Should minimum wage be linked to company size and/or income

[Iyiyiiii]

If you work for Sainsco (just an example) full time (35 to 40 hours a week) at minimum wage

37.5 hours at minimum wage (£10.42) is £ 20,319
Total benefits: £ 68.96 per week
Universal Credit

Dob 1981
Location south east
Rent to private landlord £800 a month

Why on earth don’t the government make large companies pay more wages.

I think that it should be a company size issue, like the Sunday trading laws. You can't fudge how many people you employ like you can hide/write off profit money

Example, if you employ more than 150 people, your minimum wage goes up to £13.30 an hour

To take home £1,903.25 (min wage + UC) per month, you will need a salary of £27,671.28. (Hourly rate around 13.30)

**figures are not exact

AIBU no this would never work and would stunt company growth

YANBU not a bad idea....

For me I think minimum wage should be equal for all but the government shouldn't be subsidising the wages of those working for huge companies that turn a massive profit, its ridiculous. There should be support for small businesses though, some add a lot of value but just don't turn enough profit to offer decent wages (but might provide a service or product that is of value or be at the forefront of innovation etc).

You're right OP, the welfare state shouldn't be subsidising individuals on wages that don't match the cost of living while companies make ridiculous amounts of profit for shareholders.

I'd tweek it a bit though, every company has to pay a decent wage regardless of size - and if they can't then the company is the one who's applying for 'top up' benefits to enable them to do so, and fulfill certain criteria to be eligible.
So the small local business that genuinely can't afford to pay employees a living wage gets top ups to enable them to, Sainsbury's with their 300 million profit? No, you can pay your staff yourself out of your profits.
Pretty much the same way benefits work for the individual - you earn over X amount or have X amount sat in property or savings then you're expected to fund your self and not rely on benefits.

that would work (for me)

I agree that if you work full time, you shouldn't need benefits. But then minimum wage should be raised across the board. No idea how it would work with different size companies.

What happens when companies go through bad patches now? they sell assets / borrow more / lay off staff...

New hires could be at a lower salary, until they get big again

I want companies to pay their way

This.

The amount of money you would need to pay a single parent to be able to afford to live in London without benefits would be huge.

Which private business would employ them, when a childfree person with a high earning partner could afford to work for much less, because their expenses are lower and they have someone to share their living costs with? Who wouldn't be entitled to benefits whatever their income was.

I too don't know the answer, but basing NMW on what someone with the highest outgoings (single earner household with DC living in a high cost area) needs to live on probably isn't the way to go.

Maybe taxes on company profits should be higher? Which would contribute towards benefits for those who are entitled to them.

So the windfall tax, that is generally aimed at energy/oil companies. Just need to find a way to stop them hiding their profits in other countries to dodge the tax.

Economics clearly not your strong suit.

Big company doesn't equal big profits. Turnover does not equal profit.

If it was legislated that bigger businesses had to pay more, small businesses would disappear as no one would want to work there. Small businesses feed into larger businesses, the whole chain collapses

A disproportionate minimum wage would drive up the costs to end users.

The issue is housing. If housing costs wren't so high then there wouldn't be such a need for top ups.

There have always been jobs that will not support a family on their own (very low skilled, seasonal, erratic hours etc..).

There are different ways to fill these jobs.

In the past many of those jobs came with non financial benefits - for example in the past many hospitality, housekeeping and farm labouring jobs came with free or very subsidised accomodation.

Another way was lower skilled or seasonal jobs were done by people with fewer outgoings - eg as as second jobs, by (mainly) women with caring responsbilities , older people, students, teenagers or immigrants who were prepared to work hard and put up with very cheap or basic living conditions for a period of time.

In some countries automation has solved some of this issue.

Labour decided to make these jobs open to more people by topping up the wages with benefits.

I am not sure there is a right or wrong answer to this one - it is just a case of how we want to address it.

If anything, minimum wage should be tied to UK GDP.

In Sainsbury’s defence, their lowest rate is £11. Appreciate this is also very hard to live on but they aren’t NLW-payers (same is true of most supermarkets).

Because you'd be creating a rule which is really easy to game. Sainsburys (et al) then set up a new company for each physical supermarket, so employees are directly employed by that subsidiary. Each one employs far less people, and hence their minimum wage goes back down. Slightly more money goes to accountants.

Most of what you want is an argument for higher minimum wage for everyone.

Doesn't really stand up to scrutiny. If that is the case, why has inflation outstripped wage growth over the last 5 years? We had negative wage growth between 2021 and 2022, why didn't we experience deflation?

Very good point. One of our most basic needs for survival, ie shelter, is disproportionately expensive. Numerous reasons why it has got so out of hand - foreign investment in British real estate has been a big problem. Labour have said they will address this which is very welcome indeed. It won’t solve the problem overnight of course but at least they’ll tackle it.

I understand and agree with the sentiment however I can't see this method working.

Companies grow and shrink all the time, you can't change minimum wage based on how big a company is.

Why do you "need" £50k if you have no childcare costs??

I think there should be a maximum wage based on the wages of others in the company and that should include contract workers.

Yes - with low rental costs and no childcare? what are you paying for?

The issue here is in work benefits. Income that comes from tax but isn't taxed. Cut those, increase NMW and public services will get better and there'll be none of this nonsense of not working more than so many hours a week or your benefits will be cut. You want more money, you work for it.

I totally agree with this too

I earn min wage and no benefits. No DC and don't rent so not entitled

@ladykale It is nt the only figure that is a bit off in the post. I live in London and earn less than £80k pa and definitely do not get any benefits!

I don't understand people who constantly say minimum wage should be £15 an hour! If unskilled jobs like working in a warehouse or supermarket (for example) are paid at £15ph surely skilled jobs should be paid far more than this? Teachers, nurses, junior doctors should be on at least £25/£30 an hour on that basis, which will NEVER HAPPEN - why on earth would they bother to do these difficult, highly trained jobs if they can just work in a supermarket?

Way to make even more nurses and teachers quit!

I don't know what the answer is, but constantly raising the minimum wage is not it!

Flawed logic.

When you divide a "big business" by the number of stores it has, the numbers are usually pretty similar proportional to store size.

Why should, say, a Tesco that makes £100k p.a. from a small convenience store pay a higher wage to it's staff than a privately owned/independent store that also makes £100k p.a.?

The OP needs to stop thinking about size and start thinking about turnover/profit per store or per employee, and then they'll see that it's not much different to much smaller/private businesses. Divide the turnover/profit by number of stores or number of staff or number of customers, and you usually come down to a more realistic number!

It's obvious that a chain with 100 stores is going to make 100 times more profit than a business with a single store!

I work for a small company. My bills aren't linked to my pay so why should I have to work more hours or take a 2nd job just because I don't work for a large company. Is it right that "Beryl from next door" who works at Sainsburys gets paid more MW ph than I do? How is that fair?