to think its not that benefits are too HIGH, its that the minimum / average wage is too LOW.

[MistyMountainHop]

inspired by a load of recent threads about benefits (which may or may not be bullshit a bit of a stretching of the truth) and lots of mnetters (and a lot of the general public) up in arms about people choosing to be on benefits rather than work and that benefits are too high

well i think that the average wage is too LOW and vastly disproportionate to the cost of living. when people can "earn" more for NOT going to work than they can working then something is badly wrong. and i have been on benefits (single parent) abou 5 years ago and its SHIT. me and dc were POOR. i certainly didnt have this fictitious daily-mail benefits lifestyle with lots of spare cash, luxuries etc. hell no. i had enough to cover my rent and bills with a bit of change to feed me and dc. but if i had have worked at that time i would have probably only managed to get a minimum wage job which would have been pretty much the same as what i was receiving anyway. so shoot me, i decided i didn't want to work because it just wasnt worth it. (disclaimer for any dm readers: i do work now and have done for a while and now married and dh works too so no benefits apart from a little bit of tcs)

i know people on min or very low wage get "topped up" with tax credits and all that shit etc but IMO there is something really wrong with the world when people can work full time and still need financial help from the government to pay their rent and bills.

so surely in the final analysis its not that benefits pay too much, its that employment pays too little?

i am not very good at getting my point across so i hope this makes sense! but this was just something me and my friends were having a drunken conversation about at the weekend. and thought i would put it to the aibu jury :o

HOUSE PRICES AND PRIVATE RENTS ARE OUT OF CONTROL. Hence Housing Benefit is costing us all zillions, while the winners in the housing market have made enough money never to have to worry about money ever again

For those who argue 'childcare costs are too high and the minimum wage is too low' - well, which is it to be?

As Chair of our pre-school, I'd love to pay our staff more (they are not on minimum wage but there wages are not great, either) but the only way we could do this is if the cost per session rose. We are a charity, so its not like we are making a profit.

Raise the minimum wage by all means - but expect a proportional rise in the price of services.

Agree, the issue of being part of the mass of working poor is an increasingly significant one.

It stems from two primary factors:

1) The ever increasing wage gap between rich and poor (wealth distribution vs. even 20 years ago) - compared to many other countries, the UK is shocking bad at dealing with this, and it's getting worse, not better (compare to a country which does it best of all in Europe, e.g. somewhere like Denmark).

2) the government subsidisation of private enterprise skewing the free market e.g. if Joe Bloggs on average wages can't afford his London home, HB and TC top ups kick in - this, arguably, was one of the main drivers behind house price inflation, as free market rents/house purchase prices had their natural limits lifted off. This is why the benefit reforms are needed (for the good of the wider economy) despite being rather poorly implemented in specific cases (e.g. the CB reduction if one earner in the household earns even £1 over the threshold is alienating people, who don't want to face the reality of these goverment reforms as being neccesary anyway).

Item 2 above, of course, is a very powerful political tool ("vote for us or we'll take away the tax credits you're relying on to feed your family") and is surely one of the things our elected officials in government over the last 15 years should be most ashamed of - holding people to ransom whilst lining the pockets of shareholders in private companies.

if wages were higher and transport and housing costs lower it wouldn't matter that childcare was also higher - one negative wouldn't outweigh the 3 positives.

It is wrong to make changes to the benefit system without having done anything about the high cost of living (which is getting ever higher) it's not acceptable to make a generation homeless in the hope it will make things better without providing the path to make it better.

YADNBU!

I guess I should really have mentioned a third element, though, if we're being totally honest:

3) The living standards of huge numbers of British citizens needs to reduce - not to poverty level, but certainly not putting so many of our young into university despite their questionable academic qualifications. No more flat screen TVs. Potentially couples living for a few years with their parents whilst they save for first homes (not living alone into their 30s). A la 1970s. This is especially true when you consider that a couple with NMW earning potential expects to live in a similar material comfort as, say, a couple on £25k/yr each. If we're setting the economy up properly, we need to assign the true value of things to their price tags - we could increase the NMW to £15/hr, but then your shopping would probably tripple in price... and so on. It's not as simple as putting up the wages of people on the lowest rungs of society.

