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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Aibu to not want a £15 minimum wage?

663 replies

Israisingwagesworthit · 24/08/2022 09:30

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?

OP posts:
Miajk · 24/08/2022 12:04

If we can afford to pay ceo's and shareholders millions I don't see why we can't afford to pay other people £15

Davina69 · 24/08/2022 12:05

I run a small business and an increase in minimum wage will probably finish us off.

I currently take the same as my staff which is just over minimum wage and any increase would mean we would need to increase prices.

Nobody seems to admit that lockdown wasn't perhaps as good an idea as first thought. Most of the money I make this year will be used to repay the huge loan and overdraft I incurred just to be able to stay in business.

It's time to admit that the second lockdown was hugely damaging and that until the government cuts the amount of money it wastes, we are stuck

MarshaBradyo · 24/08/2022 12:07

MidnightMeltdown · 24/08/2022 12:01

YABU

Inflation is coming from energy prices and these prices are set on the international market.

A rise in minimums wage wouldn't mean that these people are suddenly rushing out to stock up on luxuries, it will mean being able to afford the basics (I.e. food and energy).

It would mean a hike in prices for companies though, pushing up inflation

Grumpypants78 · 24/08/2022 12:07

UrsulaPandress · 24/08/2022 09:32

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

The issue is everyone's wages are not pushed up though only those on minimum wage, others on higher salaries get minimal increases so you end up with workers wages overtaking those of their managers or people in more senior roles 🙄

Grumpypants78 · 24/08/2022 12:09

Miajk · 24/08/2022 12:04

If we can afford to pay ceo's and shareholders millions I don't see why we can't afford to pay other people £15

Most CEOs and shareholders don't get millions, you're just talking about conglomerate corporations not the majority of SMEs.

RedToothBrush · 24/08/2022 12:09

Crikeyalmighty · 24/08/2022 11:56

When we were in Denmark minimum wage was really high(around this I think) but so were lots of wages- a lot of quite average office jobs paying around £38k.

The thing is they had high minimum wage, huge tax (around 46%) but no NI, no council tax , cheap public transport and childcare full time at around £240 a month- so most couples with kids worked. There was also lots of very good quality social housing (for Danes) so whilst a lot of couples were bringing home around £3800 equivalent, even with 2 kids their childcare and rent were around £1300. Leaving around £2500 , no council tax etc. The tax take was high and so services were good.

It benefitted young families a lot, it didn't benefit older workers with no kids or single people if any age (apart from cheap good quality housing) but the mentality was different - it was seen as for the common good.

People always say, yes but it's expensive. The only thing I thought was very expensive was eating and drinking out - (that's because people are well paid). So we just did Less if it and more 'brunches' - less evening meals out.

Yep. Social common good as a priority rather than a individualist society which fuelled populism.

Its a completely different value system.

But you can't break out of where we currently are, without having a massive shift in ideas. Thats not fixable with a minimum wage rise.

The fact that the unions see a minimum wage rise as the solution rather than a cultural shift is probably the most depressing thing.

Its also why I comment on the Union leaders earning £100,000 and living in council houses because its indicative of the problem. They don't believe in solving the issues anymore than the Tory government. If they did they would fully understand their social responsibility and why their personal accountability mattered so much.

ginnybag · 24/08/2022 12:11

Some of what's being missed is that 'benefits' are wealth redistributors. Tax credits, universal credit, child benefit etc - they're hated on here 'because no-one working should have to rely on benefits' but, actually, they form an important role of moving money from the wealthiest to the poorest. And they do it in a way that doesn't damage small businesses or cost jobs.

The problem with lifting the minimum wage is that it's becoming cost-ineffective to do it, and is contributing to an overall drop in the standard of living. Low wage sectors are seeing roles cut rather than paying increased costs, and these roles are increasingly replaced with technology and higher insurance premiums.

Security is a classic example. Not that long ago, every construction site had guards. Then the minimum wage lifted, and lifted, and sites realised that, for the cost of paying the guards for half a project, they could buy and install a CCTV system, pay an increased insurance premium for the whole thing, and crack on.

And that's what they've done. They gamble the cost saving against the disruption of losses and the insurance overheads and the costs don't stack up. The fact that you get a less-safe environment is a knock on cost. Those jobs are gone, now, for the most part, and they're probably gone for ever. Many remaining security roles needs skills beyond the basics. It's becoming another 'closed' field for the very set of people it once offered lifelong, decent employment to.

Supermarkets are similar. Tech is replacing jobs, and the customer suffers as well as the employee.

And, yes, absolutely people should be offered more training, but its also reality that not everyone in society has (or ever will have) the ability, personality or interest in a 'highly-skilled' role. We need jobs for those people, too, so keeping them cost-viable is necessary, whilst also allowing those people to pay their bills and have a standard of living.

