Wtf The Living Wage

[blackgoose]

The living wage should be the same for the whole country. It would be good if MPs actually represented the area they are supposed to represent, instead of voting through more pro London laws.

[winkie]

The living wage should be the same for the whole country. It would be good if MPs actually represented the area they are supposed to represent, instead of voting through more pro London laws.

If you have no mortgage or a small debt London is one of the cheapest places to live in the country......most property in London I would say is mostly paid for and as there is more money in the London economy it is easier to make money from others with the cash to spend...the climate is warmer and the distance between A to B is shorter...so energy is less...economy of scale.

[MrPin]

There is no such thing as a living wage when all they are pumping is inflating the costs that have to be paid...rising income will only mean costs of living to rise higher and faster......the best way is to work in groups pooling income helping keep the fixed costs down.

You could live in a commune with me! You obviously would have to cook for the Right Reverend Guru Pin, and disciples!

[SarahBell]

You could live in a commune with me! You obviously would have to cook for the Right Reverend Guru Pin, and disciples!

A commune would certainly do away with any bedroom tax issues..

[MrPin]

A commune would certainly do away with any bedroom tax issues..

It's something I have discussing with a lady friend of mine (married ladyBTW). We could all pool our resources, and buy a "****** off" sized house! You don't need so many cars, fridges, or televisions! Between you, you can pool your resources! Somebody will be a good gardener, somebody can fix cars, and somebody can cook! It reminds me of the "olden days" when people looked after each other! I do not see a flaw in that, but obviously you need to get on! It could be the future?

[Eddie_George]

High housing costs not even mentioned.

Because they don't want house prices to correct because they, their families and their friends all have leveraged property porfolios.

[The Knimbies who say No]

Because they don't want house prices to correct because they, their families and their friends all have leveraged property porfolios.

Spot on Eddie.

This living wage stuff is pretty nauseating, especially frm a party who have done more to ensure that the working poor are screwed than anyone else. Shareholders in listed companies are trousering taxpayer subsidies by idiot politicos making low wages viable.

What Reeves would say, if she was serious about this, is that the benefits system is going to be reformed in such a way that makes impossible for a firm offering NMW to employ people in many parts of the country. But, that involves an admission regarding the scale of housing costs, which runs counter to their deep-seated belief in infinite HPI.

Edited November 3, 2013 by The B.L.T.

[durhamborn]

Labour now know that their tax credits have made it worthless for employers to pay more.

They also know they have made it worthless for a lot/most people with children to work more hours/get better paid jobs.

They also know as long as tax credits exist and we remain with open borders wages will keep falling in real terms and benefit spending will keep going up.

It also means anyone without children who dont get tax credits/benefits are being paid far less than they would be and pushed into poverty due them.

The answer Labour have come up with though is bonkers.

Add on lots of paperwork for employers so they pay more than they need to and get back half the rebate that tax credits give their employees.

There would be gainers,the people not getting tax credits but its a very small number.

This shows Labour cant bring themselves to admit tax credits are a disaster and have no wish to reform them.Instead they hope the nice employers will pay more than they need to,.

Ridiculous policy that will never work,or even ever affect more than a few people.

[slacker]

I lean towards scrapping min wage and a lot of regulation to get more 16-25s in work.

Regardless of the morals, politics of it all - we need to be doing something and, in some EU states, we're in danger of creating a lost generation who will be a burden for a 3 or 4 decades.

But I can't reconcile that with the fact the state is then subsidising though benefits the employee living costs whilst companies are profiting from their labour.

If we could reduce the state cost we could reduce tax burden on business, increase external investment in real industry and the problem starts to go away without intervention.

Except that never happens, most current investment mechanisms encourage shareholders to strip out all value like locusts.

There must be some silver bullet to fix the root cause - maybe:

- tax short-term profit

- tax relief on a taper for % staff on a 'living wage'

- tax relief for apprenticeships

Also need some kind of jury system to adjudicate tax payable by multinationals with more than 500 staff in country. So they can't use IPR licensing, inter-company loans etc. to avoid paying tax locally but make massive net profits in low tax divisions overseas.

Then if a company generates £500M revenue in UK, pays near zero tax, but records a £100M profit in British Virgin Islands - and employs 2,000 people on minimum wage (who need state benefits to eat) the jury could say £20M tax this year or lose your license to operate in UK. There is no other way to legislate this using specific tax rules, there is always a way around them.

