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New national minimum wage

New national minimum wage

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The national minimum wage increased to £6.19 last Monday for all workers who are not self-employed over 21. 

We're writing a piece on Employment Law reform at the moment and we want to know: how does this affect you? What are your views on this? 

Replies (117)

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Teignmouth
By Paul Scholes
03rd Oct 2012 21:17

I'm with @billybragg

My thoughts go to humans at the other end of the  UKII (UK Inequality Index) and their value to society in comparison to workers on £6.19 ph (11p more than last week), but best not go there.

So, per Billy, how about a living wage?

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Time for change
By Time for change
03rd Oct 2012 21:44

I'd like to see a

politician, advocate a minimum hourly rate of £10.00.

I'd also like to see;

a proper education for all, no matter what the background. Home economics in the curriculum including a meaningful education in financial matters.

Do you honestly see any political party advocating any of my thoughts?

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By petersaxton
04th Oct 2012 06:16

We can increase the national minimum wage as high as you want

but it will mean that more people will not be able to work and the rest of us will have to be taxed to the hilt so that they can sit at home doing nothing.

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Replying to David Heaton:
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By andy.partridge
04th Oct 2012 09:29

Furthermore

petersaxton wrote:

but it will mean that more people will not be able to work and the rest of us will have to be taxed to the hilt so that they can sit at home doing nothing.

I'm with Peter. We live in global economy. How can firms expect to compete if there is a mandatory increase in their cost base? Only if there is corresponding relief in another area, eg. employer's NI. Everyone deserves a living wage for working, but we have to protect the conditions that maintain and create jobs.  

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Replying to Andy Dalton:
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By B Roberts
04th Oct 2012 14:41

Compete with whom?

andy.partridge wrote:

petersaxton wrote:

but it will mean that more people will not be able to work and the rest of us will have to be taxed to the hilt so that they can sit at home doing nothing.

I'm with Peter. We live in global economy. How can firms expect to compete if there is a mandatory increase in their cost base? Only if there is corresponding relief in another area, eg. employer's NI. Everyone deserves a living wage for working, but we have to protect the conditions that maintain and create jobs.  

Compete with whom ?

If you mean China, then I have no desire to compete with a country that pays children a couple of USD a day to produce goods (not that we would physically be able to compete, thankfully).

 

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Replying to David Heaton:
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By B Roberts
04th Oct 2012 14:39

Wasn't that the argument when NMW was first introduced ?

petersaxton wrote:

but it will mean that more people will not be able to work and the rest of us will have to be taxed to the hilt so that they can sit at home doing nothing.

 

Wasn't that the argument when the NMW was first introduced ?

I don't recall an increase in unemployment as a result.

In my simple economic mind, if people earned more then they could spend more which would require people to provide more goods and services, thus generating jobs.

 

 

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By Steve Holloway
04th Oct 2012 09:48

There can be no winner in this argument!

The minimum wage (basic state pension / unemployment benefit etc etc) is not enough to live on in an expensive country like the UK.

The minimum wage is already too high to enable this country to compete in a global labour market.

Just pick the argument you feel most comfortable with and get on with your life.

 

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By Jekyll and Hyde
04th Oct 2012 09:52

I personally think is it discrimination in the workplace...

.. and someone should challenge it.

Say you are an employee being paid £6.50 (or £7.50 or £8.50) per hour and you have been informed there is a pay freeze this year as there was last year. Now someone that was being paid £6.08 has been given a pay increase whilst all other staff have not.

Where is the fairness for the employee being paid £6.50 and where is his/her incentive to work in the favour of the employer. Is his/her work any less deserving of a annual pay increase than the employee on £6.08?

This would go all the way up the sprectrum of pay. Why is the employee being paid £6.08 deserving of a 1% pay rise when an employee on £21,000 isn't.

I would write more, but it may only offend people here

 

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By silicondale
04th Oct 2012 10:07

I'm not with Peter and Andy

It's obscene that we have such wealth inequality in what is supposed to be an enlightened civilised society. The red warning lights flash when you get apparent agreement to this, followed by a "but". Andy's "...but we have to protect the conditions that maintain and create jobs" means "... but no need to do anything about it in case it upsets the rich people who control everything".

