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Monday, 26 December 2011

Monday, December 26, 2011 Posted by Jake 2 comments Labels: , , , , , , ,
Posted by Jake on Monday, December 26, 2011 with 2 comments | Labels: , , , , , , ,

"Never waste a good crisis". Who first said it - I don't know. But using a crisis as a smokescreen to push through changes irrelevant to the crisis itself is a tactic used by leaders great and small. A golden chance to quickly make changes that under normal non-crisis conditions they could never get away with. From the head of a household cutting pocket money, to the head of a company cutting jobs and pay, to the head of a government cutting pension entitlements.

Pensions are part of employees' compensation - that is "pay" to the likes of most of us. Far from ballooning out of control, employees' compensation has been falling as a percentage of Gross Domestic Product for years. 

What this means is that as the country gets richer, the share paid to ordinary ripped-off Britons has fallen, as can be seen from this data from the Office of National Statistics 

Graph of Compensation of employees as % of Gross Domestic Product: CP SA (Quarterly) (The ONS defines "Compensation of employees" as wages, salaries and social contributions made by employers).

A phenomenon that really kicked off in 2000, during the last Labour government, and being followed through with a vengeance by the current Tory-LibDem coalition. The jump in the employees' share of GDP seen in 2008-10 has nothing to do with greater fairness, and everything to do with the slump in GDP. Current government policies to freeze pay and cut pensions (public and private) aim to get things back to abnormal.

Ordinary Brits get their share of the nation's wealth mainly as pay and pensions. Reducing the pay and pensions share means increasing the share that goes to dividends, capital gains, and other forms of wealth that are all for the less than ordinary Briton.

"Something has got to be done!"; "Just get on with it!"; "Carpe diem!". Panic the people into accepting drastic action. Panic MPs into voting for it, panic unions into submitting to it, panic the citizens into lying back and thinking of England.

2 comments:

  1. For long term pension liability projections, and the Hutton Report, see our other post http://www.blog.rippedoffbritons.com/2011/12/liebrary-are-public-sector-pensions.html

    ReplyDelete
  2. Thank you. Interesting - in a depressing sort of way. Are there similar figures for the share of GDP going to profits? taxation?

    ReplyDelete

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