National living wage - £7.20 from April 2016

mattcanary

szam_ wrote: »

I'm glad someone see's it.

This whole "it's great for people on minimum wage" argument is crap, and those on it in 5 years will still be complaining that they are still not paid enough, because the cost of living will be roughly around the same as it is now. They will have added £2.50 per hour to every over 25 retail worker - that is a LOT to cover, given the amount of people in retail on minimum wage - someone has to find the money for it? And it'll be the consumer. And that's just the retail industry, it doesn't cover other industries, or suppliers for the retail industry.

Greedy Directors and CEO's will always be greedy Directors and CEO's. Prices will rise to cover the cost of increased wages, or staff will be laid off and unemployment will rise - probably both. Shareholders won't want to see "profits took to 50% hit this year to cover the cost of increased minimum wage", nor will companies sit there and take it.

My OH is livid. She's on £8.75 an hour (she had something like a 5p increase in April) - if she continues in what she's doing at the moment, and she knows it's highly unlikely to rise to cover the increase in minimum wage in her industry, in 5 years time she will effectively be a minimum wage worker (she could earn a minimum of 50% more than she does now in GBP terms, in Australia, but whilst it's a sought after role, they don't do sponsorships on it). The general feeling from her now, is an idea we've been floating around for a bit, but getting a degree in nursing/midwifery and getting out of the country as soon as possible.

But perhaps Tax Credits are on their way to being abolished.
That would mean average spending power does not go up that much so the price of goods will not rise excessively.


Got to be better to have people paying their way rather than relying on Tax Credits for some of their income. It's better for all concerned (except perhaps for poor employers that are hapy for the government to subsidise them).

GothicStirling

mattcanary wrote: »

Got to be better to have people paying their way rather than relying on Tax Credits for some of their income. It's better for all concerned (except perhaps for poor employers that are hapy for the government to subsidise them).

But they won't be 'paying their way'. Living costs will rise (that means food, petrol and gas/electricity, as well as interest rates that will have to rise sooner or later). So the lowest earners will still be in the same position, in need of tax credits to just get by.

mattcanary

GothicStirling wrote: »

But they won't be 'paying their way'. Living costs will rise (that means food, petrol and gas/electricity, as well as interest rates that will have to rise sooner or later). So the lowest earners will still be in the same position, in need of tax credits to just get by.

Tax Credits are being lessened though so will the overall spending power be that much greater?


As for interest rates, they are at an artificially low level. They should have been raised a long while ago.

dharm999

Are there any studies on the impact on inflation as a result of this increase? I would assume inflation will increase as a result of this. As it increases won't this mean an increase in the probability of a rise in interest rates to counteract the inflation increase?

This rise has a significant impact on the company I work for. They operate in a low pay low margin industry, so this increase will have to be passed on to their clients, there just isn't fat profit to reduce to pay the increase. The company is one of the more efficient ones in the industry, so there is very little fat to cut to try and mitigate this increase. I suspect there are lots of companies in a similar situation, and my feeling is that there will be more job losses than the government has predicted.

yenool

Very smart to rename it the "living wage" rather than "minimum wage". It steals the campaign there has been for a proper living wage, despite not actually offering one.

£9 sounds a lot but by 2020 it wont be much.... if they even implement it. It also wont be a living wage to people <25, on 0 or low hour contracts.

The slash in benefits such as tax credits more than cancels this out.

patman99

In reality if you reduce the in-work benefits, then you reduce the spending power of the ndividual, not increase it.

The Tories are trying their level best to fix the un-fixable. Trouble is, they are setting up the UK for a Greek-style fiasco.

It is predicted in the next 3-5 years the amount of freely available money being spent by the lower 50% of earners will reduce so muach that it will have a huge effect on the retail sector.

CCFC_80

Fireflyaway wrote: »

Its good news for some, but I'm sure it will lead to some small companies having to lay off staff.

Maybe so but if the case then should small companies be setting up in business if they can't afford to pay their workers the basic wage.


Let's face it the same argument was used when the the Labour Government when elected in 1997 implemented the NMW.
The Tory party were in uproar stating it would cost 1000's of jobs but my recollection is that not one job was lost with this scaremongering and introduction of the NMW.

Takeaway_Addict

CCFC_80 wrote: »

Maybe so but if the case then should small companies be setting up in business if they can't afford to pay their workers the basic wage.


Let's face it the same argument was used when the the Labour Government when elected in 1997 implemented the NMW.
The Tory party were in uproar stating it would cost 1000's of jobs but my recollection is that not one job was lost with this scaremongering and introduction of the NMW.

Thats not what the person quoted said, it means employers will reduce their headcount, their number of hours a week etc.

You are right in that unemployment did reduce after 97 but from what I have read this time they believe 60000 jobs will be lost initially and there could be up to 4m hours lost each week.

http://recruitingtimes.org/news/5113/living-wage-could-mean-60000-job-losses/

http://www.independent.co.uk/news/business/news/budget-2015-live-osbornes-living-wage-will-leave-60000-job-cuts-says-obr-10375495.html

I do think initially it is a good think, I have some doubts about the large increases year on year as this will pressurise businesses but I suspect that this will be tempered down the line.

CCFC_80

Takeaway_Addict wrote: »

Thats not what the person quoted said, it means employers will reduce their headcount, their number of hours a week etc.

You are right in that unemployment did reduce after 97 but from what I have read this time they believe 60000 jobs will be lost initially and there could be up to 4m hours lost each week.

http://recruitingtimes.org/news/5113/living-wage-could-mean-60000-job-losses/

http://www.independent.co.uk/news/business/news/budget-2015-live-osbornes-living-wage-will-leave-60000-job-cuts-says-obr-10375495.html

I do think initially it is a good think, I have some doubts about the large increases year on year as this will pressurise businesses but I suspect that this will be tempered down the line.

It still comes down to the same thing. small employers laying off staff or not setting up a new business because they want to get away with paying scooge wages.


It's all old hat, the same argument was used in 1997 to frighten people into voting for a labour government implementing a NMW. They stated as now, 1000's of jobs would be lost and to reiterate again to my knowledge not a single job was lost as a result of it coming into effect.

Firetastic

I was watching Question Time and I think it was the UKIP lady who said they should have made it £9.00 in January and then increased it. Does anyone agree with this?