Politics Ed Miliband Living Wage

[Embattle]

http://www.bbc.co.uk/news/uk-24786397

He clearly didn't get the memo about how quite a few of the larger companies generally avoid paying tax any way, I also don't see a one year tax break for those that do is really going to cause them to set the precedent of paying a living wage continually year after year.

 

[Wij]

Doesn't matter if it would work. Its about whether voters believe him.

 

[Raven]

Its like his energy price freeze plan. Won't ever happen but he is in full make stuff up mode now.

 

[Aoami]

Token gesture. Raise the minimum wage to a living wage and you'll get my vote. Edit - £7.45 an hour is not a living wage.

 

[MYstIC G]

Token gesture. Raise the minimum wage to a living wage and you'll get my vote. Edit - £7.45 an hour is not a living wage.

Raise that and the cost of everything goes up until nobody can afford anything. It's a balance that's needed not all this knee jerk rubbish.

 

[Tom]

So basically, instead of giving the money directly to the public, he'll give it to companies who'll then pass it on to their employees.

And this is different to welfare...how?

Also relevant:

http://action.labour.org.uk/page/s/volunteer

But it's ok to not pay people anything, isn't it Ed?

 

[Scouse]

Raise that and the cost of everything goes up until nobody can afford anything.

That's what they said about minimum wage. But it's bullshit - argument was disproved and other countries that pay much higher minimum wages don't experience that either.

Make work worth doing and more people will leave benefits behind, get a little dignity and have something to aim for.

 

[Chilly]

Also relevant:

http://action.labour.org.uk/page/s/volunteer

But it's ok to not pay people anything, isn't it Ed?

That's a bit of a stretch, Tom. Community activism is predicated on people caring enough to get involved. If you paid them, what's the point? It would just be a huge lobbying firm (which is quite possibly what Labour/any party actually is, but that's another argument ).

 

[MYstIC G]

That's what they said about minimum wage. But it's bullshit - argument was disproved and other countries that pay much higher minimum wages don't experience that either.

Make work worth doing and more people will leave benefits behind, get a little dignity and have something to aim for.

That's fine but as someone that runs a business it don't work like that. Charges=Cost+ is the model of most every business. So if you increase the bottom line cost you will increase the charges. Maybe not globally in everything, everywhere but take Petrol as the example. Crude goes up, Pump prices go up.

 

[Aoami]

I understand that a proper minimum wage increase (£3-4p/h) will hit the small businessman, but I think it will only be a short term issue and benefit everyone in the long run when people have more money to spend. Huge companies like Tesco should not be allowed to sit on ridiculous profits and pay their employees next to nothing, I know that's capitalism and how it works, but it shouldn't work like that.

 

[Chilly]

Right, so everyone has more money to spend and businesses cost more to run and goods become more expensive...sounds like pretty standard inflation to me. The wage increase will only remain real for a year or two, after that the very high inflation that will inevitably follow will eat the increase entirely.

 

[Access Denied]

Tesco actually pay a decent hourly rate. I'm on £7.28 an hour as a CA. However, they do screw Team Leaders and Managers, especially in Express stores. They're salaried. They get paid for 36 hours a week but due to the wages budget being ridiculous they rarely do less than 45 hours, just so stuff gets done to Head Office standards.

Tbh the only thing I can see happening with a big minumum wage increase is firms hiring less staff. Therefore putting more pressure on those already in place to get more and more done.

 

[Raven]

A £3-£4 minimum wage increase would mean a hell of a lot of redundancy in small businesses. The youth would be the first to go and then the old meaning a bigger burden on the tax payer, more people in long term unemployment and probably more crime. And do you really think the big companies would pay it without either passing the cost on to the customer or also making huge redundancys? It's like these windfall taxes Labour get themselves wet over, do people really think the energy companies would just absorb them? Would they fuck...they would just bang on another 10% to bills.

The man is a buffoon advised by buffoons.

 

[Tom]

They get paid for 36 hours a week but due to the wages budget being ridiculous they rarely do less than 45 hours

If they get paid for 36 hours they should do only 36 hours work.

 

[DaGaffer]

If they get paid for 36 hours they should do only 36 hours work.

He didn't say that.

Back on topic, its a pointless exercise as it only lasts a year; even the most short-termist Financial Director wouldn't be stupid enough to think he can get the benefit and then row back on it in year two, so the business would end up carrying the cost, which doesn't make much sense.

 

[Gumbo]

If that sort of Min wage rise came in tomorrow I would have to sack one of my employees tomorrow. Many businesses are only just keeping their heads above water at the moment, the only way to avoid this increased cost would be to lay people off. Ed's an idiot, luckily enough people can see this that there is no chance of him being elected.

 

[Chilly]

Ed's an idiot, luckily enough people can see this that there is no chance of him being elected.

I bet you he does. They'll promise all sorts of shite and convince enough retards who dont know any better to elect them.

