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tomandlu

Pay Better Wages, Minister Tells Domino's Pizza Boss

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Pay better wages, minister tells Domino's Pizza boss

Chief executive Lance Batchelor has complained that he has been unable to fill 1,000 vacancies since migration rules have been tightened up.

But minister Mark Harper said Domino's should "reflect" on salaries, adding: "It's a market."

He added that laws would not change "just so he can keep his wages low".

Edited by tomandlu

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it's the perfect tax credit job.

earn around minimum wage for a couple of evenings a week

make out that you have a job

collect top up in work benefits

win for the "employee"

win for the employer (payroll subsidised by taxpayer)

if the employer paid more the employee would just get less tax credits

& the employer would have a higher wage bill.

not including undeclared tax free tips!

Edited by Bringingitdown

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I must admit that was my first thought when I heard him and Stuart Rose had been trotting out this old cliche again, but I am not sure it is that easy.

Importing immigrants to do low level jobs that British people won't do gives us a dual problem - Brits that think it is fine to sit on the dole and claim benefits and immigrants that are working for low wages who are no doubt also entitled to benefits to top those wages up.

Making companies like Domino's pick up that slack would certainly appear to solve those problems, but how long would it last when people found out they couldn't have their XXXXL pizza for £15 delivered any more?

The problem is that prices have gone so out of control that the Government freely admit that the minimum wage (and even the 'Living Wage') aren't really enough to live on because those who earn that little will be entitled to benefits.

Surely we should aim for a minimum wage that is actually the minimum that you can live on in the UK without needing benefits? To get there, either the current minimum wage needs to increase massively or the level of benefits and the general cost of living needs to fall.

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The problem is that prices have gone so out of control that the Government freely admit that the minimum wage (and even the 'Living Wage') aren't really enough to live on because those who earn that little will be entitled to benefits.

Surely we should aim for a minimum wage that is actually the minimum that you can live on in the UK without needing benefits? To get there, either the current minimum wage needs to increase massively or the level of benefits and the general cost of living needs to fall.

they aren't MEANT to be enough to live on.

the whole point of this is to build up a grid of ultra-dependency on government.

it's a power,grab, plain and simple.

...and it will work pretty much the same way as the french revolution did when the aristocrats got too greedy.(yes it was exacerbated by some jacobins, but it takes two to tango.)

if the "lordship" play by the rules and don't steal peoples property through legislative skullduggery, then the kneejerk reaction doesn't happen.

you reap what you sow.

they just don't learn.

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I dont get it. I occasionally have a dominoes (not really my favourite pizza, but needs must ) and yet whenever I go in there its empty. I guess maybe 99% of their business is deliveries, but ive never had to wait.

Wonder where the real money comes from? Do they get paid to hire people. Tax credits bump up slave wages.

Without govt assistance I wonder if dominoes would be a viable business model.

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Blimey, a Govt. Minister has said something sensible for a change.

The margins on pizzas are huge, and after fixed costs of premises etc the extra capacity Dominos says it can unleash from existing branches should go straight to the bottom line.

If you want to get the workers to help you get that extra capacity, pay up you cheap bas****s.

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it's the perfect tax credit job.

earn around minimum wage for a couple of evenings a week

make out that you have a job

collect top up in work benefits

win for the "employee"

win for the employer (payroll subsidised by taxpayer)

if the employer paid more the employee would just get less tax credits

& the employer would have a higher wage bill.

not including undeclared tax free tips!

You can't claim tax credits whilst doing a minimum wage job.

(Well you can claim them, but you wouldn't get them, being as you have to work over 30 hours to qualify and that would carry you well over the income threshold).

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You can't claim tax credits whilst doing a minimum wage job.

(Well you can claim them, but you wouldn't get them, being as you have to work over 30 hours to qualify and that would carry you well over the income threshold).

if you wouldnt qualify for WTC would you not get housing benefit & child tax credits then? I thought that was the whole point of people doing these low wage jobs not for the money but for to access in work benefits?

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You can't claim tax credits whilst doing a minimum wage job.

(Well you can claim them, but you wouldn't get them, being as you have to work over 30 hours to qualify and that would carry you well over the income threshold).

