Does anyone actually believe that employers will raise wages if tax credits are cut?

[ssd]

We get tax credits, I earn £6.50 an hour, that's minimum wage.

I dont for a single moment think my employer will raise my wage when my tax credits are cut.

AIBU to ask, does anyone, apart from this government, actually believe wages will go up when TC are cut?

Maybe I'm being naive, and years of being in a workplace have left me to think that's the last thing that will happen.

AIBU?

I think I struggle with TCs because I see them as an employers' subsidy and they are responsible for 21% of the welfare budget, second only to the state retirement pension of 46%.

BUT the government is more interested in those on jsa, esa and sanctioning and reducing their availability- but those 2 benefits are only accountable for 3% of the welfare benefit. (around the same percentage as pensioners winter fuel allowance)

DH works and earns £6.51 per hour. There is absolutely no chance the wage will go up. He even struggles to take his holiday allowance as it is. He has very little job security.

He has qualifications too, and is still only earning a pittance.

While the company directors drive to work in brand new cars that cost £70k plus to buy. Disgusting.

BTW I have to say that I agree that TCs have allowed employers to keep wages low. To me it is in a similar vein to how people feel about HB, and the way it is lining the pockets of the private LL, TCs are lining the pockets of employers because their wage bill is lower than it should be.

It does need tackled, but why does it have to be the people who have no say and no power to change it that lose out? Why are they not focusing change towards employers? Because it is easier to blame the low paid.

Nope. This shit is why I now work for myself (not saying that is an option for everyone).

I'm in the public sector - fuck all chance of a wage increase and no chance of increasing my hours - I'll have to sell a child!

I don't believe they will no, not unless they are made to, an that's not going to happen any time soon!

of course they won't

and many won't be able to anyway, ie very small employers, if they were forced to (which they wont be) then they would go bankrupt

i have a small business, its just me but sometimes i employ one person, i couldn't afford to pay much more than NMW

i have a small business, its just me but sometimes i employ one person, i couldn't afford to pay much more than NMW

But what about the people who can't afford to work for you for NMW?

I am not having a go at you personally, btw, just the notion that it is terrible for business owners to be able to afford higher wages, but somehow acceptable for employees to work for low wages.

It will just increase the housing benefit bill.

YANBU.

I think they assume people will pick up more hours - ignoring fact they may not be any more and that that could well increase childcare costs meaning it isn't viable option.

Or that people will go looking for better paid jobs - which again will probably not be there as who doesn't want to be paid more now.

I think most people will belt tighten further - which may affect confidence in the economy and mean people aren't willing to invest in business - a general depressing effect.

I also think HB may well go up meaning as much money as thought won't be saved. At least until they further cap that.

I just don't think they care.

Employers will not put up wages. I think the Tories talk big and then fall back from what they had declared they will do to seem ever so reasonable (Thatcher used to do this a lot). So instead of a large cut to CTC - they might freeze it (forever) in the end or change the thresholds - so it will be a cut but not as bad as everyone feared and people will say "Phew, at least they didn't do..." and it will seem like the Tories listened to what "hard working families" were telling them. Bless

i have a small business, its just me but sometimes i employ one person, i couldn't afford to pay much more than NMW

If you run a business which needs to employ people but you can't afford to pay them a living wage then surely your business is just not viable?

?

i have a small business, its just me but sometimes i employ one person, i couldn't afford to pay much more than NMW.

This is the problem with the system (I don't blame you personally). The state is providing a subsidy to business to allow them to get a business input (labour) at below the cost of supply (a living wage).

Which is why tackling tax credits without simultaneously bringing in a living wage is a bad idea. It doesn't tackle business models that are unsustainable without either subsidy or long-term reliance on poverty wages.

The state is subsidizing the wealthy and powerful few and keeping the many poor and enslaved

Face facts, we have a rentier economy and most of us are just here to provide a revenue stream for the one percent with the money and power.

We are cash cows farmed by an extractive elite ?

I wonder if the tax credits cuts will come in around the time that this 30 hours of free child care for working parents is supposed to? This would at least lessen the blow for some.

We both work full time and get some tax credits every month, all of which directly goes towards nursery costs. If these were stopped, we could not make up the shortfall, it would cost less for one of us to give up work. If however the tax credits were cut once these free 30 hours came in, it would be more manageable.

I don't think for a second wages would rise to reflect the loss of TC. I'm worried, I bet some people are terrified of what's to come.

I think some employers will raise the wages of certain jobs if they can't get the quality of recruits they want without the "top up" of tax credits. It'll take time for that to feed through the system though.

I used to work for £17k pa. I had 22 members of staff reporting to me and responsibility for a budget of £1.5m. There's no way I would have applied for that job, were it not for the fact that I knew I would get around £10k pa of working tax credit & childcare tax credit. The responsibility was easily worth £27k pa.

We should ask the government if they're going to lead by example seeing as they employ a fair whack of the people who are on tax credits either directly or via councils - nurses, TAs, binmen, care workers, cleaners.

Strangely, I can't imagine they're wanting to spend their "savings" that way.

No chance employers will raise wages to make up the shortfall as they know there are dozens of people desperate enough to do the job for low wages as it's better than nothing.

What really pisses me off is the government are talking about cutting tax credits to encourage people to earn more but everyone I know is doing as many hours as they can already, if there aren't the hours available how can you do more? What they seem to forget is that someone needs to stack shelves and work as waitstaff and care assistants and these are low paid jobs, wrong but it's the way it is.

Then there's the whole 15 free childcare hours, yes I know it's to help cut the childcare bill for working parents to take the sting out of the cut in tax credits but it's only for 3/4 year olds and likely to only be term time so you'll still be up a creak in the holidays but have less money coming in.

So on one hand it's a case of 'cut tax credits to reduce the welfare bill' and on the other hand it's 'lets pay for 15 hours childcare'. Is it just me who can't see the saving?

I think the focus should be on getting one parent working instead of two able bodied parents being at home, sahp allow the other parent to work. For us, and many others, childcare would cost more than I earn during term time never mind the holidays and we have little family support as my dad works pretty much full time.

I realise the welfare bill needs to be cut but with the best will in the world if there are no jobs/not enough hours, never mind flexible to fit round the other parent and childcare, then how are people supposed to earn?

I work in public sector, wages have been frozen for 4 years. No chance of extra hours, I ask every month, big fat NO, not enough funding.
I've just taken on a zero hours care job, in the hope of recouping loses due to tax credits eventually being merged with universal credit. Of course care packages are being cut, so I don't know if that will work. It really is shit in the real world, unlike the people living in tory land, who just get richer.

oneflew yes I agree with you as an nhs worker on that one

So what happens to someone who is on higher that nmw, but perhaps is only able to work restricted hours sue to the sector they work in and childcare options.

Also for some who also claim housing benefit would the drop in tax credits not push up the entitlement to hb ? so if it saving central government only to put more pressure on local authority?

In my opinion this would only work if they increased the minimum wage, which labour should have had the guts to tie to a living wage when they introduced it.

I do however think that the concept of the a government propping up a low wage economy with tax credits is a stupid economic policy, in my view the government should provide the economic infrastructure that ensures fair workers pay, access to high standards of education etc. they should not be paying people who work for private companies.

I just don't quite know how to fix it without causing hardship to people who don't deserve it.