How Big Companies Will Deal With The Minimum Wage Rises.

[workingpoor]

With just 2 months to go until the first of 4 consecutive rises in the National Minimum Wage begin,

How are these large companies that rely on low wages going to deal with the wage rises? shed staff or cut overtime & shift rates?

It's going all the way to £9p/hr in 4 consecutive wage rises.

Staff at Tesco will be told next week that pay rates for working Sundays and Bank Holidays, late nights and overtime hours are set to be slashed as the supermarket giant seeks to cut costs, This is Money has learned from a source.

It is believed employees at the retailer used to receiving double time for Sundays and Bank Holidays will be told on Tuesday that they will get just time and a half from July - a pay cut of 25 per cent.

Higher pay rates for overtime will also be revoked, with extra hours paid at the standard rate, according a whistleblower who wishes to remain anonymous.

And a premium for working the hours 10pm-midnight will be scrapped as part of the pay review. This is Money understands it was a deal agreed behind closed doors with the Union of Shop, Distributive and Allied Workers.

http://www.thisismoney.co.uk/money/news/article-3424205/Tesco-slash-pay-staff-working-overtime-late-nights-Bank-Holidays.html

Edited January 31, 2016 by workingpoor

[Timak]

Our local nursery/playgroup are desperately money raising to keep running.

The government are saying they've got to offer 30 free hours and put everyone's wages up (which is desperately needed as they earn minimum wage) however the government will only pay a rate for those 30 hours that is well below break even. It isn't even the increase in wages but the national insurance and pension changes too.

I don't think they've thought through quite how precarious the financial position of small organisations that don't seek to make a profit are.

[wish I could afford one]

With just 2 months to go until the first of 4 consecutive rises in the National Minimum Wage begin,

How are these large companies that rely on low wages going to deal with the wage rises? shed staff or cut overtime & shift rates?

It's going all the way to £9p/hr in 4 consecutive wage rises.

Staff at Tesco will be told next week that pay rates for working Sundays and Bank Holidays, late nights and overtime hours are set to be slashed as the supermarket giant seeks to cut costs, This is Money has learned from a source.

It is believed employees at the retailer used to receiving double time for Sundays and Bank Holidays will be told on Tuesday that they will get just time and a half from July - a pay cut of 25 per cent.

Higher pay rates for overtime will also be revoked, with extra hours paid at the standard rate, according a whistleblower who wishes to remain anonymous.

And a premium for working the hours 10pm-midnight will be scrapped as part of the pay review. This is Money understands it was a deal agreed behind closed doors with the Union of Shop, Distributive and Allied Workers.

http://www.thisismoney.co.uk/money/news/article-3424205/Tesco-slash-pay-staff-working-overtime-late-nights-Bank-Holidays.html

Offshoring that was marginal now becomes viable -> less jobs in the UK

Automation that was marginal now becomes viable -> less jobs in the UK

If neither of the above are possible then you're looking for 'efficiencies' -> less jobs in the UK

The above is inevitable given shareholders expect more earnings every year that passes.

[SarahBell]

With just 2 months to go until the first of 4 consecutive rises in the National Minimum Wage begin,

How are these large companies that rely on low wages going to deal with the wage rises? shed staff or cut overtime & shift rates?

It's going all the way to £9p/hr in 4 consecutive wage rises.

Staff at Tesco will be told next week that pay rates for working Sundays and Bank Holidays, late nights and overtime hours are set to be slashed as the supermarket giant seeks to cut costs, This is Money has learned from a source.

It is believed employees at the retailer used to receiving double time for Sundays and Bank Holidays will be told on Tuesday that they will get just time and a half from July - a pay cut of 25 per cent.

Higher pay rates for overtime will also be revoked, with extra hours paid at the standard rate, according a whistleblower who wishes to remain anonymous.

And a premium for working the hours 10pm-midnight will be scrapped as part of the pay review. This is Money understands it was a deal agreed behind closed doors with the Union of Shop, Distributive and Allied Workers.

http://www.thisismoney.co.uk/money/news/article-3424205/Tesco-slash-pay-staff-working-overtime-late-nights-Bank-Holidays.html

So the unions stuck up for the workers?

It'll explain why Tesco are closing lots of night opening - Tesco calls time on 24-hour shopping at 76 large stores as customers turn away from nightowl grocery trips

Read more: http://www.thisismoney.co.uk/money/markets/article-3422669/Tesco-calls-time-24-hour-shopping-76-stores.html

[winkie]

If house and rent prices were not such a high price big companies would not have to pay so much.......swings and roundabouts.

