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....

You are right, Zara Sultana said this in the House of Commons.

So where would you buy your food if the entire food chain wasn't a viable business? They'd all go under, from the shops, back through to wholesalers and food processors, right back to farmers. That leaves you growing veg in your garden! Or, they have to put up prices throughout the food chain, meaning much higher retail shop prices, meaning your newly increased minimum wage now covers even less!

That’s right, and now it’s harder to see how much taxpayer subsidy is going to landlords, to employers, or to childcare providers. Less transparent, just how the current administration like it.

Jeeze, can you imagine what unfortunately would be like!

I don't want this, and I say that as someone who works in a supermarket

Why not? Smaller companies could apply for relief in the way that they apply for rates relief.

I think this would cause a huge boom in franchising tbh

If this was brought in, the government would have to raise it's own salaries significantly too, £15 ph, or equivalent to just under £30k pa for 37.5 hours per week.

Which is more than teachers, nurses and graduate trainees in the civil service are paid, plus a lot of other industries, in the first few years of their careers. You know, all those people who are currently striking because they haven't had pay rises for years and still aren't getting them.

So a lot of people currently at university or starting soon would graduate and find themselves eligible for a job paying NMW. Or is the plan to raise everyone's wages by a similar amount?

There’s a lot of factors and as your say poor economic policy doesn’t help. Inflation will pretty much always be higher than wage inflation because employers won’t match inflation…but even a wage increase below inflation causes additional spending, which pushes up inflation more, so after the wage increase inflation goes up again and widens the gap. Without the government doing something (good luck with that) it could, in theory, become a never ending cycle, I.e. each time moves then the other moves etc. It happened in Germany in the 1920s I think it was (I loved history at school).

nobody working full time ( 35 or more hours per week) should be getting benefits to top up wages,
if a business can't afford NMW it is not a viable business
they may still need benefits for housing and childcare but 35 hours at minimum wage should be enough to live off. Rents vary so much across the country a 2 bed place can be anything from £550 - £2000 a month, childcare costs are similar
I think the housing element of UC should be much more locally based and the cap set at county level, OK of course there are variations within lincolnshire for example but i don't think you can realistically make areas more sensitive than county level

Another idea is that the NMW is £12 employers have to pay £11 even the tiniest company, any company wanting government help via UC to top to £12, would have to prove that giving everyone £12 would make company unprofitable ( a set profit is allowed as things have to work financially but profits don't need to be 20% more than last year)and that no one in company was paid more than 10 x NMW ie £110 per hour (ie £200,000) there would be a sliding scale so they may have to pay 11.28 themselves with 72p subsidy etc, accounts would need auditing to ensure no hiding profits or offsetting notional rather than real losses etc probably too complicated

The taxpayer should not be subsidizing low wages. Full stop. Tax credits were the single biggest mistake our incompetent politicians, namely labour made. This has suppressed the productivity of this country for 25 years. Employers have no incentive to invest in automation and productivity if they can get cheap labour, usually through uncontrolled immigration. Who loses? Everyone. Through a. Lower standard of living because there is less money to go around more people.

If you can’t afford to pay your employees enough to pay for at least themselves (just the Individual and no dependents) to live without government subsidy, then you don’t have a viable business model.

there is also an argument to be made that an employee should be able to have a dependent, but I’m comfortable stating that if the company can’t provide a wage for at least one person to have clothing, food, and shelter, that company should go out of business.

Massive typo. Inflation. Can you imagine what inflation would be like.

Supermarkets have a low profit on sales, like 3%. Raising wages so much would have to massively impact prices. It's a really bad idea.

Sainsbury revenue was about £31bn and they made £327m profit before tax, and £207m after tax. It employees 171,000 people, which may equate to about 125,000 full-time equivalent employees. The profit is thus £1656/FT.employee or about £0.85 per employee per hour. Do you really think they could afford a £3/hour pay increase?

If you want to talk about big numbers, UK schools employ about 1m people (60% teachers) and revenue is £57bn. The NHS employs about 1.25m people and the revenue is £180bn.

Small businesses wouldn't find any employees.

They couldn't.

It would go on to the price of items. As would the wage rises for all the support staff that are employed through an agency and all the wage rises for the people employed in the production of the food that aren't directly employed by the supermarket.

If people think inflation is bad now...

Thinking that an increase to minimum wage is the easy solution demonstrates a pack of understanding in how the economy works.

Lack.. I'm sorry. I'm home ill today and I'm not doing very well with typing...

Insofar as big companies avoid tax, they nearly all do so by legal means. And the scope for companies like Sainsbury's (which is primarily UK-based) to do so is VERY limited. And even somewhat notorious companies like Starbucks pay VAT, business rates, NICs etc. Whereas many of the small local cafes, barbers, grocers etc. in my part of N London are more, er, flexible in some of those areas. (And/or exist primarily to launder money...)

I think large companies who make huge profits should pay more than the minimum wage. Otherwise the taxpayer is in effect subsidising them by making top up benefit payments like UC to their employees whilst the company shareholders get paid generous dividends and directors get huge bonuses.
So yes I think youre are right, there should be a way to make large profitable companies pay more than the minimum wage because the miminum wage really isnt enough to live on without a top up of benefits. Morally its wrong, how to fix it is an issue , and tbh i dont think most politicians will see it as a problem as they are scared of upsetting businesses ( and they are probaby in the category of shareholders or chairmans who profit!)

Maybe some sort of sliding tax liability for companies based on turnover/ profit. The less their employees claim benefits, the less tax liability. Effectively make it preferable to pay employees properly, then it also cuts out the bureaucracy if less are claiming. The downside is the risk that companies would avoid employees with bigger family set ups.
It seems to get chicken and egg at present.

Nail on the head there. Brown made a massive mistake in throwing money around, which fuelled inflation, and gave the "green light" for people to work only 16 hours per week. We'll be feeling the consequences for a generation or two. Tax credits were a stupid idea. Like a lot of other mistakes, he was told at the time it was a massive mistake, but he ignored the experts. You can trace the housing cost inflation right back to Brown's tax credits.

To be fair is sainburys they do pay more than minimum wage in my expensive south east town. And they have an anti social hour uplift for certain shifts. Im not saying its an amazing wage btw.

Why would I go work for the local greengrocer if I could get paid more at the supermarket?

Exactly, and the bigger firms usually already have a better full employment package than your local private independent shop, such as usually enhanced pension, holiday entitlements, sick pay entitlements, career progression, in house training courses, etc. A local greengrocer will offer the bare legal minimum, no career progression, etc.

Makes no sense at all to legally force a business to pay more wages than others.

But then again, it made no sense to throw tax credit money at people but Brown did it anyway.

At the end of the day, more money in the economy fuels inflation and would probably make the housing crisis worse.