Why the Tories are bastards

[breadandbutterfly]

Came across this today whilst researching something else - may explain a lot why George Osborne just doesn't 'get' the problems with his ideas - may also explain some of the attitudes of some of our fellow posters. :)

www.economist.com/node/16690659

Oh God, not again. Yet more MN Tory-bashing. Yawn.

Am I having a funny turn, or is someone seriously referring us to the Daily Mirror website for intelligent political comment?

"because my experience has been that people who have dragged themselves up by their boot-straps are more likely to expect others to do the same rather than less."

yes there is truth in this I think

B&B, because where I live, only a very small % of people earn over the HRT allowance. Isn't it about top 10% of UK earners? which seems wrong judging by the amount of people complaining about CB on the other thread so mumsnet must be disproportionate to 'everyday families'. It's not affecting everyday families but a very small % of well off families.

Ttosca, don't let them take the p--s out of your fire and passion, someone has to have it.

Why not the Mirror Damsel? Or do you think the Wail is more "intelligent"?

adamschic - I don't know where you live, so quite possibly you live in a part of the country where wages are lower but the cost of living is correspondingly lower too.

Your theory that those who are HRT payers are all comfortably off just doesn't apply to those who live - by necessity - down south, in commuting distance to London. For example - my OH's job is London dependent - it could not be done anywhere outside of commuting distance to London. And he's hardly unusual in that. If you look at the cost of housing a family in the south, and transport to work, that eats up a huge amount of salary for all those in that situation; ignoring the obvious fact that AS IT'S TAXED AT A HIGHER RATE, THEY GET LESS OF THE (SMALL) BIT OVER THE HRT THRESHOLD ANYWAY.

According to the tax calculator, someone on 43K takes home £2629/month. OK so far. Start by taking off at least about £1250 of that ie almost 50% on rent and transport to work (I'm assuming on that salary you couldn't afford to buy a family home anywhee near London, unless you were lucky enough to have bought years ago). That wouldn't get you a palace in a posh area or indeed in London itself at all - we're talking a long commute. So nearly 50% gone on housing and essential transport costs already. Add in bills, food - let's hope you don't have any childcare costs because that could eat up the majority of your left-over pay. Obviously, you don';t want holidays or own a car, or ever have any major repairs/replacement costs eg let's say your PC you need for work breaks down. Or someone gets sick.

According to recent figures:

"Rising prices left the average UK family with just £162 of weekly disposable income ? 7.9% less than this time last year."

www.guardian.co.uk/money/2011/sep/27/households-record-fall-disposable-income?INTCMP=ILCNETTXT3487

So these figures make clear that the average family has around £650/month left after paying for accomodation, transport, bills and food. (And that that amount is itself exceptionally low by recent standards.)

But on the figures quoted above, I'd be very surprised if the example family budget quoted above will allow for this. Certainly not if they have any childcare costs, debts or any other unexpected expenditure. DESPITE being supposedly in the top 10%, according to you. Certainly, £600 a month to cover all bills, childcare, and food for a family of 4+ doesn't seem overly generous to me; maybe you succesfully feed your family on beans 7 days a week, I don't know.

So maybe living costs are lower in your area, adamschic. But I would be careful of extrapolating from that to the conclusion that as a result, everyone else in the UK is just ticketyboo, or lying.

Did I mention the Wail, crazynanna? No, I thought not. Please don't put words in my mouth.

Funnily enough, there are some people out there whose labour just isn't worth £6.08 per hour. They are usually the young and poorly educated urban types who have considerable literacy and numeracy problems, no track record of being able to get out of bed in the morning and no 'marketable skills' worthy of the name. In short they are in the market, alongside millions of others just like themselves, with half of Eastern Europe and those that already currently do our minimum wage jobs.

If these people could make themselves more attractive to potential employees by being competitive on price (through their wages) they might actually have a chance of getting a job in the first place. Once in a job, they can establish a track record and apply for better jobs. (I suspect most people who entered the workplace before 1998 did exactly this - my first job paid £1.80 an hour back in 1993, the second paid £3.90 and before long I was earning decent money).

Of course, if this theory is right, we could expect to see higher levels of unemployment amongst the young and the inexperienced. Anyone want to wager which demographic group pays the price for the minimum wage? Bingo - the 16 - 24 year old age group make up 40% of all those claiming unemployment benefits despite many of that demographic group still being in FE or HE.

