To think raising NMW is a good thing

[Kilot]

The poorest in society will earn more. Companies will have to pay more, benefits will drop.

In theory it’s great , if the reality is businesses stop employing then it really isn’t great and will increase unemployment levels .

But if the businesses fold, the benefit bill will be larger, to now support the unemployed people.

Or people with mortgages etc, who don’t get all the help, will be put in a dire situation.

Increase tax free allowance?

Well small businesses and new businesses won’t be able to absorb it will they. PP obviously think they shouldn’t be in business then - personally I’d rather not see a world where the only businesses that exist are massive faceless ones.
my DP and I both work in agriculture; last year his company made a lot of staff redundant and the same will follow with this. My company too, especially with the pressure on the agri sector at the moment. It’s a really worrying time for us and a huge amount of people we know.

My husband is in hospitality (independent business running a few venues, currently only 1 is profitable as it is and they are on their bare bones in the rest) he is in charge of finance and this now means working many many hours more to work out how this will work out, hard decisions for the venues and eventually if the venues have to close he'll be out of a job.

So many posters on here are so far out of touch of the real world its unreal, I have a pretty secure public sector role so I'm ok but obviously its not about individuals its the wider picture, clearly many people are just cushy in their job in big companies and give no thought to the knock on effect. Its certainly nothing to do with businesses wanting to pay shit wages (well most of them anyway)

The thing to watch is employment especially for young people. There’s already threads on some finding it very hard to get work. If that increases that’ll be tough.

When the NMW goes up this then narrows the gap between the people on NMW and the next level up. And the one above that. And so it goes on.
Semi skilled workers in the construction industry, supervisors in the hospitality industry etc. So that pushes their wages up too. So the wage bill for every company goes up far more than the increase in NMW.
So the prices go up. The money has to come from somewhere.

If only this were true. Perhaps in the long run and maybe some larger companies but the reality for a lot of us that have just managed to start earning above NMW is we are back to earning NMW again (or very close to) and given rising above NMW often comes at a cost such as paying for education or reduced free time due to studying etc it makes people start to wonder "why bother".

I know for myself I spent a few thousand on a distance learning course and lost many hours of family time to get my just above NMW job. Now I will be only earning 29 pence an hour more than if I hadn't bothered. My company will struggle to afford the NMW increase so certainly won't be increasing the pay for the rest of us when they don't have to.

It will definitely be worse for young people especially those trying to get jobs whilst studying or in jobs not requiring higher education quals (people often forget that families struggle and need old teens to contribute). Businesses wont want to take on an inexperienced younger when they have to pay them so much.

I think full time more skilled work for young people may get better as they'll work for NMW to get in the door, experienced workers will want more money so businesses will want to pay as little as possible to survive.

But if the next level up don't get a rise when the NMW do what's that going to do for morale?
Let's say I'm a supervisor in a pub / restaurant responsible for dealing with complaints and cashing up and locking up at the end of the night. I'm not going to be happy just earning fractionally over the NMW and John the barman can just clock off and go home.
Let's say I'm semi skilled in a building site now just earning fractionally above the bloke who is the labourer on NMW. It's my name on the job sheet etc. Again I'm not going to be happy.
NMW rise pushes everything up.
I'm not saying people don't deserve a decent wage. Of course they do. But the wage bills in the pubs are continuously increasing so the prices go up so fewer people go out to eat and drink because they simply cannot afford it. So these businesses are closing down.

We are making the same point I think.

Happened to a friend. After NMW went up, and her pay didn’t increase, there was a 50p difference. You could call it poor management, but this was in a company that almost was going to close, but due to tough decesions (and depot closures elsewhere) lived to fight another day. She did feel aggrieved (and complained to management. Not sure what the outcome was).

A couple of points.
One, as I said in my previous post, there has been a generational change where a lot of Gen Z do not prioritise work any longer, saying that they value their free time more. I don't know whether this is a good choice or not but I can tell you that over the last decade I've had some fantastic Gen Z employees who won't work full time and prefer to take Universal Credit top-ups. I would love them to work full time. I've also just checked on a benefit calculator and they would not be entitled to any Universal Credit on the wage I pay them (a bit above living wage) if they did work full time. So how is that my fault?
The second point ties in to the first. I recently had a very demoralising conversation with a young person fresh out of uni. with a first class degree who can't get a job and they are applying for anything - coffee shops, factories, you name it. They live in a big Northern city and have a wide friendship circle from uni and almost all of them are still unemployed after having finished last summer. This person is so vibrant and enthusiastic. They told me they are just continually trying but that when they do see a job to apply for they themselves know at least twenty other people in their friendship group who apply for the same one so there are presumably hundreds of applicants. They also told me some of their friends are starting to give up, saying I will never have a good job or a house so I may as well forget it. What a start to a young person's life. It's appalling we've let them down like this.
Labour is making this situation worse by systematically draining money from small businesses to pay for their pet projects and by the way (to those who say let them all shut down) there are over five million small businesses, over 90% of all businesses. New legislation coming in as well will hammer young people. A business will no longer be able to employ Xmas staff unless they give them the same number of hours in January. 🙄 A new employee can go on long term sick from day one and be paid for this. Would you be keen to employ more people? It's a disaster.

