).[0]
|
| - Property prices have shot up 10% during the pandemic,
| bolstered in part by the Government cutting stamp duty on
| sales.
|
| - A few days ago the Government raised National Insurance
| (which is an income tax) on _all_ workers to pay for social
| care while protecting property wealth with a contribution
| cap.
|
| Nobody in power is popping the property asset bubble in the
| UK any time soon. It's a sacred cow.
|
| I'm in the top 2% of earners by income in the UK and I'm
| still completely priced out of wrt to buying a modest family
| home (or flat) a humane, commutable distance of central
| London. Price/Income ratios are too high even for me because
| I'm competing with my peers. It's a supply problem, and a
| problem of foreign investment and bad incentive schemes.
|
| [0] https://www.mirror.co.uk/news/politics/boris-johnson-
| clingin...
| imtringued wrote:
| >- Property prices have shot up 10% during the pandemic,
| bolstered in part by the Government cutting stamp duty on
| sales.
|
| Something that is hard to understand is how taxes influence
| the price of homes and land. People have a fixed budget.
| The rule of thumb is that they will spend at most 30% of
| their income on housing. Popular cities usually have an
| inrush of educated people getting high paying jobs. The
| existing residents see their % rise beyond 30% as a result
| but the rule of thumb still applies.
|
| When you have a fixed budget then adding more taxes won't
| lead to spending more, it means the government siphons
| money off the purchase of the home. That money cannot be
| used to purchase homes. When people talk about how taxes
| make housing expensive they are dead wrong. Taxation does
| not change your budget. When the government drops taxes on
| housing what happens is that a bigger chunk of the budget
| is being used for actually purchasing housing rather than
| paying taxes. This means house prices will rise and you
| will not be better or worse off than before. However, the
| rise in home prices fuels speculation. People buy houses
| expecting that they go up. The reduction in taxes created a
| gap and speculators simply insert themselves in that gap
| and take their profits.
|
| The problem isn't the speculation in itself but rather the
| expectation that housing will always go up. It's not only
| investors that want to make money. Homeowners see an
| opportunity to create a big gap by voting for restrictive
| zoning or making new construction a legal minefield. The
| real problems begin when even grandma and her dog are
| speculating.
| ItsMonkk wrote:
| Exactly.
|
| If property taxes were raised to 100% annually of the
| cost of the home, the price of the house would instantly
| drop to somewhere near the annual rent cost. "Buying" the
| house would end up being close to a security deposit. It
| goes without saying though, that 100% annually is not a
| good number. It would disincentivize building, which is
| something we really need right now.
|
| The right number is a Land Value Tax such that the cost
| of the property equals the cost of the building. So if
| you have two properties, one in downtown SF, and one in
| the middle of Montana, and each are the exact same house,
| but the Montana house sells for $200k and the SF house
| sells for $1M, really it's the land in SF selling for
| $800k. So that SF market price should move to $200k. To
| do so we need to tax the property at increasing rates(per
| sqft of land) until they match. When we tax enough, the
| new price will reach its improvement value.
|
| In the short term this will have devastating effects on
| the Net Worth of individuals who took out loans or
| otherwise bet their income on owning a home, so I
| advocate for a one time tax break(that for exceptional
| cases like the elderly would be transferable for straight
| cash upon sale of the property) equivalent to the drop in
| market value of the home. So in the SF case, they would
| get a $800k tax credit.
|
| Once this system is in place being a NIMBY will no longer
| be a profitable stance, and will instead cost that area
| money in taxes. As it will no longer be a perverse
| incentive, the population will mostly switch to becoming
| YIMBY's, and advocate for better Zoning rules and to ease
| up on silly restrictions. The tax money can be spent on
| high value improvements to the area that will boost
| everyone's quality of life, and if none are found, can be
| simply given back equally to all.
|
| Once this system in place and the tax credits have been
| used up, we can even go further and get rid of income
| taxes, sales taxes, corporate taxes, and capital gains
| taxes. The value of the land tax will be enough to
| replace all of them. All from a tax that because land is
| at a fixed supply, is completely non-distortionary and
| results in no dead weight loss.
|
| Housing can either be an investment or affordable long-
| term, it can not be both.
| bb123 wrote:
| There is housing available within commuting distance - I
| bought a 2 bedroom flat walking distance from a station
| with a 35 minute link to Kings Cross for under 200k. People
| seem to think they have some sort of God-given right to
| live in central London. If you want to buy a property you
| may need to make some sacrifices in that department. Yes
| the town I live in is pretty shite, and I have to train to
| work or to see friends on the weekend but I own my home.
| heavenlyblue wrote:
| How often is the train? Or is it one of these rare direct
| 35 minute trains?
| jvvw wrote:
| Luton? I think some parts of London are more reachable
| from affordable places than others and that requirements
| do change when you have a family (more space and you may
| not need the best school but you don't want a terrible
| one). We live further up the Thameslink line and we get a
| lot of people moving here from London after having
| children, but it is a long commute.
| Sanguinaire wrote:
| I lived in Luton for a year and commuted in to London.
| Yes, it is certainly more affordable; but only because
| the NHS covers the cost of dealing with your stab wounds.
|
| For non-UK people: yes of course I'm joking, however
| Luton is the home of both a large immigrant population
| and the "English Defence League", the closest thing we
| have to the KKK.
| nly wrote:
| Define 'commutable distance', because to me that means
| 30-40 minutes door to door.
|
| Hitchin is 33 minutes to Kings Cross on Thameslink and I
| could definitely do my commute from Hitchin station in
| ~50 minutes, which is roughly 10 minutes more than it
| takes me from Zone 3, door to door, now.
|
| If you look around on RightMove, 2 bed flats going near
| Hitchin station (Purwell) are ~PS335K and a 20 minute
| walk away, so my commute would be up to 70 minutes.
|
| Then factor in that you're dropping PS5K/year for a
| season ticket (roughly the equivalent to adding ~PS100K
| to your mortgage at current interest rates), giving up a
| lot socially, still don't have a garden, still have a
| pokey little flat, is it worth it?
|
| I respect your life choices, but it's not for me.
|
| > People seem to think they have some sort of God-given
| right to live in central London.
|
| I think anyone earning in the top 2% should be able to do
| this, yes. After all, central London contains 2.3% of the
| UK population. If they're all at the top then by
| definition it should be possible.
|
| In any case, I don't want to get too personal. My partner
| works all over London also so being in London makes sense
| for us. I also respect that this is a nationwide issue
| affecting a lot of people worse off than me.
| bryanrasmussen wrote:
| >I think anyone earning in the top 2% should be able to
| do this, yes. After all, central London contains 2.3% of
| the UK population. If they're all at the top then by
| definition it should be possible.
|
| Ok but if you're barely in the top 2% that would sound
| like you'd afford the worst in London - is it the worst
| you're going for or are you expecting to be the quality
| of what you'd get other places?
|
| Obviously I don't know if you're barely or not, just
| since you said top 2% and not top 1% it might be you are
| just at the edge.
| bin_bash wrote:
| Clearly some of the top 2% would live outside of London
| as well
| bryanrasmussen wrote:
| good point, I wonder what percentage is. someone should
| make a top percentile view of this
| https://www.ons.gov.uk/visualisations/dvc1370/ for just
| London to make it easier
| throwaway1777 wrote:
| We're talking about where all the people who work at
| costa and pret live more than the top 2% earners. I guess
| they all need to commute in from the outskirts to make
| the rich people's coffee.
| yesOfCourse9 wrote:
| Yes only the elite, who speculate prices beyond the reach
| of normies, should be allowed to live where they want.
|
| Nice embedded class based bias by the stiff upper lip
| crowd.
|
| Make the minority that hands itself free money subject to
| the same open market and you have a point.
| II2II wrote:
| > Yes only the elite, who speculate prices beyond the
| reach of normies, should be allowed to live where they
| want.
|
| It is not even a case of living where you want to, nor is
| it a case of supporting a particular lifestyle. It is a
| question of quality of life. If your commute is 30
| minutes door-to-door, you are losing an hour a day. That
| hour could be better put to use to improving your skills,
| working paid hours, taking care of your personal well-
| being, or leisure. It is also worth noting that most
| people measure commute time as time in transit with a
| private vehicle, this incurs additional costs (meaning
| working additional hours) and the only way to get around
| it involves a significant tradeoff for time.
|
| There are many people who do not want to live an elitist
| lifestyle and would be happy to live somewhere other than
| where the elites live. What they don't want to endure is
| a quantitative and qualitative diminishing in their
| quality of life.
| yodelshady wrote:
| > Nobody in power is popping the property asset bubble in
| the UK any time soon. It's a sacred cow.
|
| It's a bad mad, especially considering how much the Tories
| have relied on there _being_ homeowners. Their whole thing
| is that that group is the sensible middle, who work for a
| living, but also appreciate that suppliers of capital have
| limits.
|
| Odder still to not protect flat owners with cladding (I'm
| not one, FWIW). Higher-density housing is happening, and
| you've just told your next cohort of supporters to a) never
| invest in this asset class, we will render it worthless, b)
| never vote for us either, even as homeowners we won't
| support you.
| notanzaiiswear wrote:
| Or many people want to live in London.
| zpeti wrote:
| Agreed. 20 years of lower and lower interest rates, meaning
| higher and higher mortgage amounts have driven up prices into
| oblivion. Either these prices are inflated away or there is a
| collapse. There's not much else you can, UK housing market is
| so far from market reality that it's a joke.
|
| And ironically the more you create policies like lower
| deposit amounts for younger people, or subsidised mortgage
| payments, the more you drive up house prices making these
| policies hurt the next generation of young people more.
|
| Perfect example of government intervention making things
| worse creating more government intervention etc etc
| imtringued wrote:
| >Agreed. 20 years of lower and lower interest rates,
| meaning higher and higher mortgage amounts have driven up
| prices into oblivion.
|
| The falling of interest is purely market driven. There is
| no government intervention there. Interest rates have been
| falling for a long time, far longer than 20 years and the
| reason is pretty simple. There are people out there who do
| not spend their money. The interest rate simply moderates
| between saving and investment. If saving is going up
| relative to investment then the interest rate must drop.
|
| https://news.ycombinator.com/item?id=28373304
|
| You say higher and higher mortgage amounts have driven up
| prices but if you spend $360k what is wrong with getting a
| $360k house out of it in the end? What's so good about
| paying interest?
| nly wrote:
| > The interest rate simply moderates between saving and
| investment.
|
| For businesses perhaps, but this doesn't happen much at
| the personal level. Most people will save in cash, rather
| than invest, even if interest rates are zero or negative.
| Most people are risk adverse.
