to think gov's Youth Contract proves NMW too high

[takingbackmonday]

The gov is ploughing more money we dont have to 'tackle' youth unemployment by subsidising half of the minimum wage businesses pay new staff.

AIBU to consider this yet more proof that NMW should be either lowered or abolished. Business taxes should also be lowered. The economy's a mess. NMW is set to high.

Yes. The thing that terrifies them above all else is the common man realising just how much power they actually have and turning, en masse, on the actual problem in this country.

It's why they set us against each other, trying to make us hate each other - oooh, immigrants stealing the jobs, benefit fraud, middle classes, chavs...

While we're attacking and blaming each other, we're not turning our heads and taking a good long look at them

ChristmasBreak - exactly. TC's being paid to FT workers on NMW IS an admission that NMW isn't liveable. It is a business subsidy that ALLOWS employers to continue to pay their employees a smaller amount of money than it is possible to live off.

Without the subsidy of TC's - how can anyone work for NMW? So you are stuck in the situation where Government either has the choice to cover the shortfall between what employers in the UK are willing to pay and what their employees NEED to live off, thus costing the taxpayer a fortune, OR stopping TC's and raising NMW to a liveable level, which would apparently make businesses leave the UK for countries with cheaper labour costs.

Neither of the 'solutions' will actually balance the books - so what can be done? We are already tipping over into Indentured Servitude in the form of Workfare, which in itself will lower the amount of NMW jobs available - I just wonder what the UK will look like in 10 years time...

So, is there a way to solve this? I don't think there IS a solution,other than the mega-rich putting their hands into their pockets and paying more tax. Which isn't going to happen - even on MN, most high-rate tax payers seem to believe they work harder than anyone who is working for NMW, and most of them have said that if taxation in the UK is raised any higher, then they will emigrate. Which would leave the economy even worse off...

Redistribution of wealth? Never gonna happen, realistically. It's only going to get worse, and I forsee a totally different employment landscape in the UK in 10 years time. One where you are either comfortable and doing OK, or you are an indentured servant working for £65 a week 'JSA'. But you aren't 'seeking work' because you are already doing a FT job. For peanuts.

I just wish the Government would see that there is NO WAY we can be competitive with China or India for labour costs, and find some other way of boosting the economy, without eroding the work available for NMW workers.

Of course they are trying to make everyone turn against each other - if everyone sat up and looked at the ruling classes in the UK - we would HAVE a revolution. Why do you think that the police and the judicial system are coming down so hard on the recent riots? Yes, the looting was wrong - but the looters have been punished much more severely than someone who comitted the same offence just a few weeks earlier. Why? To send a message to the proles that civil unrest will be cracked down on. It is because it wasn't just one person breaking into a store and stealing a TV - it was a mobilisation of quite a lot of people, and the Government are worried that it is the start of something bigger.

divide and rule/conquer

age old solution...

I just wish the Government would see that there is NO WAY we can be competitive with China or India for labour costs, and find some other way of boosting the economy, without eroding the work available for NMW workers

They know that, and they also know these countries spend a fraction on public services compared to us.

But the obvious answers anger their paymasters, so you have the dangerous muddles we have today.

we need to go back to manufacturing. look at how germany does it successfully. you need large numbers of jobs for people without the skills or interest in being an 'information worker' or in finance.

i am prounion (DP is in the NUT) but the UK unions of the 70s did a lot of damage in terms of competitivesness. set their members up for Mrs T to give them a kicking. in contast german union reps sit of the board of the company.

Hecate - agree with every word you said.

Definitely meant 'big' business, not sme's - basically anyone earning ten plus times their nmw's workers salaries - in my opinion ten times your lowest workers salary is too much. And just increases the gap between rich and poor.

I'm guessing Philip green is 10,000 times his nmw's employees salary

I'm guessing Philip green is 10,000 times his nmw's employees salary

I wonder who pays more tax.....

Hunty "I just wish the Government would see that there is NO WAY we can be competitive with China or India for labour costs"

superficially i agree but Germany does manufacture competitively

I wonder who pays a higher proportion of their salary and overall wealth in tax and who spends a higher proportion of their wealth on living expenses.

from www.numbeo.com/cost-of-living/country_result.jsp?country=Germany

GERMANY
Rent Index: 30.09
Groceries Index: 75.74

UK
Rent Index: 39.85
Groceries Index: 95.20

i can understand rent being more expensive as they have more land per capita but why is our food so expensive?

