The UK economy unexpectedly flatlines for a second month, raising concerns about the recovery. Explore the economic cost of toxic workplaces and their impact on productivity and GDP. Discover how China's economic growth outpaced the US under the Trump administration. Plus, delve into the latest US Census Bureau report on household incomes and the widening disparities across racial and gender lines.
Sources:
https://www.theguardian.com/business/article/2024/sep/11/uk-economy-unexpectedly-flatlines-for-second-month-in-row
https://finshots.in/archive/the-economic-cost-of-toxic-workplaces-sebi-work-culture-india/
https://www.counterpunch.org/2024/09/11/under-trump-chinas-economic-growth-nearly-doubled-the-growth-of-the-us/
https://www.washingtonpost.com/business/2024/09/10/household-income/
Outline:
(00:00:00) Introduction
(00:00:39) UK economy unexpectedly flatlines for second month in row
(00:03:15) The economic cost of toxic workplaces
(00:05:33) Under Trump, China's Economic Growth Nearly Doubled the Growth of the US
(00:08:08) Household incomes rose last year for the first time since 2019
Simply Economics
UK Economy Stagnates, Toxic Workplaces’ Economic Impact, China’s Growth Surpasses US
The UK economy unexpectedly flatlines for a second month, raising concerns about the recovery. Explore the economic cost of toxic workplaces and their impact on productivity and GDP. Discover how China's economic growth outpaced the US under the Trump administration. Plus, delve into the latest US Census Bureau report on household incomes and the widening disparities across racial and gender lines.Sources:https://www.theguardian.com/business/article/2024/sep/11/uk-economy-unexpectedly-flatlines-for-second-month-in-rowhttps://finshots.in/archive/the-economic-cost-of-toxic-workplaces-sebi-work-culture-india/https://www.counterpunch.org/2024/09/11/under-trump-chinas-economic-growth-nearly-doubled-the-growth-of-the-us/https://www.washingtonpost.com/business/2024/09/10/household-income/Outline:(00:00:00) Introduction(00:00:39) UK economy unexpectedly flatlines for second month in row(00:03:15) The economic cost of toxic workplaces(00:05:33) Under Trump, China's Economic Growth Nearly Doubled the Growth of the US(00:08:08) Household incomes rose last year for the first time since 2019
- Duration:
- 10m
- Broadcast on:
- 11 Sep 2024
- Audio Format:
- mp3
Good morning and welcome to Simply Economics. It's Wednesday, September 11th. On today's show, the UK economy unexpectedly flatlines for the second month in a row and we explore the economic cost of toxic workplaces. Plus, under Trump, China's economic growth nearly doubled the growth of the US. This coverage and more, up next. I'm David and you're listening to Simply Economics. We start off with some concerning news about the UK economy. According to the latest data from the Office for National Statistics, activity remained flat in July for the second straight month, failing to bounce back after the recent election. The economy grew 0.5% in the three months to July, but the weak performance in the first weeks under the new Labour government came as a surprise to economists who had been expecting 0.2% monthly growth. Here with more insight is our economics correspondent. What do you make of this stagnant economic picture? The economy had been showing some positive momentum, growing 0.7% in the first quarter and 0.6% in the second quarter as it recovered from the mild recession in late 2023. But that recovery seems to have run out of steam based on the latest ONS figures. Of the main economic sectors, only services managed to eke out 0.1% growth in July. Production, including manufacturing, contracted 0.8% while construction output fell 0.4%. So it's a fairly broad-based slowdown we're seeing. There was an expectation that some of the weakness in June was temporary due to the political uncertainty around the election. Is it possible this summer slowdown is still just a blip? It's possible, but it does raise concerns that the recovery is losing momentum. The new Chancellor Rachel Reeves acknowledged the scale of the economic challenges, saying, "Change will not happen overnight, and that two quarters of growth doesn't make up for 14 years of stagnation. She'll be delivering a budget next month that will be closely watched." Some economists caution that the government needs to be careful not to overcorrect with its narrative around potential tax rises, which could dampen business investment and confidence. What's the outlook from the Bank of England? Could this sluggish growth picture prompt them to cut interest rates again? The weak July figures have slightly increased market expectations for another interest rate cut when the BOE meets on September 19th. They just lowered rates last month to 5%. Most economists still expect rates to remain on hold in September, with the potential for another cut in November if growth remains anemic. But today's data does make a September rate cut a bit more likely than it seemed before the ONS report. The Bank of England, like other central banks, is having to walk a fine line between supporting growth and keeping inflation under control. Thanks for that update and analysis of the latest UK growth figures, certainly a challenging economic environment for the new government to navigate. On the topic of economic challenges, a new report is shedding light on the costs of toxic workplaces in India. Employees at the country's capital markets watchdog SEBI have raised the alarm about unrealistic expectations, immense work pressure, and even public humiliation on the job. Here to discuss this further is our economics correspondent. So tell us what exactly are the employees at SEBI saying about their work environment. The situation at SEBI sounds quite dire based on what employees are reporting. They say the key result areas, or KRAs, that are used to measure performance are set unrealistically high to the point that they feel like moving targets that are nearly impossible to hit. On top of that, workers are facing immense pressure to deliver results, and perhaps most troubling, some have even faced public