interestrateripoff

Minimum Wage Increase For Adults, Nothing For The Youth

36 posts in this topic

[url="http://www.telegraph.co.uk/finance/debt-crisis-live/9152149/Debt-crisis-Live.html"]http://www.telegraph.co.uk/finance/debt-crisis-live/9152149/Debt-crisis-Live.html[/url]

[quote]11.34 The National Minimum Wage rises by 1.8pc for adults this October but is frozen for 16 to 20 year old over concerns that it is damaging job prospects, Ricard Tyler reports.

Vince Cable, the Business Secretary, said it had been a “very hard decision” but the one million under 25s who are out of work would benefit if more jobs are created.

Quote [i]In these tough times freezing the youth rates has been a very hard decision – but raising the youth rates would have been of little value to young people if it meant it was harder for them to get a job in the long run.

The adult rate rises 1.8pc or 11p an hour to £6.19, while the rates for 18 to 20 year olds stay at £4.98 and those for 16 to 17 year olds remain at £3.68. However, the rate for apprentices jumps 5p to £2.65 an hour.[/i] [/quote]

This should help get growth back in the economy. Just what most small business would hope for an increase in costs.

1.8% should help people close the gap on inflation...

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It's a good job benefits are going up 5.2 percent.

I would like to see a graph of 40h/week at minimum wage vs JSA/Income support + rent over the last 10 years.

Extrapolate the graph and you will see the gap is closing at an alarming rate. soon you will lose money by working.

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[quote name='khards' timestamp='1332159301' post='3289514']
It's a good job benefits are going up 5.2 percent.

I would like to see a graph of 40h/week at minimum wage vs JSA/Income support + rent over the last 10 years.

Extrapolate the graph and you will see the gap is closing at an alarming rate. soon you will lose money by working.
[/quote]

Isn't that already the case for those in low paid jobs?

Ultimately that minimum wage needs to be removed altogether - it hasn't helped anything at all.

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[quote name='Ascii' timestamp='1332160830' post='3289553']
Isn't that already the case for those in low paid jobs?

Ultimately that minimum wage needs to be removed altogether - it hasn't helped anything at all.
[/quote]

That makes no sense. Despite the predictions, the introduction of the minimum wage did not crash the economy, and it works perfectly well in other European countries too. What is clearly wrong is that some benefits are too high - particularly related to housing. For work to pay, it's benefits that need to be cut, not wages.

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[url="http://www.guardian.co.uk/news/datablog/2012/mar/19/minimum-wage-housing#start-of-comments"]How many hours would you have to work on the minimum wage to cover your weekly rent? See what the data says[/url]

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[quote name='Orsino' timestamp='1332161618' post='3289574']
That makes no sense. Despite the predictions, the introduction of the minimum wage did not crash the economy, and it works perfectly well in other European countries too. What is clearly wrong is that some benefits are too high - particularly related to housing. For work to pay, it's benefits that need to be cut, not wages.
[/quote]

Youth unemployment has been climbing in the UK for the past 10 years, and youth unemployment in Spain is now running at 50%. It's young people who are primarily affected by the minimum wage, so I'm not sure how safe of a claim it is to say that it works perfectly. (I do agree, however, with your main point that the problems have to do more with the relative level of benefits vs. wages.) Edited by RichC

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Any company that cannot pay at least £5 a hour given the current cost of living should not be in business. They are either utterly ineffcient or basically making a profit out of screwing people.

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[quote name='OnlyMe' timestamp='1332163043' post='3289607']
Any company that cannot pay at least £5 a hour given the current cost of living should not be in business. They are either utterly ineffcient or basically making a profit out of screwing people.
[/quote]

In a competitive market, a lot of companies don't have a choice. How is farmer going to explain to Tesco that the price of his vegetables is 20% higher than the next guys because he's decided to pay his workers more than the market rate? How long is he going to be around? And if Tesco agrees to pay more, how long are they going to be around when they raise their prices by 20%?

