this is London it's the capital city of the United Kingdom and one of the richest cities in the world with an economy worth more than half a trillion dollars meaning that if it were a country it would have the 26th largest economy in the world roughly the same size as norways and for nearly two centuries both in Britain and Europe it's been a hub for high value services like Finance offering some of the highest wages in the region but behind its displays of vast wealth lies a very different picture in 2023 London's councils estimated that
more than 1 in 50 people in the city are homeless this is a figure which has risen by more than 50% in just 10 years which means Britain now has by far the highest level of homelessness in the developed world all this while real wages that is what people take home after accounting for inflation have remained flat for over 15 years this means people are being paid roughly the same as they were in 2008 while the prices of almost all goods and services have increased and Essentials like housing have skyrocketed it's therefore no wonder that
people are beginning to leave the UK at an unprecedented rate a junior professional could earn more than double in New York compared to London with the cost of living only around 1/3 higher because of this every year more and more of Britain's young skilled workers leave the country for a better life elsewhere particularly from Britain's famed National Health Service which is facing a potential Exodus of doctors and nurses due to poor pay overwork and deteriorating working conditions people flooding out of the UK is perhaps a good metaphor for the current state of the British economy
and ironically more people from outside the UK are immigrating to work in Britain each year than ever before whilst it's true that the primary reason of migration is to use the UK's World leading Education Services Research conducted in 2015 found that those leaving the country were significantly more skilled than those entering the nation each year stating that increases in net migration over the last decade have significantly increase the pool of low skilled workers in Britain's economy offsetting skilled workers with less skilled workers is not good for any country as It ultimately means lower productivity and
a poorer quality of goods and services that are offered within the economy so why could it be that a seemingly wealthy country like Britain is seeing a mass Exodus of some of its most talented and Young workers part of it has to do with living standards in the UK becoming worse and worse each year in fact this was the main reason given by Britain's leaving the country and this makes sense as if you remove London's output and population it would shave off 14% from British living standards making the remaining UK perform worse economically than Mississippi
the lowest ranking US state in terms of perita economic performance this all ties into a growing theme that the UK's best days are behind find it and one which is also supported by the data in 2007 the average UK household was just 8% worse off than its peers in Northwestern Europe but in the 15 years that has followed this Gap has grown to a record 20% on present Trends the average Slovenian household will be better off than its British counterpart by 2024 and the average polish family will achieve the same feat by the end of
the decade and these stagnant wages is a burden which is being disproportionately felt by those with lower incomes while the UK's top earners rank fifth for living standards the average household ranks 12th and the poorest 5% rank 15th far from Simply losing touch with their Western European peers last year the lowest earning bracket of British households had a standard of living that was 20% weaker than their counterparts in Slovenia this is part of a growing Paradox that as more and more people move to the UK its levels of public services and pools of skilled workers
are gradually declining win so let's take a look at why this is happening to one of the richest countries in the world and why everyone suddenly wants to leave the United Kingdom before we start I'd like to thank the sponsor of today's video incog if you use the internet as much as me then your data will have ended up all around the web when you make online purchases or create accounts and what's worse is that there are data brokers who are collecting analyzing and selling your data to buyers all over the planet which is a
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is visit incog docomond and use the code invisible hand at checkout to get 60% off an annual plan check the link in the description to get started it wasn't that long ago that Britain was one of the most prosperous and attractive destinations for young skilled talent in the world a feeling which is shared by many Britain too a recent poll found that 60% of respondents view life as being better in the 1990s and 2000s than today this era in particular is looked back upon with Nostalgia for many British people music from bands like Oasis and
the Spice Girls were worldwide hits as the cool Britannia movement swept the country and the end of the Cold War was also adding to a global sense of optimism of course there is always a tendency for people to view the world of the past favorably but the 1990s stand out in particular as they were a period of real economic success for Great Britain despite a rocky start to the decade marked by the turmoil caused from The Fallout by the ERM and a recession in the early 1990s the UK entered an era of remarkable economic resilience
from 1992 onward Britain enjoyed its longest stretch of uninterrupted growth since the second world war driven by a combination of structural reforms effective monetary policies and favorable Global conditions this period often referred to as the long expansion was characterized by continuous GDP growth and significant productivity improvements the financial sector played a pivotal role in this economic success with substantial credit expansion particularly in property lending driving consumer spending and investment regulatory change also made the UK an attractive place to invest meaning the UK retained a positive balance of net income from abroad however in this decade