A single parent can claim at 16 hours,a couple at 24 hours.A single mother with 2 children on NMW at Dominoes working 16 hours would get around £90 wages+£200 tax credits+£30 child benefit+£120+Housing benefit.

I doubt any supermarket or fast food chain could survive without the taxpayer funding 70%+ of the wage bill as they do now.

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Wouldn't eat that crap if you paid me. The day fast food outlets actually start to make an effort with, taste, presentation or nutrition then I might be interested. I will save my health and go without or make my own like Jamie.

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I dont get it. I occasionally have a dominoes (not really my favourite pizza, but needs must ) and yet whenever I go in there its empty. I guess maybe 99% of their business is deliveries, but ive never had to wait.

Wonder where the real money comes from? Do they get paid to hire people. Tax credits bump up slave wages.

Without govt assistance I wonder if dominoes would be a viable business model.

Your £15+ pizza costs about a pound to make. The main costs are largely fixed: premises and fuel and leafleting. The pizzas are pure profit after you cover the overheads.

Where i am the employees are all foreign, mostly Asian, who will earn around minimum wage but will probably share rooms to make ends meet. they can make a lot more than back home and probably still have better accommodation.

While I think there is something odd about Brits' reluctance to work in restaurants beyond the pay issue, we are unlikely to want to compete against immigrants from developing countries who live 4 in a one bedroom flat.

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I think Domino's pizza should be a special case they should let in more immigrants to fill these rolls.(or is that subway)

I don't think having shares in the company has affected my judgement on this :unsure:

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Who the hell eats Domino's greasy pizza's anyway? Can chav's afford to pay another quid for their staple diet?

15 quid is a lot to pay for cheese on toast. you can hardly call them chav's they are connoisseurs.

same way that anybody that pays more than £4 for a bottle of wine is a connoisseurs

or 31p for a packet of cornflakes is a connoisseurs

or some one that pays more than 23p for a tube of tooth paste is a connoisseurs

There are a lot of connoisseurs about theses days.

Wonder why the rich keep getting richer and Why they spend so much on advertising?

Edited by gf3

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It's interesting that a tory minister is expressing this view- given that it seems to conflict with the party line that 'flexible' labor is the key to prosperity.

Maybe it's gradually dawning on the PTB that without wage inflation all the Zirp and QE in the world will not succeed in inflating away our debts.

The Japanese government has recently pleaded with their employers to raise wages before 'Abenomics' implodes- with little success.

Japanese companies are largely ignoring Prime Minister Shinzo Abe's calls for higher wages in the face of an expected sales tax increase, a Reuters poll shows, underscoring the difficulties the government faces in trying to defeat entrenched deflation.

Abe will make a final decision on October 1 about whether to lift the tax to 8 percent from 5 percent in April. While necessary to bolster state coffers, the hike threatens to take the wind out of the success he has had with boosting stocks and weakening the yen.

Now that Japan Inc has begun to benefit from his bold monetary and fiscal policies, the prime minister wants companies to return the favour by lifting wages, which in turn will boost consumption and prices, and make the recovery sustainable.

http://www.reuters.com/article/2013/09/20/us-japan-survey-idUSBRE98J08A20130920

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Who the hell eats Domino's greasy pizza's anyway? Can chav's afford to pay another quid for their staple diet?

Dominos results here:

http://ww7.investorrelations.co.uk/dominos/financial/index.jsp

Profit last year ~£40m on £600m of sales,

23,000+ staff, if they are paid £9/hour inclusive of employer taxes and work 24 hours * 52, that's ~£250m. Increase that £9/hour to £10/hour and that's £287m.

£37m more, and the profit turns to nothing.

If that happens, then they will close many of their shops.

Simple really.

While the pizza has high margin, the net profits are close to 5%, and increases in wages make much of their business non-viable.

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While the pizza has high margin, the net profits are close to 5%, and increases in wages make much of their business non-viable.

Without state top ups, that's exactly what dominos and 90% of our service industry businesses are, non-viable.

