Unit labour costs can be reduced by improved manufacturing methods and tooling.
Germany has, since 1945, had a history of such constant improvement.

Unit labour costs are not just about wages.

The cost of living in the UK is far higher than in many other European countries – not least because of the cost of accommodation. Average private rent in the UK is £712 a month. (22 June 2012) Average house price in the UK is £226,887. (Jan-March 2012) Let's start with the rent: that works out as £8,544 per annum or £164.30 per week. Shall we be really, really tightfisted for the sake of this little experiment? We'll say that you need a further £100 per week for all your travel (to and from work), your clothing, your basic bills, your food. This is not the life of Riley we're discussing. So at an average private rent, you need £264.30 per week to live at a very basic level. That's an income of £1,374.36 per annum net. If that is an average house price, then a sensible mortgage (no more than three times your annual income) means that you need an annual income of £75,629, unless we wish to encourage and create more of the lunacy that contributed to the financial crisis in the first place. In the case of the rent, the scenario suggested does not mean that the individual would be able to contribute much to their local economy, which in a larger economy that is largely dependent on people having disposable income, is not a positive situation for the said economy – never mind the individual. The median salary for an office administrator in the UK is £16,332. Popular employers, with salary range: The National Health Service (NHS) £14,798 - £47,045 HSBC £13,292 - £60,124 Barclays Bank PLC £14,001 - £59,256 Tesco PLC £13,037 - £53,923 Lloyds Tsb PLC £14,292 - £60,074 The figures suggest that the idea that we have vast swathes of massively overpaid workers, who can all afford to have their pay cut or held down (a cut in real terms) is a myth. Rise in costs of utilities in the UK in the last decade plus. This is Money wrote:Energy bills have grown seven times faster than people's income since 2004, highlighting the squeeze that is being placed on household budgets. Where eight years ago the average energy bill was £522, it is now £1,252. Full story

The cost of living in the UK is far higher than in many other European countries – not least because of the cost of accommodation. Average private rent in the UK is £712 a month. (22 June 2012) Average house price in the UK is £226,887. (Jan-March 2012) Let's start with the rent: that works out as £8,544 per annum or £164.30 per week. Shall we be really, really tightfisted for the sake of this little experiment? We'll say that you need a further £100 per week for all your travel (to and from work), your clothing, your basic bills, your food. This is not the life of Riley we're discussing. So at an average private rent, you need £264.30 per week to live at a very basic level. That's an income of £1,374.36 per annum net. If that is an average house price, then a sensible mortgage (no more than three times your annual income) means that you need an annual income of £75,629, unless we wish to encourage and create more of the lunacy that contributed to the financial crisis in the first place. In the case of the rent, the scenario suggested does not mean that the individual would be able to contribute much to their local economy, which in a larger economy that is largely dependent on people having disposable income, is not a positive situation for the said economy – never mind the individual. The median salary for an office administrator in the UK is £16,332. Popular employers, with salary range: The National Health Service (NHS) £14,798 - £47,045 HSBC £13,292 - £60,124 Barclays Bank PLC £14,001 - £59,256 Tesco PLC £13,037 - £53,923 Lloyds Tsb PLC £14,292 - £60,074 The figures suggest that the idea that we have vast swathes of massively overpaid workers, who can all afford to have their pay cut or held down (a cut in real terms) is a myth. Rise in costs of utilities in the UK in the last decade plus. This is Money wrote:Energy bills have grown seven times faster than people's income since 2004, highlighting the squeeze that is being placed on household budgets. Where eight years ago the average energy bill was £522, it is now £1,252. Full story

Stating the obvious there.

"Steady". Not 'cut'. Henry Ford understood that it makes business sense to ensure that your own workforce can actually afford to buy your product.

It's the economics of the madhouse to have a country dependent on people having disposable income (and spending it) – and then trying desperately to cut that income, while the cost of living continues to rise.

