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?

I work for a charity with a mix of paid and voluntary staff. With fewer people volunteering (there's a whole other thread on that here today) an increase in our wage bill on this scale would about sink us.

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.

I always take the view that if a business/organisation says it can't afford to pay its staff a sensible wage/salary, it doesn't have a viable business.

There is an issue with the differential between the low paid and the more skilled jobs, but then you could take the view that the lower skilled jobs are undervalued anyway and are not so low skilled or lacking in responsibility.

Other countries seem to manage to pay their workers decent salaries - they pay high taxes too - but they have a decent standard of living and far more equal society.

@Toddlerteaplease
That is awful. And i definitely think that needs to be addressed because otherwise you have people repeating this nonsense

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.

ad infinitum.

If all those who have remembered "wage price spiral" from Economics 101, they should also try to remember how the Keyensian multiplier works.

But also. If you train everyone to have these qualifications and therefore the high paying jobs (chortle, see the nurse above) and thus have a high-skills society - who is picking the fruit?

Ok, so if people are concerned about their wage being devalued for whatever reason then we need to look at help adjusting the cost of living to match what the lowest paid can afford. Housing is the first thing that springs to my mind.

This, in spades.

In my 2 decades working, my real-terms pay has already been cut by 20% and the gap between what someone starting in my job and someone of 10+ years experience can earn has shrunken considerably as those at the bottom got way more of a % pay increase while those higher up the ladder had to contend with less.

If we keep increasing minimum wage but forget about everyone else then, at some point, everyone will be on minimum wage and the jobs with crappy conditions, which nonetheless at least used to pay reasonably well, will be left without people wanting to work in them.

This doesn't just apply to teaching - how many managerial jobs in retail, hospitality etc. earn above minimum wage, but by far not £15 per hour? ho would take on the extra work and responsibility while being paid the same as everyone else?

The answer is not to continually just look to the bottom.
And, as PP have pointed out, just deciding to increase people's pay will simply make everything more expensive.

I earn £10.81 an hour as a manager with a shitload of responsibility and stress; and that’s if I only work my contracted 48hrs.

Our wages bill is already too high; and our EBITDA is a few pounds a week at best; in a minus often.

I don’t see how this would work without prices skyrocketing. It’s not always about fat cat CEOS, we’re a business just about paying to stay open.

A £15ph minimum wage should mean that the amount of top up benefits fall. It is perverse that taxpayers subsidise a boost to minimum wage because it's not enough to live on.

I can't get angry at people on low wages wanting to be paid more when people at the top are getting pay rises. If you run a company and want your lower paid people to accept a below inflation pay rise then you should accept a pay cut too. It's outrageous that share holders are making record profits when low paid workers basically have pay cuts.

I'd either lose my job or have my hours reduced because they couldn't afford to pay that much.

@WhileMyGuitarGentlyWeeps But that was the point of my post. The top bosses will just increase costs to maintain their massive profits, rather than letting profits dip to allow the real terms benefit of minimum wage happen.

If they just increase prices to cover the cost of an increased minimum wage then it disadvantages everyone, those who earn minimum wage, those below £15 per hour currently and those slightly over £15 per hour. For example, I earn £19.50 ish per hour for a very stressful job, If I could stack shelves for £15 I'd take the payout as my mental health would probably improve and I'd be moving all day rather than stuck at a desk alone. That leaves a gap in the 'skilled jobs'.

The introduction of the minimum wage made it easy for businesses to undervalue staff. My mom earnt piece work in the 1980s and earnt more than she does now on minimum wage. Should we remove minimum wage altogether? But that allows further exploitation of the poorest in reality.

Also I'd never say that minimum wages need to work harder to get more pay. My mom is on minimum wage, her bones are literally crumbling as a result of being a 60 year old doing hard manual labour in a factory 40 hours per week for minimum wage. Seeing her working so hard for so little i ensured i got a higher paid job to have easier work.

I currently work for a small business and if min wage was increased to £15ph my boss would have to let staff go to cover the increase. As much as I would love a pay rise not had one for 4 yrs I would much rather not do the work of 2 or 3 to gain it. I think many other business's would be in the same situation

In Finland the wage structure is much more flat. People still aspire to be doctors or solicitors because they are stretching themselves and doing work which will satisfy them. And of course teaching is seen as a highly desirable jon which is only open to the best and brightest.