[justthisbloke]

Offshoring that was marginal now becomes viable -> less jobs in the UK

Automation that was marginal now becomes viable -> less jobs in the UK

If neither of the above are possible then you're looking for 'efficiencies' -> less jobs in the UK

These are the inevitable outcomes of any minimum wage regime. You're effectively banning some workers (those who would choose to work for less than NMW) from employment. And, unless demand changes, the labour will bet met in another manner (offshoring or automation).

The above is inevitable given shareholders expect more earnings every year that passes.

This shareholder *hopes* for such increases but feels it would be daft to *expect* them!

[bristolhunter]

With just 2 months to go until the first of 4 consecutive rises in the National Minimum Wage begin,

It's going all the way to £9p/hr in 4 consecutive wage rises.

Astonishing... ten years ago, £18k was a decent graduate starting salary... now it's going to be minimum wage.

[interestrateripoff]

All to cut the welfare bill. Somehow I think it will fail or succeed by cutting discretionary spending and thus reducing employment.

[workingpoor]

I've got an interview at Iceland tomorow for a Home Delivery Driver's job the rate is £8.55 p/hr believe it or not!

Edit: Tesco were paying £7.10 p/hr for delivery driver (with £9.71 overtime rate which looks like it hasn't got long now)

Edited January 31, 2016 by workingpoor

[Guest eight]

It is believed employees at the retailer used to receiving double time for Sundays and Bank Holidays will be told on Tuesday that they will get just time and a half from July - a pay cut of 25 per cent.

I simply can't accept that Tesco currently pay double time for Sunday working.

[Motor_Blade]

Offshoring that was marginal now becomes viable -> less jobs in the UK

Automation that was marginal now becomes viable -> less jobs in the UK

If neither of the above are possible then you're looking for 'efficiencies' -> less jobs in the UK

The above is inevitable given shareholders expect more earnings every year that passes.

A nail on the head post IMO, the living wage is a good idea on paper that is liable to have a lot of unintended consequences....mostly bad.

[winkie]

A GP on the radio was saying when working a Sunday shift the other day got paid £1000 saw three patients....a cost of £250 each.....Sunday working overtime, double and triple time is over....looking like one working day is now the same as any working day......good for the goose.

[spacedin]

If it results in increased automation and efficiencies then that's a good thing.

It would be good if it meant people worked less. Most people in the UK work below the EU average number of hours, however, they still work more than some of our neighbours like people in Germany for example It might be a reason why such countries have greater productivity too.

Edited January 31, 2016 by spacedin

[workingpoor]

Here is the thread on Verylittlehelps a tesco workers forum it appears that double time for a sunday was in fact true!

Lots of talk about the NMW rises:

http://www.verylittlehelps.com/index.php?PHPSESSID=f92d6463883e66473d26209fa91e9c4a&topic=15076.0

A quote:

Back of a paper calculation.....

Sunday pay cut by 50% for 15% of all staff so that's a reduction in the total Sunday pay bill of 6%....

Removal of NP1 for all twilight, night shift and early staff so that's probably around 8% cut in the contracted weekday hours wage bill if we assume equal numbers of staff across all shift types.

Reduction in the overtime bill from time a half to single pay if we assume part timers do 3/4 of over time hours and full timers do the other 1/4 so that's a reduction of whole overtime bill of 8%

Plus the savings for Tesco paying less into our new pension schemes so that's probably around 8%...

So even with this 3.1% across the board pay rise, Tesco have actually made savings on their wage bill and on their pension bill.

So collectively, taff have ended up paying a "fee" to Tesco so that Tesco can "give" the staff a "pay rise" so that Tesco can claim to comply with the National living wage laws......

So this legislation to phase in the national living wage has in fact been a Trojan horse for Tesco to cut their wage bill but be seen to "follow" the spirit behind the national living wage law.....

Edited January 31, 2016 by workingpoor

[Motor_Blade]

Here is the thread on Verylittlehelps a tesco workers forum it appears that double time for a sunday was in fact true!

Lots of talk about the NMW rises:

http://www.verylittlehelps.com/index.php?PHPSESSID=f92d6463883e66473d26209fa91e9c4a&topic=15076.0

A quote:

Back of a paper calculation.....

Sunday pay cut by 50% for 15% of all staff so that's a reduction in the total Sunday pay bill of 6%....

