To think raising NMW is a good thing

We run a small business which employs staff, mostly part time (due to operating hours - we literally can't be open full time)

Last year the combination of the increase in the real living wage (which we pay) plus the employer NI hike was brutal. It would have wiped out our entire profit margin if we had not increased our fees. Every other local business in the industry did the same.

The same will happen this year. Small businesses can't absorb it, but actually neither can many large businesses. So prices will rise.

In my sector it's the people who are earning above NMW but below the 40% tax threshold (the majority of the skilled staff) who have been receiving minimal pay rises to cover the increases in NMW. No one argues that NMW shouldn't be increased, but now attention is moving to the living wage, this strategy is going to come under pressure as the staff who've been funding the cost of improving base salaries edge ever closer to not earning a living wage.

Easier said than done to find alternative work. Given how difficult it now is for school leavers to find work, and a reluctance of some employers to take on overqualified people for entry level roles, the theoretical "I'll jack it all in and work for Tesco for the same money" is a fantasy.

I bet a lot of people who think NMW is only right and fair, are more than happy to snap up a bargain from Shein or Temu 🤔

there is another option. And that is that you should be budgeting for a salary increase. And most sensible companies will have done this.

I don’t think anyone wants any business to go bust. But neither do we think it’s fair that people slave away like they did in Dickens’ time for an exploitative employer.

nice

@WestwardHo1 thank you.

What also pisses me off is the number of people we interview who are clearly just filling in time for the job centre. We would happily give many of them a job, give them a try, training and frankly in 5 years they could have a free house with the job if they’re willing to work. But when you ring to offer them the job they literally disappear. Back to the benefits. We used to get the odd one every couple of years. There’s load now.

But my unviable business is the problem. That feeds the nation, that gives 6 steady jobs. Not greatly paid but better than NMW as we make cuts in other areas to be able to do so.

A lot of comments from people seemingly gleeful that many, many businesses may go bust as a result of this.

Where do these people expect the people who sadly lose their jobs to do?

There is no magic money tree though?

A company has a salary budget and if NMW goes up they employ fewer people or they go bust.

In no scenario does higher NMW lead to lower benefits

Money doesn’t grow on trees, so a company that had could afford to employ ten people, may then only be able to afford eight.

And what happens with unsustainable businesses?
They cease operating ... and their jobs disappear.

What sum is a liveable wage?
How long is a piece of string? It depends on where you live and the size of your family. You expect the gov't to regulate all the variables?

Get more skills. Earn more. Why aren’t these options for you?

Well they will have to take more from ordinary workers, given that tax revenue is already 7.5 billion less than expected, according to the OBR. Maybe the wealthy and more globally mobile people leaving is starting to have an impact.

People who spout shit like this are the ones who have no idea that SMEs make up a huge proportion of a our tax paying private sector workers (about 60%), and about 33% of those are microbusinesses, so sole traders, partnerships etc.

"Millions of profit" 🙄

I agree on this. Charities should get an employer's NI tax break.

That way the staff could still earn what they would doing a job in a similar role in a non-profit business, but without costing the charity the full 15% NI on top.

To the poster who told me my business isn’t viable I Suppose you are right. But these business aren’t all Amazon who pay less tax than me. It’s people like me who literally feed our country, look after our kids and old people. If we go you will be left with foreign imports made by people on far less than our minimum wage, in worse conditions for the staff and animals and food safety issues can be really dodgy.

We don’t make millions. We have 6 days food in this country at a push of something goes wrong. Why the fuck aren’t we caring about the fact that we can’t feed, clothe or heat ourselves.

Absolutely people deserve a decent minimum wage - I strongly believe the real living wage (which is more than NMW) should be paid.

I’m also not thinking of Oxfam etc but small to medium sized charities of which there are many - with a tiny management team who are on low salaries themselves and working over and above the hours they are contracted for.

If these charities are the only ones running a support service for victims of abuse in the area, or the ones offering specialised supported living - and increases mean they have to stop operating or reduce the services they offer, then it isn’t rich shareholders who suffer.

More and more previously government run services are now taken on by charities, I think there should be a differentiation and more government support/allowances for non-profits. Not that it should be used as an excuse to pay people less.

Wages can’t be raised in a vacuum. They have to underpinned by higher productivity and economic growth.

This is the crucial point that few people grasp. Raising NMW doesn't suddenly magic money out of nowhere.

It's a just and right idea

In reality it won't work.

Employers can't afford it

So, everybody else should take home more but the business owner should settle for less.......🤔😂 Way to incentivise people to run a business and employ people! 🙄

That old chestnut.

It reminds me of Covid when I was told on MN that if I couldn't afford to close down my business for a few months with no income coming in (this was before the self employment grants were announced) that it deserved to go under and was obviously failing anyway.

They should, but they’re not. How many TAs are we happy to be made redundant while that’s still the case?

If they really cared about lower earners they would have increased the personal allowance. This is just a stealth tax grab that will fuel inflation and encourage companies to explore AI.

For each 40 hr a week worker the government gets £9 per week in tax and EE/ER NI and the worker gets £14 a week to give to Tesco when food inflation continues to rise.

It's easy to say businesses that can't afford this aren't viable but that doesn't change the fact that unemployment will increase. The sector I work in is struggling, many businesses have already gone this year. I'm not sure what the future holds.

Agree with this, I am seriously considering quitting my band 6 job in the nhs, it just isn’t worth the stress, travel, and work that I have to do outside work hours to ensure everyone is safe. A supermarket job and UC credit too up would leave me in a very similar position financially, when travel costs etc are taken off