Pay freeze to last until 2020

[martyh]

Originally Posted by Hugh

Agreed - but two parties were involved.

indeed ,i have done many jobs costing quite a few thousand eg conservatories and extensions that it was quite apparent that the customer had taken out mountains of credit to pay for it.At the end of the day the market was there and the banks just supplied what was wanted i.e cheap credit way past a persons earning potential not saying it was right or anything it's just we asked and the banks gave

[Chrysalis]

wage inflation has been constrained for over a decade, even during the early 2000s and late 1990s pay rises were usually tied to "official inflation". At least they were around here and any job I had anyway.

The problem is the country has another problem and that is huge debt levels from mortgage holders as well as government debt. Its clear what they trying to do which is to use inflation to get those down.

For real wealth to go up we need wage inflation to exceed actual inflation (will never happen in modern era) or actual deflation which many people consider disastrous (particurly property owners).

[Angua]

Originally Posted by Chrysalis

wage inflation has been constrained for over a decade, even during the early 2000s and late 1990s pay rises were usually tied to "official inflation". At least they were around here and any job I had anyway.

The problem is the country has another problem and that is huge debt levels from mortgage holders as well as government debt. Its clear what they trying to do which is to use inflation to get those down.

For real wealth to go up we need wage inflation to exceed actual inflation (will never happen in modern era) or actual deflation which many people consider disastrous (particurly property owners).

We are lucky in as much as we put a huge deposit on our house and got an affordable mortgage. House price falls would not bother us too much. However, as there is a severe shortage of housing in areas where the work is, this is unlikely.

As for the wage gap. This increased at a faster rate during Labours term of office. Partly because bonuses were tied to profit rather than productivity. Which has the wonderful effect of squeezing wages whilst maintaining salaries.

[richard1960]

Originally Posted by Chrysalis

wage inflation has been constrained for over a decade, even during the early 2000s and late 1990s pay rises were usually tied to "official inflation". At least they were around here and any job I had anyway.

The problem is the country has another problem and that is huge debt levels from mortgage holders as well as government debt. Its clear what they trying to do which is to use inflation to get those down.

For real wealth to go up we need wage inflation to exceed actual inflation (will never happen in modern era) or actual deflation which many people consider disastrous (particurly property owners).

Tend to agree i was a union steward in the 90s and every pay settlement i negotiated for was tied to "offical inflation"figures.

Yes i think you are right the government is using inflation to get mortgage over borrowing debt down and other debts also such as personal loans.

Yes i would go along with that wage inflation does need to exceed actual inflation for real wealth,people who think they are rich because they have a property going up in value built up on huge debt piles are living in la la land.

[alferret]

I have just had to swallow a 1.2% pay cut

[Alan Fry]

Originally Posted by Hugh

And how did this make people who could not afford the mortgages and the credit cards they took out spend more than they could afford?

They gave low interest rates and allowed then to take the loan, rather than reject them over risk!

[martyh]

Originally Posted by Alan Fry

They gave low interest rates and allowed then to take the loan, rather than reject them over risk!

doesn't force people into taking the loans out ,that is purely the choice of the borrower .Low interest rates are merely a way of atracting customers over the competion ,it's a bit like a 50% sale in a clothes shop people can buy at low prices at whichever shop they get the best deal but no-one is forcing them

[Alan Fry]

Originally Posted by martyh

doesn't force people into taking the loans out ,that is purely the choice of the borrower .Low interest rates are merely a way of atracting customers over the competion ,it's a bit like a 50% sale in a clothes shop people can buy at low prices at whichever shop they get the best deal but no-one is forcing them

Lets just say "It was an offer they could not refuse"

[martyh]

Originally Posted by Alan Fry

Lets just say "It was an offer they could not refuse"

did this offer "they couldn't refuse" come with a free pair of concrete boots

[Hugh]

Originally Posted by Alan Fry

Lets just say "It was an offer they could not refuse"

Let's not, as that statement has no connection with reality.

[Alan Fry]

Originally Posted by martyh

did this offer "they couldn't refuse" come with a free pair of concrete boots

No, I meant it was a rather good offer, but it was too good to be true

[Hugh]

They could have said "No" (as I do, if I am offered something I can't afford).

btw, I don't agree with the finance companies making the offers, but as I have said previously, it takes two to tango.