 

[Athan]

Rather than just supposing what the effects would be maybe we should all (I only skim-read it at this stage) read an actual study: http://www.geog.qmul.ac.uk/livingwage/pdf/Livingwagecostsandbenefits.pdf

 

[Chilly]

Rather than just supposing what the effects would be maybe we should all (I only skim-read it at this stage) read an actual study: http://www.geog.qmul.ac.uk/livingwage/pdf/Livingwagecostsandbenefits.pdf

Ok, highlights:

Many businesses managed to adapt to the wage premium in a cost-neutral way. Ie, they found savings elsewhere and used that to offset some of the wage increase.
Turnover of staff and sick days went down, the saving to business from this was between 0.1% and 2%, but included some weird edge cases.
Businesses found it easier to hire.
It's good PR and helps get contracts.
The average psychological wellbeing score for those employed in LW workplace was higher than amongst their equivalents employed in NLW workplaces and this relationship withstood adjustment for factors such as age, gender, ethnicity, working hours, educational attainment, dependent children, having another job and being born in the UK.
Our best estimate of potential savings to the Exchequer from living wage implementation in London is £823 million per year.
And, finally: Indeed, our case studies show that the headline increase in wages associated with the living wage – some 30-37% above the level of the NMW – was not reflected in the changing costs of the contracts or service.

 

[Chilly]

I guess the problem is that, fundamentally if costs to consumers do not go up either businesses end up managing themselves better and finding those savings elsewhere (very possible) or it eats into their margin if they are already running close to the edge (probably quite common). Treasury saves almost £1bn per year, too. And in fact their estimate was very low because they believe they sampled it incorrectly and the savings would be substantially higher.

 

[Access Denied]

The only problem with that is the inference that the business gives a shit about its employees and customers. Small business may do so but large coporations? No chance. Take supermarkets as an example, Tesco in particular but the other big ones too. Raising the national minmum wage will simply mean they push the extra cost onto the customer. Everyone has to eat, right?

I work for Tesco so I know how they work. They're absolutely profit driven. There's no "Stack it high and sell it cheap" ethos anymore. It's all about keeping the shareholders rolling in cash. There's no doubt in my mind that Tesco would never just accept a drop in their profit margins and I can't see any of the other big supermarkets being any different.

 

[Raven]

Exactly, its a choice of pass the price on to the customer or fire staff...or a mixture of both.

 

[rynnor]

Exactly, its a choice of pass the price on to the customer or fire staff...or a mixture of both.

The only thing that can be usefully done by the Govt is to cut peoples living costs.

Massive house building progams in the southeast tp provide abundant cheap housing would be a useful thing the state could do.

 

[Chilly]

Exactly, its a choice of pass the price on to the customer or fire staff...or a mixture of both.

That's simply not true. No business is run perfectly. There's always cost savings to be made in places other than pure staff costs. Tesco is probably one the best run businesses in the country so perhaps they have less to optimise, but I bet they could pull a few hundred million in cost savings out of the hat pretty easily.

 

[Raven]

As of 2012 Tesco employed 475000 people in the UK.

For arguments sake lets say 250k of them are on about £8 an hour and work 35 hours a week

If they were to increase everyone's wages to £11 an hour they would have to find savings of £26 million a week or £1.3 billion a year.

No chance, if they could save that much then they already would have...especially when their growth hasn't been the best in recent years.


Edit, a small company employing 10 members of staff on minimum wage would have to find an extra 55k a year

 

[Scouse]

If they were to increase everyone's wages to £11 an hour they would have to find savings of £26 million a week or £1.3 billion a year

Or roughly one third of their yearly profits that otherwise goes to shareholders.

Meh, even with your maths I'd say that tesco really has a moral imperative to pay their staff well before shareholders...

 

[Raven]

Did they recently become a coop or something?

And what about small companies? Or would they be exempt? How would that work?

 

[Scouse]

Fuck 'em

 

[Raven]

That's not what I said...

If things such as fuel duty and such were cut it would lower the cost of things for everybody, getting about and all items bought, especially food. Before a higher minimum wage is introduced other avenues should be looked at. Enforcing a higher minimum wage wont mean shit if everyone whacks up their prices. It will also mean those on higher pay grades will also want more. Higher prices = lower quality of life for everyone. Higher social security payments would be needed because inflation would be rampant, higher taxes would be needed which would cause even more of a problem for low earners.

Actually, lowering fuel tax and duty would be one of the single most useful things any government could do.

 

[Tom]

Actually, lowering fuel tax and duty would be one of the single most useful things any government could do.

No thanks. About 70% of journeys to work are under 6 miles. We need to get some of those people out of their cars and onto bicycles or public transport. That way, we free up the roads, put more money in people's pockets, make them fitter and healthier and consequently save money on the NHS. Making motoring cheaper is not a good idea, especially when you consider that motoring is heavily subsidised by the general public (including non-drivers).