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Saturday, 18 August 2012

Living in the real world

Some people really just don't get it. Such as the BBC and the Labour Party.

 How can unemployment be decreasing (and employment increasing) when GDP is falling? Simple really. Everybody who is in work is being paid a lower aggregate amount (hence the 0.7% fall in GDP). The trouble is that working for less than you did before, or as we old fuddy duddies like to call it, "matching wages to the real value of labour as determined by market forces, is an experience well understood and experienced in the private sector, but virtually unheard of in the NHS, the BBC or the rest of the public sector.

A dear friend, who I knew for many years as a top corporate finance banker, but who left the City ten years ago to work as a consultant, tells me that he has found a new job. I say job, but in reality it is nothing more than a casual labourer contracted by the day for peanuts, paying far less than he earned as a basic wage in the 1980's.

 That is the reality of the private sector today. Remember all the talk of the benefits of globalisation? Real enough if you were a plutocrat staying aloof from all that, but in the real world, wages were forced down., At foirst private sector wages, and now it is time for the public sector to feel the pain.

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