If this is what unbridled capitalism leads to, then we have the wrong economic model. Soviet Communism might have failed, but that doesn't condemn all socialism. What is wrong with something more like Scandinavian-style social democracy - or the sadly short-lived 1968 Czech model of "socialism with a human face"? Serious restraint at the top, and keep people well above poverty levels at the bottom. High taxes but also universal benefits. Not perfect, but much better than we have now in the UK. And evidence also that it makes for an overall happier society. You don't see any mass exodus of Swedish wealth creators to foreign tax havens. So it isn't perfect - no system can be - but surely better than red-in-tooth-and-claw capitalism that gives us Fred Goodwins and arrogant posh boy chancellors who delight in letting them get away with it (and give them a nice 5% tax cut as an added bonus).

A simple rule on pay multiples might suffice to start with - the highest paid employee of a company should not receive more than 5 times (in total, including bonuses, dividends etc) more than the lowest paid. And apply this across the entire economy. 100% tax (and penalties?) on anyone who breaches it.

And enough of this myth that just because somebody is rich and sits on a company's board of directors he(usually) or she is magically a "wealth creator". Rubbish. The wealth creator is the one who actually does the work, who actually makes things - it's the production line employee. Just a pity that none of our main political parties now understand this.

 

 

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Replying to Haemorrhoid:
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By Jekyll and Hyde
04th Oct 2012 10:24

.

silicondale wrote:

And enough of this myth that just because somebody is rich and sits on a company's board of directors he(usually) or she is magically a "wealth creator". Rubbish. The wealth creator is the one who actually does the work, who actually makes things - it's the production line employee. Just a pity that none of our main political parties now understand this.

I agree, in a lot of the cases it is your slightly above minimum wage worker - medium rate pay worker (£15,000 - £50,000), who appears to be getting a very bad deal with things at the moment (as well as hstorically). Where are their rewards for the hard work they have put in over the last few years for keepingthis economy going. Why are they not entilted to a 1% pay reward.

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Replying to Haemorrhoid:
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By andy.partridge
04th Oct 2012 10:51

Spoiled by extremes

silicondale wrote:

It's obscene that we have such wealth inequality in what is supposed to be an enlightened civilised society. The red warning lights flash when you get apparent agreement to this, followed by a "but". Andy's "...but we have to protect the conditions that maintain and create jobs" means "... but no need to do anything about it in case it upsets the rich people who control everything".

And enough of this myth that just because somebody is rich and sits on a company's board of directors he(usually) or she is magically a "wealth creator". Rubbish. The wealth creator is the one who actually does the work, who actually makes things - it's the production line employee.

Let's get something straight. Not all employers are blue-chip multinationals, not all employers are rich. On the contrary. You appear to be frustrated by the shameful antics of a few, but the vast majority of employers are SMEs and their ability to flourish would be severely hampered by a minimum wage of £10/hour as was suggested by Time For Change.

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By petersaxton
04th Oct 2012 10:38

Rules are madness

"A simple rule on pay multiples might suffice to start with - the highest paid employee of a company should not receive more than 5 times (in total, including bonuses, dividends etc) more than the lowest paid. And apply this across the entire economy. 100% tax (and penalties?) on anyone who breaches it."

So who could somebody like Andy Murray employ?

If he gets £10m per year then he would have to pay anybody who worked for him £2m per year.

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By ShirleyM
04th Oct 2012 10:45

Job creation?

Just a little bugbear of mine, but quite often the successful 'wealth creators' do the exact opposite. They make massive redundancies, work their existing employees into the ground, but this improves profits for the shareholders who are so delighted with the results that they vote through a massive bonus for the 'wealth creator'.

OK - this isn't always the case, but it happens too frequently, and will continue to happen while ever there is mass unemployment. People are being treated appallingly by some employers, for very little reward, but it's that or the dole.

Anything that will create new jobs is good news in my book, and hopefully it won't be at minimum wages.

I would also like to see something along the lines of normal multiples for the highest and lowest eamers in a company. I would maybe allow low/high earnings outside the recommended limits, but the outsiders must be reviewed on an annual basis, and the reason for the difference must be explained, and justified.

I would also outlaw golden handshakes for people who have failed in their duty, or turned a blind eye to illegal activity within the company.

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By silicondale
04th Oct 2012 11:21

Sure, Andy - not all employers are rich. I have been in business myself for over 30 years, all in the SME sector (in fact, S rather than M), but I would find it shameful to have to pay anyone as little as the NMW in order to make the business successful. To pay someone below a living wage, and then for yourself to enjoy the fruits of the business, modest though they might be, is as much exploitation as the worst excesses of those that ShirleyM describes.In effect, you are expecting the State to pick up the tab (in the form of tax credit and other benefits payments) for your own miserliness. Your business 'succeeds' only because of this hidden subsidy.

