Monday, 20 November 2017

Brexit has already cost the average British worker the equivalent of a week's wages


Ever since the EU referendum Brexiteers have continually promoted the myth that Brexit is not going to be a disaster because the "project fear" predictions of the Remain campaign supposedly didn't come true after the referendum.

The main problem with this myth of course is that the predictions of an economic downturn have largely proven quite accurate since the Brexit vote. 

It's clear that what has actually happened to the economy in the wake of the Brexit vote actually lies pretty much in the middle of what the various Brexit forecasts predicted (see image).

It's also worth remembering that many of the pre-Brexit forecasts were built on the (somewhat naive) assumption that David Cameron would stick to his word and trigger Article 50 on the day after a Leave vote.


So when Cameron didn't actually do that, he dramatically softened the immediate economic impact of Brexit by deferring a significant measure of the economic damage (thus helping to generate the seemingly ubiquitous 'Brexit isn't so bad' trope).

Even though Cameron handed the Brexiteers a huge propaganda boost by renageing on his empty threat to trigger Article 50 on the day after the EU referendum, the Brexit vote still caused a significant measure of economic damage.
 

The immediate slump in the value of the Pound took time to filter through to millions of ordinary British workers through rising inflation, but those who live, study, or have business elsewhere in the EU suffered an immediate 10%-15% collapse in their living standards (think of the adverse effect of the £ slump on UK pensioners in Spain who saw the value of their pensions decline dramatically, or UK based businesses reliant upon imports from the EU).

We already know that since Brexit the value of the pound has collapsed, inflation has risen significantly above the Bank of England interest rate, the real value of UK workers' wages has declined dramatically, and the UK has slumped to the lowest growth rate in the EU.

Now a study from the Centre for Economic Performance and the London School of Economics has calculated the scale of the damage for ordinary working people.

According to their calculations, the post-Brexit rise in inflation has caused price increases of £404 per year for the average household.

If the damage is calculated in terms of the reduced real value of workers' wages, it's equivalent to a £448 per year pay cut for the average worker, which is the equivalent of losing an entire week's salary.

 
The extraordinary thing is that Brexit has already collapsed the UK growth rate, caused a significant rise in inflation, and trashed the real incomes of millions of ordinary British workers, yet it hasn't even happened yet!

Had David Cameron triggered Article 50 on June 24th like he said he would, the UK would already have had to have concluded the Brexit negotiations by the end of 2017 so as to leave time for the ratification process (any EU-UK deal is subject to democratic approval in the parliaments of all EU member states).

So given that Brexit has robbed millions of workers of the equivalent of a whole week's wages, and that the impact on the wider economy is right in the middle of the forecasts, isn't it about time that we lob these dishonest "Brexit isn't so bad", "Remain were pushing project fear lies" tropes into the dustbin (a bin that is already pretty damned full of other Brexiteer lies)?

But even as we're lobbing this dishonest Brexiteer trope in the bin, they're coming up with a new propaganda narrative aimed at pinning the blame for the Brexit damage onto pretty much anyone who is opposed to their own fanatical "no deal" interpretation of the Brexit vote.

The Brexiteers accused Remainers of lying and fearmongering when the economic predictions showed that Brexit would be bad for the UK economy and bad for ordinary British workers, and now that these predictions are demonstrably coming true, they're now seeking to pin the blame for their own mess onto the very people who predicted these negative outcomes in the first place!


The problem of course is that it's ridiculously difficult to reason people out of a belief that they didn't reason themselves into in the first place. So people who are ideologically committed to Brexit will shrug off the erosion of their own wages, and accept the Brexiteer propositions that the blame for any negative outcomes lies with anyone but the Brexiteers themselves (Remainers, the EU27, the courts, the opposition parties, academics who dare to critique the Brexit process, the left-liberal elements of the press, economists and other experts ...).

To many people Brexit is like a religious cult based on the unquestionable assertion that "Brexit is good", so even if they're shown how it isn't good, they'll tinker around with ancillary beliefs until they develop a convenient excuse.

Just as the religious cult leaders might absolve the gods of blame for the devastating flood/drought/famine by claiming it's vengeance for the people not praying hard enough, the leaders of the Brexit cult are beginning to insist that Brexit isn't to blame for the low growth/high inflation/collapsing wages, but that the public are to blame for not believing in Brexit fervently enough!

We know that Brexit is already harming the UK economy and the lives of millions of ordinary workers, and we know that the damage will be very much worse if the hard-right Tories get the ruinous "no deal" Brexit they're craving. So the only way of stopping this extreme Brexit disaster from happening is by breaking people out of the Brexit cult, which is clearly easier said than done.


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