Reform is needed at a much, much deeper level than that.

What about abolishing the minimum wage? Then people would I hope be employed for less money. That would mean that they couldn't afford to buy things so they would not buy them. That would bring down prices of food, utilities and housing. Yes, it would be draconian but everything worked all right before the minimum wage was brought in.

I worked in a school office not so long ago and, if someone were applying for free school meals, they had to show proof of income support. Some of the amounts shown in the books (the sort you handed over at the Post Office) absolutely astonished me because some were reaping nearly £400 per week just on Income Support. If they were on income support, they were probably claiming Housing Benefit, Council Tax Benefit and whatever other benefits are available to these people. Yes, I know that not everyone is a scrounger but some of these people would roll up to the school to collect their children in practically new Range Rovers and similar people carriers! And didn't wear rubbish clothing or shoes. I was earning half their weekly amount and mentally complained to myself. That's one big reason that I think immigration should be stopped because most of them were.

Reindeer
I agree that the HB and TC introduction was a factor in the rising housing prices, that it completely skewed the market value of housing. I also agree that there needs to be reform, but I don't think that the current cuts are the way to go about this.

It is simply not acceptable to push prices up and up for years (via the previous government policies) then say, "We are going to change all that" and take the rug from under the feet of those struggling families.

The development of house prices took 20 years, we cannot expect them to stabilise within a year or two. And how are people to live in the meantime?

it's not acceptable to make a generation homeless in the hope it will make things better without providing the path to make it better.

The government didn't seem to have any issues with sticking two fingers to the almost-retired generation with the bouts of QE being pumped into the economy, though, did it?

Every £ artificially injected in these rounds affects annuity rates, which many people are locked into for the rest of their life.

It's cutting loose one part of the voter segment (people about to retire) in order to spare the pain of others (young voters, middle aged voters, homeowner types).

actually, backtracking somewhat having read some of the replies, i think its actually cost of living thats the main problem.

consider this: 10 years ago i was 21, single, no dcs. i rented a nice new build city centre 2 bed apartment for £230 a month. i drove a mazda mx5 (admittedly second hand) and had a pretty nice life, lots of nights out, designer clothes, posh haircuts, beauty treatments, holidays etc. i only earnt £15k working in a call centre but petrol was cheaper, food was cheaper, gas, electric, car insurance was cheaper, the list goes on. had i wanted to, i could have easily bought my own house (and goddamn how i berate myself for being too short sighted to buy back then, now i have no chance )

however i now have younger single friends on similar wages and they are FUCKED. because the average wage hasnt really risen so they are only on the same as i was 10 years ago. yet it costs upwards of £400 pcm to even rent a room in a shitty houseshare. petrol, food, utilities, car insurance etc has skyrocketed. they can't buy, they can't even rent anywhere decent. theres no council houses. there are no decent paid jobs.

i fear for my DC future i really do.

(p.s. I'm not at retirement, alas, I'm just stating this from a dispassionate viewpoer - in case anyone thinks I'm a 59 year old with a bee in her bonnet! )

RuleBritannia
scoring out a nasty comment about immigrants does not make it any less said

and leaves the impression that you are a right wing nutjob

Recipients on Income support on £400 a week, driving new Range Rovers. Ha. Very good.

MmeLindor, I actually agree with you 100%.

We need long term, deep reform.

But the chances of that happening are unlikely - governments have elections to win too often

sooo. Minimum wage goes up. In order to meet the increased costs of employment, businesses put their prices up. Meaning everything costs even more. Meaning that wages again don't cover everything. so minimum wage goes up. So businesses put up their prices in order to afford the increased costs. So everything costs more. So minimum wage goes up...