The country cannot afford for all the profit from energy, telecommunications, water etc. to go offshore and back to a few big shareholders. The 'living wage' issue can't be fixed whilst that happens.

The company may say stuff it - we'll not operate in UK - fine, someone else will supply the electricity or mobile network or water who is happy to get taxed for it.

[up2late]

This seems to be yet another moronic policy which we will be saved from because the implementation itself is so bad.

From a business perspective, the choice is this:

1. Get benefit of a 1 year tax break by paying all workers a living wage. Benefit is limited and short-lived while the cost is likely to be ongoing. Try reducing your wages after the year and see what happens.

2. Get benefit of permanent tax breaks by paying set up fees to an accountancy firm to create an offshore subsidiary. Continue to pay workers as little as you can get away with. Benefit is likely to continue long term and the cost is a one-off.

It's a win-win, as Labour are seen to be "doing something for hard-working families" while actually having no effect whatsoever on the wages that businesses have to pay. If the policy actually worked, the fallout would likely be immense as firms either went bust or suffered industrial unrest at the end of the year.

Policies like this seem to be continually sought out by the 3 mainstream parties. It allows them to market themselves as a party that is doing something about a problem while ensuring that the policy has no effect at all, thus avoiding the risk that it could go wrong.

This is exactly why I vote for a minority party. I'd rather that we try something drastic with the risk of failure than continue to tinker around the edges of a fundamentally broken system.

[winkie]

A misguided policy as the fixed fuel prices for a few months is....anyone now today has the power to fix their energy prices if they so wish......only kicking the problem cans further down the road, not solving the fundamental problems only a cover up to creating new ones.

[alexw]

I lean towards scrapping min wage and a lot of regulation to get more 16-25s in work.

Regardless of the morals, politics of it all - we need to be doing something and, in some EU states, we're in danger of creating a lost generation who will be a burden for a 3 or 4 decades.

But I can't reconcile that with the fact the state is then subsidising though benefits the employee living costs whilst companies are profiting from their labour.

If we could reduce the state cost we could reduce tax burden on business, increase external investment in real industry and the problem starts to go away without intervention.

Except that never happens, most current investment mechanisms encourage shareholders to strip out all value like locusts.

There must be some silver bullet to fix the root cause - maybe:

- tax short-term profit

- tax relief on a taper for % staff on a 'living wage'

- tax relief for apprenticeships

Also need some kind of jury system to adjudicate tax payable by multinationals with more than 500 staff in country. So they can't use IPR licensing, inter-company loans etc. to avoid paying tax locally but make massive net profits in low tax divisions overseas.

Then if a company generates £500M revenue in UK, pays near zero tax, but records a £100M profit in British Virgin Islands - and employs 2,000 people on minimum wage (who need state benefits to eat) the jury could say £20M tax this year or lose your license to operate in UK. There is no other way to legislate this using specific tax rules, there is always a way around them.

The country cannot afford for all the profit from energy, telecommunications, water etc. to go offshore and back to a few big shareholders. The 'living wage' issue can't be fixed whilst that happens.

The company may say stuff it - we'll not operate in UK - fine, someone else will supply the electricity or mobile network or water who is happy to get taxed for it.

Simply put we have had a large global surplus of labour develop that has significantly reduced the bargaining power of UK labour. That means reduced wages for UK employees.

Companies will never pay more than they have to, why on earth would they? If the end result is UK workers living in shanty towns or japanese style cubicles then that is what will happen unless some intervention is taken to prevent it. We already see something akin to this for illegal migrant workers living in sheds with beds. They, you will note, cannot claim benefits nor can they pressure their employers to pay the minimum wage due to their illegal status.

Thus removing benefits without some way of making employers pay more won't see low-end wages rise, nor will it see prices fall for them (the increased company income will be creamed off by those with economic power, i.e. shareholders, CEO's, highly skilled workers), instead they will simply have to make do with less. In essence adopt developing world living standards. The same will happen if the minimum wage is scrapped. Currently employers only pay it because they have to, if they don't they won't.

But topping up wages via benefits is an extremely poor way of solving this issue. What is needed are economic measures that increase the wage bargaining power of workers by reducing the effective labour surplus. One such way would be to close our borders to the influx of cheap migrant workers. There are many many others also. The problem is the UK like every other nation is signed up to the globalist project that is impoverishing so many of our people.

Edited November 3, 2013 by alexw

[Venger]

Look at how executive pay has risen since the minimum wage came in. Now they want more.

Exactly, and the 1997 voters thought they were going to get something good with a minimum wage, where they gap in wages only got much bigger.

