Labour’s Minimum Wage Link – will affect the UK recovery/jobs.

TheHammaconda ....... a Minimum Wage set differently across industries, all playing 'catch up' with earnings over 10-15 years, with rises over 5-years – do you not agree with me that those types of threats will make employers think again about hiring from now until 2015, never mind after?

Do you agree with me that such pay increases would totally freak out the BoE re inflation, that can look the other way if it is caused by say a weak Sterling and external factors i.e. more expensive imports and rises in the oil price – but WAGE inflation leads to higher structural inflation = MUCH HIGHER UK INTEREST RATES.

Economically, adopting Stagflation as a business model by policy design, would be suicide for the UK, so either this is another policy lie a clearly desperate Miliband won’t be able to keep, or if not, come 2015 Labour better make an early appointment with the IMF to sort us out again.

P.S. This is a good article (once past the advert), which although supports my views, it has those of others from the other camp
www.forbes.com/sites/jamesdorn/2013/05/07/the-minimum-wage-delusion-and-the-death-of-common-sense/

TheHammaconda ….. it was my pleasure, I now have grown up words to look up over coffee, rather than sitting here reflecting on ttosca the-not-so friendly dinosaur’s pre 1979 ‘good ol days’, when UK wage demands drove UK manufacturers/industries out of business, often after years of taxpayer subsidised nationalisation and an IMF bailout – ahhh I remember them so well, I can’t think why they had to change.

My problem with your post and it’s “evidence”, is that I seriously doubt if those Minimum Wage increases were anything like as drastically non commercial as Miliband is touting, clearly worried about all these Leftie political splinter groups setting up and throwing serious ‘red meat’ in their direction – so who says he’ll do anything for votes?

“Election 2015: Ed Miliband targets minimum wage for maximum gain”

www.independent.co.uk/news/uk/politics/election-2015-ed-miliband-targets-minimum-wage-for-maximum-gain-9393068.html

“Labour will pledge today dramatically to increase the minimum wage paid to millions of low-income workers in the biggest shake-up of the scheme since its inception.”

“Under plans to be set out by Ed Miliband, Labour will commit itself to raising the minimum wage significantly faster than growth in average pay over five years if the party wins the next election.”

“Currently, the minimum wage is just 53 per cent of median earnings and has fallen by 5 per cent in real terms since 2010. Labour pledged that its target for increasing the minimum wage would help to reverse years of growing income inequality.”

And in answer to MY QUESTION, it appears that the Minimum Wage will be more equal for some than others

So not so much A Minimum Wage, more like Labour State Wage controls more akin to the 1970’s, which with State Controlled Energy Prices, State Controlled Rents, State Controlled Home Building (200k a year paid for how?) and no doubt State Controlled bank lending (as that worked so well with Northern Rock, RBS and Lloyds) – if that lot does not destroy business, business investment and jobs, I don’t know what will, since 1979 at least.

“Labour is also backing proposals to set sector-by-sector minimum wages – so that minimum hourly rates of pay could be higher in some jobs than in others. Under current arrangements, the minimum wage – which is due to rise to £6.50 in October – is set by the independent Low Pay Commission, which is made up of representatives of industry, unions and academics.”

“It is tasked with striking a balance between the need for wage growth and concerns about the impact on employment and economic growth.”

Are you seriously saying that a much higher Minimum Wage, which I have to assume is Mr Miliband's objective, as why bother if it is not - will affect Corporations and small businesses the same - and that small to medium businesses, the back bone of our economy can all afford it???????

Your tired of it because it shows time and time again your failed anti business that ideology; as where has it worked, Russia, China, where?

How did it work in 1979?

How did it work in 2010?

Put yourself in the position of anyone putting their all, including their family's future in a business, start up or otherwise, how the hell can you work out your labour costs one year from next on a national average that includes what, the City and all other high paid sectors?

Show me some countries where a HIGH Minimum Wage creates jobs - and maybe start with the U.S. as how much in English Pounds Sterling is $7.25 an hour, that Obama via spin maester Mr Axelrod is trying to change for votes, against the viable commercial interests of America.

Donki …. Lets look at your point on the current disparities in our system from a different ‘tax’ direction; on the rate and how it is being spent.