Surely if you can't afford to pay employees enough to live on your business isn't making enough to hire employees full stop. Businesses can't puss the buck into someone else because they want labour at unfair prices.

If that happens, I'm quitting teaching and going back to work in retail, that was much much easier!!

What is the point in training and doing a stressful job if you don't get rewarded for it?

There needs to be a tax system that penalises companies that pay low wages yet making billions and conversely one that helps the struggle business or charity with higher wages, be that on corp tax or with VAT, more support for Charites (not private schools, they aren't charities)

the big problem though is with public services, they are not for profit, so how do we pay for the 10s of billions needed for higher pay?

Sure there would be savings in not paying working benefits but it wont be enough.

So i think there needs to be a wealth tax.

We simply cannot keep getting tax payers to subsidise the profits of large profitable companies.

There must be another answer somewhere

To some extent, the increases in the tax free personal allowance and NIC thresholds are "part" of a potential answer. People on minimum wage now pay a lot less tax and NIC which is a "pay rise" in terms of their take home pay.

So how does that work with public sector or firms that are nominally private but exist only because of the public sector i.e Care Agencies.

In 10 years time there won't be a need for fruit pickers, or shelf stickers, or warehouse workers, it will all be automated with few people managing the machines.

The country needs to move to upskilling the workforce before droves of low paid workers are made redundant with no opportunity to redeploy into skilled roles.

I do think there needs to be a fair living wage not just a minimum wage but we also need to think of the repercussions. What is a NQ teacher or nurse on? NQ nurse starting salary is 27k which is a bit under £15.

So if you were earning minimum wage as a nurse are you going to keep doing that or find an easier job? Then if nurses wage are put up other sectors will want more and then yes prices rise and the people on &15 an hour are back at square one? I don’t know the answer.

I assume working conditions for doctors, solicitors and teachers are far less appalling than they are over here?

I know that teachers have it much easier - more freedom, more public recognition and respect (rather than being seen as the root of all evil by so many), far less pressure on them to get results to nurse some stupid league table.

Should a couple of 18 year olds on minimum wage, doing unskilled work, with no qualifications, be bringing in £60k a year household income though?

I’m not arguing either way - I’m just very confused because as a skilled worker, with two degrees, and ten years work experience I earn £27k. And my husband’s wage works out to around £15 an hour for a very highly skilled role, and ten years experience. We’re not considered underpaid - we earn the going rate for our line of work.

I'd like to see the idea of Basic Universal Income properly addressed.

If businesses close down, then that will increase unemployment, costing the taxpayer a lot more than "subsidising" low wages via the benefits system. It would also cause more empty shops and derelict industrial premises, again, causing the taxpayer more expense in terms of crime, renovating run down areas, etc.

My view is that companies need to accept lower profits. Corporate greed in big companies has gotten way out of hand. Smaller companies need to accept that if they can't pay a decent wage and make a profit then they don't have a viable business. I have a friend who has a small food business, she complains that she can't get any staff to work for the money she's offering but if she offers a higher wage then she won't make enough to make the business profitable. In my view she obviously doesn't have a business worth keeping then. There are too many people opening up small businesses such as gift shops, hat shops, pet shops, etc etc etc just because they want to then lamenting when they don't get the footfall or can't recruit staff because they aren't offering a decent hourly rate.

Previously I was all for a raise in minimum wage, but £15 per hr is quite a jump and too much too soon surely? I earn around £25k for various reasons atm (needed low stress job for m h issues etc). I don’t quite earn this £15 per hr currently but I accept that if I retrain I can do so- easily- again.

But It’s not as simple as just raising the minimum wage though, is it? You get the next lot of people who are on just over £30k saying “what about us; we need a raise!” etc etc. Also, I bet people on benefits would feel they deserve a raise in their ‘income’- where does it stop?

I do feel though that many small businesses have no business operating if they can’t pay their staff properly. I’m always looking for jobs- keeping an eye on better opportunities in the market etc- and am alarmed to see that anything beyond entry level in admin etc these days only pays v little over minimum wage which is impossible to live comfortably on.