Once embrace Gov deciding things for business with things like minimum wage, distorting markets, then it sets the scene for everything else. Gov interferring in house markets with all their schemes to help you pay more, Gov interfering in energy markets because the QE, base rates slashed to protect the over-indebted, and other measures have had an effect on energy companies with rates. Next water according to Milliband. Gov/state making life fair lol - people always looking to Gov to make life cosy. Living wage now, to try and counter all the distortion in markets, but only adding more.

[alexw]

Exactly, and the 1997 voters thought they were going to get something good with a minimum wage, where they gap in wages only got much bigger.

Once embrace Gov deciding things for business with things like minimum wage, distorting markets, then it sets the scene for everything else. Gov interferring in house markets with all their schemes to help you pay more, Gov interfering in energy markets because the QE, base rates slashed to protect the over-indebted, and other measures have had an effect on energy companies with rates. Next water according to Milliband. Gov/state making life fair lol - people always looking to Gov to make life cosy. Living wage now, to try and counter all the distortion in markets, but only adding more.

The minimum wage has absolutely nothing to do with executive pay. I don't know where on earth people get this stupid idea from.

The U.S. has had a minimum wage since 1941.

Yet despite all this U.S. CEO pay was relatively low until the 1970s-1980s but since then it has absolutely rocketed.

So how does rising U.S. CEO pay correlate to the minimum wage? It doesn't.

Look at Germany which doesn't have minimum wage laws, but does have collective bargaining agreements that started over 50 years ago. Again CEO pay is rocketing.

So how does rising German CEO pay correlate to the minimum wage? Well since Germany doesn't have a minimum wage it obviously doesn't.

What it does correlate to is the wage bargaining power of workers. As the ability of workers to demand pay rises has fallen globally relative to the economic power of CEO's, those CEO's have redirected increased company income to shareholders and to themselves.

Edited November 3, 2013 by alexw

[workingpoor]

All this living wage propoganda is BS.

Min wage £6 odd, living wage supposed to be £7 odd that's like and extra £30 a week would hardly make a difference with inflation running at 10%+.

Absolutely no chance of meeting borrowing criteria to buy a house. (even under HTB)

if buy into it if it was all that would be paid out not topped up by a myriad of tax credits & in work benefits.

yes let's go with the governments living wage plan and stop all in work benefits immediately then see if all these self employed start up's are truly viable without tax credits.

[winkie]

All this living wage propoganda is BS.

Min wage £6 odd, living wage supposed to be £7 odd that's like and extra £30 a week would hardly make a difference with inflation running at 10%+.

Absolutely no chance of meeting borrowing criteria to buy a house. (even under HTB)

if buy into it if it was all that would be paid out not topped up by a myriad of tax credits & in work benefits.

yes let's go with the governments living wage plan and stop all in work benefits immediately then see if all these self employed start up's are truly viable without tax credits.

Living wage means to them, how much can be passed over for another to hopefully pay leaving less for us to pay.....if you don't pay it rest assured no one out there will willingly pick up the bill.

[Democorruptcy]

Before joint income mortgages a second salary was added to the disposable income from the main salary. Now too much of the income is spent on servicing housing debt or rent. Families are struggling because living costs are too high but the main living cost is housing. If mortgages had been limited to 3 times main income, families wouldn't be struggling.

[winkie]

Before joint income mortgages a second salary was added to the disposable income from the main salary. Now too much of the income is spent on servicing housing debt or rent. Families are struggling because living costs are too high but the main living cost is housing. If mortgages had been limited to 3 times main income, families wouldn't be struggling.

....but they don't want half the population at home, they want as many as possible out there working for as long as possible, sometimes for as little as possible.

[zugzwang]

I have mixed feelings about the proposal but suspect it will be as well received in the country as the energy pledge has been. 'Red' Ed clearly has a much better understanding of the public mood than his Tory detractors. The next GE is going to be more like 1945 than 1979: there's a generational inequality that needs to be addressed and repaired. The rich are seen once again as idle and undeserving crooks, their assets fit for seizure and redistribution.

[awaytogo]

Is this the dumbest idea ever? How in gods name do they work out what a living wage is?

So I get a 'living wage' of £7 an hour instead of a minimum wage of '£6' an hour.

What kind of marketing BS is a 'living wage' anyway? Its like goddamn gordon gekko's take on communism.

WTF is the point?

How about paying my ever increasing rent and transport instead of a god damn arbritary 'living wage' instead?