|
| Source: https://www.ft.com/content/2bcd4367-ef4c-4d1d-a69
| d-df2126b0f...
|
| > While the annual ISA tally showed high levels of
| saving, most of the money went into cash ISAs, which
| offer low rates of interest and could leave savers
| vulnerable to rising inflation.
|
| > Some 300,000 new subscriptions went to stocks and
| shares ISAs, compared with 1.2M new subscriptions for
| cash accounts.
|
| So that's only ~20% of savers investing in to stocks in
| the most tax efficient way possible in the UK, even when
| the Bank of England base rate is at 0.1%
| ZeroGravitas wrote:
| Depends on what you mean by "government intervention".
|
| The phrase is usually used to stop people fixing problems
| like this, which are the kind of collective action problem
| that only government action can solve.
|
| The government intervention you mention is actually just
| the voters with property using their vote to protect their
| wealth. And that worked exactly as intended.
| nivenkos wrote:
| The answer is to control the housing market and stop it being
| used an investment against inflation. Force people to invest
| in industry against inflation - not rent-seeking in housing,
| or cryptocurrency pyramid schemes.
|
| Only allow resident citizens to own the one property they
| live in, and have the government handle rentals like the old
| council housing / Folkhemmet homes.
| mrfusion wrote:
| Nah the answer is to simply build more.
| boldslogan wrote:
| I think the political will here is kind of weak...the
| voters who own housing dont want their asset to decrease in
| value and wont vote for politicians who want to force
| investment into industry, versus the renters who do.
|
| I am not sure what to suggest...
| The-Bus wrote:
| If some combination of pensions/social security allowed
| people to live a comfortable, safe retirement with some
| guarantee of food, shelter, and medical care, then they'd
| be less worried about the one asset they own worth more
| than five figures.
| nicoburns wrote:
| Medium term I think this political will will change as
| fewer an fewer people Can afford housing
| disgruntledphd2 wrote:
| Probably not in the UK, as the house-owning population
| are much older and tend to vote Conservative (the current
| governing party).
|
| Young people are already screwed, and unless they all
| show up to vote in marginal constituences (unlikely) then
| they'll continue to get screwed, unfortunately.
| nicoburns wrote:
| Right, but the age cohorts that are screwed are only
| going to get older over time (unless policy changes).
| disgruntledphd2 wrote:
| That time is well beyond the average politicians event
| horizon, I suspect.
| kavalg wrote:
| Reminds me of my childhood in Eeastern Europe, where people
| were getting divorced (only on papers) in order to buy
| another aprtment :)
| giancarlostoro wrote:
| I met a Cuban a few years back that said the same. His
| parents worked their butts off and owned two homes. They
| got divorced to keep them both, but they were never
| separated only legally.
| bko wrote:
| > Only allow resident citizens to own the one property they
| live in, and have the government handle rentals like the
| old council housing / Folkhemmet homes.
|
| How can you say you "own" something if you're not allowed
| to sell or rent it to anyone you want?
| nivenkos wrote:
| It's like that when I buy a bottle of whisky right now!
|
| And because you can live in it, and don't pay anyone to
| do so.
| [deleted]
| 908B64B197 wrote:
| > The answer is to control the housing market and stop it
| being used an investment against inflation. Force people to
| invest in industry against inflation - not rent-seeking in
| housing
|
| This.
|
| Every boomer thinks he's a genius investor for simply
| blocking all residential development and looking at the
| price of his house go up. The government knows it and wants
| to keep the votes coming in so they prop up real estate as
| much as they can. Notice the same parties will
| simultaneously try to push some sort of virtue signaling
| (pro-diversity or whatever) to the younger demographics at
| the same time. They can't afford to pander to them via
| housing policy so they have to find something else...
|
| This isn't creating any kind of value, nor innovation.
| Apple, Google and Facebook, like it or not, created a
| tremendous amount of wealth for the country. Housing
| didn't.
| FredPret wrote:
| Actually encouraging landlordism will decrease rents.
|
| - Buy-and-hold rental property investors buy properties
| using Excel, and are vastly less susceptible to hyped and
| emotional pricing than the public.
|
| - More landlords = more capital available for home-builders
| = more houses built
|
| - Supply and demand - more houses and more landlords, with
| the same number of tenants, shifts pricing power to the
| tenants
| nivenkos wrote:
| Step 2 just isn't happening, at nowhere near the levels
| necessary.
|
| Instead people are investing in housing as a "store of
| value" against inflation, maybe not even renting it out
| and just hoping it appreciates. This is driving prices
| sky-high.
|
| Meanwhile local politicians and boomers support NIMBYism
| and oppose all housing developments, leading to a massive
| shortage in housing. Landlords love this as it increases
| the value of their properties, and developers don't care
| as they can sell the fewer houses they build for greater
| profit.
|
| Whilst at the same time national leaders support mass
| immigration leading to a huge increase in demand.
|
| Overall this rewards property owners and hurts working
| people and the economy (when people can't easily move to
| economically active areas, and have less disposable
| income). Ultimately harming social mobility and
| destroying faith in capitalism and private property as a
| whole (it becomes to resemble feudalism, destroying the
| idea that you can work hard and have a good life).
| FredPret wrote:
| > Meanwhile local politicians and boomers support
| NIMBYism and oppose all housing developments
|
| This is the problem - artificially constrained supply.
| Fix this and the lower prices will follow. Fix other
| things and you'll just create further distortions and
| frustrations later on
| jimbob45 wrote:
| Making more houses won't solve the problem - there will
| just be more houses to rent out at vastly inflated
| prices.
|
| Renting houses simply shouldn't be such a profitable
| endeavor. There have been stories posted where hotels
| snap up apartment units for AirBNB because those make
| more money than hotel rooms. That should _never_ be the
| case.
| FredPret wrote:
| Lmao. Have you ever owned a property you were trying to
| sell or rent out? Every single month of vacancy / no sale
| hurts, a lot.
|
| If there are more units than renters, prices WILL drop,
| and fast. Landlords compete against each other, which is
| why you want many of them.
| jimbob45 wrote:
| In the world of 20 years ago, I would agree with you.
| Renting simply wasn't profitable enough to be a problem
| back then.
|
| However, in today's world where AirBNB is unbelievably
| profitable, more houses than ever can be put up for rent
| at extreme prices. It heavily restricts the housing
| supply in a way that wasn't possible before AirBNB came
| around.
| FredPret wrote:
| AirBnB does throw a spanner in the works of the rental
| market.
|
| But I don't think there's either an infinite pool of
| AirBnB demand or that every landlord is willing to put up
| with running an AirBnB regardless of profit (doing AirBnB
| is more a business than a passive investment).
|
| Maybe limiting AirBnB in residential zones will
| contribute to the solution, but neither limiting the
| capital flow into housing nor limiting the number of new
| units built will ever work.
| carom wrote:
| I am a landlord, I specifically bought a property that is
| zoned for more units so I can build more housing when I
| have money again in the future. My dad is a landlord, he
| is actively building. More units mean more money. You can
| support a larger population. As a former renter I want
| more units too. I hated paying 38k / year for a mediocre
| apartment in SF Bay.
|
| >Meanwhile local politicians and boomers support NIMBYism
| and oppose all housing developments
|
| This is 100% the issue. Build more housing. Allow smaller
| units and efficiencies for lower income residents. Get
| rid of some of the bureaucracy around building, so much
| of it is just implicit NIMBYism.
| SquishyPanda23 wrote:
| > The answer is no lockdowns
|
| Ah yes, the anti-vaxxer chiming in with the "let everyone
| die" approach to the economy.
| dang wrote:
| This sort of comment will get you banned on HN, regardless
| of how wrong someone else is or you feel they are. If you'd
| please review
| https://news.ycombinator.com/newsguidelines.html and stick
| to the rules when posting here (all of them--you must have
| broken at least half a dozen here), we'd appreciate it.
| SquishyPanda23 wrote:
| okay thanks
| tclancy wrote:
| That sounds a lot like if we just do what we have been doing
| for the last couple hundred years it will all work out. But
| we have a couple hundred years of evidence of who it works
| out for and who it does not.
| FredPret wrote:
| What are you talking about?
|
| Standards of living have increased the most at the bottom
| of society.
|
| - Labourers used to work seven days a week (12 hour days),
| then six, now five times eight is standard, with some
| exceptions.
|
| - Workplace safety have gone from a laughable concept to
| the first priority.
|
| - 100% of Western populations can read and write. This used
| to be a rich-person thing
|
| - How many poor kids have you seen lately with their faces
| covered in coal dust from the mines?
|
| - There are thousands of other examples. Poor people today
| live longer and better in many important ways than rich
| people even a hundred years ago, never mind a "couple
| hundred years."
| pyrale wrote:
| > Standards of living have increased the most at the
| bottom of society.
|
| Ah yes, conflating 150 years of history like the 60's and
| the 2010's were comparable in a stable stream of
| progress.
|
| Remember even further, when we were forced to dress in
| animal furs and sleep in grottos? How amazing progress we
| made since then... I wonder why the serfs are
| complaining.
| FredPret wrote:
| Oh, I'm sorry that the eye-watering amount of progress
| isn't good enough for you, because sometimes it's faster
| than other times.
|
| Only if every single minute is better than the last by
| the exact same amount is capitalism working!
| pyrale wrote:
| Are you the fifth Yorkshireman ? Too bad you left the
| band before it became famous.
| FredPret wrote:
| Well, be unhappy then if you insist. I tried.
| onlyrealcuzzo wrote:
| How can you be confident we will get there?
|
| Central Banks can easily knock interest rates down a few
| points and take away all gains in labor wages (plus more).
|
| Why would Central Bankers (who answers to no one) stop giving
| themselves (and other asset owners) more and more pie when
| it's so easy to take it?
|
| What's the incentive to stop? The West is on a 20-year trend
| to lower interest rates. Japan's on a 30-year trend.
|
| Have you stopped to consider how hard it is to maintain a
| life a leisure in a low-growth environment without slave
| labor? /s
| chooseaname wrote:
| > Housing is anything from a third to 50%
|
| This is way too much. We just finished paying off our current
| house and our payment was around 14% of our net. We are high
| earners in a low CoL area so the house is really nice, but
| wasn't very expensive. I can't imagine being "house poor" after
| this.
| notanzaiiswear wrote:
| Apparently there are people who are willing and able to pay the
| housing prices, so your claim seems obviously false.
| prawn wrote:
| I'd be tackling housing prices. I think wages (in AU, at least)
| already render many small businesses unviable.
|
| Historically in Australia, it's seemed like houses have doubled
| in price every 10 years. More recently, it's seemed like every
| 5 years. A house I bought 10 years ago would now be 2.5* that
| as land value alone. A building I bought has apparently doubled
| in value in five years.
