Larry Summers might be correct about £ : $ parity

It's particualrly hard to bear when you realise that our minimum wage here is £9.50 for 23 year olds and over..

18-20 year olds.. just £6.83...

Compared for example to...

Alabama$7.25 (Federal, no state minimum)
Alaska$10.34
Arizona$12.80
Arkansas$11.00
California $15.00 for businesses with 26+ employees$15.00 minimum will apply to all employers Annual increases begin 1/1/23
Colorado$12.56
Connecticut$14.00$15.00 effective 6/1/23
Delaware$10.50$11.75
Washington D.C.$15.20
Florida$11.00$12.00 effective 9/30/23
Georgia$5.15 (Employers subject to the Fair Labor Standards Act must pay the $7.25 Federal minimum wage)
Hawaii$10.10
Idaho$7.25
https://www.paycor.com/resource-center/articles/minimum-wage-by-state/
 

The Pound to Dollar rate reached an all-time low of $1.054 on 25th Feb 1985. The fall in the rate was more a function of US Dollar strength than British Pound weakness. A doubling in the oil price led to high inflation in the 1980's. To combat inflation, the US Federal Reserve raised interest rates above 20%. This led to huge international capital inflows into the US and a surge in the value of the Dollar.

In basic terms, £1 is worth more than $1. So at face value, you could say the British Pound is stronger than the US Dollar. However, the value of one currency compared to another is not a true indicator of strength, wealth or power. A better way to measure a currency’s strength is through its relative movement over time. Over the past 50 years, the Pound has halved in value against the US Dollar.

The British pound fell 13% against the US dollar in the two weeks after Brexit. The Pound fell in value as Brexit created uncertainty in the UK for trade, emigration and the legal system going forward.The £ to US$ exchange rate fell 12% within the space of two weeks in March 2020, such was the impact of Coronavirus on the world's stock markets. Investors sold the Pound in favour of the perceived safety of the US Dollar.

It's worth remembering that the collapse of Northern Rock about ten years ago, caused the first run on a UK bank since the 19th century. We recovered, lessons were learned. Stock market jitters, what's new?
 
Here in New York, upstate it is $13.20 an hour and in NYC, $15 an hour. Although in healthcare in upstate NY, we are getting $15 an hour. All hail the US dollar! Hail! Hail! Hail!
 
Not being an economist, wouldn't a devalued pound be an advantage in a global market? The UK's main claim to fame is in manufacturing, and wouldn't a devalued pound make its goods internationally cheaper, and thus more in demand? And wouldn't it make foreign goods more expensive, again, a plus for the home industries?
 
fuzzybuddy said:
Not being an economist, wouldn't a devalued pound be an advantage in a global market? The UK's main claim to fame is in manufacturing, and wouldn't a devalued pound make its goods internationally cheaper, and thus more in demand? And wouldn't it make foreign goods more expensive, again, a plus for the home industries?
Click to expand...
You would think that. U.K. goods and services would become "cheaper", but demand would also theoretically increase, putting pressure on internal pricing of those goods and service. The real issue, is the somewhat de-coupling from the Euro, which represents the UK's biggest trading partner.

The UK has a rather large trade deficit. The added costs of imports will likely outweigh any gain from exports. Given time (a few years), it would rebalance.

On another forum, the question had been posed "does the average American understand the seriousness of the current dilemma Europe is facing, and the impact on the American economy"? The counter was "does the average European understand the seriousness of their current situation"? The answer seems to have been... "the average European has a growing sense of alarm, but far short of full comprehension, whereas the Americans are, as always, oblivious of Europe's woes".
 

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