If you can't make your business model work without relying on NMW labour, then you don't have a business model. This is exploitation of just the same sort that the Fair Trade movement is working to end in developing countries. What price human dignity? If we all have to pay a little more for our plums or cabbages, so what? It means that we have actually been paying too little - and perpetuating this exploitation.

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By petersaxton
04th Oct 2012 11:28

Regulation like this doesn't work

When landlords couldn't get tenants to leave due to the laws in the 1970s it meant that nobody rented their property out because they could never get it back. People couldn't live anywhere. Now there is a more flexible market, if a tenant loses their flat or house they can find another one easily. 

"And enough of this myth that just because somebody is rich and sits on a company's board of directors he(usually) or she is magically a "wealth creator"."

What has this got to do with the minimum wage? How many rich people are on company boards? 

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By petersaxton
04th Oct 2012 11:39

My example

I assume my example demolishes the theory of multiples. I would expect that companies would be organised in narrow wage bands to get around the legislation leading to even greater inefficiencies.

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By petersaxton
04th Oct 2012 15:01

Simple economics?

 

“I don't recall an increase in unemployment as a result.”

You will find that economics is more complex than you think. There are many factors that affect unemployment over a period and you can’t look at one factor and say that is the sole cause of the change.

“In my simple economic mind, if people earned more then they could spend more which would require people to provide more goods and services, thus generating jobs.”

If employees earn more then, other things being equal, the employers will be earning less so there will be no change in demand. In any case, it also matters what people spend goods on and which countries these goods come from. Please don’t rely on a “simple economic mind” because you can get an awful lot wrong!

“Compete with whom ?

If you mean China, then I have no desire to compete with a country that pays children a couple of USD a day to produce goods (not that we would physically be able to compete, thankfully).”

Why are you choosing China? People in this country are competing with the whole world.

If you want to use a “simple economic mind” we can try. Say there are only two countries in the world: UK and China. China pays children a couple of USD a day to produce goods and therefore can charge a lot less than the UK. Everybody in China and the UK wants to buy Chinese goods (except you but you don’t have any money because everybody is buying everything from China and you in the UK can’t sell anything) and nobody buys UK goods. I’m sure you will understand what will happen in this very simplistic world. I realise that not everything bought is goods that can be sent around the world but there's still enough to make a massive difference to wealth.

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Replying to Tim Vane:
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By B Roberts
04th Oct 2012 15:06

Thanks

petersaxton wrote:

You will find that economics is more complex than you think.

There are many factors that affect unemployment over a period and you can’t look at one factor and say that is the sole cause of the change.

 

Thanks for the lecture Peter.

Ps - in your first post you said "we can increase the national minimum wage as high as you want but it will mean that more people will not be able to work and the rest of us will have to be taxed to the hilt so that they can sit at home doing nothing."

Even my simple economic mind can see the contraditction in your later comments.

 

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By petersaxton
04th Oct 2012 15:28

My pleasure

"Thanks for the lecture Peter."

I could see you needed it.

"Ps - in your first post you said "we can increase the national minimum wage as high as you want but it will mean that more people will not be able to work and the rest of us will have to be taxed to the hilt so that they can sit at home doing nothing."

Even my simple economic mind can see the contraditction in your later comments."

I can't see any contradiction. Can you explain it to me please?

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Teignmouth
By Paul Scholes
05th Oct 2012 08:53

National Maximum Wage

For many in our industry where "profit" is the end game to so much of what we do and concentrate on, it is difficult sometimes to stand back and see that there is another side.

The balance between wage & profit (disregarding owners' remnueration as an expense) has been at the heart of economic & political debate for the best part of 200 years and in practically every bit of research done, when the gap is wide you get a sick economy & society and when it is in balance, you get relative health & prosperity.  Just Google "economic inequality" and dip your toe in.

In times gone by, say in the Victorian era, when there was huge inequality the situation was rescued to a certain extent by ethics where the wealthiest & most powerful felt an ethical obligation to do something about it.  This lasted until maybe 40-50 years ago in terms of what some have called the "shame gene" where the economically powerful were prevented from abusing their position but this was chucked out in the 80/90s.