| chooseaname wrote:
| > I think wages (in AU, at least) already render many small
| businesses unviable.
|
| Probably an unviable business no matter the wage. People
| cannot be depended on to subsidize someone's business by
| accepting crappy wages.
| M2Ys4U wrote:
| >I'd be tackling housing prices.
|
| The government has absolutely no desire to do that. Their
| voter base is predominantly home owners who think of their
| house as an asset that should only go up in value.
| prawn wrote:
| Yes, I think the best opportunities are incremental changes
| like phasing out negative gearing, tweaking SMSF rules and
| so on.
| onlyrealcuzzo wrote:
| When the average person makes more money sitting in their
| house than they do working - it's a gift-horse that is hard
| to look in the mouth...
| benbojangles wrote:
| I agree. Also, High streets don't have to 'die' due to
| excessive rent either, the government could hike taxes on
| vacant stores 1000% then make possession orders on unpaid
| premises after 18 months. Then the gov can nationalise shop
| rents according to reasonable incomes.
| [deleted]
| scatters wrote:
| > hike taxes on vacant stores 1000%
|
| That's how you get high streets lined with charity shops.
| Not that I have anything against charity shops, but is
| that really what you want to see?
| M2Ys4U wrote:
| I'd advocate for scrapping council tax and business
| rates, replacing them with a land value tax payable by
| the _freeholder_ rather than occupant.
|
| I just don't see the current Tory party touching it with
| a barge pole.
| GordonS wrote:
| I'd love for council tax to be scrapped, but I'd prefer
| it to be replaced by a risen in income tax, with money
| dished out by Central government to local councils.
| aurbano wrote:
| Only issue is that UK politics are dominated by rich
| landowners...
| lovich wrote:
| How does that tax not just passed onto the occupant? When
| I was renting I was basically paying all my landlords
| costs for the property + profit on top. If there's not
| enough units available or if the landlord class acts as a
| cartel in pricing then every cost is going to the
| occupant
| xyzzyz wrote:
| The tax incidence depends on the elasticities of demand
| and supply. Since the supply of land is, for practical
| purposes, perfectly inelastic, land value tax cannot be
| effectively passed onto the tenant.
|
| See https://en.m.wikipedia.org/wiki/Land_value_tax#Tax_in
| cidence
| ndr wrote:
| _" We advertised locally for 70 fruit-pickers and we had nine
| applications. On follow-up, only one was still available... in
| terms of recruiting locally, we failed completely," says Ali
| Capper, the owner of Stocks Farm in Suckley and chair of British
| Apples and Pears.
|
| At her orchard, harvest has just started. It must be done quickly
| and requires many pairs of hands.
|
| Ali had to turn to specialist recruitment firms and has brought
| in seasonal workers from Poland, Romania, Bulgaria and Russia._
|
| What's a reasonable prediction here? Higher wages and more
| expensive fruits? A bunch of farms going bust?
| heurisko wrote:
| I don't know why they are surprised to receive not many
| applicants locally, as you can't support yourself in the UK on
| seasonal work.
|
| The growing prosperity of other countries, may also mean you
| can't rely on the difference in purchasing power to attract
| seasonal workers from other countries.
|
| Which leaves either investing in machinery, or perhaps
| marketing your job as an "experience" to those who aren't
| relying on the wage, but wouldn't mind some exercise outdoors.
| nicoburns wrote:
| Or paying more
| tomp wrote:
| I love how all the elite arguments that _immigration doesn 't
| reduce wages_ (which the working class always thought were
| complete bullshit) were proved to be complete bullshit during
| the pandemic-related border closures.
|
| Of course, the discussion about _what to do_ about that remains
| - open borders & keep wages low, or close borders & raise
| local wages, or close borders & keep wages low & invest in
| automation - but it's nice to have the discussion honestly,
| without gaslighting the opposition.
| Workaccount2 wrote:
| The meme to mock those critical of immigration (usually
| conservatives) is _" Those dirty immigrants are taking our
| jerbs!"_
|
| It's a miss statement about when the crux of the issue is.
| It's not jobs being taken, it's wages being held low.
|
| I worked at a warehouse that started pay at $12/hr. This was
| in 2016. Talking to one of the older guys, he started at
| $12/hr as well. _In 2001_. I 'm sure you can guess what the
| worker makeup of that place looked like. There is no need to
| raise pay if you always have willing workers.
| pessimizer wrote:
| > (usually conservatives)
|
| Usually nationalists. Conservatives love wages being
| lowered, and employees that can't complain without being
| deported. They're anti-immigration when it comes to law,
| but very pro-immigration when it comes to enforcement.
| Ideally, for them, they would have draconian immigration
| laws that would only begin investigations based on a
| tipline that only employers would have access to.
| toto444 wrote:
| It is a bit more complicated because if the wages of fruit
| picker decreases, the farmers may sell their fruits for a
| lower price. So everyone else's wage actually increases. Not
| the amount of PS you get at the end of the month but what you
| can afford with these PS (more fruits).
| tomp wrote:
| This same argument could be used to justify slavery. I'm
| quite unsympathetic to such arguments, especially when
| talking about the lowest classes of the society (as
| measured by wealth).
| ladyattis wrote:
| On each country it really depends. For the US, low wage
| immigrant workers don't depress wages that much but in high
| skill areas immigrant workers can depress wages up to 20%
| last time I read a study on the matter. So it's really about
| what kind of work and where. Lots of engineers have felt the
| squeeze on immigrant labor for years but since engineers
| don't usually unionize they don't bark as much and thus bare
| the loss.
| zpeti wrote:
| Pretty big red flag was why so many multinational
| corporations are pro open borders. Corporations rarely take a
| stance on political issues unless they have a reason to do
| so.
| adventured wrote:
| In the US there is a particularly pro big business
| conservative wing of the right that is hyper in favor of
| unlimited low skill immigration. It's totally at odds with
| the mainstream conservative position on immigration. So why
| do they hold that position? It's not out of the kindness of
| their gentle pro-immigration conservative hearts of course.
| It's because they want the cheap labor to feed to big
| business and it helps to suppress wages for all the rest of
| their workers.
|
| If you go back just 15-20 years ago, the Democrats
| universally understood this fact of labor supply/demand.
| Large amounts of low skill labor hurt their middle class
| and lower class labor voters, hurt their wages. And the
| Democrats used to be against such vast low skill
| immigration, because they had a large labor vote to
| protect. You can see this in action by looking at speeches
| from decades past (including by still prominent Democrats
| like Bernie Sanders). Their position now? Crickets. They've
| gone radio silent on the matter vs a few decades ago. That
| specific labor vote is no longer what they view to be the
| future, how they are plotting political dominance for the
| next 50 years.
| disgruntledphd2 wrote:
| > (including by still prominent Democrats like Bernie
| Sanders)
|
| Bernie only changed his tune after Trump got elected.
| FWIW, it's always been obvious that more immigration
| reduces wages for low-skill workers (and everyone I
| suppose, depending on the volume of immigration). I was
| always really confused that this was not common
| knowledge.
|
| Like, Ross Perot ran against Clinton/Bush 1 on pretty
| much this platform, and that was in the 90's.
| willcipriano wrote:
| The more you think about it the worse it gets. It's one
| thing to be in favor of immigration, it's another thing
| entirely to be in favor of illegal immigration. The Tyson
| Chickens of the world love illegal immigrants, they don't
| file workers comp claims or take you to court if you fail
| to pay them. Supporting illegal immigration is supporting
| the creation of a untouchable quasi-slave caste. If
| immigrants had the same rights, privileges and
| responsibilities of domestic workers, they probably
| wouldn't work for such a steep discount. This is why I
| believe many proported immigration proponents don't ever
| seem to manage to meaningfully open up the border, that
| isn't what they are going for.
| adventured wrote:
| That's certainly right. One of the big lies in the US
| today about illegal immigration is that there are 11
| million illegal immigrants in the US. That has been the
| same number touted for most of two decades (it's still
| mindlessly repeated by talking heads on TV).
|
| The real number is now closer to 22 million illegal
| immigrants, according to a recent Yale study [1].
| Representing around 6% of all people in the US. So wait,
| how are all of those people surviving? They're cheap
| labor for the big business machine, they're an
| unprotected cheap labor caste as you correctly point out.
| They can't complain, they don't have well protected
| worker rights, and it can take a long time to become a
| citizen. It's a human rights travesty, and both the big
| business conservatives and the Democrats (as both are pro
| open borders) are morally culpable for it.
|
| The rational approach for the US would be to remodel its
| immigration system as something similar to Canada,
| focused more on high skill labor. We need to turn off the
| flood of illegal immigration while simultaneously
| creating a reasonable citizenship pathway for the 22
| million illegal immigrants that are here now (most are
| never leaving, so the proper thing to do is to provide a
| citizenship pathway), which would also begin bringing
| them into the tax base and protecting them as workers.
|
| [1] https://insights.som.yale.edu/insights/yale-study-
| finds-twic...
| hirako2000 wrote:
| Or simply relax immigration policies to basically let
| migrants get work permits, they would argue for a fair
| wage, and we can let the market decide. From what history
| says, that's what the US used to be in previous
| centuries. People came and worked, and grew and made what
| the US had become before politicians decided to make it
| harder and harder for migrants to settle legally.
| Aunche wrote:
| In the short term, sure, the domestic workers get higher
| wages, but in the long term it just incentivizes fruits to be
| imported directly from Eastern Europe instead.
| mensetmanusman wrote:
| This is a really good point, unfortunately I don't think
| people will learn their lesson. Instead, we will complain
| about all the wasted food, and we will spend effort on trying
| to bring back this invisible servant class instead of
| investing in automation.
| anonymousDan wrote:
| I disagree. The value of the pound plummeted as a result of
| Brexit. So relative wages _might_ increase in future, but
| there is no guarantee that it will make workers any wealthier
| overall. Of course you might argue you only care about
| relative wealth, but then you have to worry about inflation
| due to rising cost of imports etc. I think it 's more
| complicated than the simplistic picture you paint above.
|
| For me the things that need to change in the UK are to (i)
| reduce the cost of access to education and (ii) reduce the
| cost of housing.
| epicureanideal wrote:
| Plummeted? Adjusted slightly you mean...
| nostrademons wrote:
| Immigration doesn't reduce the wages _of those making the
| argument_ , who are usually employed in
| professional/managerial classes that benefit when there are
| lots of employees at the bottom.
|
| This also illustrates the economically rational response to
| immigration, though. Be a turncoat. Move up the value chain
| into management (or other industries that benefit from a
| larger population of workers), so that you too can benefit.