Mintball wrote:The cost of living in the UK is far higher than in many other European countries – not least because of the cost of accommodation. Average private rent in the UK is £712 a month. (22 June 2012) Average house price in the UK is £226,887. (Jan-March 2012) Let's start with the rent: that works out as £8,544 per annum or £164.30 per week. Shall we be really, really tightfisted for the sake of this little experiment? We'll say that you need a further £100 per week for all your travel (to and from work), your clothing, your basic bills, your food. This is not the life of Riley we're discussing. So at an average private rent, you need £264.30 per week to live at a very basic level. That's an income of £1,374.36 per annum net. If that is an average house price, then a sensible mortgage (no more than three times your annual income) means that you need an annual income of £75,629, unless we wish to encourage and create more of the lunacy that contributed to the financial crisis in the first place. In the case of the rent, the scenario suggested does not mean that the individual would be able to contribute much to their local economy, which in a larger economy that is largely dependent on people having disposable income, is not a positive situation for the said economy – never mind the individual. The median salary for an office administrator in the UK is £16,332. Popular employers, with salary range: The National Health Service (NHS) £14,798 - £47,045 HSBC £13,292 - £60,124 Barclays Bank PLC £14,001 - £59,256 Tesco PLC £13,037 - £53,923 Lloyds Tsb PLC £14,292 - £60,074 The figures suggest that the idea that we have vast swathes of massively overpaid workers, who can all afford to have their pay cut or held down (a cut in real terms) is a myth. Rise in costs of utilities in the UK in the last decade plus. Full story Still we have lots and lots of Poles and other East Europeans coming here to enjoy a far better lifestyle than they could at home despite taking "low-paid jobs." Not only that, but they do them better than the average British person. Why is that? So many of the rising costs you mention are a reflection of either / both inept government over decades in this country and the poor of the world getting a larger, albeit, small slice of the cake. Do you think the British have a divine right to be better off than the peoples of Africa, Asia, South America, etc? We are looking over the edge of the abyss in economic terms at present. A very indebted nation whose manufacturing output and exports have just dropped back to the darkest post-Lehman days, despite government wishing for an manufacturing, export lead recovery. Added to that, most of the major ecomomies of the world are not growing and even China has taken a big turn for the worse just recently. We are potentially on the brink of a global economic depression. So if you think things are bad now, brace yourself. Soon it'll be no time for flowery niceties, it'll be a case of working hard for lower real rewards for years to come. Get used to it. Your country needs you.

Mintball wrote:The cost of living in the UK is far higher than in many other European countries – not least because of the cost of accommodation. Average private rent in the UK is £712 a month. (22 June 2012) Average house price in the UK is £226,887. (Jan-March 2012) Let's start with the rent: that works out as £8,544 per annum or £164.30 per week. Shall we be really, really tightfisted for the sake of this little experiment? We'll say that you need a further £100 per week for all your travel (to and from work), your clothing, your basic bills, your food. This is not the life of Riley we're discussing. So at an average private rent, you need £264.30 per week to live at a very basic level. That's an income of £1,374.36 per annum net. If that is an average house price, then a sensible mortgage (no more than three times your annual income) means that you need an annual income of £75,629, unless we wish to encourage and create more of the lunacy that contributed to the financial crisis in the first place. In the case of the rent, the scenario suggested does not mean that the individual would be able to contribute much to their local economy, which in a larger economy that is largely dependent on people having disposable income, is not a positive situation for the said economy – never mind the individual. The median salary for an office administrator in the UK is £16,332. Popular employers, with salary range: The National Health Service (NHS) £14,798 - £47,045 HSBC £13,292 - £60,124 Barclays Bank PLC £14,001 - £59,256 Tesco PLC £13,037 - £53,923 Lloyds Tsb PLC £14,292 - £60,074 The figures suggest that the idea that we have vast swathes of massively overpaid workers, who can all afford to have their pay cut or held down (a cut in real terms) is a myth. Rise in costs of utilities in the UK in the last decade plus. Full story Still we have lots and lots of Poles and other East Europeans coming here to enjoy a far better lifestyle than they could at home despite taking "low-paid jobs." Not only that, but they do them better than the average British person. Why is that? So many of the rising costs you mention are a reflection of either / both inept government over decades in this country and the poor of the world getting a larger, albeit, small slice of the cake. Do you think the British have a divine right to be better off than the peoples of Africa, Asia, South America, etc? We are looking over the edge of the abyss in economic terms at present. A very indebted nation whose manufacturing output and exports have just dropped back to the darkest post-Lehman days, despite government wishing for an manufacturing, export lead recovery. Added to that, most of the major ecomomies of the world are not growing and even China has taken a big turn for the worse just recently. We are potentially on the brink of a global economic depression. So if you think things are bad now, brace yourself. Soon it'll be no time for flowery niceties, it'll be a case of working hard for lower real rewards for years to come. Get used to it. Your country needs you.