Britain continued to shift towards a more service-based model of employment and while prosperous it did not provide the broad-based employment that the industrial sector had causing widespread job losses in areas like heavy industry and mining jobs which tended to be located in poorer areas of the country away from cities like London the UK continued to grow in this period however Midway through the 2000s a number of problems were starting to appear and the financial crisis of 2008 exposed and exacerbated these underlying weaknesses in Britain's economic model revealing an overreliance on financial services and a lack
of adequate investment in other vital sectors today the nation grapples with a number of severe issues including an overstretched NHS a housing affordability crisis and aging infrastructure all of which stem from past policies and require urgent attention to secure a sustainable future perhaps the most important issue for people living in the UK right now is that of housing not only are there not enough homes but ones which exist have become unaffordable for the vast majority of the population this has made home ownership for firsttime buyers nearly impossible without an income far above the average or
financial support from the so-called Bank of mom and dad and this shouldn't come as a surprise the UK has consistently built fewer homes compared to the needs of its growing population especially when compared to other developing countries this shortfall is largely due to restrictive planning laws limited government funding for public housing and a prioritization of other economic areas over residential construction ruction over the decades the cumulative effect of not building enough homes has led to a significant Supply demand imbalance in the housing market this is an issue which has its roots in policies of the
past introduced in the late 1970s the right to buy scheme allowed tenants in public housing to purchase their homes at a discount at the time this policy was seen as really Progressive as it made home ownership achievable for those who before could only have dreamt of it and while this policy enabled many people to own a property it also led to a substantial reduction in the stock of social housing and since these homes were not replaced at a sufficient rate the social housing sector shrunk by about 25% since the 1970s Al while the population has
continued to increase with fewer social homes available and ongoing challenges in housing affordability more individuals and families have turned to the private rental sector this increased demand has naturally led to Rising rents as the supply has not adequately kept pace with the demand Rising rental costs have disproportionately affected those on Lower incomes who find fewer affordable options available and usually need to compete on price for what they can afford and what makes all this worse is that house prices have continued to outstrip real wages for well over 30 years creating an even bigger difference in
society between those who own their homes and those who don't housing Supply is of course an issue across a number of Western European economies iies however it's particularly bad in the UK in England there are now 1.4 million fewer households in social housing than in 1980 Al while the UK's Genie coefficient a measure of inequality has been steadily Rising this has led to overcrowding both in the private sector and in social housing and what this means is that on an unprecedented scale more and more households are being pushed into homelessness but one which is less
visible to the broader public temporary housing after declining for several years the number of English households living in temporary accommodation has more than doubled between 2010 and 2023 from 48,000 to 112,000 the highest figure since records begun conditions in these buildings are often atrocious damp and mold are common place as are insects and animal infestations the disruption of being moved from place to place like this causes adults to drop out of work and children out of school further decreasing social Mobility as those unfortunate enough to live in these conditions are even less likely to earn
a higher income in the future these Arrangements also impose enormous cost on local councils which last year spent almost 1.8 billion on emergency shelter a figure that has more than doubled in real terms over the past decade this nightmare scenario is due to three main factors woefully inadequate rates of house building a dwindling social hous housing sector and the erosion of financial support for those unable to afford Market rents and these issues aren't likely to get any better soon as shifts in the UK housing market have disproportionately disadvantaged the youth a significant portion of older
individuals own a second home whereas young adults today is far less likely to own even a single home and are far more likely to rent this change reflects broader economic Trends where stagnant wages contrast with soaring asset values exacerbate in wealth disparities the slower economic growth also means fewer opportunities to advance your career impacting earnings especially during critical early stages in the UK it used to be the case that you could expect to earn more or have a better economic Outlook than your parents however this trend looks to have died as those born in the