| mmarq wrote:
| There's no opposition to gaslight, the vast majority of the
| population believes the myth of immigration reducing wages,
| while there's no evidence of it being true (you are welcome
| to provide some). This vast majority is not the opposition,
| but the force that elected the past 3-4 conservative and
| euro-skeptic governments that gave us the "hostile
| environment for foreigners".
|
| In the UK, EU nationals earn more than the locals, so one
| inclined to silly socio-economic statements should argue that
| locals reduce wages.
| digianarchist wrote:
| There's a University of Oxford study that confirms EU
| migration has had negligible impact on wages in the UK. The
| study appeared to be focused on wage decline. What I'm less
| convinced of, and what is much harder to measure, is what
| impact it has had on wages rising.
| hihihihi1234 wrote:
| The Tory governments of the last 11 years were not elected
| by anything close to "the vast majority"
| mmarq wrote:
| You are right, I didn't express myself correctly.
|
| I meant that the vast majority of Britons (and of
| Westerns) believe that immigration has a negative effect
| on wages, which is a false credence. They haven't all
| voted for the Conservative party, but the notion that
| these people have been gaslighted or ignored by the elite
| (which includes the parliament and the government) is
| patently absurd, given who ruled the country and what
| happened in the past 10 years.
| brigandish wrote:
| > I meant that the vast majority of Britons (and of
| Westerns) believe that immigration has a negative effect
| on wages, which is a false credence.
|
| Maybe they read Bank of England reports? [1]
|
| > The static results suggest that the statistically
| significant negative effects of immigration on wages are
| concentrated among skilled production workers, and
| semi/unskilled service workers.
|
| [1] https://www.cityam.com/bank-of-england-mass-
| migration-can-de...
| tomp wrote:
| The proof is in the pudding: "we can't find local workers
| willing to work for these low wages so we'll import them
| from abroad".
|
| A lot of EU immigrants come to London to work in
| tech/finance _because_ they offer higher wages than pretty
| much anywhere on the continent (I was one of them). But the
| working class is pretty far removed from the effect of
| professional-class immigration.
|
| The UK has many other structural problems so collapsing the
| whole Brexit discussion into one dimension is a bit of an
| over-simplification, though if you asked me to do the PCA,
| I'd say the main cause was _" protest vote"_. (Pre-BJ
| governments weren't Euro-sceptic.)
| KptMarchewa wrote:
| > The proof is in the pudding: "we can't find local
| workers willing to work for these low wages so we'll
| import them from abroad".
|
| You're not talking about alternative, which is "the
| production stops to be profitable, so we won't do it".
| mmarq wrote:
| > The proof is in the pudding: "we can't find local
| workers willing to work for these low wages so we'll
| import them from abroad".
|
| Everywhere in world there are labour shortages, because
| we just ended lockdowns 3 months ago. In other places
| they are blaming the shortage on the young being lazy or
| on unemployment benefits, with the same scientific
| rigour. So I'm still waiting for a proof (not a pun or an
| anecdote) that immigration reduces salaries.
|
| > A lot of EU immigrants come to London to work in
| tech/finance because they offer higher wages than pretty
| much anywhere on the continent (I was one of them).
|
| Which means that EU nationals living in the UK earn more
| than the locals, so they can't be driving salaries down.
| Unless you hypothesise a fantasy counterfactual where
| Jack deChav, who's now an underpaid bartender, would have
| become a software developer and would be earning 6 digits
| if only Carlos de Perros, S/W developer from Malaga,
| didn't steal his job.
|
| > But the working class is pretty far removed from the
| effect of professional-class immigration.
|
| Whatever the working class is in the UK, if they believe
| that immigration reduces salaries, they are far removed
| from any modern notion of truth.
|
| > The UK has many other structural problems so collapsing
| the whole Brexit discussion into one dimension is a bit
| of an over-simplification, though if you asked me to do
| the PCA, I'd say the main cause was "protest vote". (Pre-
| BJ governments weren't Euro-sceptic.)
|
| I'm not collapsing anything into anything. I've read a
| false statement "immigration reduces salaries" and I
| replied to it. Incidentally the UK has been playing with
| "hostile environments", euro-skepticism and Brexit and
| yet real salaries are still below 2008.
| disgruntledphd2 wrote:
| > Whatever the working class is in the UK, if they
| believe that immigration reduces salaries, they are far
| removed from any modern notion of truth.
|
| Can you provide some references for your (rather strong)
| claim?
| mmarq wrote:
| > Can you provide some references for your (rather
| strong) claim?
|
| My claim is self-evident, if you believe something
| absurd, you are by definition "far removed from any
| modern notion of truth".
| disgruntledphd2 wrote:
| Sorry, I don't agree. If the supply of labour increases
| without any consequent increase in demand, then one would
| expect to see the price of labour reduce, right?
|
| That's what econ 101 would say, right? You're the one
| making the claim that it doesn't. If such a claim is self
| evident, then you should be able to produce some kind of
| reasoning as to why it is so, no?
| mmarq wrote:
| > Sorry, I don't agree. If the supply of labour increases
| without any consequent increase in demand, then one would
| expect to see the price of labour reduce, right?
|
| Which is only true if the foreigner in question teleports
| themself to their country of origin whenever they are not
| working. Even if they got all their food delivered from
| Poorland, there would be an increased demand for
| deliveries.
|
| > That's what econ 101 would say, right? You're the one
| making the claim that it doesn't. If such a claim is self
| evident, then you should be able to produce some kind of
| reasoning as to why it is so, no?
|
| No, unless we assume that workers don't consume anything
| and are perfect substitutes, if there is perfect
| information in the labour market, etc...
|
| None of these assumptions holds true, so the impact of
| immigration on wages can't be estimated like the impact
| of potato overproduction on the potato market. So it
| becomes an empirical question, and evidence suggests that
| no country experienced long term wage compression because
| of immigration.
| Levitz wrote:
| >So I'm still waiting for a proof (not a pun or an
| anecdote) that immigration reduces salaries.
|
| And what would that be? A study linking both while
| accounting for every other factor? I don't think it's
| even possible to do such a thing.
|
| >Which means that EU nationals living in the UK earn more
| than the locals, so they can't be driving salaries down.
| Unless you hypothesise a fantasy counterfactual where
| Jack deChav, who's now an underpaid bartender, would have
| become a software developer and would be earning 6 digits
| if only Carlos de Perros, S/W developer from Malaga,
| didn't steal his job.
|
| There is competition even in software development, it
| doesn't take anyone to be a bartender for competition to
| cause a wage drop, moreover the reality is way more stark
| when you look at jobs that aren't as cushy as software
| development. A Spanish waiter is probably used to lower
| salaries and is probably more dependent on his job than
| an English one that has a support network in his country,
| his chances to unionize are also lower. We see it all the
| time with immigrants from low income countries.
|
| I can imagine how immigration can lead to economic growth
| and salary growth as a result, but I find it impossible
| that the race to the bottom caused in low-income jobs is
| worth for them at all, if anything the economic growth is
| caused by this low-cost labor.
| mmarq wrote:
| > And what would that be? A study linking both while
| accounting for every other factor? I don't think it's
| even possible to do such a thing.
|
| What's the point of saying something if you think that
| it's impossible to prove?
|
| > There is competition even in software development, it
| doesn't take anyone to be a bartender for competition to
| cause a wage drop, moreover the reality is way more stark
| when you look at jobs that aren't as cushy as software
| development. A Spanish waiter is probably used to lower
| salaries and is probably more dependent on his job than
| an English one that has a support network in his country,
| his chances to unionize are also lower. We see it all the
| time with immigrants from low income countries.
|
| The number of software developers in the UK kept going up
| until the beginning of lockdowns, but salaries went up
| instead of going down. How's that possible if more people
| mean lower wages?
|
| Is there any evidence of Spanish bartenders pushing
| bartender salaries down?
|
| > I can imagine how immigration can lead to economic
| growth and salary growth as a result, but I find it
| impossible that the race to the bottom caused in low-
| income jobs is worth for them at all, if anything the
| economic growth is caused by this low-cost labor.
|
| Is there any evidence of this "race to the bottom [..] in
| low-income jobs"? Is there any evidence of it being
| caused by immigration?
| [deleted]
| imtringued wrote:
| I'm pretty sure it is well known that globalization equalizes
| wages globally. That means they meet in the middle. Poor
| nations see relative wage growth and wealthy nations see
| relative wage decline. On average everyone is better off but
| it also means that those living in wealthy countries now feel
| extreme pressure to compete globally. For most people that
| simply means skilling up at college and moving to large
| cities to which investor money is flowing.
| pessimizer wrote:
| Globalization equalizes wages amongst people who can't
| lobby for protectionism. So _only_ for the poor. If medical
| /drug patents and professionals were subjected to the same
| type of _globalization_ that lower-leveraged workers were,
| inflation would run in reverse for the next 10 years.
| Instead, people who spend most of their income on
| consumption are drowning in what are really hidden tariffs
| and rent-seekers doing arbitrage.
| kubb wrote:
| Work camps where exploited eastern europeans live in horrible
| conditions, their rights are violated, they get underpaid and a
| substantial portion of their wage goes to the agencies acting
| as middle men.
| plantain wrote:
| Are you describing the old system or the new system?
|
| Because that's what the UK had before, and it's what the
| Australian system they're trying to emulate produces too.
| swarnie wrote:
| That's the old system.
|
| People _would_ come in, live on site and be feed on site,
| work hard for 3 months (maybe moving sites as demand came
| and went) then leave and go back home.
|
| The 3 months of hard work and bad conditions was worth it
| because of the buying power the wages had comparatively
| back home.
|
| UK people simply wont put up with that because they have to
| use the wages in the UK.
| kubb wrote:
| The old system isn't that much different from the new
| system is it? Just the agencies will get paid more for
| handling the legal side and logistics of importing the
| workers.
| meheleventyone wrote:
| In this case the jobs were always done by foreign seasonal
| workers. I dunno if Brexit has made them more expensive but I'd
| imagine they are less easily available.
| tpm wrote:
| Both more expensive and less available.
|
| But the funny thing is in Eastern Europe, where these workers
| come from and where they presumably are now, there too are
| record job vacancies and rising wages. So probably something
| to do with either the pandemic or overheating economy from
| the cheap money.
| dustintrex wrote:
| Much of Eastern Europe is also undergoing demographic
| collapse, with total fertility rates under 1.50, and unlike
| Western Europe they're not getting much in the way of
| immigrants. Even Syrian refugees etc simply pass through.
| tpm wrote:
| Sure but that's fun for the future, for the current
| situation on the labor market that does not matter at
| all.