You don’t understand economics or small business do you? The garage that repairs the car, will now be charging more for those repairs. Most independent garages run on reasonably tight margins. The courier who delivers the parts needed for the car, is now more expensive to employ, the manufacturer of the car part will increase the unit price of the spare parts to cover the increased courier fees. that increase is handed on to the garage, which in turn is handed on to you, the paying customer.

the house repairs you mention, okay let’s take a look at that. So you need a couple of slates and underfelt repaired and get a roofer in, the roofer runs their own business and is a sole trader. The roofer looks at the repair job, and needs scaffolding. The scaffolding company, also a small business, needs to increase the hire of the scaffolding to cover the extra wage for the employees. The roofer will need to pass this on to you, the customer. Now you have the cost of the under felt and slate, both manufactured over seas, so no increased cost there, but increased costs associated with transporting the materials, so once again that cost is given to the supplier, who then passes it on to the roofer, who in turn passes it on to you the paying customer. So now from your minimum wage, you have extra scaffolding costs, extra material costs and because everything is now costing more, the roofer is putting up their costs to do the job….so your increased minimum wage is now worth less in real terms than it was a few months ago.
do you see how this works?
now don’t forget that garage, supplier of car parts, supplier of roofing materials, scaffolding higher and roofer are all paying tax to the government which goes into the pot for services like the NHS, education, benefits. If they all go out of business, not only have you lost the tax, you’ve also got more people unemployed and claiming more from the government pot, oh and now you have a longer wait to find someone to do your car and roof repair, and due to reduced competition those bigger businesses will charge you more for shoddy work and lousy customer services…

So because I don't earn above MW I don't work hard? Have never trained or put in the hours?

Do you pay for childcare? Are you saying those nursery workers don't work hard, put in the hours and haven't trained?

Do your children go to school? Are you saying TAs don't work hard, put in the hours and haven't trained?

Do you have an elderly or disabled relative who requires care? Are you saying carers don't work hard, put in the hours and haven't trained?

Do you access anywhere public, ever? Are you saying cleaners who clean those places don't work hard, put in the hours and haven't trained?

Shall I go on?

Only they don’t increase the pay of the next level up. They just let the gap get smaller and smaller or employ less staff.

I might as well be on min wage now, skilled job 15 years qualified.

Only if combined with a reduction in corporation tax to encourage employers to employ more people.

Trained nursery workers earn above NMW, the untrained staff don't. No one is suggesting that NMW workers don't work hard or train, but those who are trained as supervisors etc are now earning pence above the NMW workers so what's the point in paying to train and putting the effort in for no extra money.

Saying unskilled workers sounds horrible because obviously they have skills but its business speak and everyone knows what it actually means. Lets n9tpretend that a cleaner is skilled in the same way as a shift supervisor in a supermarket or a room leader in a nursery.

I'm not talking about disability or family carers, I'm talking about professions. If it's all the same and there's no difference in training or skill or difficulty, why doesn't everyone just choose a higher paid career? Or are you saying it's literally just a random lottery?

This absolutely. An acquaintance posted a job advert recently, graduate level. 400 applications within 2 hours. That's how bad the situation is.

is that a good reason?

I think some of them do want to pay the lowest- not talking about your husband - but i’ve worked for a lot who do. Also, there is a lot of over capacity in hospitality now and that doesn’t make it difficult to survive.

Q1) what do you do?
Q2) nursery workers are linked to state funding - is it all that difficult to become/do? - all you need is a level 3 qualification at the most? Don't even need to do to uni?
Q3) why need TAs when you can have teachers. TAs can improve their incomes by training, doing the pgce and becoming a teacher
Q4) fair point on carers. I agree. It's a tough job and yes if I were emotive they'd deserve more pay

Cleaners - how hard is it to do?

I agree the situation is difficult out there. However, it is also very easy to have your cv ready, and just press ‘submit’, and apply for any one job.

I think you are being pretty dismissive of 'all you need is a level 3 qualification' 'dont even need to go to uni'

Theres a massive gap between no skills and level 3 and plenty skilled work doesn't need university in its training.