To wonder where all the money is going to come from to increase wages?

[girlfriend44]

Genuine question. Re people who are striking for more money.

Where do they think the extra money is going to come from to increase all their wages and how will this keep inflation down?
Can the government really afford to pay everyone more?

It feels like no rash decisions are being made on anything economy related in the hope that Putin will either die or be removed from office and someone reasonable takes the reins in Russia. That would remove one of the stresses.

They don't seem to be making long-term decisions. Increasing wages beyond inflation would bite them in the arse if the rates become reasonable once again.

Close the loopholes.

When you have the chairman of the govt party paying millions in "tax disagreement" and the wife of the PM avoiding tax through non-dom status, it is quite clear that there IS the capacity to fund. Austerity is a choice.

Scrapping the carbuncle that is HS2 would free up an awful lot of the money in one fell swoop.

www.google.com/amp/s/amp.theguardian.com/commentisfree/2022/nov/14/uk-finances-black-hole-hs2-vanity-project

The "they've wasted it on other things so they should spend billions on double digit % public sector wage increases" argument isn't great.

Can we not get a refund for the HS2 project? Tories have spent billions in it haven't they?! Or maybe if they all started paying the taxes they owe?

They seem to manage to find it for mps often enough

There are only 650 MPs, and more like 6.5 million public sector employees. It does affect the sums.

The Government creates our money supply. It can create all the money to pay people in the public sector fairly if it wanted, but it doesn’t want to.

We can’t afford to NOT increase their wages if we want functioning health and education services.

@Lockheart I type too slowly but we are on the same page.

Strikes won't work, the government don't care, plus if they give in everybody else will be striking. supermarket workers and carers, earn a pittance in comparison, yet still an important job. Government will not back down, it's all a huge waste of time. People are better off switching jobs.

That's overly simplistic and incorrect - although it is the ridiculous line that Thatcher always parroted. It wasn't true then (as she well knew) and it isn't true now. It's way more complicated - some good more detailed explanations have appeared on this thread.

Who will run the NHS and Education when everyone has switched out of those jobs?

www.officialdata.org/uk/inflation/2000?amount=25000

Here's an interesting link.
Wages have NOT kept up with inflation.
Pay scales across all sectors are lagging.

We could cut down on mp's expenses for a start

That's a fair point, but that argument is just an illustration that money can always be found for things the government regards as worthwhile.
Their refusal to remunerate public sector employees properly or fund public services adequately is because of their dislike of any enterprise not motivated by greed.

The private sector, this is the plan.

Focussing on just the money is misisng the point.

Teachers are not striking for more money, they are asking for better working conditions, respect (as in for their profession to be treated with respect) and for pay comensurate with their expertise/at a deserved rate.

If you sat down with any working teacher and said, hey, we have no more money, but what can be done is to make sure you have adequate resources (to support evey child in their learing and make sure all children have what they need (food, paper, pens, IT - so you dont have to supply this stuff yourself), make sure you never work over your core hours, make sure we cut the administrative burden and streamline pointless testing systems, as well as speaking about and celebrating your prefession more then many of them would be somewhat happy.

The pay increase they are asking for is in many cases driven by the oppostie of these things - regular overtime, no support, massive admin burden and having to constantly put their hand in their own posckt to support children they work with.

Lots of poeple get paid what teachers do - and consider it an ok salary - but this is because it is representative of their working conditions and their professionsal status - this is not the case for teachers right now. Thats why teachers are (rightly) mad and striking.

But if the PP's answer is "just switch jobs" the private NHS will still have to offer higher pay to get people to "switch" to work in it.

First sensible answer

They could ask Michelle Mone and the rest of them to pay back the money they took through dodgy PPE contracts. The amount of money Tory cronies have stripped from this country is disgusting.

The big problem here is the Tories 13 years of economic stewardship has been a total disaster. Many of us were shielded enough not to feel it acutely, but those with the least have been feeling it for a decade or more.

At its core, the Tories have not done enough to spur sound economic growth.

Under the last Labour Government, from 1997 to 2010, the economy grew by 60% (and that's after you account for the financial crash in 2008-09). About 4.6% a year. Under the Tories from 2010 to 2021, it grew by just 25% or 2.3% a year.

But it gets much worse. In real terms - i.e. after accounting for inflation - the economy grew by 33% under Labour (2.5% a year) but under the Tories, the real growth has been 0.7% in 11 years - that's 0.06% a year.

Why is that relevant to what sort of wages can be afforded? Well, if the economy had grown under the Tories at the same rate as under Labour, UK GDP in 2023 would be worth about $1 trillion more than it actually is.

What does that mean? It means (with the right policies at least) more money for higher wages in the private sector, more tax revenue, less dependence on benefits, particularly in work benefits like tax credits.

There is a difficult fiscal position now - but it is entirely of the Tories making because the economy has essentially flatlined for the last thirteen years.

Yep, that's the reality of it.

All government borrowing ( the national debt is currently greater now than it was at the end of the war ) has to be paid back, with interest, out of taxation. So you either pay for further public sector funding out of taxation now or you pay to service the debt out of taxation - to simply print more money just stokes inflation. The comment that we can fund the increase in spending from the increase in taxation revenue is total nonsense ( borrowing is greater than the increase in tax revenue !!! ). The only way you could do that would be from an increase in productivity in the private sector, and we have low productivity.

So, the only way to pay for all this public sector pay demand is to increase taxation or take it from somewhere else, or both - either way, we, as a country, cannot afford it. Going on strike will not alter that.

@Persuadable excellent and thoughtful words. For me, absolutely true.

It’s not and servicing debt costs tax payers a lot too.

A fair chunk is for energy support atm, another hit after pandemic

I don’t think there will be inflation matching rises even with strikes

To some extent, yes, they are.

Government finances don't work like those of households. Governments can print money, move money, and borrow money over ridiculously long time frames.

It's not the way to finance revenue spending like public service wages, but it is a way to finance public investment on infrastructure and capital projects that will power our economy to drive more tax revenue to pay for revenue spending like public service wages.