| Leherenn wrote:
| I was thinking it must be too soon to have a significant
| effect yet, but apparently I was wrong. According to
| [https://fred.stlouisfed.org/series/LFWA64TTPLQ647N], the
| working age population in Poland has declined by about
| 10% in 10 years.
| tonyedgecombe wrote:
| Dig up the fruit trees and sell the land for housing?
| GordonS wrote:
| They'd never get planning permission, because "but the green
| belt!".
|
| It really boggles the mind how for _decades_ we haven 't
| allowed enough new housing to be built.
| tonyedgecombe wrote:
| It's happening around me (Oxfordshire), there is a lot of
| new housing and it's mostly on farmland.
| CodeGlitch wrote:
| Lorry drivers getting 40% higher pay:
|
| https://www.bbc.co.uk/news/uk-england-coventry-warwickshire-...
|
| In fact I can see this happening across many industries, and if
| you are one of those people working minimum wage can only be a
| good thing? The import of cheap labour _does_ push down the
| wages of the working class - so the middle /upper classes get
| to buy cheaper fruit...
|
| I believe farmers will have to work with this new "normal", and
| it'll take a few years for them to figure out how to cope.
| spywaregorilla wrote:
| A guy driving a truck might enable 10,000 burger sales in an
| hour. A cashier might enable 100. It's easier to raise the
| truck driver's wage.
|
| Raising wages and prices can be done, of course. But if
| you're planning to export those goods to other countries,
| you've just made your products more expensive. If your goods
| are fungible, you may not be able to raise the price at all.
| Higher wages might simply make your business not viable in
| the context of international trade.
| quickthrower2 wrote:
| Wonder if it will cause high inflation, and if that'll force
| up interest rates
| codegrappler wrote:
| It certainly feels that way. Businesses can't find workers,
| so wages increase, costs are passed on to consumers, prices
| inflate...
| pibechorro wrote:
| It will. And they will avoid at all costs to raise it, for
| higher interest rates will default everyone over leveraged,
| which is everything and everyone at this point outside of
| the preppers and Libertarian types which have been yelling
| about this for a long time now.
| thomasz wrote:
| It's not like the working class doesn't have to eat. In fact,
| they will be hit hardest by increasing food prices.
|
| > Indication of some degree of food insecurity was reported
| by 14.2% of the sample and tended to be higher amongst
| younger age groups, those on lower incomes, and home renters
| (as opposed to owners).
|
| https://academic.oup.com/jpubhealth/advance-
| article/doi/10.1...
|
| I somewhat doubt that we're talking about upper/middle
| classes here.
| neilwilson wrote:
| "It's not like the working class doesn't have to eat. In
| fact, they will be hit hardest by increasing food prices."
|
| But they are the ones getting the higher wages, so it
| doesn't matter.
|
| It's those people not getting wage increases that end up
| taking the loss - which is the middle class and the public
| sector.
| CodeGlitch wrote:
| True - but other aspects of your running costs
| (electricity, gas, rent, etc) will not increase, as I don't
| believe they depend on cheap labour.
|
| Interestingly (can't find the reference right now), I've
| read that the high cost of labour in the UK contributed to
| the push for mechanisation of farming, which resulted in
| the industrial revolution (something we have all benefited
| from). In China, labour costs were (are?) so low that there
| was no reason to invent a farming machine, when you could
| pay a peasant to do the job for less.
|
| So if this runs long term, we will see further automation
| of farming?
| Scoundreller wrote:
| Or just better distribution. It's not hard for an Apple
| picker to pick a few dollars worth of apples per minute
| at harvest time, but that's the supermarket price, not
| what the farmer can sell them off for per bushel.
|
| I know picking isn't the only cost, but it seems like the
| cost of picking doubling or trebling should have minute
| effect on profitability.
|
| Farmers need to get better at capturing the price that
| consumers are willing to pay.
|
| Somehow, farmers markets have become the place to pay
| premium prices instead of lower prices.
|
| Or convince consumers that a bit of scab on an apple is
| fine to eat and doesn't need to be destined to make sauce
| or juice.
| neilwilson wrote:
| The UK will need to adopt the approaches in farming taken
| by the Dutch amongst others.
|
| The crops planted will be the ones more amenable to
| automation.
| nicoburns wrote:
| Not if their wages grow in line with the increases.
| xienze wrote:
| Yes, "if". The problem is that companies don't move in
| lockstep with the broader economy, so it might take a
| year or two of food and goods increasing in price 12%
| before your company has managed to give you a 5% raise,
| which in turn requires them to raise the prices of their
| goods. And hopefully _their_ customers don't balk at the
| increased price because _they_ haven't yet been able to
| absorb their own set of wage increases.
| nicoburns wrote:
| The context of this post is that companies are having
| difficulty hiring and are having to increase wages. Which
| is what is being hypothesised to lead to price increases.
| Which would suggest that wage increases would come first
| in this instance.
| xienze wrote:
| Yes, but they're hesitant to do that because of the
| impact the wage increases (which then get passed on to
| consumers) will have on sales. There's this notion that
| companies could simply double or triple wages with a
| negligible impact on the bottom line or consumer prices
| but are just being dicks. Which is not really the case.
| Margins are just razor-thin. So you get in a sort of
| Mexican standoff situation. Who's going to blink first,
| raise wages, and lose sales?
| nicoburns wrote:
| If they can't find staff then the companies don't have
| much choice but to raise wages. They'll lose more sales
| if they have to close their business due to lack of
| staff.
| [deleted]
| rm445 wrote:
| Seasonal agricultural labour has been a problem in the UK for
| literally centuries, since the move away from subsistence
| farming and the beginning of the industrial revolution.
| Traditional solutions, as well as migrant labour, include
| benefits such as subsidised housing and a minimal off-season
| social safety net. Which I guess are a form of higher wages,
| but more directly applied.
|
| I suspect that the mix of crops could change in the medium
| term, to less labour-intensive and more automation-friendly
| ones. Expect lurid headlines and more expensive strawberry jam.
|
| It will be interesting to see whether the government caves to
| ag-industry pressure and puts in place special summer visa
| schemes or similar. On the one hand, the current government is
| fairly right-wing. On the other; they are quite
| interventionist, aligned with business interests, and dependent
| on rural votes. And most of all, media-led. I'd guess they'll
| respond to headlines about fruit rotting on trees with some
| madcap scheme.
| GordonS wrote:
| I noticed the article never mentioned anything about pay and
| conditions for the advertised fruit picking jobs.
|
| My prediction is that the government will make it easier for
| people to come to Britain for seasonal work. And then they'll
| make it easier for companies that claim they have "labour
| shortages", regardless of whether those companies actually
| tried meaningfully improving pay and conditions first.
| flerchin wrote:
| Jobs only stay vacant when the compensation is not market
| clearing. In many cases, the compensation for the marginal jobs
| will need to include childcare or training.
| yawaworht1978 wrote:
| What are these jobs? Human health and hospitality?
|
| Then they go on and list fruit pickers? And retail stores hiring
| staff for the Xmas onset?
|
| Are they kidding? These are temporary jobs, probably not
| previously posted as done underhanded, but now there's no fruit
| pickers for cheap and they seek more official channels.
|
| And drivers, yes obviously drivers to deliver the aforementioned
| goods.
|
| Covid, Brexit, good luck finding the fruit pickers.
|
| This is not an economic recovery, this is harvest and Xmas time,
| nothing fundamental has changed.
|
| As for the housing prices, indeed, as you would say in England,
| in "the north" , you get double the house for half the price, and
| even better quality. It's not London though, and there's not too
| many jobs.
| ourlordcaffeine wrote:
| I believe the vacancies are mostly bar staff, carers, farm
| labour and haulage.
|
| There are a bunch of delusional pub landlords in my city who
| complain about the lack of staff and claim stuff like "today's
| youth are entitled and lazy" - but apparently failed to notice
| local supermarkets literally pay more with fewer hours.
| Zigurd wrote:
| Not every posted open position will be filled. Some of those
| postings are the equivalent of lowball bids. They are
| opportunistic. Some are critical and must be filled at any price.
| The vacancies number does not capture the difference. I wonder
| how that shakes out in retrospect. Jobs that never got filled
| were not real vacancies just as "I'll give you five dollars for
| that car" does not make me a customer.
| api wrote:
| Good. Wages must be forced up. You can't have a modern economy
| without a capitalized middle class.
|
| Real estate is so ludicrous we need quite a bit of inflation to
| make it reasonable again. The alternative would be a deflationary
| crash where real estate crashes and obliterates everyone's home
| equity, but that is far more painful to virtually everyone.
| mschuster91 wrote:
| > Real estate is so ludicrous we need quite a bit of inflation
| to make it reasonable again.
|
| Alternatively, we could invest in rural areas and other left-
| behind areas ("flyover states" in the US, Eastern Germany in
| Germany). Right now, the infrastructure there is flat-out
| unable to sustain quality modern human life unless you're Amish
| and fine with travelling on horseback: no high speed internet,
| no public transport, road and rail infrastructure are crumbling
| apart, no business opportunities, no education, no
| entertainment, no access to healthcare.
|
| The demand for urban housing is so immense because urban areas
| are the only places to enjoy modern living. Making rural areas
| inhabitable again would take away _a lot_ of the pressure.
|
| Additionally, we could go and use eminent domain against
| foreign (especially Chinese) speculators who use Western urban
| housing solely as a "safeguard" for their wealth against the
| CCP. The side effect from doing that would be that it increases
| the pressure inside China against the CCP - when people
| suddenly have nowhere to hide their assets from the CCP, they
| will have to demand an end to the CCPs unilateral seizures.
| whywhywhywhy wrote:
| UK has excellent rural areas so although that might help in
| America keep in mind it hasn't helped in the UK.
| [deleted]
| Pxtl wrote:
| That sounds like a recipe for suburban housing sprawl, which
| is what you get in North America when people start moving en
| masse to a rural area, and it's expensive on infrastructure
| and unsustainable from a climate perspective.
| api wrote:
| I am no longer convinced that urbanism is categorically
| better for the environment. Here's why.
|
| First of all, consider direct energy consumption. A
| suburban or rural home can probably get >50% of its energy
| use (including cars if they are EVs) from solar power
| directly off its own roof and property. This is year round
| in the sun belt and at least 2/3 of the year elsewhere.
| Batteries are getting cheap enough that home load leveling
| or even fully grid-free homes are now approaching middle
| class affordability.