You need available jobs across society, not just highly skilled ones. You also need a reason for people to take on the less-desirable ones, or the stressful ones, or the ones that require years of training and student debt. If you hike the minimum wage, you can get rid of 'benefits', but then cost of living will increase, because wages for the semi-skilled and skilled will also have to jump (see all the strikes from those sectors currently, because they haven't kept pace with the lift in the NMW). You need businesses to be here, to thrive and survive to create those roles, and not all of them are 'viable' but a lot are definitely needed - private care companies, nurseries, shops, garages etc - so we'll need tax-breaks and support for them. We'll need to fund better conditions and perks for roles like nurses, forgive student debt for teachers and doctors, or people won't go into or stay in those roles.

We also need to acknowledge that a percentage of people in society will never 'work', for any number of reasons, and will - financially - always be takers rather than contributors. We need to stop demonising these people.

A previous poster suggested a much more dynamic taxing system. That's a brilliant idea, but would need massive investment in HMRC and DWP, because they aren't fit for purpose now.

There's no way to do this without spending public money somewhere in the system.

Left to me, I would freeze the minimum wage, overhaul both personal and business tax - and business tax rates should be based on a combination of the profit margin of a company, the absolute amount made, and the pay gap between highest and lowest, including director dividends past a threshold - and then increase low wage support via the PAYE system.

Walkden · 24/08/2022 12:12

Surely it has to be wrong that people working minimum wage still have to claim state benefits to survive?

Ultimately this means taxpayers are subsidising all business that rely on minimum wage labour and those subsidies are shovelled on to shareholders and CEO in the form of profits.

The argument that decent wages cause inflations or mean people will lose jobs or businesses fail date back to the mills and the origins of the trade union movements

Iamthewombat · 24/08/2022 12:13

Thats irrelevant to people under 40 in reality who are unlikely to get much of a pension full stop due to the current economic reality.

(The ‘irrelevant’ thing, according to this poster, is the fact that the shareholders of FTSE quoted businesses are often pension funds. The type that invest the savings of ordinary people saving for retirement).

Is that so? They will end up with a lot less if you get your way, won’t they? When corporate profits are curtailed so that these mythical shareholders can sit on their diamond encrusted thrones setting fire to £50 notes. Which in reality means that ordinary people’s pension savings will grow more slowly.

In any event, who says that the under 40s can’t save into a pension? Plenty do, especially since joining a workplace pension scheme became the default.

I’m not saying that the minimum wage should be suppressed because shareholders are more important but as a PP notes the lack of understanding of how things like plc profits and dividends, and corporate ownership, work, is surprising.

We can not get away from the issue that the over 65 are net benefiaries from the tax system whilst those under 40 will be net contributors over the courses of their whole life. We really have a situation where the elderly have taken away from subsequent generations.

Great, blame the ‘boomers’ again. Those bastards. Or do you mean that everyone retired (I assume that’s what thebover 65 thing means) will be a burden on the young? What do you propose to do about that, since it will happen to all of us one day?

ClottedCreamAndStrawberries · 24/08/2022 12:14

This is always going to be a contentious topic. Raising the NMW to £15 per hour is all very well but if everywhere has to raise their prices because of it then suddenly, £15ph has the same buying power as £9ph used to and we’re in the same situation anyway 🤷‍♀️ No idea what the solution is.

MarshaBradyo · 24/08/2022 12:16

Ilovemycatalot · 24/08/2022 12:01

Everyone deserves a wage to live on and current NMW doesn’t reflect that. If businesses go bust because they have to pay a real living wage it probably wasn’t a very viable busses to start with.

This is worrying

So small businesses would collapse, employment would rise, young people have fewer opportunities to start working and we’d see very bad outcomes

If tax we pay goes towards redistribution as pp said and avoids collapse of SME then imo it is preferable

There are other areas that could be looked at over this to with skills first

JustALittleHelpPlease · 24/08/2022 12:18

Davina69 · 24/08/2022 12:05

I run a small business and an increase in minimum wage will probably finish us off.

I currently take the same as my staff which is just over minimum wage and any increase would mean we would need to increase prices.

Nobody seems to admit that lockdown wasn't perhaps as good an idea as first thought. Most of the money I make this year will be used to repay the huge loan and overdraft I incurred just to be able to stay in business.

It's time to admit that the second lockdown was hugely damaging and that until the government cuts the amount of money it wastes, we are stuck

Whilst I sympathise with your struggles to keep your business and employees afloat I'm not quite sure how you think this would help.

If everyone stood up and said "yep, bad idea" what would change for you or your employees? If the government hadn't offered those loans you would presumably already be out of business. Your employees either reliant on benefits or employed elsewhere. Assuming they went to jobs earning the same they would be costing/inputting exactly the same amount of money.

The net loss/benefit to the government would stay the same. You are paying the loans because you wanted to keep the business afloat, presumably because you hope to increase your gains in the future or because you prefer working for yourself and are prepared to put in the slog to do that.

