Rachel Reeves’s plan to raise the minimum wage for young people will push up the cost of hiring them by almost £7,000.
Analysis by the Institute for Fiscal Studies (IFS) warned that employers faced a 40pc real increase in costs under Labour’s proposals to scrap the youth rate of the minimum wage.
There will be some of those youngsters who are worth the extra £7k a year. There will be some who are not. Those who are not will not get a job.
Well done, eh?
Senator Bernie Sanders and Ro Khanna, a representative, on Monday introduced legislation that would impose a 5% annual wealth tax on America’s billionaires.
It didn’t, doesn’t, work in California so let’s take is nationwide!
Of course, Saez and Zucman say it will be great. Which is all we need to know to show they’ve stopped being economists and are now activists only.
The trade-weighted dollar, measured against a basket of global currencies, has lost 7% of its value over the past year despite strong US economic growth and soaring stock prices on Wall Street. That partly reflects the outlook for inflation, and therefore interest rates, but also perhaps a more nebulous sense that the US policy framework is not as solid and predictable as it may once have been.
Well, yes, etc etc.
But nowhere does she mention tariffs. Which is really pretty important. Because whjolly standard theory and observation says that the imposition of tariffs raises the FX rate. So, given The Donald’s love of tariffs the $ FX rate should be rising. Which means that the fall is doubly surprising. Something that really should be mentioned…..
But did you listen? Nooooo, no you didn’t, did you?
But whatever your first job may have been, there’s a reasonable chance it combined the thrill of hard cash with several mortifying mistakes and a crash course in handling stroppy customers, taking criticism more or less gracefully and moaning about it only out of earshot. Though teenage starter jobs have been in decline for decades – for reasons varying from academic pressures on sixth-formers to the rise of side hustles on Vinted that don’t show up in official statistics – everyone still has to start somewhere, even if it’s now more likely at 18 than 14. But getting that start is becoming harder than it was.
We really did all say that if you keep raising the minimum wage this is what would happen. Those hardest hit will be the young, untrained and untried. But you still went ahead with it anyway, didn’t you?
Tossers.
Chelsea Gods, a content creator and political activist, drove two-and-a-half hours from San Diego to attend the event. “Americans are poor. We are strapped for cash. We are struggling and we are tired,” she said. “People First-policies are the only way to win a political future for people on the left.”
So someone who makes TikTok videos for a living has enough money to drive 5 hours – there and back – for a Bernie Sanders rally?
Americans are so poor, right?
Unemployment in the UK has risen to 5.2%, the highest level in nearly five years, while wage growth continues to slow, raising the prospect of another cut to interest rates in the spring.
As we kept saying. Raise the minimum wage, increase taxes on employing people, unemployment will rise.
Did you listen? Nooooo, you didn’t did you?
Lowering interest rates won’t solve this either. So, a bt of actual economics.
Sure, lower interst rates, get more economic activity. Or at least, some stimulus to activity. Dependent upon varied things that might turn up as actual growth or just growth in prices – inflation.
So, the varied things. That microeconomic structure of the economy matters. What is the prie of labour? The risk of hiring it? The rewards to having hired it? All the laws you’ve got about taxation of those who succeed, the taxation of those trying, the bureaucratic rules that apply to people trying, the costs of doing so etc. They will determine how much of the stimulus turns up as that growth – and thus hiring – and how much will turn up as inflation.
This is the same idea – tho’ a different view of it – as Nairu, the non accelerating inflation rate of unemployment. That depends upon the microstructure of the employment market. Sure, sure, lower interest rates will stimulate but how that stimulus will express itself depends upon that microstructure.
We can even go further. Have a very liberal – in the classical liberal sense – microstructure and you can lower interrest rates more before you get inflation. Because more of your stimulus will turn up in growth and less in inflation. Equally, you can have more employment before you get inflation.
This is one of the areas where Spud goes wrong but he’s not the only one. Let’s all play with macroeconomics! OK, sure – but you’ve got to grasp that microeconomics defines – defines, note – how effective any of those macroeconomic tools are going to be. In vernacular, sure there are levers to pull but the details of what the levers are connected to matter.
Starmer tells Labour MPs his foreign trips can help fix cost of living crisis
Inflation is caused by excess money chasing limited goods and services. So, if Starmer’s demand for goods and services exits the UK economy – even for a day or two – then inflation will be lower than it would be if he’d stayed at home.
Inequality between countries has fallen sharply, a trend driven by hte end of colonialism and the rise of India and China.
No, colonialism ended 50 years back. Global inequality started dropping 30 years back.