|
| EVs are now 100% practical as replacements for gas cars
| even in rural areas. I have a 200 mile range Nissan Leaf
| which was very affordable and would suit me just fine even
| if I lived way out in the exurbs or countryside, and
| they're building fast chargers everywhere where I live
| (Ohio) even along highways in the country. The next
| generation or two of cars (or a Tesla today) might even
| drive me to my destination, allowing me to read on the way
| the way I did in the subway when I lived in the city.
|
| Secondly, the vast majority of your land use and probably
| more than 50% of your energy use is not direct. A huge
| fraction of your energy use is in the embodied energy of
| the products that you purchase and their transportation
| around the global supply chain. An even larger fraction of
| your land use is in farming and resource extraction to
| support you and your lifestyle.
|
| Where you live changes none of that. A cheeseburger or
| laptop purchased in the city has exactly the same footprint
| as a cheeseburger or laptop purchased in the country.
|
| In fact, I can see a future where dense cities are actually
| _worse_ due to being harder to power with renewable energy.
| To power a dense city you might have to gather a lot of
| renewable energy from far away, which means more
| transmission infrastructure and more transmission losses.
| If we shifted to local farm-to-table eating patterns food
| in the city may even have more embodied energy due to a
| longer supply chain to get it there. Then consider that
| city dwellers eat at restaurants more and restaurants waste
| a lot more food than cooking at home usually does.
| (Seriously... look into how much food most restaurants
| throw away!)
|
| Cities are hands-down superior to suburbs and the country
| in a fossil fuel powered world. In a post-fossil-fuel world
| it's very debatable.
|
| Last but not least, we new urbanists (Gen-X and younger)
| have discovered that big cities are real estate cartels
| that make it impossible for the middle class to accumulate
| wealth. That's already pushing people away. For young
| people today I would recommend not going to a high cost of
| living city for any reason other than to level up your
| career and then leave. Big cities used to be fun centers of
| art and culture, but that's being driven away by real
| estate hyperinflation. I'm seeing more and more cool stuff
| happening in small towns across the country where creatives
| are settling so they can afford to live without spending
| >50% of their income on rent.
| Pxtl wrote:
| For the last part, I'd argue that our failure to make
| enough city is the reason you've got people spending 50%
| on rent.
| CuriouslyC wrote:
| Rural areas aren't so bad off. Satellite and boosted cellular
| internet are a thing, and that covers the education,
| entertainment and business opportunity categories. Health
| care and shopping are infrequent things that you can drive
| for as needed.
| ghaff wrote:
| Current satellite and hotspots can be made to work. Netflix
| is not actually a necessity for modern life. But it does
| mean compromises. Hopefully some combination of StarLink
| and 5G will be able to better fill-in for lack of wired
| broadband than we have today.
|
| Also, while there are certainly very rural areas in the US,
| most of "flyover" country is not actually in the 100+ miles
| from a grocery store, Walmart, or hospital category.
| gilbetron wrote:
| > Real estate is so ludicrous we need quite a bit of inflation
| to make it reasonable again.
|
| Don't house prices usually go up with inflation?
| aaaaaaaaaaab wrote:
| What prevents landlords from simply soaking up the wage
| increases then?
| Levitz wrote:
| What prevents landlords from getting any arbitrary amount of
| money from their tenants?
|
| I think this is a different problem regarding housing.
| quickthrower2 wrote:
| They might but it may not push up house prices
| adrianb wrote:
| How so?
|
| If these days a house listed for x gets offers at x+10%,
| after average wages increase it will receive offers at
| x+20%. Is there any historical precedent of house prices
| not rising faster than inflation, absent external factors?
|
| I think a major correction of house prices can happen in
| two ways:
|
| - economic catastrophe (everyone's unemployed) / war /
| natural disaster / ... - we wouldn't want to buy a house
| anyway in that case;
|
| - major increase of interest rates or minimum deposit
| required - we wouldn't be able to afford the mortgage in
| that case.
| quickthrower2 wrote:
| High inflation -> higher internet rates -> lower income
| multiples for loans + higher rental yields to support
| interest rates.
| eli_gottlieb wrote:
| Build more housing. A _lot_ more housing. A good portion of
| it should be publicly owned.
| aaaaaaaaaaab wrote:
| Existing owners won't let you do that, as it would
| depreciate their real estate portfolio.
| eli_gottlieb wrote:
| Yeah, it's a political struggle. It's also the only
| solution. NIMBY landowners cannot be allowed to override
| human well-being _and_ political will _and_ economic
| growth indefinitely.
| api wrote:
| They won't in major cities which are all basically real
| estate cartels, which is why I am bearish on major cities
| as anything other than office parks for rich people and
| young professionals without families.
|
| Most other things like art, actual innovation, and child
| rearing are going to migrate to medium sized cities,
| towns, and the countryside for basic economic reasons.
| It's already slowly happening.
| ghaff wrote:
| > It's already slowly happening.
|
| You're basically describing the norm in the US from post-
| WWII until about 20 years ago. Many large cities that
| many think of as desirable elite cities today (with real
| estate prices to match) were losing population into the
| 1990s.
|
| The attractiveness of living in downtowns to mostly
| college educated young people is mostly a fairly recent
| phenomenon and there's no guarantees it won't reverse.
| pessimizer wrote:
| > The attractiveness of living in downtowns to mostly
| college educated young people is mostly a fairly recent
| phenomenon and there's no guarantees it won't reverse.
|
| Especially since it already was a reversal. The white
| return-flight was driven by suburban and small-town white
| kids growing up in boring sterile sundown towns (and
| paying a premium to live in them.) In the city, if you
| were willing to put up with crime, substandard housing,
| and living within a mile of a brown face, you would also
| be exposed to the cultures of those brown faces, and the
| creativity of people whose rent was low enough that they
| had time to follow dreams.
|
| Of course, when they (and their employers) moved back,
| they accidentally recreated their mallworld hellscapes as
| all the brown/interesting people were forced out and to
| the margins. Living in their circumscribed neighborhoods
| is now even more expensive than the suburbs they fled.
| Now the only benefit is that the city-suburb they live in
| is somewhat walkable and they may not need a car, but
| they're now living very close to the poors that their
| grandparents moved to sundown towns to avoid, there are
| panhandlers and shit in the streets, and armed kids make
| expeditions into their neighborhoods to hunt them.
|
| edit: It's only rational to get bored by this and go back
| home. Especially if you've gotten married, had the dog
| for two years, and now you've gotten pregnant. Especially
| with the internet and television taking up so much
| cultural space now. They work everywhere.
| api wrote:
| I already see it reversing among everyone but those in
| high income industries. I'm seeing a ton of artists
| settling in small towns these days. The cost of living is
| low, allowing you to live on things like Patreon and Etsy
| and make your art.
|
| This kind of radical decentralization is something the
| original boosters of the Internet in the 90s predicted,
| but then the great urbanism wave of 2000-2020 happened.
| But... remember that we tend to over-estimate the effect
| of technology in the short term and under-estimate it in
| the long term. The true decentralizing effect of the
| Internet might just not have been felt yet.
| ghaff wrote:
| I'm not sure I've ever heard a good explanation for why
| the urbanism wave (among a fairly specific demographic)
| happened. As far as I can tell, it was mostly led by
| people and employers increased their urban presence in
| response to better educated/better off young people
| wanting to live in cities--not the other way around.
|
| (There are some exceptions I can think of like pharma in
| Kendall Square Cambridge. But I assume Google, VMware,
| and Facebook would be just as happy if not happier
| establishing offices in Metro West--where most of the
| computer tech has historically been--rather than
| Cambridge.
|
| Manhattan is somewhat of an outlier but Manhattan has
| long been an outlier in lots of ways.
| pessimizer wrote:
| If existing owners are allowed to build how they want, it
| would actually make their portfolio shoot up. Fewer
| restrictions on property use makes property values rise,
| obviously and trivially.
| question002 wrote:
| Hey look a bit of people trying to push their agendas by
| reporting seemingly unsustainable economic conditions. What a
| great forum for debate!!!
| jurmous wrote:
| I am curious when the UK will be less strict with worker visas
| again for European workers after Brexit. It seems the UK has way
| more economic issues during this phase of the pandemic than
| mainland EU. On the mainland there are no empty supermarkets, or
| farms not being able to harvest because of labour shortages. So
| it seems to be a Brexit issue. But if they allow more European
| workers again, what was then the point of Brexit? I would hate to
| be in the shoes of Boris Johnson.
|
| https://www.theguardian.com/politics/2021/aug/25/business-le...
| Mordisquitos wrote:
| > It seems the UK has way more economic issues during this
| phase of the pandemic than mainland EU.
|
| Tangentially related to this, I have heard little mention about
| how the timing of the pandemic may have been an absolute
| godsend and a lifesaver for the current British government. The
| consequences of COVID-19 lockdowns and travel restrictions on
| the international economy and world trade have made it the
| perfect scapegoat to blame for the impact of no-deal Brexit.
| sgt101 wrote:
| I think they will wait for the furlough scheme to unwind in the
| next three or so months before making any moves.
| tonyedgecombe wrote:
| I don't think they can. Anything related to the EU is toxic
| within the current government, including relaxing immigration
| from Europe. Nothing will change unless we get a new
| government.
| throwthere wrote:
| I guess on the one hand businesses aren't paying enough. But I
| mean, business owners aren't all just evil conspiring anti-labor
| types. They're in it for the profits and would pay more if they
| could eek out a reasonable return on investment. On a deeper
| level, you have all these zombie-businesses now supported by
| government handouts and terribly low interest rates. The zombie
| businesses soak up labor for relatively less-productive pursuits.
| GordonS wrote:
| The government should level the playing field and increase
| minimum wage, IMO.
| neilwilson wrote:
| Zombie businesses required to pay more for labour go bust.
|
| Raising the cost of labour is a far more reliable way of
| eliminating zombies than attempting to raise interest costs. No
| business can operate without labour.
| adventured wrote:
| > Zombie businesses required to pay more for labour go bust.
|
| They may survive for a long period of time in a perma low
| interest rate environment where debt has become cheap and
| stocks are highly inflated. Low interest rates, as well as
| enabling debt accumulation, also float the stock market,
| which provides shareholder dilution-based funding to
| businesses that otherwise would have far more severe
| problems.
|
| Uber is an ongoing example of that. Previously they abused
| venture capitalist institutional money to get by, now they're
| living as a parasite on shareholders (who are hoping that
| something changes about the financials in their business,
| some day, some how).
|
| Tech hasn't had a good 'ol brush fire clean out of garbage in
| a long time now.
