Breaking a rule of my moratorium reposting about politics here but... I have argued that minimum wage or even living wage simply subsidises businesses at the expense of the tax payer given how many low paid full time workers still need benefits to provide for even a basic standard of living. Therefore I agree with the Labour Left arguing for a minimum wage of £15 for all workers.. EXCEPT.. ..Unless it is implemented alongside a raft of help for small to medium business e.g. business rates abolition NI employers contributions, cuts a massive reduction in red tape and admin costs, a huge percentage could simply go bust... Say a 40 hour week = £600 pw .. even with 4 weeks unpaid leave that equates to £ 28800 p.a. Currently minimum wage is slightly less than £360 pw equating to 17280 p.a. That is an increase of £11520 per worker. Therefore a small business with say 10 workers on minimum wage would need to find over £115k p.a. extra for the wage bill. There would also be a knock on effect of more experienced higher skilled older workers seeing the pay differential eroded or removed completely giving rise to demands for pay increases leading to pay inflation making businesses uncompetitive. I DO believe that lower end wages in this country are far too low compared to the cost of living and certainly disagree that 'enforced' zero hours contracts (Govts deny they are enforced but we all know the reality) but, once again the Left wing at Conference has only 'half a plan' as they have not announced how they would fund it. Granted that saving on the Benefits budget i.e. UC or whatever might replace it could help fund the costs to business in the short to medium term whilst they adjust to the new reality but where is the detail or even acknowledgment that that needs to be done? In the Global economy and without that help, business costs would skyrocket and the consumer would pay the price and UK would become uncompetitive.
Very much agree with the central tenet of this. Small businesses have largely been forgotten about for a very long time, or bundled into the category of rich overlords that should be taxed heavily, and what some self employed individuals have endured through the pandemic and sole directors, it's one of the unmentioned scandals. While big business has burgeoned and evaded taxes, small and micro businesses are paying a huge proportion of their turnover in taxation and are faced with blue and white tape, on top of just the red. If there isn't support for small business, its extremely difficult in the current climate, with very heavily indebted businesses, to take on board a huge jump in its cost base through employment to simply operate at the level it was previously. Businesses would either just have to shut up shop, or try and operate on or near their existing cost base, meaning reduced headcounts. Theirs obviously the knock on effect in terms of inflation too. We're seeing that increase irrespective at the moment, and that is likely to channel its way through into interest rates and increase rates of borrowing. At a time when the economy is in a very shaky state and could well be subject to more hits over the winter. I hope Labour can shape an offering that appeals to small and micro businesses, given that Sunak has pretty much indicated its the small businesses that will pay for the tory crony covid response.
Cost of living needs to come down rather than wages go up. Put down cost of living and wages last longer. Put up wages and places charge more for things knowing that wages have gone higher.
The cost of living is only going one way, and it isn't down. And its nothing to do with profiteering.
Its a cycle, increase wages, firms increase costs, transport, fuel, commodities to pay for the rise enforced on them, it wont only affect discretionary or luxury items. When that happens staff say they cannot afford to put food on the table ask for a pay rise and so it goes on. Dont get me wrong, a pay rise is great and if you do continually struggle with basic bills then a decent living wage will also be welcome news , until people start saying £15 is not enough.
The cost of living has far outstripped wage increases in recent times - house prices are now unaffordable to many people, if you don't let wages catch up then its going to leave a hell of a lot of people working themselves to the bone for not much reward - if you increase the gap between what you get for doing nowt and what you get for doing a job then it will incentivise more people back into work.
This occurs when you raise taxes from the wrong people, low paid and small / medium size businesses. When resources, materials and products are owned by a monopoly this is what happens. Rent controls need to be introduced for starters, and admin and arrangement fees need to be removed from products. All these keep inflation ticking upwards. Hidden charges provide a false figure on many products and services. New build homes are at silly prices nationally, and once built drive up the price of older homes due to not enough being built in the right areas. Then there's the import and export tariffs, which weren't any issue but now are (not saying the B word). It's the perfect storm, and when you look into the Evergrande story it's even more worrying globally. How much of our money is tied up in this directly and indirectly? Cheery times.
