Date: 2022-01-20 12:46 pm (UTC)
danieldwilliam: (Default)
From: [personal profile] danieldwilliam
Totally unsurprised by the Jack Monroe twitter thread and the article on the gender pay gap.

Cost of Life

Date: 2022-01-20 12:50 pm (UTC)
dewline: Text - "On the DEWLine" (Default)
From: [personal profile] dewline
Yep...

Date: 2022-01-20 12:54 pm (UTC)
naath: (Default)
From: [personal profile] naath
Cost of living - not to mention that my fixed rate mortgage has not gone up... and my food bill is not even near most of my disposable income; I don't think my necessary expenses have gone up 5% (although I did at least look at the leccy bill... the fuel price rises are enough that I noticed, even if it desn't hurt, it must be an absolute disaster for anyone near the edge already)

wage gap > and thus we need to do more to encourage Dads to DO CHILDCARE... ahem.

Date: 2022-01-20 01:37 pm (UTC)
danieldwilliam: (Default)
From: [personal profile] danieldwilliam
My gut feel is that housing costs will be the largest factor by far in whether people see a decline in their standard of living after pay rises are netted off against wide spread cost increases.

Date: 2022-01-20 02:26 pm (UTC)
danieldwilliam: (Default)
From: [personal profile] danieldwilliam
The opposite in fact.

I'm thinking of two scenarios.

1) A household in the comfortable middle-classes and in mid to late middle age. Own their own home, have high equity in their home. Housing costs (including capital repayments) unlikely to be a large part of their total expenditure. So if CPI is 5% for things like food and utilities they have plenty of financial hinterland to retreat in to if needed.

2) a younger homeowner, with low equity, where housing costs in the form of interest on debt are a large part of their expenditure - I'm expecting interest rates to not go up much. So if CPI is 5% and they get a 4% pay increase you would think they would be net worse off by 1%, but if most of their expenditure goes on mortgage interest which doesn't got up by the same 5% then they might have more cash in their pocket at the end of the month.

Compared to someone who is renting and their landlord has the market power to increase their rent by CPI - they will feel the full effect of general price increases, including in their housing costs.

Date: 2022-01-20 03:01 pm (UTC)
danieldwilliam: (Default)
From: [personal profile] danieldwilliam
Yes, but I think mortgage payments are stickier than rent. Both in terms of market and contract situations and also because Rent = Mortgage plus Maintenance plus Profit and therefore rent includes mortgage interest in itself whereas Mortgage don't include a profit element paid to the owner of the house.

I can't remember the name for the type of good that housing is but one its features is that people will generally pay the most they can afford in order to have a relatively better house (close to schools, shops, lower crime rates etc) and I think that has an impact on the price elasticity and stickiness of rent.

Date: 2022-01-20 03:03 pm (UTC)
aldabra: (Default)
From: [personal profile] aldabra
I've been expecting for a long time that the thing that will burst the housing bubble is food and fuel price rises. Housing has absorbed all the spare money while food and fuel have been absurdly cheap by historical standards, but food and fuel are much less elastic. And the housing market is highly leveraged; when it contracts it can contract a very long way.

But I expected it to be triggered by peak oil and climate change; I thought the pestilence would be along later.

Date: 2022-01-20 02:28 pm (UTC)
naath: (Default)
From: [personal profile] naath
nah, it'll be power/fuel first.

Date: 2022-01-20 03:11 pm (UTC)
danieldwilliam: (Default)
From: [personal profile] danieldwilliam
I mean, the largest factor in whether people notice an actual reduction in their standard of living as a result of fuel and power price increases, after payrises, will be their housing situation and how fixed or sticky their housing costs are.

If your housing costs are sticky, particulary if you have low-interest nominal debt, like a mortgage, periods of high inflation are not necessarily bad for you.

Date: 2022-01-20 08:10 pm (UTC)
naath: (Default)
From: [personal profile] naath
my mortgage is fixed (low rate) until I don't expect to have a mortgage, because we are jammy sods. I notionally win y the cap gain on my house BUT I AM USING THE HOUSE so that's not real money; I actually win payrise without a rent increase.

Date: 2022-01-20 05:51 pm (UTC)
adrian_turtle: (Default)
From: [personal profile] adrian_turtle
One big issue is that food consumes a relatively large fraction of your income, if you're poor. Also, a lot of people have "necessary expenses" that did not exist 2 years ago, or that were not necessary. (Masks. Tests. Internet for online work/school.)

Date: 2022-01-20 08:08 pm (UTC)
naath: (Default)
From: [personal profile] naath
yeah, the tax system should be more progressive...my expenses went down since pandemic (elliminatedd commute, already had the internet conection, tech toys etc)

Date: 2022-01-21 12:30 am (UTC)
dewline: Text - "On the DEWLine" (Default)
From: [personal profile] dewline
Corporate lobbyists poisoning the tax system over the past half-century...

Date: 2022-01-21 12:29 am (UTC)
dewline: Text - "On the DEWLine" (Default)
From: [personal profile] dewline
If I didn't have family willing to house me...

Date: 2022-01-20 12:55 pm (UTC)
cmcmck: (Default)
From: [personal profile] cmcmck
Mostly due to fuel prices, I'd guess.

Date: 2022-01-20 03:05 pm (UTC)
aldabra: (Default)
From: [personal profile] aldabra
I'm seeing *lots* of complaints about fuel and food prices and shortages in the US north east; it's not just Britain.

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