Differences i can think of between UK & Germany:

1. tighter controls on credit.
2. fair more SMEs. much harder for SMEs to avoid tax and/or move jobs offshore

from wikipedia German corporation tax is 15%

ignore that - there are different taxes.

Germany would never have allowed an investment banking sector like the UK has, or the amount of foreign ownership of major industries ( and thus repatriation of money overseas)

Germany have also benefitted from low cost labour in Eastern Europe - Allows their manufacturing to stay more price competitive.

and 'Gastarbeiter' guest workers, generally turkish, to do the low paid jobs without right to bring their families (not say this is ok)....

so does NMW prevent this type of germanic manufacturing competitiveness?

No, the thing is Hecatae, basically I agree with you on most points you have raised, but I also think that it's sometimes used as an excuse to not raise NMW: What about small businesses who wouldn't be able to afford it?

On some level, almost all small businesses need to get loans etc in order to grow (speculate to accumulate and all that) and yes, this does get them in the shit sometimes, if their business model is not really viable.
Being in business is tough, and some people see that it can have great rewards without really appreciating that at the end of the day your customers have to want to pay for your product.
If they don't, for whatever reason, you go under. There are no great rewards without great risk (and I say that as someone who has run a business, and jacked it in, and started a new one!)
What I would like to see in this country is less red tape to actually get to the point of being able to set up a business. I ran a shop in another country, and it was easy to get started, whereas here I would need so much cash upfront just to rent premises, so it becomes too scary to just try something that may fail, and if people don't get the opportunity to try out their good ideas, then they are stuck.

On some level, almost all small businesses need to get loans etc in order to grow (speculate to accumulate and all that) and yes, this does get them in the shit sometimes, if their business model is not really viable

Small firms are incredibly fragile, the impact of increasing the workforce, or expensive payments to 1 employee who is crap/off work/etc, are much bigger when they company is a few people than even a few tens or hundreds.

So risk is very high, but in the UK "reward" is increasingly being sucked away in red tape and taxes.

Bank loans are nigh impossible to get today unless you have collateral (ie property) to put against it

"TheRealTillyMinto Fri 25-Nov-11 11:54:30
Rolo i like your comments except 'the fix':

Housing - you would need a sizable house price fall & that would damage the economy in the different way.
Food - prices are high because of global shortages. how can you fix the UK market amongst that?"

You are totally correct... if house prices fall, banks asset sheets collapse and the whole house of cards comes tumbling down.

The government are going to go the stealth route. Slow devaluation by inflation. UK House prices have already crashed when priced in euros.

The trouble is, there is no nice fix. There is no easy way out. Addressing the fundamental problems of the economy means also facing up to the harsh reality that we live in an overpopulated world where we already consume far, far more than our share of the planets available resources (albeit less than americans). Unless we find some way to export a lot of stuff the rest of the world wants, we're going to get a lot poorer over the next few decades. The wealth is increasingly going to find it's way to those countries which have stuff people want - oil and gas from russia & the middle east, products and rare earth minerals from china, etc. If we let the global economy find a natural equilibrium, we're screwed.

The bubble must be kept inflated at all costs, because reality is the alternative, and it's not a pretty one for those of us in the 'developed west'.

Unless we find some way to export a lot of stuff the rest of the world wants, we're going to get a lot poorer over the next few decades. The wealth is increasingly going to find it's way to those countries which have stuff people want - oil and gas from russia & the middle east, products and rare earth minerals from china, etc.

There was a Brazilian guy on Radio 4 World at One who pretty much said that.

Whatmeworry - I'll tell you who pays more tax - the worker on NMW in a BHS store - Green is a tax nightmare - his wife 'lives' abroad so he doesn't have to pay.

He's a multibillionaire who proportionally pays less tax than a shop assistant.

Rolo totally agree. i was on a thread where posters were wanting a house price crash, thinking it would benefit them.... err no.

WhatMe i have been looking at investments in Brazil for my DM who is retired and you are looking at 70% profit over the last 5 years.

i wonder if the BoEs roll needs to change to give it more control over govt spending so if the govt wants to spend money it does not have, there has to have a proper plan for paying it back. a bit like for the rest of us, if we borrow.

at the moment politicians just play pass the parcel with the debt & hope they dont get left with it when the music stops. oh dearie me it has now stopped.

how about if the top earner has a minimum amount they can earn so it subsidises the lower end earner and then we can all be paid fairly

how would that work catnet, who would set the amount?

WorraLiberty Please sir more

If a business cannot afford to pay a 16 yr old £3.70 (approx) and hour and an adult £6.08 then they shouldn't be in business.