The rising cost of living

[blandy]

5 hours ago, bobzy said:

From what I remember, a lot of public sector jobs were opened during the pandemic (largely in helping with it, e.g: track and trace people etc) which largely counteracted the loss of jobs in the private sector (pretty sure I read somewhere that the jobs created in the public sector was enough to fully re-hire those people who lost jobs in the hospitality sector).

All those pandemic track and trace people - they were short term jobs, and I'm not at all sure they were necessarily public sector employees, were they - I mean yes they supported service provision, but were they not (many of them) agency type contracts and jobs?

[Genie]

6 minutes ago, blandy said:

This is something that bugs me massively - not the principle, but the maths. It's complete nonsense. Here's why:

Take 2 people, person 1 earns (before their 5% pay rise) £100,000. Person 2 earns £20,000.

Person 1 gets a £5 grand a year pay rise, and person 2 gets £1 grand. Person 1, even assuming that they use more electricity and so on, is likely able to cover their increased bills, and have plenty left over. Person 2 on the other hand is in a different situation. Their £1 grand pay rise is likely insufficient to cover increased bills.

I know higher income people pay more tax and all of that, but people's costs for food, energy & other basics like water and travel to work are not inextricable liked to their income, though of course if you have more, you may choose to spend more.

Sorry to be a maths pedant, but it's been bugging me for ages, since all the discussion on strikes and so on. Inflation affects people very differently and it's not really correlated at all closely to their wages. If you have no mortgage or rent to pay, then interest rate rises have a much less significant impact on your personal cost of living. If you travel to work by public transport then maybe Petrol price rises affect you less, but train price rises affect you much more, and so on and so forth. It's much more complex than the CPI or CPI percentage v Wage percentage increase. Grrr.

It’s something i’ve wondered for a long time. You can’t spend a percentage. I always thought that payrise should be in £ not %. 

If the business gives everyone a £2k payrise for example it would be fairer wouldn’t it? (not perfect).

As you say, person on the shop floor gets 5% on his/her £20k and it’s £1000 a year before tax, NI, pension etc. He’ll be lucky to see £50-60 a month from that.

Senior manager get 5% on his/her £80k and they’re about £200 a month better off.

 

 

[blandy]

Just now, Genie said:

It’s something i’ve wondered for a long time. You can’t spend a percentage. I always thought that payrise should be in £ not %. 

If the business gives everyone a £2k payrise for example it would be fairer wouldn’t it? (not perfect).

As you say, person on the shop floor gets 5% on his/her £20k and it’s £1000 a year before tax, NI, pension etc. He’ll be lucky to see £50-60 a month from that.

Senior manager get 5% on his/her £80k and they’re about £200 a month better off.

Zackly. I know a number of businesses gave people non-consolidated lump sums following the energy price shock caused by Russia (ours did - everyone got a grand last year and another grand this year, for example and Rolls Royce did similar, and they're not the only ones). We also got a below inflation pay rise, but most people are (as per my post above) on reasonable enough money that we're still OK. It was a bit of a strange one, because we (the Union) usually have to campaign for pay rises for about 18 months to get anything remotely reasonable, whereas last year the Company (after only a few months just said "here you go - have this much this year and this much again, next year - 2 year deal, happy with that? and we bit their hand off at the time.

[markavfc40]

20 minutes ago, blandy said:

 

Sorry to be a maths pedant, but it's been bugging me for ages.

Pete no need to apologise mate. I agree with everything you said. I suppose a better of putting what I said would have been if inflation runs at 5% and you get a 5% pay rise you'll at least have not in effect had a pay cut. 

[blandy]

Just now, markavfc40 said:

Pete no need to apologise mate. I agree with everything you said. I suppose a better of putting what I said would have been if inflation runs at 5% and you get a 5% pay rise you'll at least have not in effect had a pay cut. 

OK, cheers Mark. I won't apologise for this then: "if inflation runs at 5% and you get a 5% pay rise you'll at least have not in effect had a pay cut" - that's only "in comparison to inflation" not "in comparison to your personal expenses and bills. It's the same point I made above - 5% of 20 grand and 5% of 100 grand. If the lower paid example has the extra grand, but their costs go up by 1200 quid, they've had an effective pay cut/reduced standard of living  and the higher paid person with (say) 2 grand extra costs, but 5 grand pay increase has had a pay rise, or an increased standard of living as it's termed - as the differential over their bills is positive.

Anyway, The world doesn't seem to work on my logic, so good luck to all those nurses, ambo drivers, teachers, transport workers, customs staff and all the others trying to get the vile government to pay them a wholly justified decent wage to help them with their costs.