So it isn't the Tories being bastards by cutting allowing the minimum wage to fall by the wayside, the minimum wage is just another example of the road to hell being paved with good intentions. It was a nice idea, it's just a shame it doesn't work in practice.

How the minimum wage prices the young and inexperienced out of the market

B&B, no house prices here are higher than average but wages lower, cost of living a bit less than London but higher than other major cities. Surely with only one wage earner there wouldnt be childcare? I think the whole C B debate will only adversley affect a few borderline cases. Many will be earning alot over the limit and know that they don't really need it. I think they will be looking at a transitional year if they even introduce it, which I doubt they will. Anyway that's a different thread.

MrPants, err 16-21 year olds have a lower minimum wage rate already.

B&B... I think expecting benefits to be London Weighted is never going to happen. If income doesn't support living in a particular area or a particular size home then it will force people to move to a different area or a smaller home. If the job can only be done in one location, that should prompt employees to either insist on higher wages or find a job that is more location-flexible.

If that process was applied and there was a gradual exodus away from the overcrowded, overpriced SE, many employers would have difficulty attracting employees and would either relocate their operation to somewhere cheaper or be forced to raise their wages. The BBC is a good example. Gradually moving out to cities like Cardiff and Salford and selling off their London base. I'm not sure if there is a deliberate 'population relocation' policy in government, but, if not, it may be a very welcome unforeseen consequence

Adamschic

You are quite right about the different tiers of NMW. I don't see how this changes the argument though.

For clarification, there are some aged 16-17 who aren't 'worth' £3.68 p/h. There are some 18-20 year olds not 'worth' £4.98p/h and there are plenty of people aged 21 or over that aren't 'worth' £6.08p/h.

I'm sure I don't need to say it, but the numbers above don't take into account the employers contribution to National Insurance, company insurance, H&S compliance etc, so they are hardly the full picture.

It will be even worse should the government enact the EU legislation making it more difficult for a company to get rid of (i.e. sack) unproductive workers. If that legislation goes through you can look forward to a total collapse in unskilled school leavers ever finding work.

Mr Pants I cannot see that someone who can do a job is not worth £3.68; if they cannot do that they should be supported into education (bye bye EMA) or to deal with the issues affecting their ability to cope.

Many (I know not all) of the people in the groups who find it hardest to find work or hold down a job are those who have been declared by ESA / ATOS as able to do SOME form of work, but what employer in this climate will give a job to someone likely to need time off / medical support / adaptations when another 359 people applied for the same work? Forcing those who do not have any real saleable abilities into work by removing their right to state help (and as a professional in the field I am seeing people with quite marked ASD. LD, long term health issues in this category) floods the job market whilst causing stress and insecurity to the vulnerable.

OTOH I don't support doubling NMW either; I know it would work against my own boys who happen to have SN. Living wage yes, otherwise the state just pays top ups and if wages drop resulting in lower tax yields that becomes a ridiculous circle, but that has to be balanced with the many small businesses such as the one owned by DH that would like to take on people and accept that people deserve a living wage (otherwise what are we saying... they don't deserve a roof or food? that the state has to pay people to work? what?) but simply can't afford massive wage rises.

Sensible, people focussed but sustainable growth is the key. A reasonable NMW plays a part in that.

I can't believe, in the 21st Century, that there are still people arguing against the minimum wage.

Next they'll be arguing against discrimination and sexual harassment laws in order to 'make the UK more competitive' against countries like China and India.

======

Minimum Wages and Poverty (Congressional testimony)

Today?s hearing questions whether increases in the minimum wage are a useful anti-poverty tool. In particular, the question is whether raising the minimum wage to $6.15 by September of 2000 will help those workers whose family incomes place them at or near the poverty line. As I will argue, the evidence unequivocally supports the view that increases in the minimum wage, by increasing the earnings of low-income workers without diminishing their employment opportunities, have historically helped to lower poverty rates. What?s more, this evidence is stronger in the 1990s, with large numbers of poor persons moving into the labor market. The facts clearly support the contention that if Congress wants to ?make work pay,? the current proposal to increase the minimum wage makes sense.

