Living wage

zagfles

MacMickster wrote: »

As higher wages would not have to be subsided by benefits (and the added costs of administering those benefits) however, we should face a reduction in taxation.

The money that people receive (whether through their pay or benefits) has to come from somewhere. I would prefer to see employers have to pay a living wage and hence have less of the benefits culture which seems so prevalent in this country.

So what would this "living wage" be then?

A single parent with 4 kids and high childcare costs could get tax credits (ie be "subsidised by benefits") on an income up to about £72,000. So about £35 per hour should do it.

HappyMJ

zagfles wrote: »

Good idea, but the "child poverty" targets make such a policy impossible. The gap between those at the bottom and those in the middle would widen, so increasing "poverty" as this is how it's defined.

Agreed...scrap the child poverty targets then or make them realistic to see if a child actually gets everything they need for the minimum level of benefits.

MacMickster

zagfles wrote: »

So what would this "living wage" be then?

A single parent with 4 kids and high childcare costs could get tax credits (ie be "subsidised by benefits") on an income up to about £72,000. So about £35 per hour should do it.

Forget the single parent with 4 kids (or we will start an entirely different debate), but a single person (without kids) working full time at the minimum wage should be paid enough to be able to live frugally without recourse to any kind of benefit.

zagfles

MacMickster wrote: »

Forget the single parent with 4 kids (or we will start an entirely different debate), but a single person (without kids) working full time at the minimum wage should be paid enough to be able to live frugally without recourse to any kind of benefit.

So that would be about the current national minimum wage then. Maybe 18p per hour more to eliminate WTC eligibility. £6.26 an hour.

Obviously anyone with kids would still be reliant on benefits to top their wages up. Exactly those who are more likely to be on benefits in the first place.

HAMISH_MCTAVISH

HAMISH_MCTAVISH wrote: »

The problem however goes beyond that of minimum wages and into driving wage costs up across the board, as the person currently on a living wage as a supervisor for example, would need to maintain the gap between his income and the new higher minimum wage.

Which would then translate into a serious wider inflation problem.

It's not a bad idea in theory, but there are some significant complications that would need to be worked out first.

Not least of which is that large supermarkets and other high volume retailers would need to raise prices significantly less than small retailers to cover the gap, thus increasing their competitive advantage and driving ever more small retailers out of business.

So, anyone?

MacMickster

zagfles wrote: »

So that would be about the current national minimum wage then. Maybe 18p per hour more to eliminate WTC eligibility. £6.26 an hour.

Obviously anyone with kids would still be reliant on benefits to top their wages up. Exactly those who are more likely to be on benefits in the first place.

No. Eliminate eligibility for not just WTC, but also housing benefit, council tax benefit etc. Probably another couple of pounds per hour on the minimum wage.

zagfles

MacMickster wrote: »

No. Eliminate eligibility for not just WTC, but also housing benefit, council tax benefit etc. Probably another couple of pounds per hour on the minimum wage.

A single person (under 60, with no disability) on £6.26 an hour full time (£13020pa) would not be entitled to HB/LHA in most parts of the country, even if they were entitled to the one-bed rate rather than shared accomodation rate.

They wouldn't be entitled to CTB anywhere.

MacMickster

zagfles wrote: »

A single person (under 60, with no disability) on £6.26 an hour full time (£13020pa) would not be entitled to HB/LHA in most parts of the country, even if they were entitled to the one-bed rate rather than shared accomodation rate.

They wouldn't be entitled to CTB anywhere.

But the NMW applies throughout the country and should be sufficient to ensure that no single person was eligible for housing benefit at the one bed rate anywhere in the country, including London.

zagfles

MacMickster wrote: »

But the NMW applies throughout the country and should be sufficient to ensure that no single person was eligible for housing benefit at the one bed rate anywhere in the country, including London.

So that would be over £30k a year then, higher than the current average wage. Employers in Wales, the north east and Glasgow would have to pay about £15 per hour just because that's the "living wage" in Westminster.

That would really help with unemployment in depressed areas. Not to mention the north-south divide.

ETA: how about this. Replace the NMW with a LMW ie Local Minimum Wage. Set at the applicable amount for a single person plus £5 disregard (£76pw) plus the one-bed LHA rate divided by 0.65 (ie the LHA income limit), divided by 40 to get an hourly rate.

Would give about £5 per hour in Clywd and £11.50 per hour in Westminster (doesn't totally fit the "no benefits" criteria because of tax and WTC but pretty close).

grizzly1911

zagfles wrote: »

Would give about £5 per hour in Clywd and £11.50 per hour in Westminster (doesn't totally fit the "no benefits" criteria because of tax and WTC but pretty close).

Getting closer. Just don't forget that those in "clywd" have other issues that "Westminster" doesn't such as transport and access to facilities e.g. hospitals, schooling and to "affordable" food/clothing shopping.