The minimum wage should be way above the benefit rate + plus an allowance for travelling expenses to work,as many so called experts who compare earning against benefits do not include the cost incurred travelling to work which the unemployed don't have to pay.

There has to be a differential between working and not working to create a incentive to work rather than staying at home,

This incentive has been lost in many cases and that's way so many people are happy living on benefits.

[winkie]

Simply put we have had a large global surplus of labour develop that has significantly reduced the bargaining power of UK labour. That means reduced wages for UK employees.

Companies will never pay more than they have to, why on earth would they? If the end result is UK workers living in shanty towns or japanese style cubicles then that is what will happen unless some intervention is taken to prevent it. We already see something akin to this for illegal migrant workers living in sheds with beds. They, you will note, cannot claim benefits nor can they pressure their employers to pay the minimum wage due to their illegal status.

Thus removing benefits without some way of making employers pay more won't see low-end wages rise, nor will it see prices fall for them (the increased company income will be creamed off by those with economic power, i.e. shareholders, CEO's, highly skilled workers), instead they will simply have to make do with less. In essence adopt developing world living standards. The same will happen if the minimum wage is scrapped. Currently employers only pay it because they have to, if they don't they won't.

But topping up wages via benefits is an extremely poor way of solving this issue. What is needed are economic measures that increase the wage bargaining power of workers by reducing the effective labour surplus. One such way would be to close our borders to the influx of cheap migrant workers. There are many many others also. The problem is the UK like every other nation is signed up to the globalist project that is impoverishing so many of our people.

But that will not happen......if it does they will employ fewer people or reduce the wages of exiting people on the pretext of 'fairness for all' or reduce other benefits like paid sickness or pensions or move to other places......then they will say it all the governments fault and ask for tax breaks to help improve employment and the deficit because of the growing welfare bill and deflation problem...pay the people, or pay the people to employ the people.

[durhamborn]

The minimum wage should be way above the benefit rate + plus an allowance for travelling expenses to work,as many so called experts who compare earning against benefits do not include the cost incurred travelling to work which the unemployed don't have to pay.

There has to be a differential between working and not working to create a incentive to work rather than staying at home,

This incentive has been lost in many cases and that's way so many people are happy living on benefits.

Very true.Also add on all the things you can do when not working that save money.An allotment can save £40 a week.Doing your own DIY,chopping and collecting wood for a log burner etc etc.

Working needs to pay a lot more than benefits for it to be worthwhile.

The only reason many people continue to work is to service a mortgage,,,hence why government are desperate to keep everyone in massive debt.

[wonderpup]

The problem is the UK like every other nation is signed up to the globalist project that is impoverishing so many of our people.

As was predicted by James Goldsmith- globalisation has destroyed the earning power of the western workforce- even the middle class who imagined themselves to be on the right side of history are coming to understand this reality- as their children increasingly fail to match the living standards enjoyed by their parents.

The irony is that the west is devoting most of it's remaining 'resources' (it's ability to borrow money) not to the rebuilding of it's real economy but to the preservation of the debt created by an out of control banking sector.

Imagine what might have been achieved had the billions spent bailing out the banks and the speculators instead been spend on investing in research, technology and education?

But no- we had to bail out the people who created the mess instead- and what we got for our money was a banking system still mired in 'toxic waste' and even more 'too big to fail' than it was five years ago- what a great way to invest billions of taxpayer money that turned out to be.

[workingpoor]

Working needs to pay a lot more than benefits for it to be worthwhile.

The only reason many people continue to work is to service a mortgage,,,hence why government are desperate to keep everyone in massive debt.

Very true one thing the financial crisis has given us is attitudes have changed to taking on debt many people have adjusted to lower living standards and become thrifty this is very hard for TPTB to undo now.

HTB schemes etc rolled out to keep the debt cycle going and tempt in new debtors but the public have wiser up a little thanks to forums like this one and good work being done on social media by like minded people.

Only thing is a debt based fiat monetary system like ours relies on new debt to keep going.

interesting times ahead indeed.

[bogbrush]

Two things;

First, Millibands 'incentive is absurd - a company gets CT relief on the extra cost, so his big incentive is about 10% of the cost for one year.

Second, and most importantly, all this does is raise the incentive to push for headcount reduction, or create even bigger advantages for established, higher tech firms over start up competition.

I'm all for it paying to work, but artificially pushing up wage rates won't do it. Better to reduce living costs and lower welfare accordingly.

Edited November 3, 2013 by bogbrush