The Budget

Generali

cells wrote: »

sure but that's a good thing in the medium to long term

also although people see the downside to business in having to pay lets say £10B more in wages were the min wage increased to £10ph. What about the upside in receiving £10B more in sales?

If that's what happens it's just a wash. £10bn more coming in and £10bn more going out.

Prices and wages both up by £10bn so nobody gains.

The reality is that isn't what happens. In France, rules and laws have made it very expensive to hire people. The result? More capital employed (automation) and fewer people employed (higher unemployment).

PixelPound

One factor not taken into account is the amount of hours worked by the minimum wage and how increasing it will effect that. Most working at this end are "working to live" and do the hours they need to get money to get by. Those on part time minimum wage will have multiple jobs to ensure they get the amount needed to live. If the wage is increased then there will be a lot who will would use the opportunity to reduce their hours, even if slightly so they are still financially better off than on the old minimum wage.

padington

Our unemployed are actually becoming productive. Volunteering is on the up in the UK. Ten years ago my charity was probably employing under five volunteers. Now we employ over a 100.

Worth considering.

cells

Generali wrote: »

If that's what happens it's just a wash. £10bn more coming in and £10bn more going out.

Prices and wages both up by £10bn so nobody gains.

Not at all

If supermarkets paid its workers £10B more per year and they charged £10B more to its customers (maybe increasing the price of bread from £1 to £1.03) then clearly its min wage workers are much better off (they don't spend 100% of their wages on buying food from supermarkets) and the general public on more than min wage a little worse off

increasing the minimum wage would have a small cost to everyone in that their supermarket shop is a few percent more expensive. But on the same hand the state can cut taxes as it now can pay £10B less in working tax credits

Generali wrote: »

The reality is that isn't what happens. In France, rules and laws have made it very expensive to hire people. The result? More capital employed (automation) and fewer people employed (higher unemployment).

economies have so many variables pulling one way or another its imo very difficult to point to once force as the driver.

we know that over the last 10 years unemployment in france has been about 2% higher than the UK while GDP/worker has been higher in france

However GDP is impacted by so many non employment factors that its not realistic to even judge. for example the north sea adds a lot to our gdp. while planning stamp quotas limit a lot neither of which have much at all to do with employment laws or min wages

also why use france as the comparison, why not say spain?
lower min wage and higher employment

or even germany, no minimium wage but for most of the 2000s its unemployment was ~9% at a time when both france and the uk had lower unemployment (and a min wage)

cells

Generali wrote: »

If that's what happens it's just a wash. £10bn more coming in and £10bn more going out.

Prices and wages both up by £10bn so nobody gains.

The reality is that isn't what happens. In France, rules and laws have made it very expensive to hire people. The result? More capital employed (automation) and fewer people employed (higher unemployment).

Virtually everything is labour, even GDP is about 70% wages 30% capital and that's a bit misleading because it means if you build yourself a house the labour content of GDP falls when in fact you are better off.

so effectively 100% of value added is labour one way or another

so you are correct paying one group of labourers £10B more just means the other groups of labourers just have £10B less so whats the point?

well for a start currently the system is already just that but with the state in the middle acting as an administrator. you pay higher taxes so the government can give Bob the tesco shelf stacker working tax credits so he can survive. why? why not just set the minimium wage to £10ph (or whatever is deemed liveable) and you pay directly Bob the staff member a living wage through the prices you pay tesco rather than the taxes you pay George to give to Bob?


Also putting a higher price on labour probably brings productivity forward and at the end of the day productivity is what makes us all better off. Tesco might replace bob with a machine in time but machines taking over jobs makes society on average richer not poorer

michaels

And the taxpayer pays Bob unemployment benefit rather than tax credits because (like in France) many workers are priced out of employment.

wotsthat

CLAPTON wrote: »

customers are taxpayers
taxpayers are customers

Which isn't disputed.

Why should a shopping basket in Tesco be paid for by the customer taxpayer with a sub from the non customer taxpayer? Or doesn't it matter because the non tesco shopping taxpayer is having a Big Mac subbed by a different taxpayer and it all balances out?

I'd prefer to pay less tax and make my own choices where the money is spent. Let the consumer decide.

wotsthat

michaels wrote: »

And the taxpayer pays Bob unemployment benefit rather than tax credits because (like in France) many workers are priced out of employment.

In many cases we'd be richer overall by giving Bob unemployment because tax credits are more expensive and incentivise business to engage in inefficiency.

If the gas light company was receiving a big enough taxpayer sub to employ gas lighters we might never have switched to electric lights.

vivatifosi

Re supermarket salaries... If you look at Aldi, it already pays more than other supermarkets by quite a margin. They also have one of the most competitive and best paid graduate management schemes. Hence the likes of Tesco would need to increase wages but their most feared competitor wouldn't.

My local Aldi often has job ads in the window and virtually all pay £8+ per hour and none are min wage. Asda also pay more than Tesco, which is known as a quite stingy payer.

Generali

wotsthat wrote: »

In many cases we'd be richer overall by giving Bob unemployment because tax credits are more expensive and incentivise business to engage in inefficiency.

If the gas light company was receiving a big enough taxpayer sub to employ gas lighters we might never have switched to electric lights.

Nobody bemoans the number of unemployed lamplighters, fullers, fletchers and thatchers today. Their great grandchildren are checkout chicks, car mechanics and M&A analysts.

Having said that, subsidising people in work has been contentious for a very, very long time indeed. It's been blamed for the fall of the Roman Empire and closer to home the Speenhamland System, a way of subsidising the wages of the poorest workers, was seen as a way of transfering money from the pockets of taxpayers to underpaying employers and lackadaisical workers.