Ed Milliband promotes living wage as labours next big thing

N1AK

IveSeenTheLight wrote: »

How does it lower quality of life if in theory we could lower wages and product costs.

If your paid £20k and you have £20k outgoings, what is different to being paid £5k and having £5k outgoings.

At best it'd be exactly the same (no benefit) and that would be if we could be entirely internally sufficient without increasing costs which is impossible.

The UK will only become more competitive at low skill, low value work by decreasing average quality of life.

IveSeenTheLight wrote: »

My point is, your technical paid job. Could we export more if it was cheaper to produce.
If your cost of living reduced, could your wages match the same, thus making the UK more competative in the technical market.

No because decreasing the UK average wage by 50% would at best lead to a ~20% drop in cost of living. Anything made abroad won't get cheaper, raw materials imported won't get cheaper etc. Yes we'd bring back a demand for some low skill, low value labour but that wouldn't decrease costs because we'd just be transferring work from somewhere else where costs were similar.

There is already demand for my labour at my current wage so there is no advantage to decreasing the value. If there could be more demand if someone could be paid ~£30k to do the job then train up someone currently earning minimum wage or unemployed. I'd have more competition for the higher paying work but that's fine; I accept that I can't stand still (in terms of skills, experience etc) and expect to keep earning an equivalent amount.

dunstonh

Conrad wrote: »

I'm always argueing we should make purchasing decisions based on how well workers are tret.

Yet this very forum is dedicated to reducing costs which will often mean workers being paid less.

Most people I encounter are not the slightest bit concerned with workers / trades peoples incomes when it comes to thier own buying decisions. Left wing types are in my experience the tightest of all, out to improve thier position with most of thier buying decisions.

Banks are a good example. I have a banking background. I sat the chartered institute of banking exams which were paid for by the bank. All staff who wished to progress beyond assistant manager grade had to pass the exams. Every role had a grade and you had to be trained to a high standard for each role. Only staff with the training could do that role and they knew the quirks and issues for everything. They were truly specialists in the clerical jobs they did.

Now, the banks run with around a quarter of the staff. Exams no longer required. Training is abysmal and they have to chase other income streams outside of their core area. Service suffers and you get the mess we have seen.

Insurance is very similar. The best insurers and products cost more and those providers get the fewest complaints and have the best reputation for service and quality. The ones that cut to the bone to give cheapest prices cut back on service and quality.

grizzly1911

dunstonh wrote: »

Banks are a good example. I have a banking background. I sat the chartered institute of banking exams which were paid for by the bank. All staff who wished to progress beyond assistant manager grade had to pass the exams. Every role had a grade and you had to be trained to a high standard for each role. Only staff with the training could do that role and they knew the quirks and issues for everything. They were truly specialists in the clerical jobs they did.

As they were tested at each stage and progression took time as knowledge was acquired and demonstrated it also created trust. This was both between employer/employee and Bank/customer

QUOTE=dunstonh;57038991]

Now, the banks run with around a quarter of the staff. Exams no longer required. Training is abysmal and they have to chase other income streams outside of their core area. Service suffers and you get the mess we have seen.

[/QUOTE]

They will sell you things that they don't understand and that do not meet your needs purely to gain that bonus/keep their job.

This leads to breakdown in trust and customer satisfaction as the product doesn't meet expectations.

QUOTE=dunstonh;57038991]

Insurance is very similar. The best insurers and products cost more and those providers get the fewest complaints and have the best reputation for service and quality. The ones that cut to the bone to give cheapest prices cut back on service and quality.[/QUOTE]

In the last case does the broker still get the same commission level or is this reduced too?

Loughton_Monkey

N1AK wrote: »

In a sense; the point you stopped before though is that it would be even better if the company put the machine in Romania to employ two unskilled low wage labourers and then employed the two 'yoof' in roles that justified a decent wage or trained the 'yoof' to improve efficiency and workflow so that their production capacity/quality improved and the company could justify paying them a decent wage.

