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

I agree that the triple lock has become a serious economic problem as well.

You have to tackle both things at the same time (excessive working age and pensioner welfare) if you want to actually set the UKs economic trajectory to a more positive path given the deteriotating demographics.

All of that reduction in spending needs to be channeled into productive capital investment. The UK cannot afford to ignore this as the existing infrastructure in many areas is well beyond its designed life (water and sewage being the most obvious), leading to failures and increasing costs, which also damage produvtivity.

Triple lock needs to stop now and put that cash straight into investment. No government will though but it won’t exist for today’s young.

Some interesting (& intelligent) replies. My (somewhat flippant) answers:

At some point it will be a world without work and a universal income could be required. What could we do in the meantime?

cancel net zero & get drilling the north sea

encourage Taylor Swift & Travis to settle & have a few beautiful babies - this would / could help our demographics making it cool to have babies again?!

remove illegal immigrants (note it’s not asylum seekers) with a load of cash offered to their home economies and introduce a points system to access easier visas

build roads - lots of them. All over the country. especially north of the Watford gap. Roads have a massive positive impact on economic activity of an area.

build a bridge between NI & England / Scotland. Infact make NI a trade free zone and build a Las Vegas 2.0 with a load of casinos there

lower corporation tax to 10% but make sure companies like Starbucks pay the tax instead of using some holding structures elsewhere

stop allowing people to milk the system - especially the NHS and social care.

give ozempic or equivalent for free on the NHS to anyone with a BMI over 26

A massive sugar tax & outlaw crap UPF food. Teach kids how to cook & help families by not allowing massive corporate food sellers to dominate with ready made rubbish. Make healthy food the cheapest food.

pension and private education rebates for people working in certain professions or self employed and contributing heavily to society

abolish stamp duty to get the housing market moving.

encourage Taylor Swift & Travis to settle & have a few beautiful babies - this would / could help our demographics making it cool to have babies again?!

No country has managed to reverse birth rates once below replacement rate even with financial incentives

I'm very interested to see several people suggest weight loss injections as a priority - I know about the high cost of metabolic diseases, of course, but this wouldn't necessarily have occurred to me. I wonder if it depends what region you're in, as I know obesity rates vary significantly by area.

never underestimate “swiftonomics”

maybe 2026 is the year - married & a honeymoon baby 😉

You don't need to fully reverse the birth rate decrease.

Replacement = 2.1
Current UK = 1.44

Just being able to nudge that from 1.44 to 1.7 (France has managed this) would greatly attenuate the problems stemming from serious demographic decline (1.44 would do this) by making the population reduction over time gentler (and thus more financially viable for the country).

I'm really curious as to why this is. Is it because women tend to find that they prefer to remain single/childless to an extent that overrides the biological urge to have a baby? Is it because such policies are often attempted by conservative governments pushing for women to procreate as much as possible - the more children the better - rather than around replacement level? I find it really hard to imagine birth rates continuing to be so low, or falling further, were housing affordable, salaries adequate, and childcare provided free of charge.

Obesity has sizeable long-term healthcare costs because its often accompanied by multiple co-morbidities requiring chronic medical intervention.

GLP-1s can absolutely help there. The studies so far have been very positive.

@plsdontlookatme the culture shifts

Birth rates are low in countries with far more affordable housing and childcare - see the Scandinavian countries. Finland has one of the lowest birth rates in Europe, just 1.3.

The affordability argument is a red herring, IMO.

This is really not true.

High housing costs have a direct economic link with reduced family formation, which leads to less children (on average).

Having children is far less costly in Scandinavia than it is in the UK. In Finland for example, which has a much lower birth rate than the UK, child care costs are very heavily subsidised (capped at EUR 311 a month, from a quick google), and university is completely free for all citizens.

Also there’s a very strong correlation between affluence and having fewer children actually.

