Quote:
Originally Posted by Chrysalis
how does driving wages down whilst having high inflation create wealth?
In truth to compete we need deflation, the dole in the UK is more than the average salary in romania. The difference between ourselves and some countries is immense. But we cannot drive wages down without the cost of living going down with it, it doesnt compute. Taxes for the vast majority of people only makes up a minorty of living costs, so cutting taxes wont be sufficient if the idea was to deflate living costs via cutting taxes. Things like housing costs, food, electric, gas, petrol all need to go down as well.
The truth tho is these jobs didnt need to go, companies were making money without taking such action, however in a capitalist fashion where profit growth is demanded boss's under pressure have made such moves to improve the bottom line. I seen the tricks they pull, when I used to work for walkers crisps in a management position there used to be briefings with shop floor staff and the story went like this. They were told the company made a loss/profit not based on actual profit but rather on profit targets. So eg. if the target was 100million profit and we made 86 million profit the staff were told we made a 14 million loss and hence a reduction of staff on the shop floor as well as compulsary overtime (without overtime wages). Those who didnt sign up for the work time directive were simply let go. Each year the profit target went up without a realistic reason justifying how it could be achieved, it simply went up. Occasionally automation coming in (which reduced the staffing levels) could justify it but not every year.
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How does losing more and more jobs to the likes of India and China because we can't compete with them create anything except unemployment? Nobody wants lower wages but some wages are better than no wages don't you think? Whilst acknowledging the fact that people in many other countries have to work much harder for much less, you still seem to think that people here have a divine right to a certain standard of living even if we don't create the wealth to support that. We're clearly not generating the revenue to match our spending and although it'd be lovely if we could borrow more and more money to keep people's standards of living up we can't do that. Something has to give.
Portugal is now requesting an emergency bail-out as we speak. They've failed to tackle their problems and are now going cap in hand to Brussels to keep them afloat. Do you really think that can't happen here?
http://www.cableforum.co.uk/board/35207852-post43.html