Aibu to not want a £15 minimum wage?

[Israisingwagesworthit]

This morning I saw a post saying there are calls for a £15 per hour minimum wage.

I understand fully that the current minimum wage doesn't give people enough to survive on and something needs to change to ensure everyone gets a comfortable living wage, and I support this.

However by pushing up the minimum wage doesn't that just add additional costs for businesses, therefore increase costs to consumers removing any benefit of an increased minimum wage in addition to reducing the disposable income and pay gap of anyone above minimum wage.

Surely this only benefits the government with additional income tax?

Is this the best option in a time of potential 18% inflation, would this not increase it further?

Capitalism is the issue, rather than sharing the profit wealth, CEO's (of all levels of business, small and large) keep the profits for themselves and just raise prices when costs go up.

Am i being unreasonable to assume that in order for the £15ph wage to be successful, companies must accept lower profits rather than increasing prices in line with the wage increase otherwise its just pointless and daminging to all wage earners not just the minimum wage.

Won't the government have to threaten windfall taxes to those who increase prices to maintain profits to make it work and to actually benefit minimum wage earners?

I'll admit I'm a middle earner (£40k) civil servant (so no chance of a payrise anytime soon) so would be financially damaged by a raise in minimum wage if nothing is done to stop the subsequently price increases of products after a minimum pay rise. As a result my view may be biased, but am I wrong?

YABU. "Person on £40K doesn't thing low earners should earn more."

The only reason £15/hour could be wrong is that it's too low. That's not even 30K a year for a 37.5 hour week.

I’m no financial expert but if everyone’s wages go up then prices increase then we are back where we started.

Yup.

Did you actually read my post? I'm not disagreeing that minimum wage should be higher.. but surely it just increases the cost of things making the minimum wage still unaffordable?

Doesn't companies have to reduce profits and mainten current prices to let the minimum wage increase actually make a difference?

Sorry this was meant for @Dotjones

The problem is those who earn just above current min wage but less than £15 per hour. Do we bump them up onto £15 per hour? In which case a job that used to pay above min wage is now less attractive because it’s become a min wage job and people can earn the same on the till in Asda.

For example lots of teachers currently earn less than £15 per hour. So if min wage increases, presumably teachers would be bumped up onto £15 per hour. So why would they continue to bother with the hassle of teaching if they’re now a min wage employee and can earn the same in an easier job?

Not if the big CEOs and shareholders didnt squeeze the entire rest of their businesses so that the people who create the wealth for them, remain in poverty.
Business models need restructuring. I mean, looks whats happening with the energy companies.

Capitalism has become yet another feudal system that human societies have developed.

@Branleuse this is exactly what I meant, there needs to be a limit of profits made, which would destroy the capitalism structure. That's never going to happen as those fat cats run the country essentially via lobbying/being chummy with government.

Totally agree, put minimum wage up by 50%, then expect to pay 50% more in sectors that pay minimum wage to its employees.

And yes, I earn a lot more than minimum wage, but years of training to initially do my job, as well as promotions etc through hard work.

How do you address the issue that wages haven’t covered the cost of living in some demographics for a long time hence the take up of in-work benefits? We are all paying for private companies profits.

I don’t necessarily agree that minimum wage is the way to adjust that (although I suspect it’s one of the easier ways) but there does need to be some process that ensures work actually pays for a minimum standard of living without government help. Currently people are being priced out of simply existing even when they work all the hours physically possible.

You've cherry picked one particular aspect of a minimum wage increase. Whilst it's true that cost of sales (i.e. the cost of direct production of goods and services) could increase, this is overly simplistic. Labour is a substantial part, but not the only part. You could argue, for example, that business could find efficiency elsewhere to offset a minimum wage increase (less indirect labour costs etc)

It can also be argued, for example, that an increase in minimum wage boosts productivity (ie economic output) which has a net positive effect on the economy (akin to increasing efficiency)

That's not to say there aren't arguments in both directions, and anyone who says an economic measure like this in unequivocally "good" or "bad" hasn't thought it through fully

Highly recommend a book called "The Undercover Economist" for an accessible read into how all of these things interact

Doesn't companies have to reduce profits and mainten current prices to let the minimum wage increase actually make a difference?
They also have to increase the salaries of everyone else to maintain the hierarchy. Imagine a manager on £14ph and staff on min wage. They all get bumped up to £15ph and the manager says “why should I have the extra responsibility of being a manager if I’m not being paid more?”

@Dadaya I fully agree, by raising the minimum wage you push those who just earn over £15 per hour closer to minimum wage earning, which causes the same affect. What's the point of training to be a midwife for example if you only earn £1 per hour over minimum wage in tesco.

Also the government are just increasing the number of those eligible (and would need to rely) on top up benefits to survive (not thrive) as a result of the subsequent cost of living.