Lockdown is virtually nothing to do with where we are now.

DogInATent · 24/08/2022 12:18

Toddlerteaplease · 24/08/2022 10:00

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

No one should work full time and need to claim benefits
If businesses can't do that they are not viable

For small businesses, those that are going to suffer the most in the coming crisis, the problem isn't excessive profits depressing wages. It's the limits of what people will pay for goods and services. Your local corner shop isn't paying minimum wage because it's funneling vast profits to offshore tax havens.

Minimum wage needs to rise, and needs to rise faster than middle incomes, which in turn need to rise faster than top incomes.

We need to get past the politics of envy. If minimum wage increases by 20% then your middle income salary does not need to rise by more than that. If it does then it's only fuelling the problem.

This need to value self-worth by having someone else to look down on is why we can't have nice things for everyone, and why we keep on ending up with Conservative governments. It's why we get shit like Brexit.

mam0918 · 24/08/2022 12:20

I admit Im baffled by the entire work system but I dont get how jobs people want are paid more than jobs no one wants... seems backwards.

Footballers, an unnecassery job millions of people covet for the passion of the game are paid millions (while its a hobby people do for free or even pay to do) but a public toilet scrubber (a job NO ONE wants but that NEEDS doing) isnt even paid enough to live on normally.

The whole system seems backwards to me, where are the insentives for people to do the required unplesent jobs instead of the fun wellpaid ones?

MarshaBradyo · 24/08/2022 12:22

Ilovemycatalot · 24/08/2022 11:58

Don’t worry we have a Tory government so it will never happen.

Iirc Labour proposed it, Starmer rowed back on it. Maybe they’ll change their minds again but good luck with inflation etc - I assume the reality hit them after suggesting it,

toomuchlaundry · 24/08/2022 12:23

How much do people think CEOs of large businesses should earn? What would you want to get paid for being the CEO of a multi million pound business that employees thousands of staff?

ColonelCarter · 24/08/2022 12:25

UrsulaPandress · 24/08/2022 09:32

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

Yes. That's essentially what the OP is saying. I'm not sure how that can be wrong.

It still means the lowest paid in society will struggle.

We need higher taxation of corporations, closing loopholes and spreading wealth more evenly.

beachcitygirl · 24/08/2022 12:27

If a business can't afford to pay a real living wage to its employees
ie a wage that a person working a full time 40 hour working week can live on without state benefits then that company is shit & should be allowed to fail.

The irony of someone earning circa 40k moaning about a £15 an hour wage makes me want to vomit.

Thelnebriati · 24/08/2022 12:28

Minimum wage isn't about everyone's wage going up though, is it? It is complex, but I don't see why taxpayers should shore up an established business by subsidising the wages bill; especially if upper management are receiving above average salaries or bonuses.

Iamclearlyamug · 24/08/2022 12:30

Dadaya · 24/08/2022 09:36

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?

This is my thought too. People in skilled jobs who can earn the same doing an unskilled one won't bother - which will then leave a huge area where there is no workforce to do the job

RunningSME · 24/08/2022 12:30

toomuchlaundry · 24/08/2022 12:23

How much do people think CEOs of large businesses should earn? What would you want to get paid for being the CEO of a multi million pound business that employees thousands of staff?

The slog to the top can be difficult but having met a number of CEOs who I can assure you are no more intelligent than plenty of middle managers, I would have no qualms in capping their salary at 25 x the lowest paid person in the business.

Crikeyalmighty · 24/08/2022 12:33

@RedToothBrush totally agree

MarshaBradyo · 24/08/2022 12:34

beachcitygirl · 24/08/2022 12:27

If a business can't afford to pay a real living wage to its employees
ie a wage that a person working a full time 40 hour working week can live on without state benefits then that company is shit & should be allowed to fail.

The irony of someone earning circa 40k moaning about a £15 an hour wage makes me want to vomit.

I dont think this is correct plus it is counterproductive if you don’t want tanking employment.

Don’t forget right now business energy rates are not capped, this will be driving many viable businesses to the edge and I’m sure pushing more to close isn’t actually wanted if people think it through.

dianthus101 · 24/08/2022 12:35

Thelnebriati · 24/08/2022 12:28

Minimum wage isn't about everyone's wage going up though, is it? It is complex, but I don't see why taxpayers should shore up an established business by subsidising the wages bill; especially if upper management are receiving above average salaries or bonuses.

It will make everyone's wages go up though. Many quite skilled workers will currently be on less than 15 pounds per hour so their wages would have to go up too, not just those currently on minimum wage. Many other people are on not much more than 30K despite being in skilled stressful jobs so they will also expect more or they will switch to a minimum wage non-skilled less stressful job.

Thelnebriati · 24/08/2022 12:35

I would have no qualms in capping their salary at 25 x the lowest paid person in the business.
Doesn't Germany already do something like this? Their economy seems to have survived the hardship.