Wow! Amazin!

Figures used by the Bank of England to track Britain’s five million freelancers show that average incomes dropped by more than 30pc in the first half of the year, revealing for the first time the full extent of the devastating impact of the pandemic on the self-employed….

GDP dropped by 30% (on an annualised basis it did), GDP is, by definition, all incomes in aggregate and……

11 thoughts on “Wow! Amazin!”

  1. Yup.
    30% sounds about right.
    But hey, let’s continue the lockdowns and f*king the economy six ways from Sunday.
    That way people can all be grateful that they don’t have the Chinese sniffles when they and their children are turfed out of the house because they can’t afford the mortgage.
    Morons. The lot of them.

  2. Also, had a recurrence of the posting too quickly thing with last post.
    It took a while to type as had to sort an errant toddler out in the middle of it.
    While doing that, at least 8 comments appeared on other threads.
    Maybe something to do with it?

  3. IR35 legislation was scheduled to kick in at the start of April, though a last-minute reprieve was granted because of Covid-19. If they’re counting dividends from one-person companies, then a 30% fall seems quite plausible on that basis alone.

    Conversely, if they’re counting self-employed Uber drivers and/or zero-hours restaurant waiters, then a 30% drop seems plausible too.

  4. Let me try this one again.

    If the Government does QE, rather than borrow, to pay for stuff, and part of that spending is providing furlough (ie salaries/income are artificially maintained), then – is QE directly creating additional GDP? If so, that’s hardly real GDP (in terms of any value generated)? Or am I missing something?

  5. ‘Figures used by the Bank of England to track Britain’s five million freelancers’

    I can’t tell what this even means. BoE spies on freelancers? Tracks them? What figures? Where did they get them?

    Perhaps I mistranslate English English to my American English.

  6. Difficult.

    Consumption = income = production.

    That’s just definitional about GDP. But if we just print money to make incomes is this actually GDP? If people get to consume then, maybe, if it calls forth production then definitely. I don;t actually know myself about printing to create incomes alone.

  7. Thanks Tim. As we partially printed money so that people could safely sit at home and watch netflix (whilst their bills still got paid), it looks to me like part of the link between income and production fails. If income is the means of measuring, guess it might be overstated. Though someone on here a while back did suggest that measuring was done differently in places (and used activity metrics or something, in education?). I was just curious as much as anything.

  8. I don’t know either. But furlough salaries are paid by the employer (the government’s bit is a subsidy to the employer), so I’d have thought it would show up on the employee income part of GDP under the income measure. On the expenditure measure it’s funding spending so I guess it would also be included. But there isn’t any production. Perhaps they count it as employee income but then subtract the furlough subsidy to get the income GDP closer to the production GDP? I don’t know.

  9. Ah, here we are – looks like they do deduct the government furlough subsidy from total wages so only the net figure goes into GDP.

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