[Seat68]

32 minutes ago, blandy said:

All those pandemic track and trace people - they were short term jobs, and I'm not at all sure they were necessarily public sector employees, were they - I mean yes they supported service provision, but were they not (many of them) agency type contracts and jobs?

The company I work for contributed massively towards track and trace, we are not public sector and there was a lot of my colleagues working on it. Consultants, short term.

[markavfc40]

2 minutes ago, blandy said:

OK, cheers Mark. I won't apologise for this then: "if inflation runs at 5% and you get a 5% pay rise you'll at least have not in effect had a pay cut" - that's only "in comparison to inflation" not "in comparison to your personal expenses and bills.

I suppose it would be nigh on impossible to have pay rises tailored to each individual circumstance. I agree giving everyone the same figure in money terms would be a better/fairer way rather than a percentage increase. 

[blandy]

1 minute ago, markavfc40 said:

I suppose it would be nigh on impossible to have pay rises tailored to each individual circumstance...

Yeah, you're right on that. I think though that (again, in my world) employers in general ought to look after people differently than they do around wages, particularly when inflation and the cost of living is so high, but I accept that it would be difficult to get past objections from those not at the very bottom - like "hold on, I'm a skilled worker, trained and experienced and you're giving the cleaner more than you're giving me?" type stuff, even if those same people flip that round when comparing the amount they get with a CEO or director....

[foreveryoung]

I haven't had delivery of my EV car yet, but since its delayed through no fault of my own, I have been paying only 2% bik, that was like a big pay rise on its own. 

[sidcow]

16 hours ago, blandy said:

OK, cheers Mark. I won't apologise for this then: "if inflation runs at 5% and you get a 5% pay rise you'll at least have not in effect had a pay cut" - that's only "in comparison to inflation" not "in comparison to your personal expenses and bills. It's the same point I made above - 5% of 20 grand and 5% of 100 grand. If the lower paid example has the extra grand, but their costs go up by 1200 quid, they've had an effective pay cut/reduced standard of living  and the higher paid person with (say) 2 grand extra costs, but 5 grand pay increase has had a pay rise, or an increased standard of living as it's termed - as the differential over their bills is positive.

Anyway, The world doesn't seem to work on my logic, so good luck to all those nurses, ambo drivers, teachers, transport workers, customs staff and all the others trying to get the vile government to pay them a wholly justified decent wage to help them with their costs.

The problem is the former person, their holiday in Magaluf has only gone up by £200, so they're OK. 

The second person, their 2 weeks in The Seychelles has gone up by £2,000 so they can't afford it.  So you've then got upset senior managers/directors who also then probably leave and get another job. 

You can argue if its right or wrong that they earn far more money than anyone else, I'm not taking that position, but you are reigning in their spending power and leaving them unable to buy things they presumably think they ought to be able to afford. 

[Genie]

Head of Tesco on Laura K’s show saying he thinks food suppliers are taking piss with their price increases. He said in the example of Heinz their soup went when 90 something pence to £1.71 they took Heinz products off the shelves for a period because they were asking for huge price increases.

Hopefully someone can name and shame the biggest piss takers so they can be boycotted.

[HKP90]

21 minutes ago, Genie said:

Head of Tesco on Laura K’s show saying he thinks food suppliers are taking piss with their price increases. He said in the example of Heinz their soup went when 90 something pence to £1.71 they took Heinz products off the shelves for a period because they were asking for huge price increases.

Hopefully someone can name and shame the biggest piss takers so they can be boycotted.

Hopefully the supply chain will do the same with respect to supermarkets. 

For all the PR, people's champion, we're on your side stuff, when I used to do contract jobs for Tesco, they were by some distance the worst retailer at squeezing suppliers and generally making life as difficult as possible for us. To the point where we binned them off and just worked for their competitors. Aldi and Sainsburys were the opposite. Always courteous, paid on time and didn't use their leverage to squash us to oblivion.

[MakemineVanilla]

On 19/01/2023 at 15:22, Genie said:

It’s something i’ve wondered for a long time. You can’t spend a percentage. I always thought that payrise should be in £ not %. 

 

Edward Heath's prices and incomes policy back in the 1970s stipulated that pay rises should be £5+3%, or something similar.

The unions responded with outrage that they should be allowed "free collective bargaining".

The only truly convinced communist I knew, said it was a socialist solution because it narrowed the differential between the lower-paid and higher paid craftworkers.

