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Huge shortage of staff to work in hospitality from next week due to brexit and locals not wanting to do the work as better off on benefits?


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3 minutes ago, Gribble said:

 

Wrong -  its the other way round. Benefits way too high - if these were reduced taxes could come down on both employee and employer, both having an effect in  increasing wages 

Taxes could come down? 😆

Put another rock in that pipe, dude.

32209702-8650147-image-a-26_159799564547

 

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4 minutes ago, msi said:

Remind me all the time Thatcher reduced taxes, how much wages went up?

Remind me when Osborne dropped Corporation Tax, how much wages went up ?

 

Clueless - who the f*ck do you think pays for the crazy  over generous welfare state  we have in the UK?

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Those that are paid from the public purse should not pay income tax.....what they earn should be what they get net......what is the point of getting it in one hand and giving it back to whence it came.....pointless exercise.

I wonder how many are paid with borrowed money, public or private?😉

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19 hours ago, coypondboy said:

The Brexit affect sounds like the gestapo operating at UK border according to the guardian?

All the pubs and restaurants where I live are fully staffed with English people

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15 hours ago, Young Turk said:

I think a lot of employers estimate that there isn't a combination of higher wages and prices and lower volumes which is profitable. 

 

I think that is almost certainly true, but if your business used to rely on minimum wage staff doing crappy jobs on zero hours contracts, then it might just be the case now that your business isn't viable. That's the way it goes.

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24 minutes ago, Gribble said:

 

Wrong -  its the other way round. Benefits way too high - if these were reduced taxes could come down on both employee and employer, both having an effect in  increasing wages 

Firstly, emplyers will always pay as little as they can get away with for labour - it is just another resource, after all - so don't expect employment tax cuts to find their way into employee pay packets.

Secondly, the benefits/wages relationship is a little more complex than you make out. Arguably, benefits are the thing that actually allow employers to pay wages that are far below liveable, in the knowledge (both employer's and employee's) that they will be topped up. One thing is clear; benefits are not generous right now, and very few people strive towards a benefit lifestyle. If wages were higher, people would take the jobs. If prices in some sectors have to rise (or - God forbid - executive bonuses have to fall) to keep businesses viable, so be it.

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19 minutes ago, Gribble said:

Clueless - who the f*ck do you think pays for the crazy  over generous welfare state  we have in the UK?

You make an assertion (Lower Taxes = Higher Wages) and I point out the colossal hole in your logic.  Trickle down economics has been debunked.

 

Your pathetic bait-n-switch to 'who pays' shows who the clueless f*** is

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9 minutes ago, mattyboy1973 said:

Firstly, emplyers will always pay as little as they can get away with for labour - it is just another resource, after all - so don't expect employment tax cuts to find their way into employee pay packets.

Secondly, the benefits/wages relationship is a little more complex than you make out. Arguably, benefits are the thing that actually allow employers to pay wages that are far below liveable, in the knowledge (both employer's and employee's) that they will be topped up. One thing is clear; benefits are not generous right now, and very few people strive towards a benefit lifestyle. If wages were higher, people would take the jobs. If prices in some sectors have to rise (or - God forbid - executive bonuses have to fall) to keep businesses viable, so be it.

Agree, benefits are subsidising companies that pay low wages.....what is stopping someone being on benefits and doing a worthwhile and rewarding job for no money, voluntary.......how come jobs are valued by renumeration, some jobs are worth far more than that.😉

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53 minutes ago, wighty said:

Some years ago I was a benefits advisor for citizens advice bureau.

Everyone that came in was offered a free benefits check. I'd wager at least half were entitled to more or could make minor changes to lifestyle and maximize benefits. If everyone claimed their full entitlement it would not be affordable without massive gov funding.

Very true - although it probably would cause reform to the system.

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31 minutes ago, zugzwang said:

Taxes could come down? 😆

Put another rock in that pipe, dude.

32209702-8650147-image-a-26_159799564547

 

Obviously, the government will have to default. People dumb or evil enough to lend to the State deserve to lose their shirts quite honestly.

And if, as you believe, the government only owes itself- why then it doesn't matter if it defaults, right?

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2 minutes ago, Locke said:

Obviously, the government will have to default. People dumb or evil enough to lend to the State deserve to lose their shirts quite honestly.

And if, as you believe, the government only owes itself- why then it doesn't matter if it defaults, right?

 

It's not obvious that the UK govt will have to default but that prospect is becoming increasingly likely given that the private sector is still as indebted today as it was in 2008. Perhaps more so.

