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Sancho Panza

The Number Of People On Minimum Wage Has Doubled Since 1999

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London Loves Business 1/10/14

'A record 1.2 million people are on the National Minimum Wage, which rises today – twice as many as were on the lowest legal pay rate in 1999, when National Minimum Wage was introduced.

The rate rises from £6.31 to £6.50 for adults today.

National Minimum Wage rates from today:

  • £6.50 for adults over the age of 21
  • £5.13 for 18-20 year-olds
  • £3.79 for 16-17 year-olds
  • £2.73 for apprentices

The Resolution Foundation carried out a study which found an increasing number of people are “stuck” on the minimum wage with little or no job progression.

Others agreed adding there should be further increases in the minimum wage as it had not kept up with inflation.

TUC general secretary Frances O’Grady said: “It is good news to see the worst paid adult workers receiving a pay release above inflation for the first time for six years. But it’s a muted celebration because the minimum wage would be worth at least £7 today had it kept up with rising prices.”

“Stickiness”

The Resolution Foundation said it used to rise faster than inflation but had been “blown way off course”.

Matthew Whittaker, chief economist at the Resolution Foundation, said: “Years of big increases in the minimum wage before the recession pulled the rate closer to median earnings and brought millions more workers within close proximity of the rate. The recent collapse in earnings looks to have accelerated this trend.

“The increased ‘stickiness’ of jobs on the minimum wage is a cause for concern, not least for those unable to escape very low pay. Tackling the growth and persistence of low pay is a key test of whether this will be a shared recovery.”

Fall in living standards

This comes as Office for National Statistics figures suggested living standards have fallen much further than first thought.

The ONS revised estimates it had made about the economy during the recession. It found Britain recovered three-quarters sooner than we initially thought going by the ONS’s new measure, however it also revealed the fall in real wages has taken a much bigger toll than previously estimated.

Real household disposable income per capita in 2013 was still 2.6% less than in 2007, before the start of the recession.

In previous estimates, the figure for 2013 had been 1.8% below that for 2007.

This indicates families have less spare cash than before the recession.'

Goods news for Graduates and Tax Credit workers.

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I think apprentices have to attend college at least one day per week and gain a recognised qualification at £2.73 per hour it is slave labour, and there are some grants available to employers

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£2.73 for apprentices .£100ish per week?! I didn't know that.

Jesus what a sh!t country.

Plus most apprentices are doing jobs that you could learn in a day so aren't actually increasing their labour productivity.

e.g. https://apprenticeshipvacancymatchingservice.lsc.gov.uk/Navms/Forms/Vacancy/VacancyDetails.aspx?Query=3L8G6Q9a1OFNt%2f%2fM50ax9NgPI%2fM%2bnIhP9y%2bFxWI22mJj9o2yO0YW7xCJiW5TPqHymsRF8PL8fWc%2bVBVfDA6q%2f2wPFes%2fMoS7XI4IporqrnoCaaoZ%2fap42w%2fkux1ecxF2jMRDQPnPm2COmz7A6NDc6rWEJ2aCahOKf6JGFdgmd1QPeRSgS2PYSCO03%2f1x1w%2bFn%2fGhYtDhuI2BqvPpZ9WwJgA3Vdy9w6Xtgif2QDHP0JxK8k%2bp3C40WhXF183qR7Cxp3DtnpycdiWqQmRm6OMgow%3d%3d

Basically you get to work for these guys in a junior role for a year and they give you £5k in return.

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Thanks. I can't think of anything contructive to say. I'm sure there are some decent apprenticeships out there but on the whole that seems a complete pisstake and explains a lot. I probably earned more than £2.73 ph as a paperboy in the nineties.

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Minimum wage became the de facto going rate.

The problem of course is the #costoflivingcrisis, a pity Ed's lot causes it though the great housing bubble, and general free-for-all by the spivs and chancers who were given free reign.

The fact of the matter is the pound in our pocket has been devalued - good old inflation!

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The only people a minimum wage increase benefits is those sweeping the floors in the process automation sector - although the inevitable will catch up with them eventually.

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I predict more and more people will be on minimum wage, because there is nothing pushing the other way. I predict, that unless you work for the public sector with a strong union behind you, you will be looking at a lifetime on stagnant minimum wages. If you work in a shop, the difference between the wage of a new new join and the manager is very small.

The unions have been broken up. I am not saying unions are right or wrong, but it will go full cycle.

Edited by 200p

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Tax credits.

People on low to medium paying jobs have jacked it in to work 16h @ minimum wage and get the money paid up.

Resolution Trust was funded by a crook, Chowdry, and is staffed by a load of Gordon's place men.

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Makes you sympathise with the ones opting out to go to Syria, doesn't it?

I've stopped making any assumptions on goodies or baddies, but it's worth remembering that before the perpetual terror bogeyman there were freedom fighters.