Today therefore we are probably as unhealthy as we have ever been and worse, we have seen the rise of a new strand of wealth, one that just feeds of others, which, unlike earlier generations, doesn't actually make or do anthing, it just plays with the wealth of others and those at the top withdraw it from society and sit on it for themselves.

My own view is still that the only way to right this imbalance is to bring ethics back into our business world.  Whilst it's a human attribute it doesn't mean it can't be taught or rather brought back out into the light from where many have hidden it.

This could take a long time and so I can see the logic that if we belive in a minimum wage as being one step to correcting the imbalance then why not a maximum wage?

Around 20 years ago the pay of your average senior exec of a FTSE 100 company was 25 times that of the average worker in the company, by 2008 this had risen to 120 times.  Surely accountants can see there's something not right in that stat? 100 years ago J P Morgan was quoted as saying that the top executives in a corporation should not earn more than 20 times the lowest paid worker.

A NMW, from whichever end, is a clumsy way to go about things but if it brings the facts of where we are out into the light of day then maybe it will make people question their own ethics?

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By petersaxton
05th Oct 2012 09:24

Ethics or obsessions?

Some people are just obsessed with making out that anybody who is rich is bad and anybody who sits around on benefits is being oppressed by the rich. I would much rather see a sensible debate in what can be done than people trying to make out they are sensitive souls who have a social conscience.

A NMW is more than just clumsy, it is downright dangerous because it stops people from working and then making progress later.

People scream about the pay of senior management of FTSE 100 companies but they don't seem to suggest anything that has a realistic chance of success. The problem is that these people form a cabal who plunder the wealth of shareholders. I think that one country on it's own cannot deal with this problem. The vast majority of these companies could change to another country which had more favourable laws. We've seen this with boats and I don't see anything to stop companies doing the same thing if needed. We need international agreement of some sort.

I also see a problem which nobody has been willing to accept - OK they do accept it but it makes their argument so ridiculous that they choose to ignore it. I mentioned that somebody like Andy Murray couldn't employ anybody on less than millions of pounds a year if some of the loonier suggestions were put into practice. If I was Andy Murray and I couldn't employ a chef or cleaner on anything less than five million pounds a year I would think the country had gone mad and go somewhere that has more sensible laws.

Obviously, this discussion has nothing to do with the real world and more to do with people trying to impress on others how wonderful they are for being thoughtful and considerate. If anybody has any realistic suggestions to solving the problems raised it would be good to hear them.

 

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Replying to carnmores:
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By B Roberts
05th Oct 2012 10:25

??

petersaxton wrote:

Some people are just obsessed with making out that anybody who is rich is bad and anybody who sits around on benefits is being oppressed by the rich.

I am not sure I understand what "people" you are referring to ? - I don't come to the same conclusion from reading the answers above. 

Trying to get back on topic, the OP asked for peoples views on the increased NMW - I do not see how / why you made the link to "anybody who sits around on benefits".

 

 

 

 

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Teignmouth
By Paul Scholes
05th Oct 2012 09:42

Obsessed & screaming?

Ouch, seems like I hit a nerve there Peter. 

I'm way passed obsessed & screaming, and certainly not pointing fingers at any one wealthy individual, but more, questioning a system that allows, and even promotes, a situation where a tiny proportion of society (that dreadful S word) can wield a completely disproportionate influence and power over others merely because of their financial wealth, Jeez Peter I can't believe I'm having to write this stuff down?

As far as your infatuation with Andy Murray is concerned, I have no axe to grind over his wealth as I haven't the foggiest what he does with it or what he will do with it in the future, but certainly, I would frown on anyone paying less than a fair wage to someone else if it helps them scale new heights, say by teaching him to play with a recquet in each hand and one in his mouth?

Using numbers like 5 times or 20 times for high low wages is, I agree (and as I indicated) not the perfect answer but merly by suggesting that there should be a mechanism to judge these things may open people's eyes to how far down the wrong track we have gone?

 

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By ShirleyM
05th Oct 2012 10:15

A business needs good management AND good employees

With most successful businesses the main assets of that business are it's staff. Employers spend a lot of money recruiting and training employees, so why put so little value on them?

The employees are just as vital to a business as the management, however, in these days of high unemployment they are easily replaced for someone cheaper, so the downward pressure on wages is rife.

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By Steve Holloway
05th Oct 2012 10:23

Why do these debates focus on the extremes?

