Interesting article on the minimum wage

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Whilst I agree that there should be a minimum wage, and agree with the principal of ensuring people get a fair days say.
I don't agree with this higher than inflation increases that both parties are ideally looking to implement.

I am self employed, I also employ 6 part time staff. I operate in a market that is stagnant, in a village that has an ageing population. I have to keep my prices as low as possible to keep customers coming back.
The minimum wage increase means that I have to either increase my prices or reduce my staff's hours to compensate. Customers don't see this side of the business.

There are many employers still not paying the minimum wage but little is done to clamp down on these.

 

It'll not have occurred to them that increased salaries = increased employers NI into the govt coffers, oh no.

The govt agencies should really do some research into which sectors/businesses are profiteering on the back of cheap labour and which are actually struggling to keep afloat. Cost increases have to be absorbed somewhere.

 

I have just worked out that if I pay myself and my wife (we both do similar hours) the national minimum wage, for all the hours we actually put into the business we would be bankrupt by the end of the year.

 

Would a minimum wage increase severely affect you business? Genuine question, I'm interested, trying to see this from all sides, not having a go. Do you employ many people on minimum wage?

 

Whilst the increase may appear small when it's worked out over the number of staff and hours that I use, it wouldn't severely affect my business to the extent that it would close me down. But what it will mean to me, is that I will have to increase prices to cover this cost.this is as well as the increase in gas, electric, water, business insurance, licence to play music etc etc that have all increased this year by almost 3 times the rise in inflation.

The other affect will be that I reduce the hours that the staff work, making the increase pointless and meaning that the 6 days that I currently work, will probably turn into 7.

Would it severely affect me? Yes. My business? Maybe not severely but yes. My staff? They would see more pay per hour, but less hours so yes.

 

No mate, all mine are employed at above minimum wage - the thing concerning me is this 'living wage' - which seems to be an arbitrary figure plucked out of the air to further some other agenda.

I employ at around that figure, (living wage) for some employees, but if it becomes legislation that the 'living wage' is the thing, and it has to be increased every year what then ? I can't just bang prices up every year to compensate - profit doesn't just go to light my cigars and pay for gold encrusted gates, it actually goes to buy new equipment, invest in new stuff, maybe expansion - but just as we seem to like to portray anyone on benefits as a scrounger - those who argue against that, seem only too happy to tar all employers/business owners with the slur that they are getting rich on the back of the oppressed working classes, which in most cases is complete and utter ********.

Hopefully we've come through one of the worst recessions in living memory, and I'm still here, and haven't had to let anyone go or reduce hours etc - but there hasn't been a wage rise for 3 years and my take home pay is 2/3 of what it was in 2007 - that's how we've survived - if I'm hit even further with more costs on employing people - what's the point ? Just as we seem to be turning a corner, and I can look at pushing on - here comes an election with people who have zero grasp of what it's like at the sharp end pontificating on adding further costs to running businesses.

We aren't all massive multinationals bleeding people dry.

 

Although you could argue that people being paid more money means they have more to spend, so in theory you might get an increase in customers.

 

Here's a little background to how the living wage is calculated.

http://www.livingwage.org.uk/blog/where-does-living-wage-come

My partner runs a small business so I can appreciate both sides of the argument though she does pay the living wage.

One of the main issues with the minimum wage I's that it fails to meet basic living standards and the government then has to in effect subsidise businesses via the tax credit system. The argument being that potentially these subsidies could be either directed towards other priorities or potentially towards small businesses rather than helping the larger multi nationals who exploit the system by paying the lowest they can get away with in the knowledge that the government will subsidise their business via the tax credit system.

Like I said not an easy issue. But if the government moved the money I already in the system towards helping small businesses then it could be successful without putting a strain on small businesses.

http://www.livingwage.org.uk/blog/where-does-living-wage-come

 

What Clownered has said there,I have to agree with...I'm in the same situation my staff get above the minimum wage but I get well below it.
There are a couple of points I'd like to add,a raise only impacts on honest employers...an East european friend of mine tells me that where he once worked they get around it by apparently paying the minimum wage for so many hours..but the workers actually work more hours than they are paid for..eg work 50 get paid for 25...take it or leave it.
The other thing that has struck me is that a rise will allow the Govt to pay out less in Tax credits etc..unless they also raise the thresholds for that too,if I'm correct on that one,it seems both parties are just attempting to save Govt money,rather than any attempt to make the lot of the less well off better.

 

Appreciate the point about govt subsidising wages - but imho, the employers NI should be abolished, and legislation brought in to make sure that money goes to employees instead.

The farce of taxing people to give it them back beggars belief imho.

I just am uneasy about state determined salary etc, which goes beyond the necessary legislation over Health & safety, employment law etc.

 

In theory yes. In practical terms, the people that work generally do so during the day. My business doesn't warrant opening in the evenings.
Most of my customers are retired or pensioners. All of the businesses in the village where I am based have increased prices this year.
Therefore reducing the amount of disposable income

Oh by the way I currently pay over the minimum wage, because my staff are worth it!
Like I say, I don't disagree with it. What I disagree with is above inflationary increases. And as northerner says the "living wage"is very worrying also.

 

Cheers for that

 

I just tried the living wage calculator that JimmyCricket posted above...for some reason you can't calculate if you're married and have kids above school age ...but on calculating that I have no one else in the house..I'm below it by a significant amount

 

If implemented properly the money that is currently used to prop up all businesses via tax credits including Footsie 100 companies many of whom employ people on minimum wage would be redistributed to assist small businesses cover costs so targeting it at those who need it rather than using govt funds to prop up big business with no effect on smaller businesses. Using this method there would be some saving to govt. But without this if it were used just to save money without moving some of the funds to support small businesses it would clearly be unfair

 

If the Government link NI contributions to the tax personal allowance then at 10k the employee would be £22 per month better off and the employer £25 which could be used towards paying an increase in wages.

But that would mean that the government lose out on NI (tax) and we can't have that can we.

I also think that there will be an attack on tax credits as well, but that's just speculation.

Just as a matter of interest how many believe that the basic rate of tax is 20% ?

 

It should be accompanied by an increase in tax on those earning over £1m, so you can have a decrease in your tax.

 

Tom Kennedy should be on minimum wage

 

this never happens,certainly not to small business like ours.

neither myself or my wife earn minimum wage,we earn what we do purely through the amount of hours we do.(we are a village shop).

probably 50% of my sales are for price marked goods,so we have no power whatsoever to increase the price,and if we did customers would just go elseware.

our shop is open from 7am to 9pm every day so in theory I should get at least the minimum wage even if I am not in the shop,because I am still in charge and responsible and the buck stops with me.
if I was on call for say the council or the water board(I say this because I have family in both) I would receive a premium for being sat at home waiting for the phone to ring,when you work for yourself there is no such luxury.
many high street shops are stood empty and one of the reasons for this is the inability of owners to meet the NMW,(I'm on about small one man band type operations here,should we have slave labour,certainly not,but should I be forced out of business because I cant meet the nmw,no.
many shop keepers are earning below minimum wage as are many market stall holders,but after investing my redundancy and remortgaging my house I cant just walk away,the shop will finish up being sold,probably bought by a family where they all work in the shop and live under the same roof.
all political parties are using the minimum wage and its wrong,its also wrong that its imposed on business while we allow imports from countries without any regulation.

 

Yeah I did that too. Doing me and the Mrs as separate.
Don't really know how we survive!