About half of British workers earn under £15 hour - new Living Wage?

But where do you stop. So those that were on £15 don't get a £1 pay rise?

@Badbadbunny but if we keep paying people a wage that means they can't afford housing or food, nobody will work the minimum wage wage jobs either
It's lose lose
Like "here you can have this job, you'll work 40hrs a week but you won't be able afford to rent where you live"

Great idea. Then the higher paid employees leave and go elsewhere, either to other employers, or abroad (as we see with IT consultants, doctors, etc)!

In my son's firm, they had to increase the wages offered to graduates as it is a very competitive market and they weren't getting the calibre of graduates that they wanted. That actually meant new/raw graduates were coming in at a higher wage that the previous years' intake (who'd only got an inflationary pay rise), when led to lots of them leaving! The firm just didn't see it coming, although it was blindingly obvious that 2022 graduates wouldn't be happy seeing the 2023 graduate intake coming in at a higher wage (who they'd have to train!!). To stop the leakage, they had to increase the wages of previous intakes by the same margin, to keep the differential between years. The exact same thing happens when NMW increases - everyone on higher levels (supervisors, managers, those with more responsibility etc) want at least the same percentage increase. Hence why it's so inflationary.

You reduce higher paid employees wages to balance the books.

I think the long term idea would be employers ,reduce the differential.

Because as others and myself have said, they are 5%. They could all double their salaries and it still wouldn’t have the same impact as increasing the salaries for the other 95% which is what happens when you increase NMW substantially.

Yeah so every time NMW rises every layer gets essentially the same increase because there has to be a difference in pay between the person on a check out and the team leader who manages them and then the manager who manages them. Extra responsibility/duties/work has to come with extra pay otherwise nobody would do those jobs so the increase to NMW doesn’t really end up benefitting anybody in “real” terms.

It also means (in my experience of assisting people into work) that employers now want a LOT from an employee for a NMW job. 20 years ago you didn’t really need anything to get an entry level job, you didn’t need previous experience or qualifications, employers were happy with that because they would pay you accordingly and then as you progress in your ability you would work up in pay. Because employers now have to pay NMW, and especially as it increases, they want more from entry level staff. Most job adverts now advertising minimum wage jobs ask for qualifications, 1-2 years experience, some even are asking for degrees, it makes it a lot more difficult and competitive than it once was.

I think raising minimum wage to £15 all at once might lead to redundancies. I think in April it should be raised £1 per hour. Those those who employ people eating a little bit above that rate should also raise their staff wage £1 per hour.

Yes. I can see that.

Is this why it's all so homogeneous at the bottom end now. Just each rise of minimum wage sucks in the layer above?
It sort of felt better before minimum wage came in? But I was only about 2 years into full time work then so it's hard to remember.

Exactly, and doing that would mean it doesn’t end up being an actual pay rise for anybody. Because if the employers of half the population are having to pay that extra to half the population all that happens is your food costs more, petrol costs more, restaurants charge more, gym memberships cost more, hair dressers cost more, insurance and utilities all cost more, because they are paying out more they have to recoup those costs. So you might get £15 an hour but it’s not worth any more than what you get right now.

But by raising NMW to £15 an hour you’d actually be raising the wages of significantly more than JUST those on NMW currently, there are lots of people who’s hourly rate falls between £12 and £15 so all of those would need to be uplifted to the £15. On top of that you’re then going to have to increase the hourly rate of all of the “next rung up” who WERE on £15 an hour for example the team leaders for Tesco who have the added responsibility of being in charge/managing, they need to be paid appropriately for that so their £15 becomes £17, the next run above that lets say the regional manager was £17, they are in charge of all team leaders plus management duties so THEY need to be paid fairly for that so suddenly their £17 becomes £20. It’s the knock on affect of increasing NMW, it doesn’t just affect that 5% it affects everybody else up the line.

No - I was recently employed by council leisure centres who had to close a number of their venues . One reason was due to increased staff wages. They could t increase customers membership fees - as need to keep it affordable. Yet the local authority’s contribution was cut to a third due to their lack of money.

From another angle me and DH own a small business. We have only recently employed staff other than us two and it’s a huge chunk to pay out each month. We don’t pay ourselves much more than the employees as there isn’t enough after paying salaries, pensions, employers NI contributions.