Quite so.
But a point that you omitted when talking about wage rates in Germany.

Do you really need it explaining?

Many stay for a short time, putting up with pretty dismal accommodation, in order to save money and return home, where the lower cost of living means that those savings can give them a good start in business, say.



Yes. I believe I've explained some of this at some length within the last page or so.

Do please make an effort to keep up.



Thank you for ignoring all the points made and posting, instead, an utterly diversionary post.

You have not explained how many people would live with even slightly lower wages. You don't explain how they'll pay their rent/mortgage, bills etc. Possibly you expect them all to sleep in the street and be grateful for a cardboard box?

And you have not even remotely attempted to explain how an economy that is something like 75% based on the service industries will benefit from cutting disposable income.

Now how about cutting the Chicken Licken hystrionics and actually looking at and reading those questions/points properly and trying to actually address them rather than just indulging in your usual doom and gloom scenarios.

And you can bear in mind that many very profitable companies are also being subsidised by the taxpayer in terms of in-work benefits.

LOL

You win todays prize of a "Keep Calm and Carry On" coffee mug.

1. Many Poles, etc stay long-term, work hard in supermarkets, etc and raise a family here. It can be done if you are willing to work and not moan.

2. If people cannot afford places to live then prices and rents will go go down. It's already happening, even in London.

3. You have not explained how to avoid cutting disposable income if raw material, food, etc prices rise. Just pay people more? Where will the money come from? It'll just create inflation and lower competitiveness which makes the problem worse. You must remember we are not a self-contained, self-sufficient economy but a nation that needs to trade internationally to sustain itself. My comments about the developing world are not diversionary but the absolute crux of the matter as I have been trying to point out since pre-2008.

4. In work benefits were one of Brown's silly ideas as I recall. An unnecessary complication with the usual unintended consequences so beloved of our inept politicians (*) He should have simply adjusted the tax bandings instead.

(*) Our politicians bury their head in the sand over problems and just leave them to mount up over time because of their short-termism. You may have seen the recent article in The Evening Standard that proposed a solution to a problem that politicians will spend decades moaning about, writing reports on and doing nothing. The issue was the unfunded doctors pension scheme (which has been the cause of some militancy). The liability for future pension payments is a whacking £300 billion. Suggested solution - set up a funded scheme. Government lends the scheme trustees £30 billion a year for 10 years, ie lends them £300 billion (not gives them). No increase in government debt. Proviso for lending them is that they invest in infra-structure projects (maybe social housing) which should easily generate long-term steady returns of 3% pa + Over 25 years that capital should therefore generate a further £300 billion. So, government is repaid in full and there is a pot of £300 billion to pay the doctors rather than dragging on the economy via taxation. So, more money to spend on NHS healthcare, infra-structure improved and the economy kick-started and all for free. Sadly, our politicians and civil servants seems incapable of thinking rationally and in a business-like fashion.

I bumped into three Albanians in a local french town who had spent some time in Great Yarmouth by coincidence (my birthplace) - when I asked them why they came to France they replied in good english 'England is f*****g terrible, a real dump who would want to live there ?'
it's a sad state of affairs when even the asylum seekers want to leave Blighty !!!