<p>These are the admittedly somewhat disparate pieces of information gleaned from separate sources that the question arose from.</p>
<blockquote>
<ul>
<li><p>According to The living wage foundation the real cost of living in the UK is <a href="https://www.livingwage.org.uk/what-real-living-wage" rel="nofollow noreferrer">£9 an hour</a>.</p>
</li>
<li><p>Assuming a 37 hour week this comes to £17,375 a year.</p>
</li>
<li><p>According to the <a href="http://www.compareyourincome.org/income_inequality_in_the_united_kingdom" rel="nofollow noreferrer">OECD</a> half those in the UK between 35 &amp; 44 have incomes (not necessarily from earnings) of £17,000 or less.</p>
</li>
</ul>
<p><em>From the OECD link provided tab through to the third page (selecting the age range &amp; nation as you go), then drag the marker on the ring around to the 17,000 GBP point &amp; tab on through to &quot;Where your household stands: In reality&quot;</em></p>
</blockquote>
<p>Put together those statements would seem to suggest half or more of the UK population may not be being paid enough to do much more than subsist (it doesn't but the question stands).</p>
<blockquote>
<p><em>Though it should be noted that the OECD figures are after tax &amp; I believe that the Living Wage Foundation's figures are pre-tax, also that the OECD sight compares like with like, results from one set of circumstances can't be used to extrapolate average results for the whole population.</em></p>
</blockquote>
<p>Some comment on the validity of the information provided is OK of course but the real question is what do current economic models predict as the outcomes for an economy with a disparity like this?</p>

CC BY-SA 4.0
2018-12-27T18:40:02.367Z
What exactly does the phrase "outcomes for an economy" mean?
Giskard
CC BY-SA 4.0
2018-12-27T18:45:10.253Z
@denesp : ^ stagnation, growth, collapse, inflation, deflation, by what % & all the other stuff you normally expect to try to model & predict, what else would you think I meant?
Pelinore
CC BY-SA 4.0
2018-12-27T18:50:22.373Z
@afreelunch : _"let us suppose that the living wage does indeed translate into £17,375 (pre-tax)"_ The calculation I used ((9*37)/7)*365.25 (allowing for leap years)
Pelinore
CC BY-SA 4.0
2018-12-27T19:01:06.843Z
@afreelunch : _"if we plug in 2 children, only 10% earn less than the living wage"_ so 2 "other people living in my household" then? I got 20% so I presume you plugged in a different age to 35-44 as well?, demonstrates well that any single set of circumstances used in that sight can't be extrapolated to the whole population :)
Pelinore
CC BY-SA 4.0
2018-12-27T21:45:17.823Z
Note that the OECD tool in the link talks about household income where as the salary you calculated is per person. The efficiency of multi-occupancy households will thus likely lift the majority above the OECD 'poor' threshold.
Steve Smith
CC BY-SA 4.0
2019-01-05T01:06:32.610Z
@denesp : I fail to see how the question is too broad, have changed it to clarify a little nonetheless, either there are economic models that offer predictions for this situation or there aren't (& if there are they can be listed), it's a simple straightforward question with a simple straightforward answer, if that's not enough then please clarify what more you want?
Pelinore
CC BY-SA 4.0
2019-01-05T06:00:18.587Z
To me, the question seems like "are there models that predict anything", as you did not narrowly define what you mean by outcomes. I have no power to close a question alone, other users agreed it was too broad,  so I am not sure why you are singling me out.
Giskard
CC BY-SA 4.0
2019-01-05T15:05:43.133Z
@denesp ^ just because you're the only one I can be sure to reach with a ping, you commented earlier & the auto correct on the @ name in comments doesn't happen for anyone that hasn't.
Pelinore
CC BY-SA 4.0
2019-01-05T15:12:47.273Z
@denesp so can you suggest a rewording that would satisfy your interpretation of the rules on questions?
Pelinore
CC BY-SA 4.0
2019-01-05T18:01:54.910Z
@Pelinore No, because I am not knitpicking, I honestly don't know what you are asking.
Giskard
<labor-economics><wages>
What predictions do economic models make for an economy where 50% of the population earn less than the cost of living?
Pelinore
# What predictions do economic models make for an economy where 50% of the population earn less than the cost of living?

(Asked by: username_0 on 2018-12-27)

These are the admittedly somewhat disparate pieces of information gleaned from separate sources that the question arose from.

> * According to The living wage foundation the real cost of living in the UK is [£9 an hour](https://www.livingwage.org.uk/what-real-living-wage).
> * Assuming a 37 hour week this comes to £17,375 a year.
> * According to the [OECD](http://www.compareyourincome.org/income_inequality_in_the_united_kingdom) half those in the UK between 35 & 44 have incomes (not necessarily from earnings) of £17,000 or less.
>
> *From the OECD link provided tab through to the third page (selecting the age range & nation as you go), then drag the marker on the ring around to the 17,000 GBP point & tab on through to "Where your household stands: In reality"*

Put together those statements would seem to suggest half or more of the UK population may not be being paid enough to do much more than subsist (it doesn't but the question stands).

> *Though it should be noted that the OECD figures are after tax & I believe that the Living Wage Foundation's figures are pre-tax, also that the OECD sight compares like with like, results from one set of circumstances can't be used to extrapolate average results for the whole population.*

Some comment on the validity of the information provided is OK of course but the real question is what do current economic models predict as the outcomes for an economy with a disparity like this?

**Tags:** labor-economics, wages
> **Comments:**
> **username_1**: What exactly does the phrase "outcomes for an economy" mean?  
> **username_0**: @denesp : ^ stagnation, growth, collapse, inflation, deflation, by what % & all the other stuff you normally expect to try to model & predict, what else would you think I meant?  
> **username_0**: @afreelunch : _"let us suppose that the living wage does indeed translate into £17,375 (pre-tax)"_ The calculation I used ((9*37)/7)*365.25 (allowing for leap years)  
> **username_0**: @afreelunch : _"if we plug in 2 children, only 10% earn less than the living wage"_ so 2 "other people living in my household" then? I got 20% so I presume you plugged in a different age to 35-44 as well?, demonstrates well that any single set of circumstances used in that sight can't be extrapolated to the whole population :)  
> **username_2**: Note that the OECD tool in the link talks about household income where as the salary you calculated is per person. The efficiency of multi-occupancy households will thus likely lift the majority above the OECD 'poor' threshold.  
> **username_0**: @denesp : I fail to see how the question is too broad, have changed it to clarify a little nonetheless, either there are economic models that offer predictions for this situation or there aren't (& if there are they can be listed), it's a simple straightforward question with a simple straightforward answer, if that's not enough then please clarify what more you want?  
> **username_1**: To me, the question seems like "are there models that predict anything", as you did not narrowly define what you mean by outcomes. I have no power to close a question alone, other users agreed it was too broad,  so I am not sure why you are singling me out.  
> **username_0**: @denesp ^ just because you're the only one I can be sure to reach with a ping, you commented earlier & the auto correct on the @ name in comments doesn't happen for anyone that hasn't.  
> **username_0**: @denesp so can you suggest a rewording that would satisfy your interpretation of the rules on questions?  
> **username_1**: @Pelinore No, because I am not knitpicking, I honestly don't know what you are asking.  

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## 0 answers