In an ideal world yes ...but how do you achieve that when most infrastructure gas, electric, public transport, is foreign owned or part owned. Supermarkets - more than 50% of our food is imported and raw materials account for much of the cost. The labour costs, i.e. wages and the very thing we are trying to improve relative to costs of living are really the only thing you can change.. In spite of the fact that wages in this country are low, and in many cases lag behind other countries for years, our productivity levels have also lagged behind in many areas of industry albeit a few companies demonstrate high levels of efficiency but mostly foreign owned. Lack of investment has blighted the UK for decades.
I've got a bold idea - how about some sort of single market with our closest neighbours. We could also do some sort of agreement on movement of people, so we don't end up with shortages of key workers like we have now. And maybe throw in an internal energy market to help regulate price and supply to avoid the massive hikes and supplier insolvencies we're seeing. We could call it all something like the Union of Europe. Just an idea like.
The money goes round in circles. Except for the super rich. Make Wages enough to prevent benefits for the able. Benefit system savings to reduce business rates. And assist small businesses. There are ways. I’m no expert. But it would take folk out of the poverty trap . not having to rely on benefits and a feeling of self worth. Sure someone will rip my thoughts to bits. That’s why I rely on the experts to manage it. Not the greedy b’stds though. Gives them a sense of power over the poor.
I agree that wages don't meet the increase in cost of living and that should be for whichever weak party we get in power to sort with the energy/fuel/water etc companies. They won't though. Tradesmen who've done their apprenticeships and served their time where I work get £14 an hour. Nurses receive around £15 an hour too so moving forward, why go through the torment of trying to better yourself when you can do bare minimum and get paid the same or are we also raising wages for these types of jobs. Where does it stop. The tories and labour before them have been too weak to address the imbalance where it should be addressed and the utility industries are laughing in their faces
On the one hand, you've got the people who insisted that the minimum wage would put millions of small businesses out of business arguing that a £15 minimum wage would put businesses out of business - mostly Tories, rich On the other hand, you've got people worried that to support the rise would force price increases so you've got inflationary pressures (and a £1 increase in wages costs the employer an extra 14p for NI and Pension contributions) On the other (third?) hand, the 1% end up with 90% of the money in circulation anyway, so any minimum wage rise would just see the richest get richer... Don't get me wrong, I'd like to see everyone that works not needing to claim UC to live, but it would require significant payrises across the board - why work hard and push yourself for £15 ph when you can get that for any job?
It's thick. It's a self imposed soundbite that the Tory media can now use to again say how out of touch Labour is. The minimum wage for people is currently <£9 of you're over 23. Living wage assumed to be £9.50ish. Saying we're gonna campaign for £15 an hour, effectively doubling the people costs of businesses is just another example of daft student politics introduced by the left of the party hellbent on never, ever being in power again. Mental.
If they'd pitched at £12, with a bit of rates relief for SME to compensate, this could have had popular support. If they could then demonstrate that this reduced dependence on in-work benefits, didn't drive inflation compared to the rest of europe and didn't adversely impact three majority of small businesses, then it would be reasonable to propose further increments. The moonshot figure of £15 and hang the consequences is too risky and plays right into the tories' hands.
In theory, if you had a "universal credit system" there should be no need for minimum wage, because based on your earnings you should be able to claim either a tax credit, or a top up to ensure your needs are met. I don't get this "living wage" idea. A married man who's spouse also works, living in Barnsley surely has a lower "living wage" than a single parent with 3 children living in London? If we were to have a truly fair system, and I don't have the figures to do the maths, but I bet it would work... is to allocate an income to every person in a household, and for the government to pay them it weekly/monthly etc. If their wage is less than this, the government ensures it is topped up. If their wage is more than this they receive the difference every month as well, but the tax rate is exponentially increased so if you earn up to 15% above the per person household income, you're taxed at the usual rate. If you earn between 15% and 25% above the per person per household rate your tax rate increases and you contribute a bit more to the people who need to be subsidised. If you earn between 400% and 500% the per person per income household, you should be paying 75% tax on that. It'll never happen though because too many people like what they already have and don't think they should have to give it up for others, usually citing a reason they read in a billionaire owned newspaper story.