|
| Companies like Snowflake that are bleeding enormous sums of
| money, would collapse in a traditional 1990-1991 or 2001-2002
| style recession. Snowflake is similar to any number of
| supposedly fast growing, huge loss-making companies like
| Exodus Communications from the dotcom era, that imploded when
| the music stopped (and so many of their business clients
| pulled back on spending). Snowflake's sales over the last
| four quarters: $851 million, their operating loss over that
| time: $775 million. They would instantly shatter if a real
| recession hit, the stock would drop by 95% rapidly. There is
| a lot of that garbage floating around the tech space these
| days, because we haven't had any good clearing fires in a
| long, long time.
| disgruntledphd2 wrote:
| To be fair to Snowflake (not that I disagree) their product
| is pretty good. It's far too expensive for what it is, but
| at least it's not Hive.
| albertshin wrote:
| I agree with the sentiment of lofty multiples, but what do
| you think happens to good product companies in that
| scenario? Sure their stock tumbles quite a bit but would it
| actually affect the business itself?
|
| I heard the dot com bubble "garbage" was full of companies
| with no revenue, no customers, etc. I'm not sure many of
| the high growth tech companies burning $$s are cut from the
| same cloth though as they really do have products and
| customers in the present; it's just that the market expects
| an insane number of new services/customers in the near
| future...
|
| For example, I'm guessing customers can't just cut off
| Snowflake easily (time wise and effort wise) so the
| cashflow would remain stable for a while. As long as they
| don't need to do a secondary offering (and have some cash),
| wouldn't they be able to weather a storm? Perhaps at the
| cost of some massive layoffs/refinancing but would still
| prevent an actual collapse?
| question002 wrote:
| Love how someone suggests we start another pandemic and that
| doesn't get flagged but I get flagged.
| wing-_-nuts wrote:
| My question is when are we getting project loom?
| https://wiki.openjdk.java.net/display/loom/Main
| NiceWayToDoIT wrote:
| This reminds me of David Graeber's story on how during one of the
| pandemics, a plague killed so many people in the UK that those
| who left got rich by inheriting land and by increasing wages, as
| there was no one to work.
|
| In the case of UK there was a superstorm of Brexit, IR35 change,
| and pandemic all in one - adding to the issue for employers. But
| in a way, I do not see this as an issue but a chance to equalize
| wealth. Either they will reduce their profit and increase wages,
| automate or go bust.
|
| Is it good or bad? We will see over a longer period of time...
| fenk85 wrote:
| theres another option, some of those jobs go elsewhere
| jenscow wrote:
| Or just increase wages and increase prices.
| NiceWayToDoIT wrote:
| Second part is not that simple in global economy if you have
| Chinese cheap labor as direct competitors especially in the
| food industry where margins for farmers are already too low.
|
| I would recommend Jeremy Clarkson - "Clarkson's Farm" first
| year of operation on a 300 acres farm made a yearly profit of
| PS144 :)
| long_time_gone wrote:
| ==first year of operation on a 300 acres farm made a yearly
| profit of PS144==
|
| Profit in Year 1 is better than most of the startups I read
| about on HN.
| Scoundreller wrote:
| And probably saved a fortune in property tax, and got any
| appreciation.
|
| A/B test and balance sheet will show that it was very
| profitable.
| hirako2000 wrote:
| A bit like wework, far less loss though.
| grogenaut wrote:
| I think you're also discounting that Amazon probably paid
| him several million dollars to film that show and he also
| made a lot of stupid and poor decisions for the purpose
| of entertainment. So while a lot of his struggles are
| real his actual revenue number is completely unreliable.
| Also most farms don't start off by buying a several
| hundred thousand pound Lamborghini tractor and getting
| all of their equipment every year.
|
| That's sad the show is great entertaining and informative
| so totally watch it
| imtringued wrote:
| If the market was perfectly efficient then nobody would
| earn a profit. They would simply earn money and spend it
| all.
|
| Just because there aren't any monetary profits doesn't
| meant that we didn't become wealthier in the process.
| Profit and wealth is not the same thing.
| tonyedgecombe wrote:
| Most farms are like that in the UK, they are completely
| dependent on government subsidy.
| yardie wrote:
| That's a lot better than most small businesses and startups
| where there might not be a profit at all but lots of
| starting and fixed expenses. Let's see how he's doing at
| year 3 and beyond.
| jonfw wrote:
| Not sure what style of accounting shows that profit, but
| it's very possible to be massively cash flow negative and
| still earn a profit on your balance sheet.
|
| While I wouldn't expect most startups to be cash flow
| positive after year 1, I would expect most businesses
| report a profit on their balance sheet. Maybe not tech
| startups where it's hard to put a dollar figure on what
| 2/3 of a viable application is worth, but when you're
| buying things like tractors and land which are easy to
| value you should do pretty well.
|
| Investing in real estate and farm equipment won't hurt
| the balance sheet nearly as much as it hurts your
| checkbook
| dageshi wrote:
| I might be wrong, but I thought he was factoring in all the
| equipment he bought in that first year in that calculation?
| So next year you wouldn't have that cost.
| wing-_-nuts wrote:
| Isn't it standard practice to amortize the cost of
| capital goods over their lifetime?
| tonyedgecombe wrote:
| If it's after tax profit they were talking about then you
| can claim an annual investment allowance of PS1 million.
|
| https://www.gov.uk/capital-allowances/annual-investment-
| allo...
| thedmstdmstdmst wrote:
| It feels to me like having 144 profit on a 300 acre farm is
| closer to an accounting / tax choice then true measure of
| profitability. Another poster mentions writing off all
| equipment during the first year in that calculation.
| alistairSH wrote:
| It absolutely was an accounting trick, done in the name
| of TV ratings. This is Jeremy Clarkson - he's a TV
| personality and things done on his TV shows are not to be
| taken seriously.
|
| The farm had a grain business, sheep, a farm store for
| veg and stuff, and grants from government for re-naturing
| part of the property. I have no idea how Clarkson
| calculated the 144 profit, but I suspect there was a lot
| of shenanigans do arrive at that number for effect.
|
| Edit - I'll add that I enjoyed the show. While obviously
| done for shock value (similar vein as as Top Gear and
| Grand Tour), it did a reasonable job showing how
| complicated and expensive running a farm can be.
| neals wrote:
| If you want to create jobs, start a pandemic. Over a hunderd
| thousand jobs were created for testing, contact tracing and
| vaccinations in my small European country.
| playcache wrote:
| It has much more to do with ending Freedom of Movement with the
| EU. In this respect Brexit has worked (although who knows the
| long term implications). Basically labour demands have gone
| through the roof and its now an employee market. My aunt who is
| a hotel cleaner just got a PS500 monthly increase and has been
| offered a retention bonus. Lorry / truck drivers are constantly
| being approached to switch jobs with higher payouts.
|
| The rest of the market is getting a feel of what its like to be
| a software engineer.
| jpxw wrote:
| If we're going to be that cynical, we could just pay people to
| dig holes in the ground and fill them back up again.
|
| We don't do that, for good reason.
| nvilcins wrote:
| Those jobs are temporary.
|
| On the other hand how many jobs were made redundant as a side-
| effect of the pandemic? Catering moving a lot towards delivery,
| people realizing they can actually work from home, etc.
| tonyedgecombe wrote:
| Interestingly unemployment is up (4.6% vs 3.8% in 2018). I
| doubt that will last long though.
| quickthrower2 wrote:
| You can create jobs to do anything. E.g. build the Sydney
| Harbour Bridge. I'd be building solar power stations and
| nuclear ones to create jobs and reduce carbon emissions longer
| term.
| alexgmcm wrote:
| If you want to do it old-school style you can go out and break
| some windows[1]
|
| [1] https://en.wikipedia.org/wiki/Parable_of_the_broken_window
| fergie wrote:
| The labour squeeze is placing upward pressure on wages, which is
| pumping more money into the economy which is in turn exacerbating
| the labour squeeze.
|
| Wages have been stagnant in the UK for too long. In the last
| decade or so certain sectors of the economy (hospitality,
| agriculture, nursing) have been too dependent on a vulnerable
| "serf class" of easily exploitable workers.
|
| That workers have got more money to spend is a really good thing
| for themselves and for business.
| jenscow wrote:
| But if there aren't enough workers to give the pay increase to,
| then what?
|
| Reducing the pool of workers (Brexit) doesn't sold the wage
| problem.
|
| If a production line requires 30 people, and there are only
| 20... increasing their wages won't help.
|
| It won't encourage additional staff, as company B to Z is doing
| the same, and people aren't out of work because the wages are
| too low.
|
| Increasing minimum wage is the better way to do it.
| fergie wrote:
| Good question. You have to understand that "labour shortage"
| is code for "I cant find workers for the price that I would
| like".
|
| Clearly there isn't (and can't be) and actual shortage of
| workers, there can only be increased competition between
| employers for available workers.
|
| Its worth noting that in recent history, the times when
| democracies have been closest to actual labour shortages
| (post WWI and WWII) have in fact been correlated with
| economic booms.
| jenscow wrote:
| The pool of workers available to UK companies has just been
| significantly and suddenly reduced. There is an actual
| shortage - the number of vacancies has exceeded the number
| of unemployed, without even taking skill into
| consideration.
| Levitz wrote:
| The kind of company that can survive in an economy paying X
| doesn't necessarily survive if they later have to pay 120% of
| X.
|
| And that doesn't have to be a bad thing either, that kind of
| company probably wouldn't have existed to begin with if
| inequality wasn't brutal nowadays.
| shartacct wrote:
| Zero companies are going under from increasing wages for
| their lowest earnings workers by 20%. The places hurting
| most are fast food and restaurants which have very little
| actual payroll cost once you amortize the amount of food
| they serve per hour. Increasing wages from $15/hr to (an
| absurd example) $50/hr at a mcdonald's here would cost less
| than 35c per customer assuming they serve at least 100
| customers per hour (easily more in peak time).
|
| The cost increase over the last 10y at every fast food
| place and restaurant near me has vastly exceeded 35 cents.
| Wage increases are inevitable and stagnation is only
| sustainable until normal people are priced out of living
| entirely and decide to flip the table.
|
| They can easily afford it. If you dig into any of these
| companies finances you will see that payroll is generally
| less than 20% of their overall costs. In my area most
| workers are flocking to warehouse work as a major american
| retailer has bumped their starting wage to $25.50/hr plus
| benefits and is literally hiring people without any sort of
| phone screen or face to face interview. You will out a web
| form and get a start date by email.
| CivBase wrote:
| I'm not so sure about the whole "just pay workers more" solution
| every talks about. If that were viable for many businesses, don't
| you think they'd choose to do that over closing their doors? A
| business owner has to consider what kind of wage increases would
| even be needed for a short-term hiring boom and whether they
| could sustain that increase in the long term.
|
| A case could be made that some businesses are not viable if they
| can't afford to pay market rates for labor, so they should close.