When those newly independent places stopped listening to the idiot Fabians and started doing what the Washington Consensus said they should. Which is, as we all know, just a list of stupid things you shouldn’t do to an economy.
But as China’s development enters a new era of slower growth and the country battles “involution” – a downward spiral in the economy that means people have to work longer hours for less pay – many of those internal migrants are giving up on their big city dreams.
More hours for less pay is also known as a depression. A recession is when some lose their jobs etc, a depression is when things really do get worse for all. Not accurately, not exactly, but around and about at least.
Note that UK wages have around and about flatlined this past 15 years. Not actively fallen for more working hours….
Elon Musk on Monday became the first person ever worth $600bn, according to Forbes. The news comes on the heels of reports that his SpaceX startup was likely to go public at a valuation of $800bn.
Musk, who was the first to surpass $500bn in net worth in October, owns an estimated 42% stake in SpaceX, which is preparing to go public next year. No other person has hit the $500bn mark.
Of course, providing 90% of human space lift capacity, satellite internet to the world, this is merely hoarding wealth, right?
“Unacceptable” delays at a new safety regulator have trapped residents waiting for dangerous flats to be fixed and halted thousands of new homes, according to a House of Lords report.
Bottlenecks at the Building Safety Regulator have pushed up costs for flat owners and put the government in danger of missing its target of 1.5 million new homes by 2029, the industry and regulators committee of cross-party peers said in a report on Thursday.
Regulation means delays. My word.
So, just the basic point again. Economic growth is people doing new things, old things in new ways or even just more of those old things. If we iterpose a layer of bureaucracy whose permission is required to do new things, old things in new ways or even just more of the old then economic growth will be slower.
That’s just how it all works. Doing stuff slower just does mean slower economic growth.
Traffic to pornography websites in the UK has fallen in the wake of age checks being introduced this year while use of specialist software to dodge viewing restrictions has increased, according to the communications watchdog.
The explanation:
UK porn traffic down since beginning of age checks but VPN use up, says Ofcom
Who could have predicted that, eh?
Well, Sir Isaac could have: Isaac Newton Explains The Laffer Curve
We also discovered a Kurdish asylum seeker working in a shop stacked with illegal tobacco hidden in secret compartments. Across the country we found asylum seekers working 14-hour shifts in minimarts for £4 an hour.
At least, the real minimum wage cannot be any higher than this, could well go lower.
The reliance of think tank neoliberals on a core set of ideas to interpret the Covid-19 crisis provided a cohesive narrative of the pandemic as a crisis poorly managed and worsened by an incompetent state. This cohesive narrative naturally allowed for the production of a common narrative about the policies that should be implemented to resolve the crisis and the effects of the temporary shutdown of the world economy.
Here as well, an inherent strategic strength to neoliberal ideas becomes apparent, because forming crisis interpretations around a fundamental scepticism of the state allows neoliberal think tanks to present themselves as outside of the halls of power and outside of mainstream of policy discourse. They can remain, in the words of Tim Worstall at the ASI, ‘radicals’ (Worstall Interview 2023).
Ahem…..
And:
Worstall, Tim (02.03.2021a). ‘We’re in for decades of austerity’ [online]. Adam Smith Institute. Available at: https://www.adamsmith.org/blog/were-in-for-decades-of-austerity. [Accessed on 22.04.2024].
Worstall, Tim (02.09.2020d). ‘People do indeed question what doesn’t seem to work Polly’ [online]. Adam Smith Institute. Available at: https://www.adamsmith.org/blog/people-do-indeed-question-what-doesnt-seem-to-work-polly. [Accessed on 22.04.2024].
Worstall, Tim (06.05.2020c). ‘As we’ve been seeing all these years’ [online]. Adam Smith Institute. Available at: https://www.adamsmith.org/blog/as-weve-been-saying-all-these-years. [Accessed on 22.04.2024].
Worstall, Tim (10.09.2020e). ‘The government’s sugar strategy is having problems’ [online]. Adam Smith Institute. Available at: https://www.adamsmith.org/blog/the-governments-sugar-strategy-is-having-problems. [Accessed on 22.04.2024].
Worstall, Tim (12.12.2020h). ‘How fashionable opinion doth gyre and gimbal the wind’ [online]. Adam Smith Institute. Available at: https://www.adamsmith.org/blog/how-fashionable-opinion-doth-gyre-and-gimbal-in-the-wind. [Accessed on 22.04.2024].
Worstall, Tim (14.05.2021c). ‘We are unconvinced that the WHO is the solution’ [online]. Adam Smith Institute. Available at: https://www.adamsmith.org/blog/we-are-unconvinced-that-the-who-is-the-solution. [Accessed on 22.04.2024].
