Please explain to me like I’m a 5 year old. How do we fix the economy?

[bushproblems]

The job market is shocking, the minimum wage rise has not pushed up the salaries in the next bracket, food is so expensive and working hard no longer feels like it provides the rewards it used to.

Im earning more than I have in my life, but I feel poorer than I did 10 years ago when I was just above minimum wage.

I get that employers have more costs so the profits of a company won’t trickle down like it did, but what, or who, can fix this?

Im feeling very despondent about the future for me and for the younger people in my family

The tax wedge in the UK is already extremely progressive.

Higher earners are already taxed at Scamdinavian levels of tax. Low/middle earners are taxed less than their Scandi counter-parts. This is already having impacts on aggregate productivity growth as people change their economic behaviors at the margins when faced with marginal tax rates in excess of 50%.

The UKs tax base has effectively become too narrow over rhe last 20Y with a very unbalanced reliance on higher earners. That balance needs to be fixed but that will take years (rolling NI into income tax would be an obvious initial move)

At this point, tinkering at the margins (what Labour is doing) will not work. Their changes have simply led to higher inflation which has made things worse for the country.

Interesting. I have a business degree from a former poly. I'm about to retire after 40 years earning three or four time the national average p.a. consistently despite being a single mum.

My college room mate, who has a business degree from the same lowly institution earns twice what I do.

Perhaps business degrees have changed in the intervening time.

There were far fewer degrees around in our day. Also no AI. It’s much harder for graduates to get jobs nowadays. That’s why so many do teacher training and law conversion.

polices may indeed affect them differently, but my point is many of the voters don't understand how it affects them and react only to the soundbite.

Obviously a balance is the best, but how to get that balance. just look at Brexit, any people now claiming they did not "understand" what they were voting for and regret reacting to the simple slogans when they voted.

In my opinion universal suffrage has been history's biggest disservice to the democratic principle as it has resulted in dumbing down of issues to get them past the post,

as for biased assessments to vote, so what, how many people can name their MP rather than the party colour they voted for?

3 of ours did degrees at ‘mediocre universities’

One is a lecturer at a redbrick.
Ones a journalist in national media
One is incivil service.

nephew did a degree at an old poly. Did an MA at a redbrick. 1st job 2 years ago on 55k with a car in northern England.

Hate the redbrick snobbery on here’s

Tax wealth not work.

I agree with many posters on here. We really need to attract companies that are offering well paying jobs and attract investment.

We also really really need to get a hold of our welfare and health bills. A very serious, open, honest and brave discussion needs to happen around the triple lock pension and state pensions as a whole (they were never supposed to fund people for 20+ years of retirement). We need to start encouraging people to get as much private pension provision as possible.

The same honest, open and brave discussion has to be had about the NHS and what it provides, it is simply no longer fit for purpose. We really need to stop treating it as a sacred cow and face the music. We need to stop pretending that the only private insurance health model is the US system and follow our European cousins. We need to accept that the NHS can only cope with so much. Everyone needs to be buying their own over the counter pain killers, hearing aid batteries, over the counter allergy medication ect, we need to get rid of the over 60s free prescriptions countrywide and instead have certain medication free but anything cheaper than the current NHS prescription charge and available over the counter should have to be bought regardless of age.

We need to seriously look at the assisted dying bill and accept quality of life over everything else. We (the tax payer) cannot be paying for people riddled with dementia or other deteriorating conditions with no way of improving and having to be paid for by the state to be cared for in nursing homes for years (sometimes decades, DHs great Grandma spent 20 years curled in a fetal position riddled with dementia unable to talk, eat or toilet herself, her money ran out years ago, the tax payer paid for at least 25 years of her care in a nursing home). It's very brave new world but it would seriously slash the costs.

I also believe we should seriously tighten up on the amount of men who do not pay for their children.

Productivity is doomed as we have some of the highest energy costs in the world, funny windmills weren't the answer. Manufacturers and business infrastructure need cheap energy, which we don't have. We are limited to services, which we used to excel in, but over the past 20 years we lost as the rest of the world spoke English and were cheaper to hire. Now most service roles/functions can be performed cheaper (and better?) by agentic AI. Niche products and inventions will give the economy a boost but startup businesses are actively discouraged and innovators and wealth/job creators are leaving for more welcoming business rates and flexible hiring practices.

Cheap energy is the first step to recovering the economy, but we're too busy virtue signalling ourselves into oblivion and refuse to invest in nuclear power, so the decline continues.