I do increasingly think it will take mass civil disobediance and violence to change things, there and here.

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Tax credits.

People on low to medium paying jobs have jacked it in to work 16h @ minimum wage and get the money paid up.

Resolution Trust was funded by a crook, Chowdry, and is staffed by a load of Gordon's place men.

Why work when you can do the bare minimum on a low paid job and have lots of leisure time.

In fact it makes you wonder why these figures aren't bigger!

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In an economy such as the UK's, wages are an overhead just like anything else that corporations have to pay for. It is deliberate government strategy to keep down wages as it means more jobs and the difference between what people need to live on and what corporations pay can always be made up by taxpayer funded credits or by more consumer debt. It is an extension of privatising profits and socialising losses.

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Well - it looks, to me, as if "Minimum Wage" is working exactly as it was intended, exactly as its name suggests. The purpose of "Minimum Wage" is to ensure that wages are minimum.

The "clever" thing is that "Minimum Wage" was presenting it as being in favour of the employee. It works by a combination of "anchoring" expectations and commoditization of labour. Sure, before "Minimum Wage" there were some people who were paid less - but, typically, they would find it easier to negotiate a higher rate; easier, psychologically, to move into a new job. The employer would need to consider whether or not they were paying enough - and would consider whether or not it made business sense to pay their employee more to secure their continued services. There was no surplus of labour at any price-point... so any employee who quit implied a cost for the business. This led to, some sort of, equality - wages were always up for debate... and no demographic held all the cards. Minimum wage undermines all of that - it encourages the idea (across all demographics) that all labour has low value; that one employee is worth exactly the same as another - so none deserve to be paid more. The upshot is a demotivated, demoralized, but (on average) cheaper workforce. It is the dream outcome for someone who presents themselves as a manager whose services are required to chivvy employees who hate their jobs.

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As farage said, its more a 'maximum wage' in many areas.

What, you didn't think the bosses would actually pay for it, did you?

Nope, instead people just above the minimum wage have their wages reduced to pay for it.

An evil, evil policy.

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Some of you really think wages wouldn't fall if the minimum wage was scrapped? You really think employers would voluntarily pay these rates?

Minimum wage may be maximum wage in some places, but if MW were scrapped, maximum wage would head downwards spectacularly fast, there and everywhere else.

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Some of you really think wages wouldn't fall if the minimum wage was scrapped? You really think employers would voluntarily pay these rates?

Minimum wage may be maximum wage in some places, but if MW were scrapped, maximum wage would head downwards spectacularly fast, there and everywhere else.

So why don't we just say peoples labour is not required any more, people and the work they do is not worth the money they are paid.......I am sure there are many a person sitting in an office doing a job for a wage that another would do for less.......the problem is not the wage, it is the cost of living that is far too high......the push is on increasing bills, rents, housing, taxes and fuel...creating money/inflation that is syphoned into places where no work is done but the pay is very good and increasing. ;)

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Some of you really think wages wouldn't fall if the minimum wage was scrapped? You really think employers would voluntarily pay these rates?

Minimum wage may be maximum wage in some places, but if MW were scrapped, maximum wage would head downwards spectacularly fast, there and everywhere else.

Depends, if we limited immigration, wages would likely go up. The UK since 2006 has had the worst wage appreciation in Europe. Wages went up just fine before the minimum wage.

I will admit my opposition to the minimum wage is one of basic human rights rather than economics, that my labour is my own and NO ONE has the right to tell me what it is or isn't worth other than me. If I choose to work for someone who wants to pay me £6.20 an hour instead of £6.50 which he cant afford, in what screwed up world does government believe it has the right to prohibit me from doing so. I just find the concept of a minimum wage insulting.

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Some of you really think wages wouldn't fall if the minimum wage was scrapped?

I've not seen anyone present that idea... I expect wages would fall, in the short-term, reflecting the reduced productivity of a demoralized workforce.

You really think employers would voluntarily pay these rates?

Yes I do - the large-scale corporate employers, at least. If it were not for MW legislation, there would need to be an ubiquitous cartel fixing prices in order for the (few) net beneficiaries to reap the minimum wage rewards.

I think you are making the mistake of considering the complex economic system from only one perspective. You are failing to see the big picture.

What is needed is a change in the relative supply/demand for labour - there need there to be jobs that are sufficiently badly paid that no-one (available) will do them... When this is the case, wages can be negotiated upwards - vacancy by vacancy. Minimum wage is set so as to prevent this from happening. Sure, the minimum wage employee might get a few extra pence per hour - in the short term - but this has to be offset against a loss of hope for long-term improvement in their position - and the fact that their costs will rise to (at least) absorb any benefit... minimum wage also dictates the minimum cost of living... eliminating any genuine benefit from minimum wage to the labourers.

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Scrapping the minimum wage would be bad in the short term but in the long run it would better.

Kind of like the complete opposite to when it was brought in

How would it be better in the long run?

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