“Celebrities turning 40 in 2026” popped up on my Instagram, so I googled the women to see how many had children:

Lady Gaga - 0
Lindsay Lohan - 1
Lena Dunham - 0
Mischa Barton - 0
Leighton Meester - 2
Brittany Snow - 0
Megan Fox - 4
Alexandria Doddario - 1
Mary-Kate Olsen - 0
Ashley Olsen - 1
Charlotte Le Bon - 0
Amanda Bynes - 0
Kat Dennings - 0
Emilia Clarke - 0
Jameela Jamil - 0

@NewUserName2244 , have you looked at how successful that approach has been historically? Without doubt the best approach is to grow the economy which tends to happen with lower taxation. That lower taxation then leads to a higher tax take and more money to spend on public services, win, win, win! The left hate this approach however because it tends to go hand in hand with a more restrained attitude to benefits, providing help to those in genuine need but not to the shirkers and takers. The left have traditionally relied on the shirkers and takers for votes of course.

What percentage of their young people actually go to university?

University was free in the UK and they got grants in the 80s but it was only a small percentage of young people actually went to uni.
Lots of people did HND College courses. The push for a high percentage to do university came from labour, which also rendered HNDs worthless.

@snowlaser So improve existing lines then! Over £100 bn for hs2 is and was bonkers! There could have been increased capacity on other mines but we wanted the big boys toy. People in the north should have said they didn’t want to go to London! Of course they wanted London! Or why was it designed in and out of Euston? It’s a huge expensive mistake when rail in the north could have been improved. All the talk at the time was about high speed. Capacity was not an issue and could have been solved more cheaply and destroyed far less of the countryside and our heritage. It’s a total waste of money!

Not sure why that’s relevant, but if you google, you’ll see over half of students in Scandinavia go to university.

Norway has a 55.7% university rate and a birth rate lower than the UK (1.40).

I was more thinking of the cost of free uni. Its easier for a country to support students if only 10% of young people go to uni. Much more difficult if 50% are uni bound

I was asking about Finland as you said they have free uni.

I sometimes think Uni in the UK is a way of keeping young people out the unemployment stats rather than actually educating people for the good of the nation

I sometimes think Uni in the UK is a way of keeping young people out the unemployment stats rather than actually educating people for the good of the nation

100% agree.
The UK economy does not need 50% graduates entering the employment market every year expecting to get "graduate" pay levels.
Address the lack of "status" of being in the trades and apprenticeships when trying to promote youth aspirations

Norway has free university too, not just for Norwegians but for all EU and Swiss students too. Finland is the same and has a university rate of 45%. All this can be googled.

Anyway, my point was that even in countries where the cost of having children is much lower (free childcare, free university education etc), the birth rates are low, even lower than the UK. So I don’t think affordability is the primary reason.

I also pointed out the very clear correlation between affluence and family size. Those with lots of money tend to have either no children or just 1 or 2 (see list of 40 year-old celebrities above).

If there was a solution easy enough for a 5 year old to understand, wouldnt it already be in place?

Im not an economist and no idea how much difference it would make, but I would change inheritance tax - lower the threshold at which its payable and lower the % . I think that because its a cliff edge of 40% and very few people pay it, then that encourages people to arrange their finances in a way to avoid it. If nearly everyone paid it, it would potentially seem fairer. (And generate more tax)

You can't "improve" a railway line in such a way as to add capacity! If a railway line can accommodate 10 trains an hour the only way to accommodate more than 10 trains an hour is to build more railway, which is what HS2 is doing.

What did NOT have to happen is that the new line needed to be a High Speed one. This does make it more expensive to build, and perhaps was a mistake in retrospect for a country as geographically small as England.

How can you pay me less when I have my own business?

but what characterises the Scandinavian counties?
The answer is they all have tax rates over 50% which kick in at threshold below one and a half times the average income.
Their citizens are happy to pay high taxes in return for public services funded at a level "we" cannot afford to do so.

UK top tax rate 45% on >£125,000.
UK average earning about £39k
so that top rate of tax is over 3 times above average income.

30% of the entire income tax receipts of UK government comes from just 1% of its population and just 10% of the UK population account for 60% of income tax received.
Income tax represents "just" 28% of the total income of the govt. (NI adds 18% and VAT adds a further 17%)

Is it any wonder Scandinavia can afford free universities?
They have A LOT more people paying more tax