There must be another answer somewhere

Pretty much. It's not about assuming that people who earn more work harder than those on min wage, but being realistic many higher paid jobs do carry additional responsibility and training. Who on earth would want to be a doctor, for example, when they could earn similar for working in retail where there's no need to get into debt and spend years training or have responsibility for people's lives day in day out? So either you raise wages of those professsions (hence back to where we started) or accept the already chronic shortage will be made worse.

The best solution is surely supporting people into accessing training/qualifications/experience which helps them progress rather than to stay in low paid jobs forever. Yes the value to society of some of these roles is very high and definitely some should be paid more, but raising it across the board will create more issues. There are better ways.

It's so complex,

The first and simplest thing I'd do is for the Office of national statistics to get with the times and use technology.

In Real time, they should be advising how much it would cost a family living in a variety of locations in the UK to have a basic standard of living. They could.pull this data from energy suppliers, supermarkets etc. It could easily be done in the modern world.

Obviously this has a huge number of variables because people live in a variety of different ways, but keeping things simple it should Encompass

Housing
Food
Energy
Transport costs

And these figures are updates in real time.

HMRC should take these figures and on a monthly basis tax a family unit only on income exceeding those basic costs. We shouldn't be taxing people and then handing it back to them in benefits - that only helps landlords and corporations because they are the ones subsidised.

If we did this we could very quickly gather a vast amount of statistics on what a true living wage is in every part of the UK. it's likely very different from place to place..

How do you square the fact that wages have gone down over the last decade yet inflation has gone up - to historical highs?

It is not wage increases driving inflation. That is evident.

So perhaps look into what is driving inflation before arguing against things you don't fully understand. Don't fall for the fact that a few tory MPs have loosely mentioned inflation when talking about wage rises. They have a vested interest in avoiding increasing costs for companies and they are experts at the drop and run approach to population level thought control.

YABU. I was on £8 an hour in the mid 1990s when I worked for a big company as a secretary. Would be around £17 an hour now. Yet minimum pay is less than £10 an hour. The minimum wage absolutely SHOULD be much more. Too many people at the top of these companies are taking too much, whilst the 'little people' get fuckall, except the stale crumbs,

Time to level the playing field. Shit is getting serious now. People need more money. And if anyone says 'people should have worked harder, if they wanted a better paid job,' I swear I'll blow a gasket! Don't even fucking go there.

I have two jobs that pay just above the minimum wage. I've been a Clerical Assistant, Legal and Medical Secretary in my time, used to working in a pressurised environmental, but my two current jobs are currently the most pressurised I've had, they're both jobs other might look down on but I need a lot of background knowledge the ability to act in a calm manner even though I know have the times for problems, otherwise I stay late for nothing. I come home more exhausted than my previous jobs, so obviously I wouldn't say no to a pay rise. On the other hand, the government will have to pay me more, which means less for other services, and my other job will mean customers paying increased prices.

The problem you have with that is that minimum wage job will then be on par to entry level barristers, nurses, teachers, drs, etc, etc. Where is the incentive to study, do well and get a professional job? There isn’t. It’s not a case of one being more valuable, it is the case that people who spend ££££ and years studying should be financially recognised for this. You can’t seriously expect a refuse collector to earn the same as a barrister. People want equal wages without working/studying for it, that’s the problem. Wages would need to rise across the board and then you are back to square one. YANBU.

So perhaps look into what is driving inflation before arguing against things you don't fully understand. Don't fall for the fact that a few tory MPs have loosely mentioned inflation when talking about wage rises. They have a vested interest in avoiding increasing costs for companies and they are experts at the drop and run approach to population level thought control.

yep. they are dragging the phrase "wage price spiral" from Economics 101 and totally showing up their lack of understanding of the modern /current economy by spouting this nonsense.

I'm a top band five nurse. I get £16 an hour. It makes my 18 years of work worthless.

Hmmm - if a midwife is paid £16 ph it’s more than a nurse-so not sure this is accurate. A band 5 nurse currently gets £13.84ph. And many are paying back student loans. Glad others can see how poorly paid they are but sorry it’s taken an international financial crisis to prove it

No one should work full time and need to claim benefits

If businesses can't do that they are not viable

The whole economic model is fucked up

Reasons for getting educated should be less about money and more about being the best you can be, learning and growing

But the education model is devised around supporting a fucked up economic model not the human beings who are fodder for the model - whereas the model should support all humans ( not just those at the top )

It's not about working harder- people in low paid jobs work exceptionally hard. But it's being able to access training etc that enhances your earning potential. I did a healthcare degree because I grew up in poverty and didn't want that life for myself. If I could move across into a job that paid similar that was less responsibility then of course I would.