Benefits are actually subsidies for big business

[Thatsalineallright]

I don't know, I'm not an economist, but I can't help feeling that all the various benefits and top-ups given to people in work are actually just subsidising greedy corporations.

For example an amazon delivery driver working full time. Can't afford to pay for the ordinary costs of living on their low salary. The gov gives various help with energy costs, housing, children etc. So instead of Amazon having to pay their workers a living wage, ordinary tax payers have to fill in the gap.

The delivery driver maybe feels a bit shit about needing the extra help instead of fully supporting themselves, tax payers are angry and complain about so-called benefit scroungers, the government have less money to spend on other areas. And then Jeff Bezos or whoever is happily pocketing billions in profits.

AIBU? What got me thinking was the announcement about energy subsidies for lower income households. I'm of course happy that people won't be freezing this winter, but the system just seems so broken.

I definitely remember something like this in history at O level. I think workhouses were introduced to solve the problem of farmworkers not being paid enough. If you didn't pay your workers enough to support themselves then you lost them to the workhouse. Don't quote me on that though - it was around 40 years ago, but the idea stuck with me that benefits are ripe for exploitation by businesses.

I think workhouses had existed in some form or other, maybe under a different name, before then which was why the Speenhamland System was called outdoor relief, as in not in a workhouse.

But I believe there use was probably ramped up in. The 19th century when the problem was more acute. However, it is nearly 50 years since my O-level history so I couldn't do an essay on it now!

But it always strikes me that some "new" ideas have been tried before under a different name and maybe we should look at how things went then and try to avoid previous pitfalls.

Outdoor relief came from the Poor Law of 1601! Amazing to think it was from that long ago. It made it the law that parishes had to raise funds to give to those who could not work. Outdoor Relief was distinct from Indoor Relief and was essentially the donation of food and clothes to those still in their own homes. Indoor Relief was almshouses or orphanage type places back then.

The Poor Law was amended in 1834 following a review in 1832. The changes that were made were supposed to support independent labourers, as there were poor practices taking place where paupers were coerced into providing cheap or almost free labour in return for food and clothing under their local parishes "interpretation" of relief and the Speenhamland System (as referred to by @5foot5 where parishes essentially subsidised low wages without relief).

The amendments to the Act established the Poor Law Commission to oversee a national system and so workhouses became where the destitute ended up with all the issues that have been well documented over the years. There were many tinkerings in the Victorian and Edwardian era and even more post WW1, but amazingly the Poor Law system wasn't fully dismantled until the introduction of the Welfare State in 1948.

Mostly remembered from my social history days but I did have to fact check some of the dates!

Are you all fervent communists?

I ask because I am communist, in my heart. I'd be personally happy with an economy where everyone wants to work hard, works as hard as they can manage to their highest ability, and we all have identikit homes & clothing etc.

All our work would be equally valued; the floor cleaner esteemed as much as the scientist or the business owner or the doctor or the prime minister. And all paid the same, of coures.

I am pretty sure that model is a total failure in practice, though. It's been tried and it creates enormous oppotunities for skivvers, corruption and authoritarianism. If you accept a society based on meritocratic principles, people who work hardest or have the most advantages get ahead of others, and can even pass down wealth to their kids, then the people with fewest advantages will be in dire poverty (worse, their children will suffer) without welfare.

Reform want to stop all benefits to foreign nationals resident in uK. I presume this is because they like the idea of disabled ppl or kids living on the streets and in condemned housing. Pure freemarket economy is a bad idea. Libertarian principles are awful, too. It's like we have the worst possible system now except for all the others...

People and their children starve, lose their home, get sick and end up in the streets.

Rather obvious.

Or companies have to rapidly increase their pay?

im no economist and don’t know if that would happen? I assume at some point it would have to if they want staff because otherwise people would quit and go on unemployment benefits instead? But potentially there could be a nasty gap while wages catch up.

I agree that employers need to pay people adequate wages, however employers also need people who have skills that make them employable.

We have serious issues with shortage of suitably skilled workforce in the UK.

There are widespread and persistent technical skills shortage in Advanced Connectivity Technologies (ACT), Artificial Intelligence (AI), Cyber Security, Engineering Biology, Quantum Technologies, and Semiconductor industries.

There is also a dire shortage of bricklayers, electricians, plumbers, and carpenters

We also have a shortage of production managers, robotics engineers, automation specialists, technical product managers, and data analysts who can work in manufacturing environments.

In the meantime there are the highest number of under 25s who are NEETS! What a ridiculous situation.

We also have a shortage of care workers, mainly because our own population seem reluctant to do such work!

A lot of good points here.....I guess in a way it's slightly wooden dollars. The large corporations don't pay enough to their employees and make more profit. However they also pay more tax on the increased profit which then goes to the government to fund benefits.

The question then for me is - do large corporations either pay enough tax or should they pay their employees more. They would want to pay more tax given the choice but is this enough?

I'm no economist either (I did it to A-level but that is many decades ago) but I assume that it is more complicated now than it was even a century ago because of the global economy. Many multinationals will presumably choose to go where they can get the skills they need for the least amount of money.

Your argument is bonkers.

For 1: I work for a business that pays people to do a job. They don’t pay what they ‘can get away with’ they pay the fair market wage. I’m sure plenty of other businesses are the same.

For 2: I work with people who don’t have children. Sweeping generalisation, but they have very expensive taste! They’re used to not having to spend money on children so they are very used to having the finest things in life. They definitely wouldn’t be prepared to work for less than their worth. And why should they?

The UK is mainly a country of employers paying as little as they can get away with. The problem is, while people are grateful for shit pay and put up with it, nothing will change.

No. Around 33-38% of UC credits are in any kind of work. So 60%+ are not. Isn’t that the bigger problem?
Interestingly, they don’t collate information on how many hours those claimants work. How many are full time is unknown.
99.9% of businesses in the UK are SMEs. Median profit for an SME in the UK is £13k per annum. I don’t think that is grounds to call someone a “fat cat”.