 

 

[foreveryoung]

2 hours ago, Genie said:

Head of Tesco on Laura K’s show saying he thinks food suppliers are taking piss with their price increases. He said in the example of Heinz their soup went when 90 something pence to £1.71 they took Heinz products off the shelves for a period because they were asking for huge price increases.

Hopefully someone can name and shame the biggest piss takers so they can be boycotted.

EG petrol stations, 10p+ what other retailers are selling fuel at and 67p KW for electric car charging , wouldn't even start to mention there prices instore.

[chrisp65]

2 hours ago, Genie said:

Head of Tesco on Laura K’s show saying he thinks food suppliers are taking piss with their price increases. He said in the example of Heinz their soup went when 90 something pence to £1.71 they took Heinz products off the shelves for a period because they were asking for huge price increases.

Hopefully someone can name and shame the biggest piss takers so they can be boycotted.

Tesco have no shame.

One of the worst in the country for paying their suppliers.

[Davkaus]

If he wants to talk about taking the piss how about he looks at their clubcard prices bullshit that forces their customers to be assets to be datamined if they want a fair price. 

[KentVillan]

On 19/01/2023 at 15:09, blandy said:

This is something that bugs me massively - not the principle, but the maths. It's complete nonsense. Here's why:

Take 2 people, person 1 earns (before their 5% pay rise) £100,000. Person 2 earns £20,000.

Person 1 gets a £5 grand a year pay rise, and person 2 gets £1 grand. Person 1, even assuming that they use more electricity and so on, is likely able to cover their increased bills, and have plenty left over. Person 2 on the other hand is in a different situation. Their £1 grand pay rise is likely insufficient to cover increased bills.

I know higher income people pay more tax and all of that, but people's costs for food, energy & other basics like water and travel to work are not inextricably liked to their income, though of course if you have more, you may choose to spend more.

Sorry to be a maths pedant, but it's been bugging me for ages, since all the discussion on strikes and so on. Inflation affects people very differently and it's not really correlated at all closely to their wages. If you have no mortgage or rent to pay, then interest rate rises have a much less significant impact on your personal cost of living. If you travel to work by public transport then maybe Petrol price rises affect you less, but train price rises affect you much more, and so on and so forth. It's much more complex than the RPI or CPI percentage v Wage percentage increase. Grrr.

Except interest rates on debt are a %, and key big ticket expenses like houses, cars, etc (which tend to scale up in proportion to income) will rise in % terms, not as flat rate increases.

You're right that the poor get hit harder by inflation, but I don't think that means thinking about inflation and inflationary pay rises in % terms is nonsense?

Also [cue world's smallest violin], Person 1 in your example, getting a pay rise from £100k to £105k would be paying 60% marginal tax on that additional 5k. One of the weird quirks of the tax system, due to the way the Personal Allowance works.

[blandy]

48 minutes ago, KentVillan said:

You're right that the poor get hit harder by inflation, but I don't think that means thinking about inflation and inflationary pay rises in % terms is nonsense?

If I said that, in those terms, then I didn't explain very well, apologies. It is of course complicated, and you're right about tax bands and so on. I think I mentioned that the richer people pay more taxes and have generally higher costs.... I still feel that (obviously) a nurse on 25 grand asking for 10% compared to a [insert trade of choice] on 60 grand asking for a 10% rise is kind of a different kettle of fish "generally" speaking. Nurses using food banks is really not how the Country should be. If anyone without special circumstances on 60 grand a year is using a food bank, then they probably need some financial management tips more than a pay rise.

[Demitri_C]

Tesco blueberries £2

Aldi £1 (same size)

Tells you everything you need to know about them

[KentVillan]

21 minutes ago, blandy said:

If I said that, in those terms, then I didn't explain very well, apologies. It is of course complicated, and you're right about tax bands and so on. I think I mentioned that the richer people pay more taxes and have generally higher costs.... I still feel that (obviously) a nurse on 25 grand asking for 10% compared to a [insert trade of choice] on 60 grand asking for a 10% rise is kind of a different kettle of fish "generally" speaking. Nurses using food banks is really not how the Country should be. If anyone without special circumstances on 60 grand a year is using a food bank, then they probably need some financial management tips more than a pay rise.

For example, 25-year-old nurse on 25k with no children and a partner who earns 35k… versus 45-year-old sole breadwinner, mortgage & 2 kids on 60k. Imagine inflation hits them both in much the same way.

Obviously a cherrypicked example, but not that unusual if you think of a typical junior nurse and a typical 60k earner.