The following testimony elaborates these four points:

The historical record is quite clear on this point: increases in the minimum wage have consistently been shown to have their intended effect: they raise the wages of the lowest wage workers, many of whom reside in low-income families, and they do so without lowering their employment opportunities. In this regard, the policy solidly reinforces the ?make work pay? platform that Congress and the administration have recently emphasized;

Economists have evaluated the impact of minimum wage increases practically since the inception of the wage floor in the 1930′s. At this point, I think it is fair to say that the debate over the purported job-loss effect is a debate over whether this effect is slightly below zero, or at zero. While this debate may be an important one among econometricians, from the perspective of policy makers who are looking for ways to help the working poor, it is a distinction without a difference. Even if you were to accept the most negative findings from this research, you simply could not avoid the conclusion that the benefits of the increase far outweigh the costs.

There is no better example of these points than the most recent increase, which took place in 1996-97. Despite the same dire predictions we hear today, we have solid evidence that the last minimum wage increase lifted the earnings of low-wage workers without diminishing their employment prospects. This last point is key: the employment rates of low-wage workers have rarely been higher than they are today and their unemployment rates have rarely been lower.

Finally, from the perspective of the working poor, the minimum wage is a useful anti-poverty tool. It cannot and should not, however, be viewed as a sole solution against poverty. This is primarily due to the fact that many employable poor persons have only marginal attachments to the labor market. As the literature evaluating minimum wages and poverty reveals (as well as some new findings I will present regarding the last increase), raising the minimum wage is associated with small decreases in the poverty rate, but the poor need other income supports, such as the EITC and food stamps.

www.epi.org/publication/webfeatures_viewpoints_minwagetestimony/

Mr Pants I cannot see that someone who can do a job is not worth £3.68

PeachyWhoCannotType

Really? What about kids who just don't give a damn about work and would much rather be claiming off the state? What about those with drug dependency issues? What about kids engaged in criminality? What about the illiterate? (They've had plenty of time in school and it hasn't done them any good so far, why force them to go back for even longer?) Would you want to employ them at £3.68 p/h?

At the end of the day, employment in this country isn't a closed loop system. If an employer wants someone to put in the graft they aren't forced to use youth labour. Why take a chance on a young British person when for the same money an Eastern European (who has already shown some commitment to work by travelling halfway across Europe) will do the same job. The Eastern European only wants the money so the business owner can have some confidence that they'll turn up for work at 9AM every day. Who loses out? The young and the unskilled.

Then there are the countless jobs that are threatened by automation. Raise the cost of labour too high and the incentive to replace a worker with a robot becomes stronger. Who loses out? The young and the unskilled.

This has nothing to do with special needs.

Pants-

Really? What about kids who just don't give a damn about work and would much rather be claiming off the state?

Errm... paying someone £3.68 per hour when they can get £6 from unemployment is damn good motivation to not get a job. Perhaps if they were paid a decent wage they would be motivated to work and actually earn more.

What about those with drug dependency issues? What about kids engaged in criminality? What about the illiterate? (They've had plenty of time in school and it hasn't done them any good so far, why force them to go back for even longer?) Would you want to employ them at £3.68 p/h?

These are social issues which should be addressed in the first place by social policy. It is largely social and economic policy which determines social outcomes, which is why literacy, criminality, and drug abuse problems vary greatly between countries. People's DNA is not significantly different; we're all humans.

ttosca

I can't believe, in the 21st Century, that there are still people arguing against the minimum wage.

Not me guv'nor, that'll be the Low Pay Commission - y'know, the experts at this sort of thing (as you would know if you read the linky in my earlier post).

Next they'll be arguing against discrimination and sexual harassment laws in order to 'make the UK more competitive' against countries like China and India.

Nice Strawman succesfully demolished.

Right, onto the rest of it...

The article you posted was written in America sometime prior to September 2000. Far be it from me to suggest you quote a more recent (and British) source but stuff like global economic meltdown, rocketing youth unemployment rates, deperate need to restart growth etc. all fundamentally change the game these days.

Plus, $6.15 is around £3.95 - well below the British adult NMW anyway - so wouldn't that kind of prove my earlier points?

Keep on trying.

The main reason why our parliament is populated by independently wealthy individuals is because actually the salaries paid to MP's aren't that great.

