The Minimum wage

Jennifer_Jane

Tipped on my card on Friday and was told by the waitress that if I gave it on the card (and some button or other was pressed) then the amount would be taxed, but if I just gave cash it would not be.

I was a bit flummoxed by this. What would others have done? The point was the taxation not whether or not the waitress would get the tip.

(I'm used to adding the tip to my credit card bill from my days in South Africa, which is why I tend to do that rather than digging cash out.)

CLAPTON

jamesmorgan wrote: »

They are not better off as they simply have to use that money to buy another house.

think about it again!

gingeralan

Carl31 wrote: »

Would removing the minimum wage help this country out of the economic problems it has?
Maybe we are too far down the line now, as it would probably cause more harm than good removing it, but has it made employment too expensive for Business to operate in a competitive way?

I really think that the minimum wage has been very bad for the average worker in retail type jobs. When I started working, around 10 years ago the minimum wage was just starting to be implemented. before this supermarkets all paid different amounts, some err very low payers others paid quite well. I had a friend who worked in the pound shop earning around 2.50 an hour, I worked in a slightly more upmarket supermarket and I earned 3.75. Before minimum wage it gave people working in these industries the opportunity to improve their income without having to become a manager or anything, which some people are not suited to.

At the time he could live on his wages, products are priced based on what people can pay for the basics, if you have people in the economy earning 3 quid an hour businesses will have to price so these people can live, as it is they can get away with charging based on higher incomes, the people I see now on minimum wage live no better than my friend 10 years ago even though they earn more. I have noticed a significant drop in the lifestyle of my old colleagues, don't see them very much anymore though as I moved 150 miles away for work.

Carl31

:A

gingeralan wrote: »

I really think that the minimum wage has been very bad for the average worker in retail type jobs. When I started working, around 10 years ago the minimum wage was just starting to be implemented. before this supermarkets all paid different amounts, some err very low payers others paid quite well. I had a friend who worked in the pound shop earning around 2.50 an hour, I worked in a slightly more upmarket supermarket and I earned 3.75. Before minimum wage it gave people working in these industries the opportunity to improve their income without having to become a manager or anything, which some people are not suited to.

At the time he could live on his wages, products are priced based on what people can pay for the basics, if you have people in the economy earning 3 quid an hour businesses will have to price so these people can live, as it is they can get away with charging based on higher incomes, the people I see now on minimum wage live no better than my friend 10 years ago even though they earn more. I have noticed a significant drop in the lifestyle of my old colleagues, don't see them very much anymore though as I moved 150 miles away for work.

I worked in a supermarket prior to nmw. I was only part time whilst at college, but i worked with people earning around £4-5 an hour full time who managed to buy houses on single wage

ukcarper

Carl31 wrote: »

:A

I worked in a supermarket prior to nmw. I was only part time whilst at college, but i worked with people earning around £4-5 an hour full time who managed to buy houses on single wage

When and where was that ?

StevieJ

Carl31 wrote: »

:A

I worked in a supermarket prior to nmw. I was only part time whilst at college, but i worked with people earning around £4-5 an hour full time who managed to buy houses on single wage

You are not from Grimsby per chance

http://www.rightmove.co.uk/property-for-sale/property-33989863.html

Carl31

ukcarper wrote: »

When and where was that ?

About 96/97

I live in the south east, about 10 mins north of brighton

jamesmorgan

StevieJ wrote: »

Tax credits are paid depending on wage level, so are a major determinent of wage levels, the employer can pay a low wage and the employee accept this wage if both know that the govt will make up that wage to a level that is acceptable to the employee. Therefore a rival employer would have to beat the wage plus the subsidy to entice the worker away on purely economic grounds. I remind you of what you had written and what I was responding to

Take the simple example of 2 companies trying to secure the employment of a worker. Let's say the worker can generate £7/hr of value to both companies (by value, this means the value once all other company costs are accounted for). The company owners need to secure some profit from this value (otherwise they wouldn't
be taking the risk to be a company owner). Typical net profits for most businesses are in the range of 5-10%, but to keep it simple let's say both owners want 10% profit. This means both owners are willing to pay up to £6.30 for the services of the employee. The company that pays closest to £6.30 gets the services of the employee - the other company loses out.

Now if we add a further complication that both companies know the employee gets additional income from other sources (it doesn't matter how - it could be tax credits, investments, gifts/inheritance). This doesn't change the situation from the owners viewpoint. Both owners are still willing to offer up to £6.30 to secure the employment of the worker and whoever offers closest to this level still wins.

What tax credits do, however, is change the equation from the employee's viewpoint. If the employee decides he needs £6.30/hr to fund his chosen lifestyle he would normally need to work full time at one of these companies. If he now receives tax credits, he may decide instead to only work part-time (or possibly not at all if he is receiving large amounts of Child Tax Credits).

ukcarper

ukcarper wrote: »

When and where was that ?

The average price or a terraced house in Brighton in 1996 was £68k, £5 an hour is £10.4k so they would have needed quite a big mortgage.

ukcarper

jamesmorgan wrote: »

Take the simple example of 2 companies trying to secure the employment of a worker. Let's say the worker can generate £7/hr of value to both companies (by value, this means the value once all other company costs are accounted for). The company owners need to secure some profit from this value (otherwise they wouldn't
be taking the risk to be a company owner). Typical net profits for most businesses are in the range of 5-10%, but to keep it simple let's say both owners want 10% profit. This means both owners are willing to pay up to £6.30 for the services of the employee. The company that pays closest to £6.30 gets the services of the employee - the other company loses out.

Now if we add a further complication that both companies know the employee gets additional income from other sources (it doesn't matter how - it could be tax credits, investments, gifts/inheritance). This doesn't change the situation from the owners viewpoint. Both owners are still willing to offer up to £6.30 to secure the employment of the worker and whoever offers closest to this level still wins.

What tax credits do, however, is change the equation from the employee's viewpoint. If the employee decides he needs £6.30/hr to fund his chosen lifestyle he would normally need to work full time at one of these companies. If he now receives tax credits, he may decide instead to only work part-time (or possibly not at all if he is receiving large amounts of Child Tax Credits).

I think you look at things in a much too simplistic and theoretical way.