humiliation at work, which has taken a serious toll on morale. Those are some serious allegations. Have the employees taken any action to address these issues with management or regulators? Yes, the frustration has reached a point where employees have actually written to the government to raise their concerns. It's not just a handful of isolated complaints either. Reports indicate there is a long list of grievances that workers want to see addressed when it comes to the culture and treatment they are experiencing at SEBI. Wow, that's a significant escalation. I imagine this kind of work environment must be taking a real toll on employees' well-being and productivity. Do we have any sense of how widespread this issue is in the Indian economy? While the specific situation at SEBI is getting a lot of attention right now, sadly, this is not an isolated incident. Toxic work cultures that breed high stress, unreasonable demands, and employee mistreatment can be found in many industries and organizations. And research shows the costs can really add up. Not only do workers suffer mental and physical health consequences, but businesses see higher absenteeism, turnover, and reduced productivity that can put a significant dent in the bottom line. Thanks for your insights on this evolving story about toxic workplaces in India, we'll be sure to keep a close eye on how the situation at SEBI unfolds and the broader conversations it sparks. Shifting gears to the U.S., former President Donald Trump has made some bold claims about the state of the economy during his administration. He has touted that the country experienced the fastest economic growth in the world under his watch, but do the numbers actually back up these assertions? Here to provide some insight is our economics correspondent, Abby. So what's the reality behind Trump's claims about U.S. economic growth during his presidency? Well, David, while the U.S. economy did see respectable growth under the Trump administration, it was far from being the fastest growing in the world by any standard metric. In fact, China's economic growth significantly outpaced that of the United States during Trump's tenure. From 2017 to 2021, China's economy grew by a cumulative total of 25.4%. In contrast, the U.S. economy only expanded by 9.3% over that same period. Those are some striking differences. How did this growth disparity impact the relative economic positions of the U.S. and China on the global stage? That's a great question, and the data paints a clear picture. As a share of world GDP, which is measured in purchasing power parity, China's portion grew from 16.15% at the start of Trump's term to 18.42% by the end in 2021. Meanwhile, the U.S. share of global GDP actually dipped slightly, going from 15.88% in 2017 down to 15.87% in 2021. So despite Trump's rhetoric, the numbers show that China gained economic ground on the U.S. during his presidency. It certainly seems that the former president's claims about U.S. economic dominance during his administration don't align with the data. Is there any additional context that's important to note here? It's worth pointing out that these growth figures and global GDP shares first appeared in an analysis on economist Dean Baker's Beat the Press blog. Baker highlighted how Trump seems to get very confused when discussing economics and the true state of U.S. growth compared to other major economies like China. The reality is that while the U.S. economy performed respectively under Trump, it was far from the unrivaled leader that he often portrays it to be. Thanks for the fact check and analysis, Abby. Shifting gears now, a new report from the U.S. Census Bureau shows that household incomes rose last year for the first time since 2019 but still remain lower than pre-pandemic levels. This helps explain why many Americans remain dissatisfied with the economy despite strong growth. For more on the key findings, we turn again to our economics correspondent. What stood out to you in this latest data? The census report painted a mixed picture, David. On one hand, the 4% rise in median household income is certainly positive news after several years of stagnation. However, when you dig into the demographic breakdowns, troubling disparities emerge. White households saw 5.4% income boost, while incomes for black, Asian, and Hispanic households were largely flat. The gender pay gap also widened, with women earning just 83 cents for every dollar paid to men. Those disparities are concerning, especially in light of the overall economic growth we've seen. Our families coping with the financial challenges many still face. Inflation has come down from its peak last summer, but the prices of essentials like housing, food, and utilities remain significantly higher than a few years ago. This puts a strain on household budgets, even with the income gains. The poverty rate ticked up slightly as well. However, economists point out that by some measures, this was still a strong economic year with rising employment and workers seeing some wage growth. The White House has touted the economic progress, but has struggled to convince many Americans that they're better off financially than four years ago. How might this census data play into the political debate heading into the election? For many voters, the economy and inflation remain top concerns. The Biden administration is highlighting the income growth for lower-income households in particular as evidence that their policies are working. However, the rise in the poverty rate, even as the official rate fell slightly, shows the economic picture is still complicated. Ultimately, many families are still feeling financial strain despite overall growth, and that perception could be hard to overcome politically. There's certainly a lot of important nuance to unpack in this latest census report on household incomes. Thanks for breaking it down for us. We'll continue to monitor these economic trends as the election approaches. And with that, we wrap up our stories for today. Thanks for listening to Simply Economics. We'll see you back here tomorrow. [MUSIC] [BLANK_AUDIO]