Monday, February 19, 2024

Miscellanea from capitalism's trenches.


It is reported that, ‘UK workers may face lower wage increases in 2024 as employers are mulling cutting pay rises amid persisting economic woes, a recent report by the Chartered Institute of Personnel and Development (CIPD) has found.

The drop in wage growth comes as many UK employers are cutting back on hiring plans due to slowing growth.

The average future expected pay rise in the UK dropped to 4% in the final quarter of 2023, after holding at 5% for some time, marking the first fall since the beginning of the Covid-19 pandemic. The median expected increase across the private sector showed the same expected decline from 5% to 4%, whereas the expected decrease in the public sector was steeper, from 5% to 3%.

“This feels like a key moment in the UK labour market,” said CIPD senior labor market economist Jon Boys. “The public and private sector gap in pay expectations is widening again, at a time of mounting pressures on public services,” he noted.

Lower pay rises would deal a blow to Britons’ purchasing power and curtail disposable income at a time when living costs are rising, prompting many to re-evaluate their budgets and expenses, experts warned.

“We’ve seen a sustained period of high wage growth in response to a tight labor market, and high inflation pushing up the cost-of-living. Pay growth has helped individuals but it leaves employers with a higher wage bill to cover,” Boys explained.

The survey, which was conducted in January involved over 2,000 employers. About a third of employers plan to increase their headcount over the next three months, while 10% anticipate reductions.’

In related. ‘The British economy fell into recession in the final quarter of 2023, according to official figures released on 13 February

GDP dropped by 0.3% in the fourth quarter following a 0.1% decline in the previous quarter, the Office for National Statistics (ONS) has said. A technical recession is typically defined as two successive quarters of contracting output.

All three main sectors of the economy – services, production, and construction – posted declines in the fourth quarter, according to the ONS.

For the whole of 2023, the economy is estimated to have increased by 0.1%, which the ONS described as “the weakest annual change in real GDP since the financial crisis in 2009,” excluding the pandemic year of 2020. In 2022, growth stood at 4.3%.

According to the government, high inflation has been the single biggest barrier to growth. Although price growth in the country has come down from the 11% peak recorded in 2022 and stood at 4% as of January, it’s still double the Bank of England’s 2% target.

If you think things are bad in jolly old England, ‘Annual inflation in Argentina hit a three-decade high of 254% in January even as the rate slowed slightly in monthly terms, according to official data.

Newly installed President Javier Milei has subjected the country to ‘shock therapy’ reforms aimed at stabilizing the ailing economy, including devaluing the nation’s currency by 50% against the US dollar and hiking the key interest rate to 133%.

“If one takes the number alone, isolated, it is horrifying. And indeed, it is, but you have to look at where we were and what the trend was,” Milei said in comments about the inflation data during a public appearance on the television station La Nacion Mas. The president estimated that inflation would come under control within two years.

Meanwhile, monthly inflation in the country stood at 20.6% in January, down from the 25.5% registered for December. Annual inflation in December was 211%. According to the report, transport prices in Argentina soared 26.3%, while the cost of goods and services skyrocketed 44.4% in January.

According to Milei, Argentina’s “economic activity would have fallen much more” had he not implemented the new policies. “We are focusing on taking care of the most vulnerable class,” the president argued. A self-described anarcho-capitalist, Milei, who took office in December 2023, has warned it will take time for the results of his program to be seen and that things could get worse before they get better. Latin America’s third-biggest economy has been beset by a severe economic crisis after decades of financial mismanagement.

How long till the blind shall see, ‘Poverty levels in Argentina hit a multiple-year high in January following the drastic economic reforms carried out by newly installed President Javier Milei, the Social Debt Observatory of the Catholic University of Argentina (UCA) said in its latest report.

According to the data, the share of people in poverty in the country surged to 57.4% last month, the highest since 2004, and up from 44.7% in the third quarter of 2023, prior to Milei taking office.

In what he called ‘shock therapy’ reforms, the new Argentinian leader has introduced a slew of measures aimed at stabilizing Argentina’s struggling economy, including devaluing the peso by 50% against the US dollar and hiking the key interest rate to 133%. The measures have led to a surge in consumer prices. According to official data released earlier this month, annual inflation in Argentina hit a three-decade high of 254% in January. This, in turn, caused household incomes to collapse and greatly diminished consumer purchasing power, exacerbating poverty levels.

The report noted that the greatest increase in poverty levels was observed among middle-class households that were not beneficiaries of social programs, as well as among low-skilled workers. According to the data, the percentage of Argentinians considered “destitute” surged to 15% in January, up from 9.6% in the third quarter of last year.

The head of the UCA’s Social Debt Observatory, Agustin Salvia, told La Nacion news outlet that he doesn’t expect poverty levels to grow much further, but warned that the situation will likely get worse before it gets better.

“In February and March the situation will tend to worsen, but poverty will find a ceiling of around 60%. There is an expectation that it will tend to improve in two or three months,” he predicted.

Milei reacted to the UCA report in a social media post on Saturday, pledging that more reforms would ease the crisis in the country.

“The true inheritance of the caste model: 6 out of every 10 Argentines are poor. The destruction of the last hundred years is unparalleled in Western history. Politicians have to understand that people voted for change and that we are going to give our lives to bring it about,” he wrote.’

On the other dide of the globe, ‘Australia’s unemployment rate has risen to its highest level since early 2022, hitting 4.1% in January, the Australian Bureau of Statistics (ABS) reported.

The figure is slightly above the consensus expectation of 4%, an uptick from December’s reported 3.9%. The economy added 11,100 full-time jobs and shed 10,600 part-time jobs last month, according to the data.

The report added to concerns of slack in the country’s labour market in the face of a slowing economy and subdued consumer demand. Economists warn that unemployment could further deteriorate later in the year.

Commenting on the report, ABS head Bjorn Jarvis noted a changing seasonal dynamic in the labour market around when people start working after the summer holiday period in January. “While there were more unemployed people in January, there were also more unemployed people who were expecting to start a job in the next four weeks,” Jarvis said.

Meanwhile, Treasurer Jim Chalmers said during a press conference on Thursday that the latest figures indicate that the labour market continues to soften in expected ways. “This is also the inevitable consequence of higher interest rates and persistent inflation and global economic uncertainty, because of the pressures that people are under, the pressures our economy is under, and indeed the global economy as well – those are largely the reasons for the tick up in the unemployment rate that we are seeing today,” concluded Chalmers.’

In lighter news, not really, this is about just one example of an individual’s experience of capitalism: Headline in MailOnline, ‘The letter cleaning boss sent to single mother on £13-an-hour when he fired her for eating a leftover £1.50 tuna sandwich she had found in City law firm meeting room.’ The Ecuadorian cleaner is taking legal action. Judge for yourself whether it’s just another example of what ex- Prime Minister Edward Heath once called the unacceptable face of capitalism.

There are many vulnerable workers within capitalism and there may or may not issue a call from one of the capitalist supporting Parties to improve or increase legislation to prevent this sort of thing but the only real solution is for the abolition of capitalism altogether and its replacement by by a non-profit based social system that values everyone for their contribution to society without the capitalist threat of having their livelihood (no money, no eat) removed on spurious grounds.

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