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Dominos results here:

http://ww7.investorr...ncial/index.jsp

Profit last year ~£40m on £600m of sales,

23,000+ staff, if they are paid £9/hour inclusive of employer taxes and work 24 hours * 52, that's ~£250m. Increase that £9/hour to £10/hour and that's £287m.

£37m more, and the profit turns to nothing.

If that happens, then they will close many of their shops.

Simple really.

While the pizza has high margin, the net profits are close to 5%, and increases in wages make much of their business non-viable.

I guess Dominos can borrow from its international parent to get those profits down.

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Without state top ups, that's exactly what dominos and 90% of our service industry businesses are, non-viable.

The state also introduced the minimum wage fairly recently.

I don't know how much it actually increased real wages mind, but it's an intervention in the opposite direction.

Also if you look at the people doing these jobs, most f them are immigrants and I wouldn't bet that tax credits are necessarily that big for their staff.

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The state also introduced the minimum wage fairly recently.

I don't know how much it actually increased real wages mind, but it's an intervention in the opposite direction.

Also if you look at the people doing these jobs, most f them are immigrants and I wouldn't bet that tax credits are necessarily that big for their staff.

A much higher proportion of immigrants claim tax credits compared to people who have been here since birth.

As most people working 16 hours with children TREBLE+ their wages, if a third of their staff claim tax credits the taxpayer is paying their staff as much as the business does in wages.

Id think that will be roughly right.

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A much higher proportion of immigrants claim tax credits compared to people who have been here since birth.

Not true.

http://blogs.lse.ac.uk/europpblog/2013/11/06/recent-waves-of-immigrants-to-the-uk-have-contributed-far-more-in-taxes-than-they-received-in-benefits/

The reason these people are hired is because they can easily outcompete our substantial pool of native layabouts.

As most people working 16 hours with children TREBLE+ their wages, if a third of their staff claim tax credits the taxpayer is paying their staff as much as the business does in wages.

Id think that will be roughly right.

I think the point is these people were being brought into the workplace for the first time, I remember one woman I worked with:

* lived in London, free council house, RTBed at a fraction of its value, single white mother (black father, knocked her teeth out)

* daughter also single mother, also free council house, RTBed with mum's help

Anyway, when tax credits came in, the daughter started work for the first time, because with tax credits it was even more lucrative to be a working single mother than a stay-at-home single mother.

That was the point, prior to tax credits, if you had kids you still got loads of free cash, but you didn't have to work. They've change it now, so that you get free cash but you do have to work.

Also 16 hours is not quite right any more:

http://www.hmrc.gov.uk/taxcredits/keep-up-to-date/changes-affect/work-changes/changes-to-hours.htm

* under 25, no kids - no tax credits entitlement

* 25+, no kids - must work 30 hours to get WTC

* single mother - 16 hours to get tax credits

* two parents - 24 hours collectively with at least one person working 16 hours

What tax credits have done is expand the pool of low-paid semi-casual labour, but I wouldn't necessarily describe it as a subsidy for employers - these people would still have got benefits before, we would still have paid for them, it's just that we are now paying them to be economically active, which isn't a bad thing of itself.

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All this leads to the rise of min wage zero hr contract jobs as a whole sub-sector of the jobs market. I've heard of people going for job interviews and tax credits get a mention as a way of justifying the low pay rate.

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Dominos results here:

http://ww7.investorrelations.co.uk/dominos/financial/index.jsp

Profit last year ~£40m on £600m of sales,

23,000+ staff, if they are paid £9/hour inclusive of employer taxes and work 24 hours * 52, that's ~£250m. Increase that £9/hour to £10/hour and that's £287m.

£37m more, and the profit turns to nothing.

If that happens, then they will close many of their shops.

Simple really.

While the pizza has high margin, the net profits are close to 5%, and increases in wages make much of their business non-viable.

Domino's point was that they have 1,000 vacancies and spare capacity in existing premesis. Surely if they increased offered wages they would be able to fill some of the vacancies and unleash the spare pizza making capacity, which as high margin activity without much fixed costs influence, would disproportionately improve profits.

You could equally say that Domino's could increase their prices 20% and their revenue would follow suit. It's doesn't necessarily follow that this would happen though since competition would likely take sales from them.

Edited by The B.L.T.

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