There are too many people who want to keep a supply of low value jobs in the UK when the only viable solution to maintain a good standard of living is to shed jobs that can be done at lower cost somewhere else and create jobs that pay the premium wages needed to afford the quality of life.

I hear what you say, but can't help thinking "I wouldn't start from here..."

My two lads making furniture are indeed producing output of £1 million. Public Coffers will receive a proportion of their wages, plus the boss's profits. Shipping the lot to Romania is tantamount to letting a Romanian boss do the whole thing. Then all we are left with is (a) Negative trade balance of £1m as we import the furniture, and (b) two "yoof" claiming JSA. Our 'boss' is not making anything either.

As hard as we try, I don't think the two lads could be trained to produce business software, develop a vaccine in a laboratory, or direct a film....

I think we'd all like our schools to turn out 90% of their graduates with 'skills', or the intelligence to develop them. But our lacklustre education system, coupled with the 'normal distribution curve', put paid to that.

This is why I tend to think that the UK's 'place' in world commerce is (a) the high tech/innovative/scientific area and perhaps finance where we do well, and (b) Robotics and manufacturing innovation....

(a) is theoretically what we already do well (but could do better). (b) is, I think, the only way we can staunch the flow to India/China. They are 'handraulic' but extremely low wages. Surely if we put our minds to it, then sophisticated robotics [with appropriately spotty unskilled 'yoof' to hump the goods], can, without large shipping costs, compete on price and quality.

At the end of the day, it "only" needs 80% of the workers 'creating' wealth - and then we can afford to pay the unskilled 20% to keep our environment clean instead of paying benefits.

grizzly1911

Loughton_Monkey wrote: »

I hear what you say, but can't help thinking "I wouldn't start from here..."

Surely if we put our minds to it, then sophisticated robotics [with appropriately spotty unskilled 'yoof' to hump the goods], can, without large shipping costs, compete on price and quality.

That is what happened with car manufacturing under foreign ownership.

WHat annoys me is when the government claim a number of skilled "engineering" jobs when in relaity the majority are assembly "technicians". Carbon based robots.

N1AK

Loughton_Monkey wrote: »

Shipping the lot to Romania is tantamount to letting a Romanian boss do the whole thing. Then all we are left with is (a) Negative trade balance of £1m as we import the furniture, and (b) two "yoof" claiming JSA. Our 'boss' is not making anything either.

As hard as we try, I don't think the two lads could be trained to produce business software, develop a vaccine in a laboratory, or direct a film....

Then don't outsource the low value work. Someone else will build a plant in eastern europe or asia where they can benefit from less regulation, lower wages and cheaper raw materials undercut your expensive UK production and you'll end up with a bankrupt boss and two unemployed workers.

It just so happens that the timber trade is an area I have knowledge of through family connections. Guess what, the UK industry has shrunk massively and most timber is imported already for exactly those reasons.

If the two workers can't do work that someone abroad can't do for £2ph or have work that can only be done locally (a shrinking constraint) then the only way they can afford a first world life is by subsidy by the state/other workers.

N1AK

Loughton_Monkey wrote: »

I hear what you say, but can't help thinking "I wouldn't start from here..."

My two lads making furniture are indeed producing output of £1 million. Public Coffers will receive a proportion of their wages, plus the boss's profits. Shipping the lot to Romania is tantamount to letting a Romanian boss do the whole thing. Then all we are left with is (a) Negative trade balance of £1m as we import the furniture, and (b) two "yoof" claiming JSA. Our 'boss' is not making anything either.

As hard as we try, I don't think the two lads could be trained to produce business software, develop a vaccine in a laboratory, or direct a film....

I think we'd all like our schools to turn out 90% of their graduates with 'skills', or the intelligence to develop them. But our lacklustre education system, coupled with the 'normal distribution curve', put paid to that.

This is why I tend to think that the UK's 'place' in world commerce is (a) the high tech/innovative/scientific area and perhaps finance where we do well, and (b) Robotics and manufacturing innovation....