Labour/Miliband once again are looking for Private Sector punishing solutions for their cock ups, so WHAT IF;

• Labour had not ‘diluted’ the jobs market and the commercial unskilled rates of pay with their immigration policy.

• Labour had not taken away the 10p start rate of tax, that particularly helped the lower paid.

• Labour had channelled more taxpayers money into REDUCING taxes and National Insurance for the poor (instead of raising them), rather than condemn them to in work benefit dependency, choosing to spend it on big, inefficient government, putting up the costs to business in doing business, with new red tape and regulations from government paid jobsworths trying to justify their salaries?

In growing the size/employment of an inefficient State and paying for it with higher taxes, as jobs in the likes of manufacturing plummeted, Labour’s policies showed that ‘the few’ were benefiting from ‘the many’ – only their ‘few’ are neither few or the rich.

In conclusion; until Labour get their priorities right in SPENDING OR REDUCING our taxes, populist policies penalizing businesses, their investment and job creation PAYING those taxes, it is another economic crash waiting to happen – and with a current £108 billion annual deficit and heading for £1,500,000,000,000 (£1.5 trillion) of national Debt in 2015 – that is the LAST thing we need to both pay off that debt and continue to grow the UK economy/jobs.

ttosca …. May I start with putting the record straight on a few things;

I am not against any rises in the Minimum Wage, far from it, I know too many people trying to live on it and I’m glad that in 2014, those on it will receive the FIRST REAL TERM INCREASE SINCE 2008/9, as your link shows on the graph within.

www.gov.uk/government/news/one-million-set-to-benefit-from-national-minimum-wage-rise-to-650
“The government has approved a rise in the National Minimum Wage to £6.50 per hour later this year (2014), with more than 1 million people set to see their pay rise by as much as £355 a year.”

“The rise will take effect in October 2014, as Business Secretary Vince Cable has accepted in full the independent Low Pay Commission’s recommendations for 2014, including plans for bigger increases in future than in recent years.”

“The Low Pay Commission (LPC) has said the rise, the first real terms cash increase since 2008, is manageable for employers and will support full employment.”

Next , looking at the COLD PRACTICALITIES of yet another Miliband ‘cost of living’ gimmick, writing future promissory cheques with Private Sector money he foolishly assumes will have no adverse affects, like ceasing to provide investment/services, is not just a problem for local stores, it is all small to medium sized businesses.

So now lets put straight to bed that this will somehow narrow the wealth gap between ‘the richest and the poorest’, as I doubt if there will be any ‘trickle down’ from the mega rich Russians, Chinese, Indian, American’s and even British – especially as the majority of large companies are owned by shareholders, like our pension funds – so may we please drop the ‘class’ and ‘wealth’ Labour Party slogans.

THE POINT I thought that I made in my opening post, was that how can ANY business that employs workers annually budget effectively, never mind for years ahead, WITH THE VAGARIES OF A NATIONAL PAY AVERAGE, that will have nothing to do with their specific sector, or more importantly, ability to pay those rates?

Examples of what tends to happen in the work place if minimum pay rates rise, never mind significantly in the future, is;

• Larger companies look to mechanise as much of the work as they can = less lower paid jobs.

• Small to Medium companies just making profits cut back = less jobs and/or less hours offered.

• The young suffer – as if a company is paying more, why take on a spotty ‘youf’, when you can have an older, better educated candidate from here or Eastern Europe?

The coalition inherited nearly 1 million unemployed 16-24 year olds from Labour, nearly 600,000 of them were unemployed in 2004 (see where I’m going with this), so we need policies to ENCOURAGE the company take up of young unskilled workers, like Osbornes targeted policy giving employers a National Insurance holiday to take them on – not continue the 2004 policies that gave us a ‘lost generation’ and encouraging businesses to hire ‘better value’ from here and abroad.

Yeah, yeah yeah, The Tooting Popular Front’s continual struggle against all corporations, as the UK has a god given right to perpetual Private Sector investment/jobs.

Which of the following is going to be able to absorb the costs of some annual increase in the Minimum Wage - based on some multi business sector formula, dreamed up by some old boys from Oxbridge Socialist Student Debating Society - now in Westminster?

The McDonalds Corporation or the local greasy spoons on every High Street?