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?

Rents are determined by what people can afford to pay. What people are paid is determined by the value of their labour. Saying pay must adjust to rents has things backwards, the flow of money is in the opposite direction.

Also, there is no "should" about what someone can afford. Labour is worth what it's worth, it may or may not pay enough to avoid cold and hunger. If pay is not enough to provide a socially acceptable level of income, it's the job of the benefits system to fill the gap. Artificially inflating pay rates (as a solution) is just throwing sand into the gears of the economy.

It turns out that:

John Rentoul @ JohnRetoul
To be fair, the TUC demand is for a £15 min wage when the median reaches £20

^ www.tuc.org.uk/blogs/we-need-15-minimum-wage^

Whats interesting is this paragraph:
Raise the minimum wage target to 75% of median wages
Secondly, the TUC believes government should raise its target for the minimum wage. The current target is 66 per cent of median wages by 2024. The obvious next step is 75 per cent.

Since it was introduced, the minimum wage has increased as a proportion of the median wage. The wage floor was introduced at 47 per cent and is now on its way to 66 per cent by 2024. As unions predicted, the evidence continues to show a positive effect on wages and no job losses.

So it does look like the TUC WANT people in skilled jobs to be earning not that much more than people on minimum wage.

It talks about wages and no job loses but it DOESNT talk about labour shortages in key areas.

It should. Thats the really bit challenge with this idea.

What labour is worth is an artificial concept.
If we had no benefits system at all, very elderly people could end up working for a meal. That is not what their labour is worth, that is simply desperation.

And women and black people were not paid less because their labour was worth less. They were paid less because society used to socially support that and legally employers could get away with it.

Rents are determined by what people can afford to pay. What people are paid is determined by the value of their labour. Saying pay must adjust to rents has things backwards, the flow of money is in the opposite direction.

you’ll find in some areas many vacancies for menial jobs. If people can not afford to live in an area due to high rents, then carers, nurses etc will not work in those areas or be very few about. Rural areas are constantly pricing younger people out of the area - so they move away.

Cornwall and Devon are examples of lack of staff due to lack of affordable rental homes. Every other pub and cafe has signs up for staff. It’s not just those staff but carers, nursing staff that are needed but they can’t live their due to rents

r. If pay is not enough to provide a socially acceptable level of income, it's the job of the benefits system to fill the gap.

it is not the job of the tax payer to artificially prop up a business by topping up the unliveable wages

But why does minimum wage have to be £15 or nothing? Yes it should increase but maybe not as much as £15 for the reasons others have stated.

It's enough for single people to live reasonably comfortably in most areas of the country though. The top up benefits are for those who are trying to support more than one person on a minimum wage.

dianthus101

I’ve had nurses commuting 25 miles due to not being able to afford to live in the area they are working, rents far to high and unable to get council property

private renting means that the agents decide what’s “affordable” and often one wage is not affordable for renting

But why does minimum wage have to be £15 or nothing?

it’s not the case, NMW is already set at £9.50 per hour for those over 23 years old

So it does look like the TUC WANT people in skilled jobs to be earning not that much more than people on minimum wage.

it never ceases to amaze me that people apparently have zero idea of what unions actually do or want. A large part of discussions about wages and T&C are about pay differentials. That is pretty much the lifeblood of a union. And it is one reason why they weren't entirely on board with equal pay.

So everyone's pay goes way up?

This couldn't be more wrong.

It is not the job of taxpayers to top up and artificially inflate the viability of private enterprise and profit.

Sadly the last Labour government introduced tax credits which was bloody lunacy. Thus creating a situation where exactly that happened.

Businesses (as mentioned in this thread a lot) have grown to actually believe they are viable even when they cannot afford a staffing bill that simply pays a living wage.

Bloody ludicrous.

Non-viable businesses must fail. The market will decide.

Benefits are a safety net for the the unemployed, the vulnerable & sick.

They ARE not meant to be and should
Not be a way for crap business to get away with paying low wages &'still trousering profit.

It actually makes me feel so sad that some on here have such a need to feel better than others that they would begrudge the lowest paid in society a wage rise up to one on which they could live without having to claim benefit.

Then instead of propping up profit of private enterprise -benefits could be at a level that doesn't mean those people still have to turn to food banks & school uniform banks and charity shops.

Really some of you need to give your head a wobble.

Big society means that whatever way it works it means we all rely on each other to prop each other up anyway.
I for example have no patents - part of my tax goes to care homes
I have no nursery age children - part of my tax goes to nurseries & nursery vouchers
I have no one on benefits - part of my tax goes on that.
I do however use the nhs regularly & my daughter received DLA

We all (in one way or another) give & we all take.

Either through charitable giving, food banks & taxes towards UC etc

Far better to pay decent levels of tax & NI and have businesses pay their own salaries from their own profits

And allow the lowest paid to climb off the benefit trap and allow those most vulnerable to have benefits that don't mean they also have to rummage food banks in 2022.

Dignified appropriate taxation, a real living wage that a person can actually live off & build a family.

It's not that long ago a manual labourer could afford to build a family with a housewife & 2 kids on his wage alone.

Huge corporations not paying taxation. The bloody vile wife of the exchequer having offshore accounts, the corruption so settled its almost accepted. The ideological decisions of a party determined to make the rich richer & the poor poorer as they hoover up even more ill-gotten wealth.

Reading the people on here trying to find excuses to avoid a £15 minimum wage is nauseating.

I feel bad now about ruining your outpouring of spite. I deliberately mis-stated the result to see whether anyone would notice. Confirming how little understood big numbers are by anyone who thinks that cutting CEO pay will deliver utopia. I had a right old laugh. In the end somebody did - I think it was @PestorPeston though, not you. How funny. You couldn’t wait to stick the boot in though, could you? Poor spiteful little you.

