Following the budget announcement in the UK, why is the media obsessed with the predicted growth being 0.2% lower, instead of applauding the much needed investment in our public services? Does it really matter that much?
The tax income of the government is a percentage of the GDP, and taxes are in the end where money for investments into infrastructure and other stuff comes from.
If investments must be done regardless, it means the government has to borrow money and pay it back plus interest in the future, which again is paid for with tax money.
So if the GDP sinks, future tax income must increase to balance it - either through an increase in GDP down the road, or through higher taxes.
A reduction in GDP also means that either local consumers aren’t buying as much, or exports are shrinking, both of which are negative indicators for the local labour market and lead to layoffs.
So… Regardless of county, I would say minimum wage workers should not worry about the economy. Instead put that energy into finding a career path of some sort.
That’s not me bashing minimum wage workers, it’s just … the best thing a minimum wage worker can do to improve their circumstance.
Worrying about the GDP or stocks or anything else isn’t particularly helpful, especially if you’re living paycheck to paycheck (which at least in the US where I live, most minimum wage workers are).
Even for middle and upper middle class, worrying about GDP growth and how the stock market is doing day to day (unless you’re on the verge of retirement and trying to time cashing out stocks) is not a particularly helpful exercise.
Maybe it has some abstract effect on what social services you get or whether your employer survives another year… but you can probably find better indicators of that (e.g. in the days where computers were reducing paper usage, it should’ve been increasingly obvious that working at the paper mill probably wasn’t going to be a great long term plan).
Individualism to it’s core. The only reason people with minimum wage are struggling is because rich white guys always told them to not worry about it, just try to find a better job. ( While worrying about stagnating minimum wages groth, privatizing government programs, inflating bubbles so they can pop and deregulating protections)
Nah, don’t worry about it.
Adding to what everyone else said, while GDP growth in one year doesn’t really matter much except if it’s really big or negative (i.e. shrinking economy) over time it can lead to big differences between different economies. No or little GDP growth is what we call a stagnant economy and for what that looks like in a first world country take a look at Japan. In short, though, it’s not a fun time.
