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The Consumer Crunch. Is the average wage in the UK just to low?

We have heard that it’s the Banks fault we are in trouble, our fault for over borrowing, some blame the high price of oil for the depression and now its consumers; we aren’t spending enough.  We need to spend our way out of the crunch; hence the use of quantative easing (printing money) to make more money available for us to spend and pay off our personal and more importantly for Brown our governments huge national debt.
Over the last ten years the low cost of borrowing and rising house prices has given people the illusion of wealth and covered up a very important point that is becoming more and more obvious, for the majority wages are to low.  Many people simply don’t earn enough to allow for spending on luxury products and services without the addition of equity release and cheap borrowing.

Why? Amongst other things you could look at immigration policy that has kept wages low, outsourcing professional jobs abroad, importing as many products from BRIC countries as possible and a low minimum wage.   All of this has helped the government and helped companies earn more profit up to now but is starting to ‘turn round and bite them’ as it has led to their target market for their sales (western citizens) not having enough spare cash to consume and Asia’s consumers not yet ready to step up and take their place. 
So to some degree do companies have themselves to blame?  In its simplest form; if you decide not to pay your target market to be a part of your production or service process and instead give the money to someone else as it’s cheaper but who is unlikely to purchase your finished products or use your services, is it that much of a surprise when the target market decides it can’t afford to buy?  Regardless of how much lower your costs are if you can’t make sales is it a false economy?  Of course we can’t change free market forces and wouldn’t want to, any company paying more would lose out to all the rest who still keep their costs as low as possible but wages do appear to have lagged behind the cost of living in the West for many and if wages aren’t going up then eventually the cost of living has to come down; oh! Isn’t that where we are now?
The latest figures show negative consumer price inflation (CPI) in 14 countries.  In Ireland prices are collapsing at 4.7% annually. In the US they are falling at 1.3% and here in Britain while it still remains positive it is falling.

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