Ironically I think Tesco pay all their staff above minimum wage anyway. They seem like a very fair employer. But I see what you mean.

I suppose nlby CEOs I was thinking the whole board of directors and layer below.

I think actual minimum wage is about 5% of the workforce so I guess I meant the corresponding top 5%.

The gaps just going to get bigger and bigger isn't it. If we can't fuel inflation.

£15.44 here for years at Uni, years of training and years of experience. I carry a lot of stress as the 2nd most senior individual in an SME. There's only the MD above me, and he's certainly not coining it in with a huge paycheque and dividends, plus his home is on the line as the surety for our bank overdraft.

No-one in our company is paid only the min wage as a point of principle but boy is that costing us work now. The marketplace doesn't value the role we sell at the cost it now is - they do without it instead.

Raising the min wage devalues skills, education, training and experience and does nothing to solve the problem. Costs are only ever passed on to end users and entry level jobs get cut reducing job availability and service standards for everyone.

Raising the min wage will never solve the problems of the bottom 10% because there's always going to be a bottom 10%, whatever the figures.

Four things that might:

Freely available good quality social housing that anyone can access - as it was intended to be.
Max wage/dividend caps for business to reduce inequality.
Tax breaks for SME's to incentivise above min wage pay whilst keeping them competitive.

That’s simple and here’s an example:

Tesco’s

1 CEO
320,000 employees (roughly)

Lets say 250,000 of those are on NMW. You raise NMW to £15, so a £3 per hour increase.

250,000 people earning £3 more per hour, for 8 hour shifts, 5 days a week = £30,000,000

That’s £30 million more for 1 year. The CEO would need a hell of a pay rise to match that.

@Spendonsend

This is an interesting discussion. Two things I hope someone can explain is why us it only the bottom rung that fuel inflation but ceo pay is getting bigger and bigger and doesn't.

Isn't it obvious that it's the numbers!

There is a tiny proportion of CEO's and tens of millions of ordinary workers.

Double the pay of a few hundred CEOs and it makes an insignificant difference to the amount of money in circulation. Increase the pay of millions of workers, and there's a sudden influx of money into the economy, businesses suffer a sudden and drastic loss of income, both of which cause rampant inflation.

This is an interesting discussion. Two things I hope someone can explain is why us it only the bottom rung that fuel inflation but ceo pay is getting bigger and bigger and doesn't.

I also dont quite get the idea that minimum wage has to be enough to support someone financially. Some people even say support a whole family. There are lots of people who just need a second income or who are living at home still and need experience. I started work before minimum wage and wages seemed to be a lot less homogeneous. Like a small corner shop might pay half the amount a brand shop, which might pay a little more than entry level office, but not as much as a few years office. It's like the first 10 rungs all squished together.

I just don't think minimum wage is enough at the minute
By the time my pension and student loan has come out. Then to pay mortgage, bills etc .. it's tight
But I don't know what the answer is

We are currently in a cost of living crisis so things are tougher than normal right now, but there have always been low paid jobs and highly paid jobs, there’s lots in the middle, and people live to their means or if they want more/better they improve their salaries through training, promotion etc.

What other posters have said which is absolutely correct is that just “raise the NMW” doesn’t work because all that does is inflate everything. They can increase the NMW to £15 but the consequence will be that because Tesco are now having to pay staff that they are charging £1+ extra per item to cover their increased staffing costs, the restaurant where you want to go for a meal are now having to pay their staff £15 so instead of it being £50 for a meal for 2 it’s now £65, the bus you take to work is now £6 a day instead of £4 a day because the drivers are having to be paid more. The consequence is that your £15 an hour ends up being worth exactly the same as your current wage is, if not less because with all companies paying more across the board they are more likely to boost it that bit extra.

That’s not to mention the fact that raising the NMW means raising everybody else’s salary as well because otherwise what’s the point training, studying, taking on student loans etc if you’re going to sit on the same salary as someone without all of those things?

There’s no perfect answer and at least right now in the UK we are in more difficult times that usual with cost of living crisis but the answer is not just increasing the NMW.

Housing costs need to come down, rather endlessly trying to catch up.