I'm part time and so is my DH, not on any benefits, just tired of full time, and happier part time, that's not going to change.
People want to spend more time with their families.

I honestly think that globally everyone has got to stop expecting 'growth' because the world demographics are simply not going to deliver growth. Ageing populations, probably population shrinking in western countries, it's great for the planet but the fact is we are in for a tough 50-100 years while this demographic mess works it's way through

I want to add that i'd nationalise water at least and start banging up nuclear power stations.

@Icecreamandcoffee the issue is people won’t vote for it.

I agree we need to look at the assisted billing rules, the amount we pay out when the person has no quality of life is barbaric. We need to look at the NHS, people perceive it’s ‘free’ but it’s not! If we put the actual price of meds on prescriptions people would be less likely to just collect and waste them. Before he died my DH meds were £10k a month, his last packet came from the hospital straight to the hospice, not touched by anyone outside the supply chain. He never started the packet. I asked ‘after’ what was happening with them and they were being sent to be destroyed. I could understand if we’d actually touched them but we hadn’t. Multiply this by lots of people and it’s madness!

abolish min wage, this drives me mad, I’ve an ASD young person who is capable of work, but not capable of producing £12.21 an hour worth of work so no one would take him on, if they could pay him say £7 an hour then they be more happy at giving him a job as they’d get £7 an hour worth of work out of him ! So instead he will end up sitting at home claiming benefits as no one will give them a chance.

if you’re on benefits then they need to be time limited and make the people do some sort of work. Cap nursery profits, encourage more council nurseries at a proper rate. Same for rents, homes etc

There are many nurseries not making much profit at all. Large scale ones might but many others struggle. Otherwise I totally agree that the NHS needs serious reform.

Love a redbrick! No one is too good for a redbrick

I don't think anyone knows and if they did it would be well above a five year old.

Oh my goodness. Do people really think like this?

I do agree if you are not working and claiming benefits you can do something. Answering a phone for a charity, litter picking in the park, there must be something most people can do for society while living on benefits.

Decent, manageable, non-exploitative employment opportunities for disabled people would be a huge morale booster if nothing else. I always say: if you wouldn't hire a disabled person beacuse you feel that their disability makes them too slow or unreliable for a role in your ever-so-important company in your ever-so-uniquely-demanding industry, who else should hire them? If your company is simply too squeezed to take a chance on them, where are all these cash-loaded, chilled-out companies where they can work? Why, then, should they be begrudged benefits if you don't find them employable? What do you suppose they should do?

Tax the very wealthy, give tax breaks to smaller independent businesses, not the big corporations, make multinationals like Starbucks etc pay tax in the uk, and legislate for higher wages at the lower end of earners. Use the money raised to increase minimum wage and financial support for those unable to work full-time. When ‘poorer’ people have more money they spend it on food and services, putting the money back into the economy. You have to have cash flowing to build the economy.

Yes. Because it’s true.

Disposable income has reduced due to the tax threshold freeze.
raises more money for hmrc but puts less into the economy because spending power is less.

Unfortunately...yes. I have also seen worse.

They can give back to society in the form of paying taxes when they are able to reenter the workforce - social safety nets exist for a reason. Anyone can become seriously ill or disabled at any time. I have to pay insurance on my car - I haven't crashed, but I'm paying for those who have. Maybe one day I will crash my car, though, and should such an unfortunate thing occur, it will then be my turn to get a pay-out.

A lot of posts are confusing government spending with the health of the economy.

You don't get growth in the economy by cutting government spending, this reduces the size fo the economy.

You may cut the fiscal deficit by cutting spending, but in the longer term this has a negative impact as that money is no longer spent, reducing economic activity, and likely causes further liabilities down the line. Think cutting sure start centres reduces costs and wages, but in the longer term leads to more health and society issues that cost more to fix later than what was saved.

For each £ the government spends, that is money in either a workers pocket, who will pay tax or to a private company that pays tax. That worker will spend the £ on living costs, which results in those businesses paying tax and purchasing supplies from other businesses that will pay tax. The original £ will get spent several times as it moves around the economy. For each £ cut the opposite happens which dampers consumer and business confidence.

Growth in the economy or more importantly productivity is created by investment. Think of the traditional factory worker making a 100 of a product in a day. If that worker, following investment, is replaced by a machine that can create a 1000 products in a day, that is a 10x increase in productivity. Whilst this means less workers that need training as factory operatives, you will need more workers creating the machines, maintaining and marketing/selling them. New jobs, but different skills, which is why the ability to move into a new industry / availability of training is so important to keep people in employment.