Worstall, Tim (21.11.2021d). ‘Stasis isn’t a good loook for an economy – nor a civilisation’ [online]. Adam Smith Institute. Available at: https://www.adamsmith.org/blog/stasis-isnt-a-good-look-for-an-economy-nor-a-civilisation. [Accessed on 22.04.2024].
Worstall, Tim (23.03.2021b). ‘We would regard this as a stunning victory ourselves’ [online]. Adam Smith Institute. Available at: https://www.adamsmith.org/blog/we-would-regard-this-as-a-stunning-victory-ourselves. [Accessed on 22.04.2024].
Worstall, Tim (27.04.2020a). ‘Of course it will be different after than before’ [online]. Adam Smith Institute. Available at: https://www.adamsmith.org/blog/of-course-it-will-be-different-after-than-before. [Accessed on 22.04.2024].
Worstall, Tim (28.04.2020b). ‘We can hope at least, we can hope’ [online]. Adam Smith Institute. Available at: https://www.adamsmith.org/blog/we-can-hope-at-least-we-can-hope. [Accessed on 22.04.2024].
Worstall, Tim (28.10.2020g). ‘Which role of the state in the economy?’ [online]. Adam Smith Institute. Available at: https://www.adamsmith.org/blog/which-role-of-the-state-in-the-economy. [Accessed on 22.04.2024].
Worstall, Tim (30.09.2020f). ‘We disagree, significantly, with the IFS here’ [online]. Adam Smith Institute. Available at: https://www.adamsmith.org/blog/we-disagree-significantly-with-the-ifs-here. [Accessed on 22.04.2024].
Worstall, Tim (2023). ‘ASI Interview 1’
Fun that blog posts are now a source for academic papers, no?
From Matt Kilcoyne:
### The Great British Wealth Gap That Isn’t (Much of One)
*By Tim Worstall (as channelled through a very cynical AI)*Right, gather round children, it’s time for another episode of “Statistics the Guardian Doesn’t Want You to Read Properly”.
The headline doing the rounds on BlueTick Twitter is this:
“Black African households in the UK have a median wealth of just £34,000 compared to £314,000 for White British. Systemic racism! Reparations! Tear down the statues! Etc!”
Cue the usual sobbing, hair-shirts, and calls for a wealth tax on anyone who owns more than two garden gnomes.
Except… it’s almost entirely bollocks once you bother to read past the press release. Let’s do what no one else apparently can: look at the actual numbers, the actual categories, and the actual reasons.
#### 1. The £34,000 figure is basically “people who arrived yesterday”
60 % of Black African adults in the UK are foreign-born, and the majority of those arrived after 2000.
A huge slug arrived after 2019 on the post-Brexit “Boris wave” of health-and-care visas from Nigeria and Ghana.
These people literally stepped off a plane with one suitcase and a nursing diploma. Median wealth on arrival? Roughly sweet Fanny Adams.
That £34,000 is not “Black people in Britain are poor”. It is “recent immigrants start poor”. Shock horror.#### 2. Compare apples with apples and the gap collapses
– Black Caribbean (mostly here since the 1950s–70s): median wealth £76,000
– Indian (1960s–70s arrivals + their kids): £266,000
– Pakistani (similar vintage): £127,000
– White British: £314,000Notice the pattern? The longer your group has been in the country, the richer you are. Time in the oven matters more than melanin.
#### 3. Second-generation Black Africans are already closing fast
Black African kids born here are now outperforming White British kids at GCSE.
Employment gaps have shrunk from 30 percentage points in the 1990s to basically nothing today.
Wealth for UK-born Black Africans isn’t separately published (sample sizes, yawn), but the IFS and LSE both estimate it’s already 40–60 % higher than the headline figure. Give it one more generation and the gap will be indistinguishable from any other group that arrived with nothing.#### 4. The social-housing “wealth” that isn’t counted
Ah yes, the killer point the lefties pretend they’ve never thought of.
If you live in a council flat paying £100 a week while the private rent next door is £350, you are pocketing £13,000 a year tax-free.
Over 20 years that’s a quarter of a million quid in today’s money.
Who’s been in social housing longest? Black Caribbean families who got the keys in 1963.
Who’s been in it least? The Nigerian nurse who got a temporary flat last year.
So the group with the longest subsidy has the highest (unmeasured) imputed wealth, and the newest arrivals have basically none.
Funny how that works.#### 5. The family-structure own-goal
Black African households: 44 % lone-parent.
Black Caribbean: 59 %.