The gap between the top 5% and the bottom 5% may indeed be widening but to be honest that is largely acedemic argument chosen by the left who have been in terminal decline for the last 30 years. It means little to the rest of us in the 90% (in 2008 the 95% percentile started at about £65k - so not exactly vast wealth!). So, yes there are 6,000 millionaires of thereabouts but to continue to obsess about them and make extrapolations to the rest of society is simply nonsense. The truth is most people rub along OK and are significantly better off that they were when I was growing up in the seventies. That is also why the politics of envy and breast beating has never been able to take a foot-hold since then. It is not some conspiracy of the wealthy elite but rather the wish of the majority who do not want politicians dictating what the maximum is that they could be allowed to earn if they do well.

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By Knight Rider
05th Oct 2012 10:31

National Minimum wage

 

An NMW is state imposed tyranny - an often unwelcome intervention in negotiation between employer and employee.

Paradoxically those on low incomes above the minimum wage are left worse off when the NMW rises where they are in salary sacrifice schemes.

Lets sweep all this silly legislation away ,get rid of the bureaucracy,have lower taxes and let people negotiate their own contracts.

 

 

 

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By silicondale
05th Oct 2012 11:08

Peter - "The vast majority of

Peter - "The vast majority of these companies could change to another country which had more favourable laws."

This is the same tired old argument in another guise. "We mustn't increase tax on the wealthy (aka the 'wealth creators') because they might all take their money and go and live elsewhere".

And yet it's supposed to be perfectly OK to tighten benefits rules on the poor, or increase their taxes, or hold down their NMW to poverty levels. They aren't about to run off to the Cayman Islands, are they?

It's OK to make the rich richer as an "incentive" for them to create more wealth (for themselves?). Surely the same rule applies equally well to the not-so-rich? Or are they supposed to be incentivised by suffering more taxation / lower NMW / benefit cuts? Are we really in two nations with two entirely different sets of economic logic?

If there really is such a risk that 'these companies' would run off overseas and close down in the UK - there's a very simple answer: nationalise them. I know that Ed's "one nation" Labour have renounced clause 4, and steered well clear of the obvious demand this week for taking the railways back into public ownership, but they do at least still sing the Red Flag. There must be some socialists left there! This is (partly) a tongue-in-cheek suggestion. However, there really are plenty of answers that would work without full-scale nationalisation. And is the domicile of a company's head office or nationality of a company's shareholders really that significant? Look at Toyota, Nissan, and Honda - all very successful UK manufacturing businesses - using parts and services supplied by UK companies.

 

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By Old Greying Accountant
05th Oct 2012 11:14

A couple of points ...

... !

Without getting in to the should there/shouldn't there be a minimum wage, it seems to me slightly (actually very) ridiculous that any one working a full week on the minimum wage should have to pay tax!I am not against people getting filthy rich, but when they do so at the expense of others I do have a problem. There are many businesses that could well afford to pay a living wage and still return a good profit. If they did so the country as a whole would benefit - and consumers would have more to spend making them more profits in the long term. Half the problems with the recession are due to the fact people have no money to spend because their jobs are now being done by children in third world countries for pitiful wages. The ultimate end of chasing the cheapest raw material means you end up shooting the golden goose, as the market you are selling to can no longer afford your products as you have taken their jobs away. If you think as businesses as farmers and customers as their livestock, if you don't feed the animals they die - businesses need to focus on nuturing their customers rather than exploiting them, better to keep and maintain a customer base than to continually hace to find a new one. Less is invariably more, and short term profit maximisation leads to boom and bust and the misery that brings. In my simplistc and naive opinion.

 

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By Steve Holloway
05th Oct 2012 11:12

The NMW provides employers with a legal cartel

The NMW dominates the salaries paid across industries such as retail. By pegging it at that level and knowing that there is llittle point in someone moving from Asda to Morrisons, the supermarkets are free to fix pay rates without being accused of anti competetive practices.

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By justinelaws
05th Oct 2012 12:20

It has resulted in some employees getting a larger pay rise in percentage terms than others with us.

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By Old Greying Accountant
05th Oct 2012 12:40

After thought ...

... unfortunately, without besmirching the silent majority of workers, there is a significant minority who are rock solid about a fair days pay, but a little more forgiving when it comes to a fair days work and this has a detrimental effect on everyone else

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By petersaxton
05th Oct 2012 15:02

Don't rely on the rich if you want tax revenue

 

You could say that the nerve is the one that can see people who want to legislate the country out of existence because of their jealousy of rich people.