It isn't about begrudging people higher wages in the slightest. I would love to pay everyone at least £15 an hour, genuinely. And I have already taken a pay cut myself in order to enable us to give staff a pay rise.

I just don't see how it can work. While I agree with you in principle that tax credits/UC etc shouldn't be used to subsidise employers who don't pay their staff enough to live on, the reality is simply that many businesses operate on incredibly tight margins. Like the little cafe that employs my dd for example. It's all very well saying that businesses which aren't viable should be allowed to fail, but what will happen to all of those staff when the businesses fold? Where will all the new, higher paid jobs suddenly come from?

I want to believe that this could work, but I just don't see how it could. Of course, the huge corporates could afford to pay more by not paying huge fat cat salaries to their senior staff or by reducing profits, but the vast majority of the UK workforce don't work for huge corporates - they work for SMEs, in the public sector and in the third sector, all of which would struggle to resource these higher wages.

@beachcitygirl

If your idea of "non viable" businesses fail, then that just puts more people on the dole claiming all their income from benefits, not just a portion, so cost the taxpayer billions more. If businesses fail, they're not paying VAT, PAYE, NIC, income/corporation tax, so less money paid to the government to pay the additional dole costs!

What about organisations that aren't "businesses", such as charities, public sector, schools, NHS, etc - how do they afford to pay the increase in wages? Presumably you don't want them to fail, so they'll also need more money from the taxpayer.

So you'd have to increase taxes on those who've had a pay rise from the increase in minimal wages, making them probably little better off, in fact, probably not better off at all as with their higher wages, they'll be eligible for less UC/tax credits so maybe they won't have any more money at all.

But, in the meantime, you've caused huge numbers of businesses to fail and squeezed the non profit sector!

@beachcitygirl

And it's the small businesses who employ roughly half of the UK workforce and roughly a third of the turnover (sales) of the private sector. They're the ones who ARE paying taxes etc.

If they fail and close down (i.e. your local corner shop, your local cafe, etc)., then their trade will be taken over by larger/international firms who arguable DON'T pay their full share of UK taxes.

So the Treasury could well see much lower tax revenues from a further shift away from small firms to large firms.

Do we really want more Starbucks/McDonalds rather than independent cafes??

Do we really want Amazon to get an even bigger market share when even more small shops/small manufacturers go bust?

Be VERY careful what you wish for.

@beachcitygirl has already confirmed that she doesn't care if charities fail. She thinks that the state should pick up the tab for providing services to vulnerable people.

I'm not unsympathetic to this view at all. In an ideal society, there would be no place for charities providing essential services. However, if the state had to fill the gap that would arise from charities going under and cover the cost of a massively increased wage bill in the public sector and provide benefits at a decent level for all of the newly unemployed people whose employers couldn't afford the hike in minimum wage, then I am not totally clear as to where the money for all this would be coming from.

If people have ideas for new types of business that can viably employ large numbers of relatively unskilled workers on £15 an hour in order to replace all of the existing jobs that would be lost and to make up the loss of tax revenue to the state, then maybe this can work. I just don't have enough imagination to be able to see what those businesses might look like or where they might be coming from.

Sorry didn't realise I had to provide a full blue print for economic policy here.

We should be demanding of our elected officials that the loop

Holes which allow multi-national Corps to not pay their taxes or corporation taxes are closed.
We should not tolerate elected officials who are involved in off shore behaviours.

Raise taxation to huge levels on the very very rich & raise the thresh hold at which tax has to be paid.

Raise unemployment benefit to median wage.

To be honest I'd introduce UBI but that's a different thread.

Yup tax the ultra rich. Oh and while I'm at it stop allowing off shore individuals to buy up property & huge swathes of land as investment.
I live in Scotland & people are forced far out of villages and family support as some want pretty holiday cottage investments.

Oh and shut that Airbnb shit right down.

Can most of us agree that the taxpayer shouldn't be subsidising wages for large, established companies while upper management in those same companies receive large salaries and bonuses?

YABU

Any business model that requires people to earn poverty wages is not a viable model. I don’t care if that’s a small or large business. It is not viable.

Why should those on low wages effectively subsidise the success of capitalism?

A higher minimum wage is a good thing because it means people have more money in their pockets to spend on things other than essentials. Eg luxuries, better food, sports, holidays. Which benefits their mental and physical health and has so many great knock on effects.

I have no sympathy with those bleating that their business would fold without paying their staff a pittance. It means the business is not a good business model.

But why should Amazon be allowed to exist in the form that it does?

If everyone was paid better wages - except those who have excessive wealth who need to be paid less - then we could afford the higher prices that small businesses would need to charge.

Having large, overly wealthy businesses, who push the wages down creates massive problems for those smaller businesses. The answer is not to let the smaller businesses follow the same approach of rip off wages.

A very naive point of view. Labour costs are not natural laws like say, the law of gravity. Labour costs are set by businesses. As you go further up the chain, you’ll see that CEOs are paid high wages because other CEOs agree that they should get high wages (and then claim “it’s just the market”).

Utter bullshit.

I would think most people could probably sign up to that. I think most people, too, would probably agree that we should close tax loopholes that enable large corporations to profit from UK business without paying a fair amount of tax etc.

Personally, I'm totally on board with making the rich pay higher taxes, with taxing corporate profits more, and with taking the lowest paid out of taxation altogether. I would also support a modest rise in the national minimum wage.

What I would not support is the massive hike that's being proposed here to a nmw of £15 per hour, because I believe that it would be counterproductive. It would just push more people into unemployment, public services would inevitably deteriorate due to lack of sufficient funding, and the third sector which currently provides much-needed support for the most vulnerable would all but collapse. I can't see how that benefits anyone.