Interesting article on the minimum wage

what sort of business do you have,the circumstances sound just like mine.

 

I own a cafe mate. 32 covers in a small market town just outside Mansfield.
Open 6 days a week. What do you do

 

I own a village store,general dealers in a Barnsley village.

 

the problem is all businesses are classed the same,especially by some mp's,unions and the general public,however they expect such as me to pay the same wages a Tesco,asda and the like is beyond me.
me and our lass do the bulk of the hours,i also do all of the warehousing,the accounts and the paye for the staff(I cant afford an accountant to do this),the hard work is usually done when the staff come in an evening and all they have to do is serve and be nice,just imagine what its like to be on less than an hour than them , given that you took all the risks and take all the flack.
a member of staff recently failed a test purchase on alcohol,despite being trained properly in how to handle and serve it,they even sign to say that they know that they've been trained.This was my first in 17 years of having the business and I was told if it happened again within three months I would be treated as a repeat offender and would have my licence suspended,it makes not a blind bit of difference that it wasn't me or our lass that did it.

 

Yeah I know what you mean. I have been a manager in supermarkets for ten years and been a licence holder, and still am even though my premises aren't licenced.
I have had several staff failed test purchasing. I was an alcohol trainer for Somerfield, and managed to prove beyond all reasonable doubt on all occasions, and never been prosecuted.

Do you enjoy it though mate? The Mrs and I often get home and just crash out, and moan about the amount of work, but after reflecting always think how lucky we are and that we wouldn't work for anyone again

 

I've really enjoyed reading the posts in this thread. Some genuinely interesting thoughts. But one question sticks out, isn't this the realities of being a business owner that goes with the advantages? You've both mentioned being your own boss but, for example, if you are the sole owner then don't you get to keep the profit it makes? Or are you saying that it doesn't make any profit, and is only viable by you working for less than minimum wage to break even?

 

Profit is needed to buy stock, to maintain facilities, improve/buy new equipment and so on - it doesn't just go into the owner's pocket.

Once all that's done, taxes are paid etc, then what's left is yours. The fact of the matter is, that in a lot of SME's the owner is the last to get paid. If things go awry, you have to pay your suppliers, your staff, the utilities, HMRC before you get a sniff. Rightly so, because that's what it's all about, but it's a bit of a different scenario to the one sometimes peddled where the greedy fat capitalist owner is enriching himself on the back of the poor downtrodden worker.

 

Again please forgive my ignorance (these are genuine questions, not loaded), but aren't a most of those things the overheads of the business and seperate to the net profits? Or in the instance of investing profits in more stock an attempt to grow the business and therefore enjoy greater future profits?

 

There's turnover - which is basically all the money that comes in.

Out of turnover you've got your costs - employees salaries, vat, cost of suppliers, utilities, insurance, everything that it costs to run the business. After that you then have profit - your income comes out of that, but also out of that comes new plant, machinery, premises, basically anything that you wish to re-invest in the business. So that actually comes out of profit before you get anything.

That's a vast over simplification, because there's operating profit, profit before tax, net profit, etc, and of course there are certain expenses as an owner you can put through, but any accountant will keep you one the straight and narrow, because believe me, HMRC are very keen on unexplained expenditure...

It's fcking hard, because you don't switch off at 5pm, you don't get a pension scheme, paid holidays or sickness, you are responsible for people's livelihoods and that is a massive responsibility. Conversely you have more freedom than being a paid employee, but you pay heavily for that.

I do it for not having a boss (other than the bank,HMRC, HSE etc) the quality of life and freedom it brings, and the hope that I'll have built something worthwhile to give my daughter a lift when she starts work/uni - but one way of thinking will then want to tax the tits off my daughter if she benefits in anyway from 'unearned' income on inheritance - but that's another debate. Also in the vain hope that eventually I might start earning decent money. When I'm too fcking old to enjoy it probably.

 

That seems about right to me except you did miss out on the regular pay cheque an employee gets.

 

we earn far less than minimum wage,simple as that,we do show a profit and that is our earnings,profits arnt based on what you earn per hour.profits are the difference between cost and sell prices minus your expenses,it make no difference that you work 60 hours + every week.

I'm in business out of necessity,i was an ex miner and when I got finished in the late 90's there was nothing else,my ex wife was also getting laid off because gents were shifting production to sri lanka.

the one question is, is this the reality?,yes,certainly,it doesn't mean that its right,i should not be forced to pay my staff more an hour than I earn,if we don't have a customer in the shop I don't make any money,but still have to pay my staff,there comes a point where we should be able to prove we are unable to sustain the nmw,we certainly shouldn't be forced out of trading because of it.

you couldn't say to a member of staff I'm only paying three quid and hour because 50% of the time you are here you arnt serving anyone.