“Using numbers like 5 times or 20 times for high low wages is, I agree (and as I indicated) not the perfect answer”

It’s more than not the perfect answer, it is downright ridiculous. By all means make suggestions but if they are ridiculous they will get shown to be as such.

If the country brings in rules like that there will be various ways to get round them and/or the country will be shunned by anybody who does anything useful. This country will then end up being a home for the lazy while anybody who works hard will leave because of pointless legislation and tax rates.

B Roberts: You seem happy to comment but will not answer simple questions. You said: “Even my simple economic mind can see the contraditction in your later comments." But when I said: “I can't see any contradiction. Can you explain it to me please?” you have chosen to ignore my question. Is it because you can’t come up with a sensible answer?

I don’t understand silicondale’s obsession with the rich. They pay very little tax because they are usually non-doms or resident abroad. I am thinking about the percentage of income that is paid in tax by the majority of hard working people. Nationalisation may be his solution but I think that the majority of people in the UK realise that it is not acceptable.

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By mwngiol
11th Oct 2012 09:21

Bit late

I'm a bit late seeing this thread, but I have one simple question.

How would those who are against a NMW propose to get around the problem of employers paying child/slave labour type wages?

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Replying to lionofludesch:
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By Old Greying Accountant
11th Oct 2012 09:54

They are probably ...

mwngiol wrote:

I'm a bit late seeing this thread, but I have one simple question.

How would those who are against a NMW propose to get around the problem of employers paying child/slave labour type wages?

... those who buy products made in third world and emerging economy countries in unethical and exploitative conditions!

It ios all well and good having all these "rights" and legal entitlements, but as is proven, manufacturers will move somewhere cheaper, or competition from such risks making UK business unviable.

The long term, big picture (IMVHO) is that this is extremely short-sighted as the thirst for short term profit maximisation will eventually kill the golden goose and they will destroy their own markets!

My own view is that despite big businesses best efforts, eventually labour rates and conditions will equalise - which will mean ours falling and meeting the others coming up. Then price won't be the over-riding factor and such things will be more evenly distributed worldwide as teh biggest savings will be made by manufacturing near to market - especially as transport costs will continue to rise.

Alternatively, and equally possibly, if big business can bring it off, there will be a switch and we will be the third world cheap labour making goods for the rich markets of Asia!

A thought I had was that we all want jam today, but - you have to grow the fruit first!

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Replying to lionofludesch:
By petersaxton
11th Oct 2012 10:27

Easy

mwngiol wrote:

I'm a bit late seeing this thread, but I have one simple question.

How would those who are against a NMW propose to get around the problem of employers paying child/slave labour type wages?

There's already legislation stopping children being able to work.

If there are better paying jobs around people can always change jobs.

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By andy.partridge
11th Oct 2012 09:47

Who is against it?

I think there are people who are against a significant rise in NMW but are not against its existence in principle.

Was slave labour rife before NMW? I can't remember.

 

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By mwngiol
11th Oct 2012 09:57

Rise

Andy, surely without regular increases then it would soon become meaningless and pointless? A low NMW defeats the object of a having one in the first place.

I remember when the NMW first came in, a lot of people I know had pretty big pay rises. And considering that the NMW isn't exactly high, it shows how low employers will set their pay rates when there's no bottom limit. Especially now when jobs are so hard to come by and employees are more vulnerable to being forced into accepting very low pay.

Maybe slave labour wasn't rife but it certainly wasn't rare.

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Replying to accountantccole:
By petersaxton
11th Oct 2012 10:30

Simple

mwngiol wrote:

Especially now when jobs are so hard to come by and employees are more vulnerable to being forced into accepting very low pay.

Jobs are so hard to come by precisely because there is a NMW! If there was a free market then there would be more jobs available even if they were below the NMW.

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By neiltonks
11th Oct 2012 10:00

Benefits

There's another aspect to this. Since it's not actually possible for most people to live on £6.19 an  hour, let alone less than this, many of those on NMW are receiving benefits such as tax credits. If employers were allowed to pay lower than current NMW rates, their employees would get higher benefits to compensate for their lower pay. So those of us whose employers actually pay us a living wage would end up paying even more in tax to support these low-paid people.