Lending to the State is a perfectly legitimate way of generating a future income stream. Considerably safer than buying commercial paper while generating superior returns to cash. You're highly unlikely to lose your shirt but nothing is truly risk-free.

We also trade with the rest of the world and the UK already has an enormous current account deficit to finance. Spendthrift nations ultimately go bankrupt if they fail to maintain the confidence of the markets.

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2 hours ago, Gribble said:

 

Wrong -  its the other way round. Benefits way too high - if these were reduced taxes could come down on both employee and employer, both having an effect in  increasing wages 

Simplest solution would be a universal basic income and abolition of means-tested benefits, that would guarantee that working pays. Could also abolish the minimum wage at the same time and the market distortions it creates at the lower end of the labour market.

It's means-testing that creates this unhappy situation that people on median wages who don't take anything from the state even if they would be entitled to it are often no better off (or are actually worse off) than they would be by optimising their lifestyle to maximise benefits.

Edited by Dorkins
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2 hours ago, wighty said:

Some years ago I was a benefits advisor for citizens advice bureau.

Everyone that came in was offered a free benefits check. I'd wager at least half were entitled to more or could make minor changes to lifestyle and maximize benefits. If everyone claimed their full entitlement it would not be affordable without massive gov funding.

Just goes to show how poorly designed the UK's means-testing-based benefits system is that so many people who are entitled to money are not getting it.

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1 hour ago, mattyboy1973 said:

I think that is almost certainly true, but if your business used to rely on minimum wage staff doing crappy jobs on zero hours contracts, then it might just be the case now that your business isn't viable. That's the way it goes.

But what are the consequences if a business isn't viable?

If businesses which pay minimum wages cease to be viable, will that lead to new, better paid jobs for the former minimum wage workers? That seems to require two things - better paid jobs being created and the former minimum wage workers being qualified to do them.

Both of those two things should have a tendency to occur anyway. If an entrepreneur has a good business idea, which makes better use of labour, he will offer higher wages to outcompete minimum wage employers*. So I'm sceptical that businesses becoming non-viable is likely to have positive consequences for minimum wage workers.

* If I could profitably employ people at £18 per hour today, I would offer £18 per hour and people currently earning £9 per hour would probably be keen to apply. If they lost their £9 per hour job (due to lower demand, or their employer was unable to afford minimum wage increases, or whatever), I can't see how that would make me more likely to be able to profitably employ people at £18 per hour tomorrow.

 

Am I missing something in the "maybe businesses paying minimum wage aren't viable" argument? Is there an argument about replacement jobs?

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18 minutes ago, Young Turk said:

But what are the consequences if a business isn't viable?

If businesses which pay minimum wages cease to be viable, will that lead to new, better paid jobs for the former minimum wage workers? That seems to require two things - better paid jobs being created and the former minimum wage workers being qualified to do them.

Both of those two things should have a tendency to occur anyway. If an entrepreneur has a good business idea, which makes better use of labour, he will offer higher wages to outcompete minimum wage employers*. So I'm sceptical that businesses becoming non-viable is likely to have positive consequences for minimum wage workers.

* If I could profitably employ people at £18 per hour today, I would offer £18 per hour and people currently earning £9 per hour would probably be keen to apply. If they lost their £9 per hour job (due to lower demand, or their employer was unable to afford minimum wage increases, or whatever), I can't see how that would make me more likely to be able to profitably employ people at £18 per hour tomorrow.

 

Am I missing something in the "maybe businesses paying minimum wage aren't viable" argument? Is there an argument about replacement jobs?

Ultimately its supply and demand. If no one is willing to work for X then wages will move to X+ until they reach a level someone is prepared to provide their labour. The + could come from reduced profit, reduction in other costs or an increase in price. 

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5 minutes ago, 2buyornot2buy said:

Ultimately its supply and demand. If no one is willing to work for X then wages will move to X+ until they reach a level someone is prepared to provide their labour. The + could come from reduced profit, reduction in other costs or an increase in price. 

That's correct and I don't which combinations of changes are likely or viable.

But I was responding specifically to the argument that certain types of business might cease to viable (I've heard this argument before, so I think might be quite a widely held position by advocates of higher minimum wages).

I'm sympathetic to higher minimum wages (I don't think it's obvious what the consequences would be), but if I were advocating for them, I don't think I'd want to argue that they would lead to widespread job losses and then hope the jobs were replaced. I'd argue that employers could increase prices and/or tolerate lower profits (i.e. the consequence of increasing minimum wages would be the weaken the purchasing power of everyone else).