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[quote name='Orsino' timestamp='1332161618' post='3289574']
That makes no sense. Despite the predictions, the introduction of the minimum wage did not crash the economy, and it works perfectly well in other European countries too. What is clearly wrong is that some benefits are too high - particularly related to housing. For work to pay, it's benefits that need to be cut, not wages.
[/quote]

It makes perfect sense. All the minimum wage has done has reduce productivity. Without a minimum wage you're rewarded according to productivity with minimum wage the reward for outstanding production is removed hence productivity drops to a consistent low level; what was the film - was it I'm All right Jack?

All you do is remove any expected production excess (as per Pareto) from the capable as there is no incentive for them to produce excess.

Whilst the economy may not have crashed, I would say we're in a long decline.Empirically I would say we have been in recession since about 2003 - we've just been bringing future earnings forward by borrowing. Contrast that with Germany that has reduced wages (per unit) by increasing productivity in excess of wages if not by actually reducing wages (and also by manipulating a number of south European currencies out of direct competition).

[quote name='OnlyMe' timestamp='1332163043' post='3289607']
Any company that cannot pay at least £5 a hour given the current cost of living should not be in business. They are either utterly inefficient or basically making a profit out of screwing people.
[/quote]

There are plenty of people out there that fail to produce beyond what they cost. There are those that are unproductive at £3 an hour let alone £6+ an hour - ultimately it's why we outsource about 80% of what we do here. I'll let somebody else worry about productivity; I prefer fixed costs. You can legislate a minimum wage but you can't legislate minimum productivity - it's incredibly difficult to get rid of a slacker.

The underlying problem (or for most people the elephant in the room - clearly not those on this site) is the cost of living, the majority of which is likely to be due to housing costs though of course the size and profligacy of the state is both part of the problem via housing subsidies, benefit subsidies and other channels (just noticed today on Guido that parliament has a resident lifestyle coach).

Quite how you unravel it all though is beyond me; I guess piece by piece in the same way that it was unrolled in the first place.

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[quote name='Ascii' timestamp='1332167041' post='3289667']
It makes perfect sense. All the minimum wage has done has reduce productivity. Without a minimum wage you're rewarded according to productivity with minimum wage the reward for outstanding production is removed hence productivity drops to a consistent low level; what was the film - was it I'm All right Jack?

All you do is remove any expected production excess (as per Pareto) from the capable as there is no incentive for them to produce excess.

Whilst the economy may not have crashed, I would say we're in a long decline.Empirically I would say we have been in recession since about 2003 - we've just been bringing future earnings forward by borrowing. Contrast that with Germany that has reduced wages (per unit) by increasing productivity in excess of wages if not by actually reducing wages (and also by manipulating a number of south European currencies out of direct competition).



There are plenty of people out there that fail to produce beyond what they cost. There are those that are unproductive at £3 an hour let alone £6+ an hour - ultimately it's why we outsource about 80% of what we do here. I'll let somebody else worry about productivity; I prefer fixed costs. You can legislate a minimum wage but you can't legislate minimum productivity - it's incredibly difficult to get rid of a slacker.

The underlying problem (or for most people the elephant in the room - clearly not those on this site) is the cost of living, the majority of which is likely to be due to housing costs though of course the size and profligacy of the state is both part of the problem via housing subsidies, benefit subsidies and other channels (just noticed today on Guido that parliament has a resident lifestyle coach).

Quite how you unravel it all though is beyond me; I guess piece by piece in the same way that it was unrolled in the first place.
[/quote]
Productivity has risen and wages havent kept up with productivity,

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[media]http://anticap.files.wordpress.com/2010/11/fig2_prodhhincome.jpg?w=614&h=404&h=404http://anticap.files.wordpress.com/2010/11/fig2_prodhhincome.jpg?w=614&h=404&h=404[/media]

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That productivity increases in that scheme is a given, it's just a product of automation.

Remind me when was minimum wage introduced and where does it fit on that graph.

