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.

There is no magic money tree though?

A company has a salary budget and if NMW goes up they employ fewer people or they go bust.

In no scenario does higher NMW lead to lower benefits

A lot of comments from people seemingly gleeful that many, many businesses may go bust as a result of this.

Where do these people expect the people who sadly lose their jobs to do?

@WestwardHo1 thank you.

What also pisses me off is the number of people we interview who are clearly just filling in time for the job centre. We would happily give many of them a job, give them a try, training and frankly in 5 years they could have a free house with the job if they’re willing to work. But when you ring to offer them the job they literally disappear. Back to the benefits. We used to get the odd one every couple of years. There’s load now.

But my unviable business is the problem. That feeds the nation, that gives 6 steady jobs. Not greatly paid but better than NMW as we make cuts in other areas to be able to do so.

nice

I don’t think anyone wants any business to go bust. But neither do we think it’s fair that people slave away like they did in Dickens’ time for an exploitative employer.

there is another option. And that is that you should be budgeting for a salary increase. And most sensible companies will have done this.

I bet a lot of people who think NMW is only right and fair, are more than happy to snap up a bargain from Shein or Temu 🤔

In my sector it's the people who are earning above NMW but below the 40% tax threshold (the majority of the skilled staff) who have been receiving minimal pay rises to cover the increases in NMW. No one argues that NMW shouldn't be increased, but now attention is moving to the living wage, this strategy is going to come under pressure as the staff who've been funding the cost of improving base salaries edge ever closer to not earning a living wage.

Easier said than done to find alternative work. Given how difficult it now is for school leavers to find work, and a reluctance of some employers to take on overqualified people for entry level roles, the theoretical "I'll jack it all in and work for Tesco for the same money" is a fantasy.

We run a small business which employs staff, mostly part time (due to operating hours - we literally can't be open full time)

Last year the combination of the increase in the real living wage (which we pay) plus the employer NI hike was brutal. It would have wiped out our entire profit margin if we had not increased our fees. Every other local business in the industry did the same.

The same will happen this year. Small businesses can't absorb it, but actually neither can many large businesses. So prices will rise.

And I'm afraid it is eighty years of the welfare state which has created this scenario.

Before anyone leaps down my throat (I won't be interested if they do) think about it for a moment. On what planet is it desirable that someone tokenly fills in applications because it's a requirement by the job centre and then scarpers the moment actual work materialises, because it's easier to just take the benefits than do a day's work? Some families have not worked for several generations.

You can budget money you haven't got.

It's not only one business who has to pay more NMW and therefore NI contributions. It's every business that supplies them. Those costs get passed along the chain until the end customer. Who increasingly cannot afford them.

I deal with companies all the time who barely make a profit as it is. All this talk of millions in profit is not actually the case for an awful lot of businesses. Far from it

Which was exactly what they were warned would happen, by anyone with even a rudimentary grasp of business. Yet they stubbornly stick to their mantra and their latest definition of "working people".

There's not a single economic brain among them, just student level ideology.

Did you not know that all business owners wear top hats and twiddle their moustaches, while their Savile Row suit stretches across their enormous stomach?!

@Westwardho1 I know generational families not working is a thing more so years ago. However on UC they are strict and you are expected to go to work otherwise you are sanctioned so I dont think that's the issue at all today.

Tell that to all the small tradesman who employ young trainees. They'll simply cut back on the jobs that they accept.

Good luck if you need a plumber or electrician.

The debate is not settled though. You appear to be stating outcomes as fact, when they actually are not.

This link has some data. Maybe not the best, but first result, and appears non biased.

Minimum Wage Increases: Do They Create Jobs or Cause Unemployment? - The Money Question

In general, job losses no, but less new low wage jobs coming on the market. If the raise is incremental. Large lumps in minimum wage look to be bad.

The bit that I think matters is item 2 on the link. Increased consumer spending.

Because of course, people on minimum wage are more likely to be living hand to mouth. So any extra they get is much more likely to go straight back into the economy, so the local economy is lifted . The more they have to spend, the more stuff is bought.

And if more stuff is bought, the less shops and businesses have to raise prices to cover their increased wage bill.

I know that last bit sounds a bit like a perpetual motion machine, but when you think about it, it does make sense.

That's my thinking anyway.

OMG. You think that the hospitality industry is "absolutely raking it in"???

You are so divorced from reality that there's really no point trying to make you understand.

In retail many companies operate with margins that are razor razor thin. I actually had a look at what their profit margin is after tax. Absolutely tiny. They cannot afford to pay more.

My answer is different for those in professions indirectly linked to government funding (such as carers, teachers, nurses etc)

Care workers are unpaid I get that. Buy the margins are so so small in hospitality and retail.

Hopefully that tax loophole has been closed in the budget, I heard something about it?

and if everyone did that?

Society can't function without minimum wage workers.

Some people dont think the minimum wage should be enough to live off of. People like bashing people on benefit top ups but also don't want minimum wage to rise.

The naïveté is amazing. Of course it’s easy. You just never turn up to the job you’re offered.