The areas that need to come down are mortgages - want to sell your house for £30,000? no? didn't think so and things like that.

Petrol is another one that could come down. We are being totally ripped off there, but we take it up the arse.

I don't know what the answer is, but I know that it isn't to increase minimum wage, because that would just have a knock on effect on the price of just about everything.

Hecate
Yes, there is truth in that.

At the same time, Tesco made a profit last year of £14300 per employee and are using Workfare staff, ie paid by the taxpayer. There is something far wrong here.

Companies are under pressure by shareholders to maximise profit, even if that means shafting their employees with low wages.

It is not true that an increase in NMW would necessarily result in higher costs, but it would result in lower dividends for the shareholders.

I personally think you can have a pretty decent standard of living on NMW or benefits. I dont think you should put up NMW but definitely dont think it should be abolished either.

Income support is £67 a week.

reindeer - yes, university does seem to be part of the problem. The government wants more and more of us to go to university, but that just means that jobs that used to take school leavers and train them up now require a degree. I guess the argument for universities is that it gives us a more highly skilled workforce, but much of what is learnt at uni isn't really relevant to jobs. Maybe instead of expecting people to study till 21, people should start jobs at 16 or 18 and train on the job, and take time out to study relevant courses later in life when they need the knowledge. Then they'd be contributing to the economy and not ending up in debt.

Yeah but you dont just get income support you get a lot on top and usually makes up the same as an NMW gets which is an ok amount to still be able to have a pretty good standard of living if comparing it to the poor at any other time in history.

Yes, benefits aren't as transparent as people (on either side of the "what level is acceptable" fence) make out.

You have to factor into the sums any costs you avoid (commuting costs such as travel passes or the need to run a car, work clothes, any extra cost from having to eat bigger lunches like my DH did when he was in a manual job, childcare of course is a huge one).

You have to factor in any costs you avoid (prescription fees, dental fees, glasses, school meals). I suppose tuition fees would come into it, too.

Then you start looking at the emotional costs too. Working a 40hr week for £20 disposable income at the end of the week vs. not working and juggling raising a family and earning money for £20 after bills each week... that's not an insignificant element, too. Especially when you consider that NMW jobs are more likely to be dead-end, repetative, low value work.

It's both, benefits are too high and the minimum wage is too low compared to want is costs to live.

People on anything other than disability or sickness benefits should not be able to afford to do anything other than feed and clothe themselves and keep a roof over their heads. But many of them can afford to run cars, have day trips, pets, holidays, and that is very wrong.

There are lots of people who work, and considering that it costs money to actually have a job, it is clear that the minimum wage is too low because often people are better off on benefits when they take into account the cost of travel to and from work, smart clothing, etc.

The entire system is bollocks.

KitchenRoll
Are you serious? People on benefits should not be able to run a car, or keep a pet?

How are they supposed to get to the supermarket then? Or to the doc? Or take their children to school?

There was a poster on a thread recently who said it costs her £52 a week on bus fares to take her children to school.

Particularly when teh children have to go to a specific school that caters for their SN.

IUseTooMuchKitchenRoll, look at these figures, posted in another thread (quote):

Wages (20 hours per week) £209
Housing Benefit £188 (leaving £7 for us to pay)
Council tax benefit £19 (leaving £3 for us to pay
Tax Credits £196
Working tax credits £13
Child benefit £60.50
Thats over £35K tax free! DH's fulltime wage was £34k before tax.

That's where the problem is, really. I know the current government are trying, in their own way, to make work pay (i.e. enough for the PR team to be happy), but... well I think the above speaks for itself.

And that's the problem, isn't it, mme? Businesses just aren't prepared to take the hit. they exist to make the most money they can and so they always pass on the costs. They just won't see their profits go down in order to increase wages without raising prices. Even those that could afford to do so - and most businesses aren't the big ones with the millions of pounds profit. Most are the smes that just can't afford it because they aren't making that much.