all my staff are late 40's+ up to the age of 62,their jobs are top ups for their husbands wage(,dont jump down my throat and tell me it makes no difference they shouldn't be exploited,) many small businesses like ours rely on these people so we can even be in existence,the option if we get the wage rise being touted about is that I've got to either make another 50 quid a week or save 50 quid a week,well I cant magic customers out of thin air so I've got to save it and even to a small concern like ours the biggest weekly outlay is wages so that is where its got to be saved,so staff will have to stand eight hours and either me or our lass will have it to do.You cant close the shop at slack times,because once you do that its a slippery slope.
our profits have never risen with inflation,each year the nmw goes up and each year we earn less,profits are less and less each year in that the manufacturers and suppliers need to maintain their profits,for example the chronicle went up by 10p a few week ago and there was nothing in it for the retailer,(only flack from our customers) so now our overall margin takes a hit again.
you may ask why I stick it out,well I've 15 pins in my leg,6 in my arm and oesteophytes in my spine,i've also had cancer so it would be a long shot that another employer would take me on(I actually went back into a small mine in 2007 and lasted about 9 months,my back just wouldn't take it),I did this to keep the shop afloat,however while I wasn't here I had staff fiddling the lottery to the tune of 150 quid a week.

 

Hehe, thought I'd implied that....

 

Cheers for that. I am a big supporter of SMEs. Interestingly (from experience) it is incredibley difficult for any local authority (despite their wishes) or government department to procure an SME which is telling as to where government actually stands on the issue of big business.

I work for a living wage employer. I believe in the living wage because I don't think the situation is healthy where people can be legally paid less than enough to ensure they are not in poverty, and I don't think our economic system that effectively uses benefits to top up those low wages makes sense. Particularly when the biggest winners are large corporations. But as Jimmy Cricket's post says this has to be acheived through ensuring large organisations and corporations are properly taxed to reduce the burden on SMEs to afford it.

The key thing is that you are obviously a considerate employer. The trouble is unless wages are regulated to some extent then how do we make sure people are paid properly and not exploited by those that aren't considerate, because if we trust free-market capitalism to do so then we really are ******.

 

what do you suggest for firms like ours that simply cannot sustain these rises?,

 

by the way,free market capitalism is all that will be left if we cant sustain small business,only the biggest companies will be here and their grip on the monopolies will be greater.
a sole trader should have a say in the amount they can or cant afford.

 

It's a simplistic view but I'd abolish employer's NI, and legislate so that the revenue goes to employees, hopefully lifting them out of the income levels where they receive benefits.

Taxing people to give them money back is just bonkers, but I believe that was deliberate policy under Labour to portray themselves as a caring govt - 'ooh look how much we give you' - a more honest system imho would be to get rid of NI altogether, and have a far more progressive income tax system that tries to not penalise people at the margins for earning more. I wouldn't tax anything on the first £12k of income, but would have far more bands than the bizarre system that says someone on £45k pays 45%, the same as someone on £450k pa. I know it is actually different in money terms, but I'd have 10% tax up to 30k pa, 20% up to 50k and so on. That will get holes picked in it, but I just think we have to be more progressive, and stop using tax as a punishment.

 

I'm an employer and thankfully we are in a position to pay well above the living wage. However if some of my clients were to pay a living wage to take their employees out of poverty it would place the employer into the same level of poverty. Worse than that the employer may have to cut the hours of the employee to afford the increase. Even worse the employer jacks it in and everyone is a loser.

Also why is it the small employers responsibility to lift people out of poverty ? Surely that is the government's responsibility and therefore a system of tax credits is appropriate ?

I am posting this mainly in defence of SMEs not the large employers.

 

I'd suggest that the issue of wages is looked at in its entirety. Do I think it's right that the government props up an employer like Capita through the tax credit system who pay minimum wage knowing their employees cannot afford even the most basic of things but the taxpayer will pick up the bill no. I'd say the money currently being used to pay across the board tax credits could be better spent allowing SMEs to pay the living wage and enforcing it for bigger firms who pay their chief execs millions but their employees poverty wages. So for the SME there would be no change as the increases could be funded by the money saved from tax credits.

Stop all tax avoidance schemes and pursue all tax avoiders with real determination. Again use the extra money this generates to help SMEs and employees.

When my missis started her own business the key thing for her was independence and being free of bosses. She took the decision to pay Living Wage as she felt that was fairest. In terms of money per hour she probably earns less than her employees. But if you were to Ask her I'd she was happier and more satisfied now than when she worked for others she would say yes and that money in itself isn't everything.

 

I agree in principle, although I'd also tax at a higher rate than you are suggesting at the lower levels too. But then I believe in more taxation which is probably about as popular as my views on Keith Hill. But I hate the argumnet that public services are unsustainable. They aren't. We just need to pay more for them. Or not waste the taxes we have on Iraq, Trident, the Royal family etc etc.

 

Err tax rate at £45k is 40% and increases to 45% at £150k... no honest, no need to thank me.

Also... Shhhhhhhh don't tell the public that NI isn't just another form of tax, they'll realise that the basic rate of tax is not 20% but is actually 32% .... oooo and that the government takes another sneaky 13.8% tax errr NI as well.