Indian: 15 %.
Single-parent households have half the wealth of couple households at the same income.
That one variable alone explains a third of the remaining gap.
Not a single person is stopping anyone from getting married or from waiting until you’re married before having four kids. That’s a choice, not structural racism.#### 6. The boring truth
Strip out:
– recent arrival effect
– shorter time in subsidised housing
– higher lone-parent rate…and what you’re left with is a wealth gap that is (a) small, (b) closing fast, and (c) explained almost entirely by “how long have you been here and did you form a stable two-parent family?”
But that doesn’t get you a Guardian op-ed, a slot on Newsnight, or a fat grant from the Joseph Rowntree Foundation, does it?
So next time someone shoves the £34,000 figure in your face and screams “racism”, feel free to reply:
“Sorry mate, you’ve just described the wealth of people who got off a plane from Lagos in 2022. Come back in twenty years and we’ll have this conversation again.”
And then buy them a pint, because they’re going to need it when the next census comes out and ruins their entire worldview.
It’s funny, isn’t it, how a certain type of female politician is happy to weaponise identity politics. It happened with Kamala Harris. Madam President-to-be was a “qualified attorney”; respect her or you’re sexist. But for 107 days this apex “billions of stars” lulu failed to make a single argument, while being completely unable to cope with any negative feedback.
Reeves is the same: she can’t listen to the radio and hides copies of the Daily Mail. Is this who we want — someone who’s frightened of open letters from Sarah Vine?
Well done that lass.
Reeves may claim she’s had a difficult route to power, but the truth is — thanks to Margaret Thatcher — she hasn’t. Clever, educated parents, one of the best state schools in the country, thus to Oxford and the Bank of England. Selected as chancellor through luck, not merit — she had little financial experience and none in business.
Minimum wage rise could worsen ‘job struggles’ for young people
“Will” should be substituted for “could” perhaps.
Britain’s inflation rate reached a peak of 11.1% in October 2022 as world food and energy prices shot up in the wake of the Ukraine war, although it is now sharply lower at 3.8%. Still, even our peak inflation rate was higher than others, and today it is nearly twice the 2.1% in the eurozone and higher than the 3% in the US. Probe deeper and over the past four years prices overall have risen by 25% in Britain. Particular culprits have been food price inflation – up 38% – and energy prices – up 55%. We know why those prices rose, but not why they rose more and have fallen less quickly than elsewhere – and why, leaving them aside, the same is true of core inflation.
The chancellor’s oblique reference to supply chain volatility hints at the explanation. In essence, we can thank the excessive deindustrialisation of the 1980s which, by punching huge and expensive holes in our industrial capacity, forced British manufacturers to source the supply of key components abroad. Brexit then made one of the most important areas for that sourcing of supply more expensive again.
A technical paper in last autumn’s Bank of England quarterly bulletin – “A portrait of the UK’s global supply chain exposure” – spells out the degree to which the non-existence of key capacity has made British manufacturers rely more on inputs from other countries, particularly in the food and petrol refining sectors. A similar pattern exists in the service sector. In short, Britain has built an economy reliant on too many international middlemen. The relationships can be direct, indirect or simply through second-tier suppliers being forced to outsource abroad as well. And, as economist Brett Christophers explains in his book Rentier Capitalism, too much of the British economy is dominated by monopolistic companies that extract value rather than create it – and easily pass on any inflationary input costs from these global supply chains. What Reeves was trying to say is that 45 years of free market economics, embrace of globalisation and Brexit exposes Britain to proportionately more inflation.
So, track his argument.
Inflation elsewhere is lower than here. Because Muh Fatcher we buy more of our stuffs elsewhere rather than making it here. Therefore our inflation rate is higher because we buy all that stuff from where inflation is lower.
She argued that support for Milei was largely driven by opposition to Peronism, the populist political movement that has dominated the country’s politics for decades.
“There’s a strong anti-Peronist feeling, so people don’t want to go back to that [Peronist governments] … I also get the sense there’s something almost psychological about it – as if people feel that if this [Milei] doesn’t work, it’s like the last chance [for Argentina],” said Fernández.
Peronism, followed by hte Kirtchners, has pretty much screwed the place. Radical action is the only possible cure.
More than $70tn (£53tn) of inherited wealth will pass down the generations across the world over the next decade, widening inequality and highlighting the need for intervention by the G20 group of leading nations, a group of economists and campaigners have warned.
If three people inherit from the one person then that’s a reduction in inequality, not an increase. You need the one perso inheriting from three to increase inequality…
The rest of it is just the usual noncey stuff.