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Replying to Euan MacLennan:
By petersaxton
11th Oct 2012 10:33

It's not possible for most people?

neiltonks wrote:

There's another aspect to this. Since it's not actually possible for most people to live on £6.19 an  hour, let alone less than this, many of those on NMW are receiving benefits such as tax credits. If employers were allowed to pay lower than current NMW rates, their employees would get higher benefits to compensate for their lower pay. So those of us whose employers actually pay us a living wage would end up paying even more in tax to support these low-paid people.

I don't see why it's not possible. Given the work is unskilled then it's better for people to work and build up experience rather than not get paid at all because employers can't afford to pay them.

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By mwngiol
11th Oct 2012 10:02

OGA

"My own view is that despite big businesses best efforts, eventually labour rates and conditions will equalise - which will mean ours falling and meeting the others coming up "

I'm not sure that's true. As long as some countries are able to use child and slave labour to produce cheap goods, then that gap will always exist.

What disturbs me is that some people seem to feel that rather than applying global pressure on those countries, we should allow employers here to pay immoral/unethical wages too.

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Replying to Duckie1:
By petersaxton
11th Oct 2012 10:37

Immoral/unethical?

mwngiol wrote:

What disturbs me is that some people seem to feel that rather than applying global pressure on those countries, we should allow employers here to pay immoral/unethical wages too.

Who should decide what is an immoral or unethical wage? Should we just say that everybody who is not able to get a job at a certain wage should be paid the equivalent of that wage to not work so that gradually more people decide not to work because they are no worse off?

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By mwngiol
11th Oct 2012 10:14

Neil

" If employers were allowed to pay lower than current NMW rates, their employees would get higher benefits to compensate for their lower pay. "

Absolutely true. And I like to think that most people would prefer the majority of their income to come from paid employment rather than from benefits.

Although the way Mr Osborne is going, maybe they wouldn't actually get any extra benefits after all.

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Replying to michaelblake:
By petersaxton
11th Oct 2012 10:39

Who?

mwngiol wrote:

Absolutely true. And I like to think that most people would prefer the majority of their income to come from paid employment rather than from benefits.

I certainly wouldn't. If the government was going to give me extra money for nothing as opposed to having to work harder for it I would choose the money for nothing.

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By mwngiol
11th Oct 2012 10:43

Really?

"Jobs are so hard to come by precisely because there is a NMW! "

And there was me thinking it was because of the economic crisis, caused by the greed of wealthy people wanting to get wealthier with no thought for the consequences.

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Replying to Dick Stastey:
By petersaxton
11th Oct 2012 10:52

You were wrong

mwngiol wrote:

"Jobs are so hard to come by precisely because there is a NMW! "

And there was me thinking it was because of the economic crisis, caused by the greed of wealthy people wanting to get wealthier with no thought for the consequences.

It's because the benefit payments are so high due to people paying so much of their income in taxes to pay for the benefits. If more people were working taxes could be lower.

I can see that you seem to have an irrational hatred of wealthy people rather than using analytical methods to understand the economy.

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By mwngiol
11th Oct 2012 10:45

Rule of thumb

"Who should decide what is an immoral or unethical wage? "

If people can work a full week and still be deemed to be in need of benefits to be able to live, then I'd suggest their wage could be said to be immoral/unethical.

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Replying to Ruddles:
By petersaxton
11th Oct 2012 10:54

Who says?

mwngiol wrote:

"Who should decide what is an immoral or unethical wage? "

If people can work a full week and still be deemed to be in need of benefits to be able to live, then I'd suggest their wage could be said to be immoral/unethical.

Who says they need the benefits to be able to live? Many people still spend plenty of money on cigarettes and alcohol even when they are in receipt of state benefits.

PS I don't smoke or drink!

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By mwngiol
11th Oct 2012 10:49

Not money for nothing

"I certainly wouldn't. If the government was going to give me extra money for nothing as opposed to having to work harder for it I would choose the money for nothing. """"

That's not what I meant. If you work a full working week then you should be entitled to be able to live on what you get paid without needing benefits. And I think most people would agree with that?

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Replying to Ruddles:
By petersaxton
11th Oct 2012 10:57

Living?

mwngiol wrote:

"I certainly wouldn't. If the government was going to give me extra money for nothing as opposed to having to work harder for it I would choose the money for nothing. """"

That's not what I meant. If you work a full working week then you should be entitled to be able to live on what you get paid without needing benefits. And I think most people would agree with that?

I work more than a full working week yet most of my money goes in paying taxes.

People can live on what they get paid. They spend too much on things they don't need.

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