1980s have generally earned less by their early 30s compared to the previous generation unable to afford a home and with dwindling wages it's no wonder that some of the UK's most talented individuals are leaving for other countries like the US Australia and New Zealand which offer a quality of life more appealing for ambitious and productive British workers stagnant wages are of course a major factor in this and this is largely thanks to dwindling productivity across the country productivity is the efficiency with which a nation produces goods and services from its inputs labor and capital and
since the financial crisis of 2008 the UK has faced a Stark slowdown in productivity growth before the crisis productivity was growing at around 2% annually however after the crisis this growth has nearly flatlined and notably there have been a significant decrease in investment since 2005 UK companies have invested 20% less than their counterparts in the US France and Germany placing Britain in the bottom 10% of oecd countries this underinvestment has resulted in outdated technology and Equipment reduced Innovation and a shortfall in skill Development Across both industrial and service sectors and consequently the overall efficiency and
Innovative capacity of the UK economy has suffered leading to slower productivity growth and nowhere is this clearer than with the UK's National Health Service the National Health Service or NHS was established in 1948 as a publicly funded Health Service that was free at the point of access since its introduction over 70 years years ago the NHS has become a staple of British life and something which is taken for granted by many people however as time has gone on and especially in the last two decades costs have started to spiral as the quality of treatment and
care provided has declined this is partly because when it was first introduced Britain's population was significantly smaller and also much younger meaning fewer people required Healthcare and treatment but even as taxes have risen over the last decade to record levels Public Services like the NHS are struggling even more than ever the number of people waiting for NHS consultant treatment has more than doubled from 3 million to 7.4 million in the 9 years after 2014 and data consistently indicates that patients treated by the NHS for major health issues such as heart disease Strokes or cancer have
lower survival rates compared to those receiving treatment in most other developed Nations and in 2014 the UK had below average survival rates for the deadliest cancers including the lowest rates among comparable Nations for colon and pancreatic cancers it would be easy to assume that the failure of this service is from years of underfunding whilst this is partly true the NHS has seen a significant increase in funding and staing levels since 2019 and in 2023 NHS funding was 11% higher in real terms than it was in the previous 4 years additionally the number of senior doctors
has risen by 9% and there are 8% more nurses in health visitors even after adjusting for high staff sickness absences so what's the problem despite more funding and more staff the NHS faces Rising costs due to several factors an aging population requires more Medical Care new medical Technologies and treatments are expensive and drug prices are increasing all while people are expecting higher quality Medical Care and in the last few years as inflation has run rampant staff are expecting higher wages which which also adds to the cost these Rising expenses known as health inflation make it
difficult for the NHS to improve services and outcomes even with more resources this presents an issue as in order to provide a good level of care for an increasingly aging population the NHS needs to invest in the long-term future but currently there isn't enough money for this even though funding has increased this is being used to cover the increased maintenance costs of the service which have surged over the last decade meaning there is little to no money left over to invest in the long-term capacity of the NHS and money needs to be redirected to cover
the daily operational costs this underinvestment in the NHS is part of a broader pattern of inadequate infrastructure spending across the UK sectors including transportation and public services also suffer from underfunding leading to inefficiencies and reducing service quality new projects are also significantly harder and more expensive to build in the UK than in other countries and nowhere is this better shown than with hs2 this was a proposed high-speed rail network to better connect North and Southern England ignoring the fact that these rail networks already exist the project was first conceived in 2019 and taking 11 more
years to begin Construction in 2020 by which time the proposed costs of construction had ballooned from 37 to over1 billion all of this only for it to be abandoned in 201 23 an issue which has made many of the existing issues in the UK worse is of course brexit brexit and its effects have been multifaceted and could easily take up a whole video on itself and while the decision by the UK public to leave the European Union in 2016 has undoubtedly made the UK worse off than it was before namely through a reduction of trade
with the UK's largest trading partner the EU it's not the sole reason for Britain's economic decline as many of the hardships currently being faced by Britain are also present in other European economies and Britain's current brain drain crisis is caused by a whole host of other factors namely the desire for New Opportunities and a higher quality of life turning back to the country's favorite decade the focus on immediate economic gains during the 1990s often came at the expense of long-term infrastructure planning and investment although privatization was meant to bring in capital for infrastructure upgrades in
many cases it led to underinvestment is private companies sought to maximize profits rather than reinvest in long-term improvements and now the UK is paying the price and even with the potential of a change in government in the general election it doesn't look like things will get better for a number of years