(a) is theoretically what we already do well (but could do better). (b) is, I think, the only way we can staunch the flow to India/China. They are 'handraulic' but extremely low wages. Surely if we put our minds to it, then sophisticated robotics [with appropriately spotty unskilled 'yoof' to hump the goods], can, without large shipping costs, compete on price and quality.

At the end of the day, it "only" needs 80% of the workers 'creating' wealth - and then we can afford to pay the unskilled 20% to keep our environment clean instead of paying benefits.

The issue with robot based systems, and I've proposed and implemented them in production environments is that converting plants to use them is very expensive and it's often far easier to build new facilities abroad; even where we've put them in at UK sites it leads to considerable decreases in employee numbers. Going with a robotic palletising, packing and warehousing system at a large production site can replace over 200 workers. As more firms do this there is less and less need for unskilled/low value labour.

The issue with saying only 80% of people need to 'create' wealth is that comparatively few people are net contributors to the economy. Someone earning less than £35k (people with children would have to pay as much again per child) pays less in tax than is spent per capita by the government. Theoretically everyone else would be better off if people earning less than that 'vanished' (which obviously I'm not suggesting); now some of those costs are fixed but it's safe to say that an income of less than £25k (again adding as much for kids) means that person is making everyone else poorer so it makes no sense to focus on providing more jobs below that threshold.

Conrad

grizzly1911 wrote: »

Just because you buy something for x -20% doesn't mean people are being paid less. It just means that you have found the least expensive way of acquiring it.

I take my car for a service, it needs mechanics it doesn't need a franchised showroom, coffee machines, plasma TV in reception etc to provide that service. The mechanic at the end of the day will get the going rate or there about for being a mechanic.

Many products and services contain bloat that is unproductive.

This highlights the problem when comming from a left leaning view. The small mechanic you describe is less likely to fulfill the staff benefit criteria the left always preach about, for example generous paternity, flexible working practice, lots of H&S, all manner of employee centric benefits.

This is my bug-bear with the left. They preach about idealised work places and then in quiet they shop around for best price which is typically at odds with thier espoused policitcal agenda.

An example would be buying Chineese tyres or printers.

Conrad

dunstonh wrote: »

Banks are a good example. I have a banking background. I sat the chartered institute of banking exams which were paid for by the bank. All staff who wished to progress beyond assistant manager grade had to pass the exams. Every role had a grade and you had to be trained to a high standard for each role. Only staff with the training could do that role and they knew the quirks and issues for everything. They were truly specialists in the clerical jobs they did.

Now, the banks run with around a quarter of the staff. Exams no longer required. Training is abysmal and they have to chase other income streams outside of their core area. Service suffers and you get the mess we have seen.

Insurance is very similar. The best insurers and products cost more and those providers get the fewest complaints and have the best reputation for service and quality. The ones that cut to the bone to give cheapest prices cut back on service and quality.

Yes and endlessly people try and claim it's all down to corporate profit greed, forgetting that they also play a key role in thier purchasing habits with thier endless shopping around 'Which' style for tyres and insurance.

Each of us also contribute to the maximising of profits as a result of us shopping around for pension and ISA providers that have demonstrated good past performance, ALL of which relies upon corporate profit maximisation.

grizzly1911

Conrad wrote: »

This highlights the problem when comming from a left leaning view. The small mechanic you describe is less likely to fulfill the staff benefit criteria the left always preach about, for example generous paternity, flexible working practice, lots of H&S, all manner of employee centric benefits.

This is my bug-bear with the left. They preach about idealised work places and then in quiet they shop around for best price which is typically at odds with thier espoused policitcal agenda.

An example would be buying Chineese tyres or printers.

A cynical realistic view perhaps.

The garage has a happy workforce and he also has an apprentice. As you say I doubt he has all the soft stuff but would expect he adheres to the statutory requirements and a bit more - I also know his bookkeeper but he doesn't know that.

The last point is a difficult one as most tyres and printers are made somewhere in the far east these days even under brand names. For most men in the street they would have to specifically hunt out something from the "west".

Even if you buy a premium product there is no guarantee it has actually been produced where you would expect with globalised production.