Or rather, I'd only advocate for higher minimum wages if I were satisfied that they would lead to higher prices and/or lower profits, but not less demand for labour.

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1 hour ago, Young Turk said:

* If I could profitably employ people at £18 per hour today, I would offer £18 per hour and people currently earning £9 per hour would probably be keen to apply. If they lost their £9 per hour job (due to lower demand, or their employer was unable to afford minimum wage increases, or whatever), I can't see how that would make me more likely to be able to profitably employ people at £18 per hour tomorrow.

 

Am I missing something in the "maybe businesses paying minimum wage aren't viable" argument? Is there an argument about replacement jobs?

Why would you do this? Most businesses would offer £9.01 in this situation, their mandate being to maximise profit over everything else, with of course on component of that being reducing costs as much as possible.

There's no easy answer to any of your questions, really, other than to state the point that not all business models are viable and, in my opinion at least, businesses in this country shouldn't be able to hire people at below a living wage and have the government make up the difference. That's corporate welfare disguised as welfare. It is an incredibly difficult problem to solve, though, otherwise we probably wouldn't be where we are. I personally think that removing in-work benefits would be a start, not so much because it would solve the problem, but because it would bring the problem into the spotlight. How many people currently working NMW jobs would be able to continue? If you remove in work benefits, you force employers to either offer a living wage or not get staff. Of course, there'll be knock on effects - more automation, offshoring, etc - but I don't see why taxpayers should be paying Tesco's staff costs.

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2 hours ago, Young Turk said:

* If I could profitably employ people at £18 per hour today, I would offer £18 per hour and people currently earning £9 per hour would probably be keen to apply.

 

3 minutes ago, mattyboy1973 said:

Why would you do this? Most businesses would offer £9.01 in this situation, their mandate being to maximise profit over everything else, with of course on component of that being reducing costs as much as possible.

I should clarify what I assumed in the scenario above. I meant a different business where labour was more productive (roughly twice as productive - that's why it pay £18 instead of £9). Yes, I could offer a minimal wage increase. I'm not sure people would bother applying and moving jobs for a very small increase like a penny, but perhaps I could hire them at £10.

But if labour was twice as productive, I wouldn't be able to retain staff for long if I only paid them £10 per hour. If there were comparable positions already, I probably wouldn't be able to hire them in the first place as £10 would be so much lower. Or if I had invented some completely new industry and type of job, my profits would be so enormous that competitors would enter the market and offer higher wages to compete with me. This would push up wages until they reached £18.

Even businesses which maximise profits aim to pay people roughly what they are worth in their market, precisely because of competitive market pressures.

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2 minutes ago, Young Turk said:

Even businesses which maximise profits aim to pay people roughly what they are worth in their market, precisely because of competitive market pressures.

I'm not sure that's true at all any more, unfortunately. The link between productivity and wage growth was broken decades ago - back in the 70's, if you believe the graphs (US, I assume, but the same holds):

172791-21692.png

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18 minutes ago, mattyboy1973 said:

I'm not sure that's true at all any more, unfortunately. The link between productivity and wage growth was broken decades ago - back in the 70's, if you believe the graphs (US, I assume, but the same holds):

I think that's a slightly different point.

You are drawing attention to workers in an industry over time receiving pay rises (perhaps real pay cuts) below their increases in productivity.

(I think this is often explained by workers having less bargaining power (due to the decline of unions) and facing a more competitive labour market (both competing with cheaper workers abroad and immigrants working for low wages). Maybe there are other factors though.)

 

 

I am not asserting that market forces prevent this. I am asserting that market forces require higher pay for employees in more productive roles at a given time. If they don't, how could wage differentials be explained?

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41 minutes ago, Young Turk said:

I think that's a slightly different point.

You are drawing attention to workers in an industry over time receiving pay rises (perhaps real pay cuts) below their increases in productivity.

(I think this is often explained by workers having less bargaining power (due to the decline of unions) and facing a more competitive labour market (both competing with cheaper workers abroad and immigrants working for low wages). Maybe there are other factors though.)

 

 

I am not asserting that market forces prevent this. I am asserting that market forces require higher pay for employees in more productive roles at a given time. If they don't, how could wage differentials be explained?

Pay utimately comes down to market forces (supply and demand), obviously coupled with a ceiling amount, above which it is no longer profitable to employ somebody in that position. What the productivity graph shows, very roughly, is that pay could be perhaps 2x what it is currently as a general average, and companies could be as profitable as they were in the 1970's. The money would have to come from somewhere, of course, I suspect mostly from the pay packets of those further up the corporate ladder.

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