| However, the market rates for labor seem to be in fluctuation due
| to the ongoing pandemic and associated government responses. It
| looks to me like many businesses are still just trying to ride
| the storm out and hope things look better for them on the other
| side, hence many businesses opting to close temporarily rather
| than committing to more expenses - especially in a time when
| revenue is still down.
|
| I'm also concerned about the competitive landscape going forward.
| Big businesses will all survive this recession no doubt, but what
| happens when a significant portion of their competition vanishes?
| I'd guess markets will consolidate even more as competition dries
| up and we'll double down on our dependency on cheap foreign
| labor.
|
| Maybe raising wages is part of the solution, but I think this
| problem is a bit trickier than just that.
| locallost wrote:
| My first thought was the pandemic and Brexit, but according to
| the article the employment numbers are back to where they were
| pre pandemic. So it's only Brexit? A lot of seasonal workers left
| before the pandemic and are not coming back?
| sgt101 wrote:
| There's 1.5m folks on fulough so this stat isn't that
| meaningful.
| jlokier wrote:
| For the Brexit-related component of worker shortage: It's a mix
| of workers leaving and choosing not to come back, many of them
| full-year not just seasonal, as well as workers that would like
| to come back temporarily to plug the gap, but aren't permitted
| even for skills-shortage roles.
|
| Brexit and changing social attitudes have indeed put many off
| the UK, making other EU countries more attractive destinations.
| But there are still some people who would return temporarily
| for seasonal work if it was permitted.
|
| This is not just the "low-paid, unskilled fruit picker" types
| of jobs, that are sometimes headlines. It is also skilled jobs
| that require considerable training and are paid well.
|
| Example: Industry has been crying out to allow truck drivers
| from the EU to come to the UK, under the same "skills shortage"
| short-term visas that are allowed for some other sectors. A
| number of these involve driving routes on both sides of the UK-
| EU border, too, so it would make sense from that perspective as
| well. The government has said no, they must hire British
| workers for those roles. But they know it isn't possible in the
| short term, as it takes about 9 months of training. The
| government saying "just hire British workers today" when they
| know perfectly well that's not possible to comply with, is
| typical for this government in many areas, imho.
|
| The shortage is obvious when shopping now. Common items you
| think of as in perpetual oversupply are currently out of stock,
| from normally well-managed supermarkets. For example, I can't
| buy any size pack of Coke Zero cans for delivery from the
| biggest supermarket Tesco. This is a popular item in the UK,
| and Tesco have a reputation for great logistics. Same for about
| a third of the other items on my regular items list. That's due
| to the truck driver shortage. Wages have increased tremendously
| (about 3x I think) for those roles this year. It's now a decent
| wage, more than a lot of people are earning, and they still
| can't be filled. So there's a genuine skills shortage in the
| UK, and people outside would do the jobs even temporarily while
| British workers were training, if it were permitted.
| throwaway_2009 wrote:
| Working conditions themselves have for a significant number of
| people changed dramatically.
|
| Office workers have for the most part been thrown into hybrid or
| full WFH. If they're in the office, the office probably has desk
| spacing, or maybe it's been downsized, maybe capacity is limited.
|
| If you're a cabbie, or a McDonalds employee, or a supermarket
| worker, you're probably under some sort of mask mandate or
| working with screens up.
|
| There's Brexit (reduction in EU workers).
|
| IR35 (reduction in self employment).
|
| Uncertainty in general (if I take this job, will some random
| government diktat kill it or change it significantly in the next
| N months).
|
| Oh, yeah, furlough.
|
| Everyone I know that has any ability to avoid work is doing it at
| the moment. GP's have been retiring, the well off are on extended
| leave, those who can squeak it out on reduced hours are doing so,
| etc.
|
| Personally, I see myself as being someone with a fairly strong
| work ethic, but over the past six months I've just packed it in
| entirely.
|
| I can't be arsed at all, there is no sense in me throwing myself
| into my work because we could have a lockdown/vaccine
| passport/masky maskness/social distancing 2.0/whatever that makes
| my employer change everything thus pushing me into quitting.
| There are already mumblings of it in the media _again_ for the
| winter.
| softwaredoug wrote:
| If only there were people willing to move to your country from
| their current bad situation, so eager for citizenship they'd take
| on any job.. it's almost an arrangement too good to be true
| throw84848 wrote:
| > so eager for citizenship they'd take on any job
|
| You disgust me for wishing we were exploiting people like this.
| tonyedgecombe wrote:
| That's not what people voted for in 2016.
| jlokier wrote:
| Brexit as implemented isn't what most people voted for in
| 2016 either. Just ask them. Others have. The more common
| answer is some variation on "I didn't vote for _this_ Brexit
| ". Particularly entertaining are the business owners now
| going bankrupt who voted for Brexit, now saying "I didn't
| know _this_ is what Brexit meant when I voted for it ".
|
| I'd also argue that the fundamental, defining feature of
| democracy is that the people most immediately affected by an
| issue vote on the issue. So it's not democracy when the
| people most affected are not included in the vote. That's
| fake democracy, where the foxes vote who to have for dinner
| and the other animals don't get a say, but it's what we have,
| so here we are.
| GordonS wrote:
| And one of my common responses is "well, this is the Brexit
| I voted against".
|
| Many of these consequences were completely predicable.
| softwaredoug wrote:
| They may not have voted for it, but its still a valid policy
| position to advocate for :)
| mysterydip wrote:
| There's a fast food restaurant near my house that is trying to
| fill vacancies at $20/hr.
| commandlinefan wrote:
| ... while my son works as a math/reading tutor for $8/hr. He
| thinks he's being taken advantage of, and I'm not sure I
| necessarily disagree.
| tonyedgecombe wrote:
| There are quite a few cafes and restaurants near us that have
| closed or reduced their opening hours. Our nearest farm shop
| has removed what used to be a thriving cafe.
|
| I get the impression a lot of these service businesses just
| won't be viable in a higher wage economy.
| question002 wrote:
| There's one in my neighborhood that's paying less then that and
| still multiple people work there.
| ahtihn wrote:
| McDonald's has been paying $20/hour in Switzerland for a long
| time.
|
| Given how rich the US is as a country, I always found it
| surprising that minimum wage there is so incredibly low.
| adventured wrote:
| Keep in mind the minimum wage also varies by state. The state
| minimum wages overrule the federal minimum wage when eclipsed
| (so if the federal rate is $7.25, and Maryland state is $12,
| then you have to pay $12 as a business in Maryland). It's
| probably ideal that the minimum wage is state based, with a
| lower baseline provided by the federal, given the extreme
| variance in prosperity and income levels between the states.
|
| It'd be like Germany and Greece or Lithuania having the same
| minimum wage, if you had Massachusetts or Connecticut with
| the same minimum wage as West Virginia or Arkansas (two of
| the poorest states).
|
| GDP per capita (loose reference for income potential) in New
| York state is $90,000 per year ($87k in Massachusetts). It's
| $40k to $45k in Mississippi / Arkansas / West Virginia by
| comparison.
|
| So for reference that $90k New York figure is higher than
| Norway and comparable to Switzerland. And the Mississippi
| figure is a bit above Italy. Base wages just can't rationally
| be the same in Italy and Switzerland for common service jobs.
|
| Almost nobody earns the federal minimum wage in the US. It
| doesn't matter very much at the present rate and could be
| easily, safely raised with minimum labor disruption. The
| federal minimum wage hasn't been relevant for 15-20 years,
| because the market left it behind.
|
| To push the lower tier wages higher, the US would need to set
| the federal minimum wage up near $15 these days. That's the
| floor that Amazon (via their fulfillment centers) has placed
| on the labor market as they compete to fill their huge need
| for labor, pulling it away from companies like Walmart. You
| can now earn $15 working at Walmart, Target, Amazon, grocery
| stores and a lot of convenience stores or similar type
| service businesses with essentially zero labor skill or
| experience.
| GordonS wrote:
| I heard recently that there is a separate, lower minimum
| wage for people with disabilities, which I was pretty
| shocked and disgusted to learn.
|
| I also heard that there is a separate minimum wage for
| tipped jobs - something in the region of a paltry $2.50/h,
| if I recall correctly?
| genocidicbunny wrote:
| The tipped jobs minimum wage is a bit odd in that its not
| the actual minimum wage, its more of the minimum amount a
| business can pay an employee that otherwise earns at
| least the traditional minimum wage via tips. So if you're
| not pulling in enough tips to meet the federal or state
| minimum wage, the business has to make up that shortfall.
| GordonS wrote:
| Thinking about it, this also disproves the common refrain
| by business owners of "we can't raise wages, or we'd have
| to raise prices, and people wouldn't pay them".
|
| Aside from the fact that prices wouldn't need to go up
| that much, as wages are only part of running costs,
| people _are_ already paying more than the sticker price
| by paying in tips.
| torcete wrote:
| I was actually talking about this with some friends yesterday
| night. We didn't know whether is was an effect of Brexit, the
| pandemic or both of them combined.
| boulos wrote:
| Hmm. Am I reading this correctly?
|
| There are 1M openings across the UK (population about 60M) and
| 10M across the US [1] (population 300M-ish). There are twice as
| many openings per person in the US. (I also don't assume the
| demographics are wildly out of step).
|
| [1] https://tradingeconomics.com/united-states/job-offers
| vxland wrote:
| Europe has evaded classical market economy by importing more
| people who'd work for lower wages at the slightest hint of any
| labor shortage.
|
| Pre-immigration such people would be called scabs.
|
| Now that you have Brexit, raise the wages. That's why people
| voted for it in an unusual recognition of their self-interests.
| swarnie wrote:
| If you fancy annoying people go to a UK subreddit and claim
| Brexit was about workers rights, workers compensation and was
| humanitarian issue to help those most in need.
|
| Hilarious results will follow.
| dageshi wrote:
| Only masochists go near that sub, it's pretty much the most
| miserable place on the entire internet.
| swarnie wrote:
| Which one? UK, UKpol, and even AskUK all creep there on
| occasions.
| Scoundreller wrote:
| Not sure how /uk works, but /Canada is basically made up
| of people whose own metro/regional/provincial subreddits
| don't have a critical mass, which basically makes it
| representative of low-population density areas in low-
| population density provinces.
| swarnie wrote:
| /r/UK is mainly full of people who hate the county but
| are too young or unappealing to other countries to leave
| it.
|
| Its a weird British-themed sob fest
| dageshi wrote:
| UK
|
| UKpol is not far off nowadays either, that one didn't
| used to be so terrible.
|
| Never really read AskUK but I don't doubt it's similar.
| The only way forward is to keep it casual.
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