Many heads of local councils earn more than the PM, I don't see that politics is going to attract the best and the brightest while they would be far better rewarded in business. I would like to see all politicians work outside of politics before they enter parliament. A good politician should prove his or her worth in their field of choice. That way they could actually bring some decent life experience to the table. They could also be given a cabinet placement in an area that they have some tangible experience in.

paying someone £3.68 per hour when they can get £6 from unemployment is damn good motivation to not get a job. Perhaps if they were paid a decent wage they would be motivated to work and actually earn more.

Cart before the horse - it's madness to pay £6 to for someone to sit on their arse and only £6.08 if they go out to work.

I suspect (although I may be unfair in saying this) that you would prefer that the £6.08 would go up, whilst I would rather the £6 went down.

Actually it does have a lot to do with SN in terms of literacy and numeracy, issues YOU raised. you may of course be using a 1983 definition of Sn, which is something you would benefit by updating.

£3.68 does not keep a human being. The state cannot afford to keep that person unless it absolutely has to. Unless you think those people do not deserve a roof and food then they deserve the wage that pays for that.

It comes down for me to the cost of living: it's not OK to pay someone less than that for work: who do you think should pick up the tab for the imbalance? state will lose in taxes on wages, or maybe we should be building shanty houses, saw a relevant system in Morocco a decade back where young people slept in shanty structures (well to be exact under corrugated metal sheets) until they had worked X years in apprentice jobs and could move to a bedsit.

Housing prices are high and there are no social houses left, locally there is a waiting list of £30K most of whom are working low paid families who will never rise to the top because emergency cases will always take priority. Food costs rise all the time. And who wants an employee who can't eat or has nowhere to live?

Not our business anyway. We'd rather pay minimum wage and get fed, housed people who could focus on their job rather than imminent bankruptcy.

A minimum wage also has two other effects - firstly, it can be used to ensure that you don't get a benefits trap (where it pays more to not be employed than be employed), and secondly it acts as a way to ensure that inefficient and badly-run companies are not subsidising their own operations out of what should be their employees' wages.

MrPants, again another fact you haven't mentioned, some 16 year are getting paid £2.50 an hour on a modern apprenticeship. Is that low enough?

Apologies if its already been mentioned I will read up later.

I can't believe people are seriously arguing against minimum wage either. It's not as though we have full employment in the UK - all those you deem too rubbish to be worth £6 an hour or whatever won't be the ones with the jobs for very long; there is so much competition that on average most of those earning £6/hr are probably 'worth' rather more.

But more than that, I fundamentally disagree that one's wage reflects one's worth. eg nurses earn not v much but have a high worth to society. Bankers earn shitloads but are completely worthless, in any meaningful sense.

Earnings do not reflect worth. They are a reward for putting the hours in, no more no less - different rewards in different professions.

paying someone £3.68 per hour when they can get £6 from unemployment is damn good motivation to not get a job. Perhaps if they were paid a decent wage they would be motivated to work and actually earn more.

Cart before the horse - it's madness to pay £6 to for someone to sit on their arse and only £6.08 if they go out to work.

I suspect (although I may be unfair in saying this) that you would prefer that the £6.08 would go up, whilst I would rather the £6 went down.

Yes, because you appear to be a right-wing cock.

If you have ever been on unemployment benefits, you might realise that what you get is barely enough to survive. Despite Daily Heil scare stories, 95% of claimants are legitimate, looking for work, and don't cheat the system.

With the money they get from unemployment, you just barely have enough to pay rent, food and bills, if even that. It's subsistence living.

No, the problem is that wages have been stagnating for three decades and have fallen way behind inflation. Coupled with neo-liberal attacks on employment rights, union rights, job security, etc., people are the lowest end of the spectrum are being utterly shafted by employers.

The cleaners at Buckingham Palace aren't even paid the London living wage, FFS. While the Royal parasites live off public money in palaces and castles, they pay their cleaners £6.45 per hour.

Earnings do not reflect worth. They are a reward for putting the hours in, no more no less - different rewards in different professions.

Every human being who works a full-time job is 'worth' a living wage. There should never be a situation in a civilised society where someone can work 9-5 for 40 hours per week, and not earn enough money to have a secure existence.

Haven't we learned yet that market values produce shit outcomes? How long are people still going to keep referring to 'the market' to determine political and economic policy?