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[quote name='crash2006' timestamp='1332167627' post='3289679']
Productivity has risen and wages havent kept up with productivity,
[/quote]

On the other side produvity has lagged behind other countries becuase invesment hasn't been made - wy scale up and improve efficiency when you can just go short ter and employ near slave labour - in the long run running this way soemone else will eat your chips - one of the reasons we import so much food.

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[quote name='OnlyMe' timestamp='1332168608' post='3289695']
On the other side produvity has lagged behind other countries becuase invesment hasn't been made - wy scale up and improve efficiency when you can just go short ter and employ near slave labour - in the long run running this way soemone else will eat your chips - one of the reasons we import so much food.
[/quote]
Which is another way of saying that productivity has declined. The comparison has to be against other economies not against previous production which is meaningless.

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[quote name='Ascii' timestamp='1332168555' post='3289693']
That productivity increases in that scheme is a given, it's just a product of automation.

Remind me when was minimum wage introduced and where does it fit on that graph.
[/quote]

1999

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[quote name='bewildered_renter' timestamp='1332169969' post='3289713']
1999
[/quote]
what does the Median wage do there then. Edited by Ascii

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[quote name='Ascii' timestamp='1332167041' post='3289667']
It makes perfect sense. All the minimum wage has done has reduce productivity. Without a minimum wage you're rewarded according to productivity with minimum wage the reward for outstanding production is removed hence productivity drops to a consistent low level; what was the film - was it I'm All right Jack?
[/quote]

Indeed. UK Unit labour cost and unit wage cost has been rising more or less every quarter since 2008. Normally, the unit labour cost should fall with technological advances and improved experiences..

It will take a long time for many of the public to accept that UK is not that productive and the prosperity was to an extend, an illusion.

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[quote name='Ascii' timestamp='1332169914' post='3289712']
Which is another way of saying that productivity has declined. The comparison has to be against other economies not against previous production which is meaningless.
[/quote]

Exactly.

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[quote name='crash2006' timestamp='1332167627' post='3289679'][s]Productivity has[/s] [b]house prices have[/b] risen and wages havent kept up with [s]productivity[/s] [b]house prices[/b],[/quote]Fixed!

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or a little more precisely, cost of living has increased (which of course is influenced heavily by the cost of shelter).

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I read one news article headline this morning that had minimum wage to rise 11p! I have not read the article so I dont know if it is correct.

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[quote name='RichC' timestamp='1332163361' post='3289613']
In a competitive market, a lot of companies don't have a choice. How is farmer going to explain to Tesco that the price of his vegetables is 20% higher than the next guys because he's decided to pay his workers more than the market rate? How long is he going to be around? And if Tesco agrees to pay more, how long are they going to be around when they raise their prices by 20%?
[/quote]

You are Karl Marx and I claim my £4.98


[quote]Large landed property, as we see in England, has already cast off its feudal character and adopted an industrial character insofar as it is aiming to make as much money as possible. To the owner it yields the utmost possible rent, to the tenant farmer the utmost possible profit on his capital. The workers on the land, in consequence, have already been reduced to the minimum, and the class of tenant farmers already represents within landed property the power of industry and capital. As a result of foreign competition, rent in most cases can no longer form an independent income. A large number of landowners are forced to displace tenant farmers, some of whom in this way [...] sink into the proletariat. On the other hand, many tenant farmers will take over landed property; for the big proprietors, who with their comfortable incomes have mostly given themselves over to extravagance and for the most part are not competent to conduct large-scale agriculture, often possess neither the capital nor the ability for the exploitation of the land. Hence a section of this class, too, is completely ruined. Eventually wages, which have already been reduced to a minimum, must be reduced yet further, to meet the new competition. This then necessarily leads to revolution.[/quote]

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[quote name='Ash4781' timestamp='1332178551' post='3289857']
I read one news article headline this morning that had minimum wage to rise 11p! I have not read the article so I dont know if it is correct.
[/quote]

http://www.bbc.co.uk/news/business-17429325

'Minimum wage to rise by 11p an hour'

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