About half of British workers earn under £15 hour - new Living Wage?

[Melisha]

At the moment about half of the workforce earns under £15 an hour. We need to increase national minimum wage to £15 an hour, lifting many of the workforce out of poverty.
Do you agree NMW should be £15 an hour?

No - I was recently employed by council leisure centres who had to close a number of their venues . One reason was due to increased staff wages. They could t increase customers membership fees - as need to keep it affordable. Yet the local authority’s contribution was cut to a third due to their lack of money.

From another angle me and DH own a small business. We have only recently employed staff other than us two and it’s a huge chunk to pay out each month. We don’t pay ourselves much more than the employees as there isn’t enough after paying salaries, pensions, employers NI contributions.

But by raising NMW to £15 an hour you’d actually be raising the wages of significantly more than JUST those on NMW currently, there are lots of people who’s hourly rate falls between £12 and £15 so all of those would need to be uplifted to the £15. On top of that you’re then going to have to increase the hourly rate of all of the “next rung up” who WERE on £15 an hour for example the team leaders for Tesco who have the added responsibility of being in charge/managing, they need to be paid appropriately for that so their £15 becomes £17, the next run above that lets say the regional manager was £17, they are in charge of all team leaders plus management duties so THEY need to be paid fairly for that so suddenly their £17 becomes £20. It’s the knock on affect of increasing NMW, it doesn’t just affect that 5% it affects everybody else up the line.

This is not about the lowest 5 or 10% staff. About half of workers are paid less than £15 an hour. Making minimum wage £15 would be a wage increase for about half the population.

Exactly, and doing that would mean it doesn’t end up being an actual pay rise for anybody. Because if the employers of half the population are having to pay that extra to half the population all that happens is your food costs more, petrol costs more, restaurants charge more, gym memberships cost more, hair dressers cost more, insurance and utilities all cost more, because they are paying out more they have to recoup those costs. So you might get £15 an hour but it’s not worth any more than what you get right now.

Yes. I can see that.

Is this why it's all so homogeneous at the bottom end now. Just each rise of minimum wage sucks in the layer above?
It sort of felt better before minimum wage came in? But I was only about 2 years into full time work then so it's hard to remember.

@Mrsttcno1 Supervisors/team leaders in many places are not paid much more. It is why it is often so hard to recruit for them. In my DPs job, role above gets an extra £1500 a year for a massive amount of extra responsibility and stress.

@Spendonsend before minimum wage came in. there was more differentiation between different wage levels. But the lowest wages were very low. Barely above benefits - single people only get £94 a week plus any help with rent and council tax. And job centres would force people to take these jobs. There were no childcare vouchers, so people could end up a lot worse off working.

Why does this never apply to generous pay for the top 5%.

I think raising minimum wage to £15 all at once might lead to redundancies. I think in April it should be raised £1 per hour. Those those who employ people eating a little bit above that rate should also raise their staff wage £1 per hour.

Yeah so every time NMW rises every layer gets essentially the same increase because there has to be a difference in pay between the person on a check out and the team leader who manages them and then the manager who manages them. Extra responsibility/duties/work has to come with extra pay otherwise nobody would do those jobs so the increase to NMW doesn’t really end up benefitting anybody in “real” terms.

It also means (in my experience of assisting people into work) that employers now want a LOT from an employee for a NMW job. 20 years ago you didn’t really need anything to get an entry level job, you didn’t need previous experience or qualifications, employers were happy with that because they would pay you accordingly and then as you progress in your ability you would work up in pay. Because employers now have to pay NMW, and especially as it increases, they want more from entry level staff. Most job adverts now advertising minimum wage jobs ask for qualifications, 1-2 years experience, some even are asking for degrees, it makes it a lot more difficult and competitive than it once was.

Because as others and myself have said, they are 5%. They could all double their salaries and it still wouldn’t have the same impact as increasing the salaries for the other 95% which is what happens when you increase NMW substantially.

I think the long term idea would be employers ,reduce the differential.

You reduce higher paid employees wages to balance the books.

In my son's firm, they had to increase the wages offered to graduates as it is a very competitive market and they weren't getting the calibre of graduates that they wanted. That actually meant new/raw graduates were coming in at a higher wage that the previous years' intake (who'd only got an inflationary pay rise), when led to lots of them leaving! The firm just didn't see it coming, although it was blindingly obvious that 2022 graduates wouldn't be happy seeing the 2023 graduate intake coming in at a higher wage (who they'd have to train!!). To stop the leakage, they had to increase the wages of previous intakes by the same margin, to keep the differential between years. The exact same thing happens when NMW increases - everyone on higher levels (supervisors, managers, those with more responsibility etc) want at least the same percentage increase. Hence why it's so inflationary.

Great idea. Then the higher paid employees leave and go elsewhere, either to other employers, or abroad (as we see with IT consultants, doctors, etc)!

@Badbadbunny but if we keep paying people a wage that means they can't afford housing or food, nobody will work the minimum wage wage jobs either
It's lose lose
Like "here you can have this job, you'll work 40hrs a week but you won't be able afford to rent where you live"

But where do you stop. So those that were on £15 don't get a £1 pay rise?

The answer is more housing which would reduce the cost of housing! We can't keep pumping money into the economy to drive housing costs higher and higher!

In April 24 NMW was raised 10%

If you raised NMW over the next 5 year term, by 5% each year

£12.01 = £24980 full time 40 hrs weekly
£12.61 = £26228
£13.24 = £27539
£13.90 = £28912
£14.59 = £30347

Why should the tax payer be subsidising the big operate organisations that are paying low wages, which then get topped up with U.C for working benefits? That money could be used to pay and retain nurses on better wages. Money for shareholders should be coming after those working within the business receive a wage that can be lived on sufficiently. As for smaller business, again why should people be working way below the living wage line if the business isn't profitable.

In order to afford this, taxes would have to go up massively.
Minimum wage at the moment you don't pay much tax
To afford the higher minimum wage they will have to tax most of it back off you.
It will also take you above a lot of freebie thresholds

That's the thing
People talk about top ups and freebies
A lot of people on minimum wage don't get this. Even my colleague presumed I got wage top ups when they asked why I was doing over time

As for smaller business, again why should people be working way below the living wage line if the business isn't profitable

I don't understand how you cant see the problem.

Small business, hourly rate was £50 ph, increase NMW, they increase the hourly rate. So the wage increase is off set by the cost increase.

As said up thread average self employed wage is £38k

Great idea. Then the higher paid employees leave and go elsewhere, either to other employers, or abroad (as we see with IT consultants, doctors, etc)!

Let them

Its the shareholders, landowners and those owning the business - those that don't work for the money but receive it as a passive income - its not so easy to sell up, and many don't live in the uK anyway so they can't leave if they didn't start from here

To afford the higher minimum wage they will have to tax most of it back off you.

Thats not how wages and tax works

I'm paid little over minimum wage, charity, only employee, no we can't afford to pay more!