🪧 500,000 workers are on strike today
👎 We shouldn’t be surprised – strikes, decaying public services and stagnant living standards are the product of our political choices
🥾⛰ The economic fix is simple, but the political challenge is immense
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Conversation
Replying to
😤 Are you fed up with planning around strikes, for everything from driving tests to travel, post and international travel? Why is nothing working?
The reason it’s happening is over a decade of stagnant pay, concentrated in the public sector.
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📉 Stagnant pay is the best case scenario — much of the public sector has actually had negative pay growth since 2010, concentrated in the most senior workers.
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💥 This is causing recruitment & retention issues across the public sector & worsening outcomes.
You might assume talk of a ‘collapse’ in the health service is hyperbole. An understandable but flawed rhetorical device to push NHS funding up the agenda by self-interested parties.
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📈 But what if strained, complex systems don’t fail in predicable, linear ways? What if failure scales geometrically, or even exponentially? What if austerity costs more?
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💸 Ultimately, all of this ties back to Britain’s poor productivity growth. Poor productivity growth means less tax to fund public services.
Poor productivity growth is the root cause of public sector decay and public sector strikes.
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💩 And our productivity growth since the financial crisis has been utterly woeful. We could be 30% richer if we carried on as we were before.
That would mean more money for you, at home, and more money for public services.
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🤔 Inflation is also higher in the UK right now than in peer nations… So what does all of this have in common?
UK labour force participation is lower than in peer nation. Since the pandemic, fewer people have come back to work. Fewer workers raises employment costs in wages…
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👴🏻👵🏻 Many have ascribed this to a health hangover from Covid, but it’s actually due to early retirement by baby boomers.
Why are they retiring early? Because their large housing wealth has enabled them to.
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🏚 Some of this housing wealth was generated by working hard, and saving.
But house prices have vastly outstripped earnings for decades. Far more of this wealth is simply from supply restriction caused by a broken planning system.
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🏢 Prevent the building of houses in productive areas, and productive workers can’t find employment at productive firms.
Living standards fall or stay the same. And the lower tax take, despite the highest level of taxation since the war, doesn’t support our public services.
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🇬🇧 I don’t think Britain wants that. These outcomes are shit. Nobody wants high taxes, unaffordable housing, low living standards and bad public sercvices.
We must unlock growth by building homes! Else, we’ll be bound by the British straightjacket for the forseeable.
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You can read the long form post that lead to this thread here: himbonomics.substack.com/p/britain-isnt
Big hat tips to the fantastic and estimable for their previous work on some of these subject areas!
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And if you enjoyed this, why not check out this post from April which covers why housing matters so much to productivity, and how the Conservative Party ended up in this mess:
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The Triumph of Janet
I've written on how the Conservative Party seems to have abandoned the politics of aspiration & growth in favour of inequitable, unjustifiable & damaging subsidy towards baby boomers. himbonomics.substack.com/p/-the-triumph 
Show this thread
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Or this paper that I was privileged to co-author with and on policies we can implement to reduce intergenerational inequality and get Britain working again:
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Britain’s political economy is stacked against the young
This intergenerational inequality isn’t just about fairness, it is seriously harming our country!
I’ve coauthored an @ASI paper on policies to address this vital topic with @MacdonaldJam & @pollstermike! ()Show this thread
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