Removal of NP1 for all twilight, night shift and early staff so that's probably around 8% cut in the contracted weekday hours wage bill if we assume equal numbers of staff across all shift types.

Reduction in the overtime bill from time a half to single pay if we assume part timers do 3/4 of over time hours and full timers do the other 1/4 so that's a reduction of whole overtime bill of 8%

Plus the savings for Tesco paying less into our new pension schemes so that's probably around 8%...

So even with this 3.1% across the board pay rise, Tesco have actually made savings on their wage bill and on their pension bill.

So collectively, taff have ended up paying a "fee" to Tesco so that Tesco can "give" the staff a "pay rise" so that Tesco can claim to comply with the National living wage laws......

So this legislation to phase in the national living wage has in fact been a Trojan horse for Tesco to cut their wage bill but be seen to "follow" the spirit behind the national living wage law.....

Chances are most other similar big organisations will do something along similar lines, beware of politicians bearing gifts eh?

[wish I could afford one]

If it results in increased automation and efficiencies then that's a good thing.

It would be good if it meant people worked less. Most people in the UK work below the EU average number of hours, however, they still work more than some of our neighbours like people in Germany for example It might be a reason why such countries have greater productivity too.

...

It doesn't work like that though does it. When the automation comes in the savings do not go to the worker/s replaced but rather to those that own the capital. Then those replaced workers end up un/underemployed rather than working less which implies more per hour worked if they are to earn the same. This is the current problem we have in society. In the modern world you need to get on the side of capital and not the side of labour if you are to succeed financially.

[canbuywontbuy]

Isn't it a bit of a farce to talk about national minimum wage when in-work benefits are so significant?

[wish I could afford one]

Isn't it a bit of a farce to talk about national minimum wage when in-work benefits are so significant?

Neither are affordable in a globalised world where the lowest bidder (ie those without a NMW and low/no benefits) wins the job.

[canbuywontbuy]

Neither are affordable in a globalised world where the lowest bidder (ie those without a NMW and low/no benefits) wins the job.

But....but....but....how are people going to afford their high rents/mega-mortgages without them?!

[Guest eight]

It doesn't work like that though does it. When the automation comes in the savings do not go to the worker/s replaced but rather to those that own the capital. Then those replaced workers end up un/underemployed rather than working less which implies more per hour worked if they are to earn the same. This is the current problem we have in society. In the modern world you need to get on the side of capital and not the side of labour if you are to succeed financially.

Is that ever possible for more than a certain % of the population at any given time?

[Snugglybear]

Isn't it a bit of a farce to talk about national minimum wage when in-work benefits are so significant?

The Tories are only bringing in the "National Living Wage" because they realise how much in-work benefits cost. They want the employers paying more. Of course, if the employers reduce hours or wage rates for their employees, that's not really going to work.

[workingpoor]

Isn't it a bit of a farce to talk about national minimum wage when in-work benefits are so significant?

The NMW rises should in theory reduce in work benefits by passing the responsibility on to the employer.

Working tax credit will reduce for these workers as their wages rise.

I did wonder if it was a "smoothing out exercise" by Tesco as by lowering o/time rates it could balance out the basic wage rise so workers would have little change to their total income for declaring for Tax credit purposes.

Meaning their claims wouldnt be too disrupted?

It all comes back to Tax Credits again doesn't it and the attempts employers and employees will make to ensure the free money keeps flowing.

Edited January 31, 2016 by workingpoor

[Guest eight]

Here is the thread on Verylittlehelps a tesco workers forum it appears that double time for a sunday was in fact true!

I can't access your link but you then go on to say just 15% of staff received double time. If every grunt on the shop floor was getting it that would make Tescos the most coveted job in retail.

[Wurzel Of Highbridge]

We have been automating stuff and improving systems to make things more efficient (cut down on paperwork etc.) and generally streamline tings across 200+ stores.

There's not much more you can do. the only way you can increase margins to compensate is if the competition put up their prices, however these days you are competing with amazon/ebay/google so there's not much of a position for increasing margins against these tax avoiding companies and the 1 man bands doing the dogwork for them.

[workingpoor]

I can't access your link but you then go on to say just 15% of staff received double time. If every grunt on the shop floor was getting it that would make Tescos the most coveted job in retail.

I think there is the situation where staff on newer contracts dont get double time for sunday but staff on older contracts still get double bubble.

Seems plenty of animosity between these 2 groups led to the cuts being pushed through with few willing to take industrial action to protect something they didnt get.

Edited January 31, 2016 by workingpoor