Minimum wage

michaels

chewmylegoff wrote: »

Whatever social and unemployment problems the French have don't seem to me to be obviously linked to the rate of their minimum wage which is similar to that in Germany and lower than both Australia and New Zealand. Indeed the minimum wage in France is not materially higher than it is in the UK now.

My understanding is that it is extremely expensive to employ people in France whether those costs are called wages or employer social security contributions, employment rights etc etc. The point is if you price people permanently out of the labour market then it is hardly surprising that they become disaffected.

jaydeeuk1

Hate the phrase 'Hard working families'. What about lazy working families?

N1AK

Mistermeaner wrote: »

A good thing for hard working families?

A travesty of meddling in free market economics?

It's an inevitable response to state subsidy of the low paid, be that good or bad in your opinion. If we are going to bring people's incomes and access to services like healthcare up to 'an acceptable level' then it makes sense to encourage people and employers towards higher value work.

Where our current efforts have failed is that we don't encourage/enforce the development of people not currently able to justify the higher wages a minimum wage enforces.

Personally I have little patience for the argument that it is intervention in a 'free market'. For it to be a free market we'd have to remove the social security net, and that is something I think would cause considerably more harm than good.

HornetSaver

It would be uncharacteristic of me to fail to point out that if the cost of putting a roof over one's head were lower, the existing minimum wage would be significantly easier to live off of.

SailorSam

They've just been talking about the minimum news on the Bbc news, this week the new 'working' rate is being introduced. I think they said £6.70 is to become £7.20 but it depends where you live. Some businesses are saying they can't afford it.

Thrugelmir

SailorSam wrote: »

They've just been talking about the minimum news on the Bbc news, this week the new 'working' rate is being introduced. I think they said £6.70 is to become £7.20 but it depends where you live. Some businesses are saying they can't afford it.

There's an under reported secondary impact. That it will push up wages for those above. As differentials have to be maintained. Will require an increase in productivity and/or efficiency as well.

HornetSaver

Thrugelmir wrote: »

There's an under reported secondary impact. That it will push up wages for those above. As differentials have to be maintained. Will require an increase in productivity and/or efficiency as well.

The argument against the minimum wage is that those at or very slightly above it are not worth what they are being paid. I respect that argument in isolation, though think the economic upsides outweigh the downsides.

The reason the secondary effect you mention is rarely talked about is because it would involve those same people using the same argument to say that people worth £9.50 an hour are now going to be paid £10 an hour, not because they are worth more money, but because they were always worth £x.xx per hour above the minimum.

Thrugelmir

HornetSaver wrote: »

The argument against the minimum wage is that those at or very slightly above it are not worth what they are being paid. I respect that argument in isolation,

Between now and 2020 MW will increase by a minimum of £2.30 per hour. So if somebody works full time say 1950 hours a year. That's an increase in basic wage of £4,485. Would you be happy if say you had 5 years experience in the job to be told you'd now get paid the same. And wouldn't get a differential to somebody starting tomorrow. Staff retention may well be an issue for that employer. .

michaels

Thrugelmir wrote: »

Between now and 2020 MW will increase by a minimum of £2.30 per hour. So if somebody works full time say 1950 hours a year. That's an increase in basic wage of £4,485. Would you be happy if say you had 5 years experience in the job to be told you'd now get paid the same. And wouldn't get a differential to somebody starting tomorrow. Staff retention may well be an issue for that employer. .

Although with 900k extra unemployed perhaps employees will not be so bullish about going elsewhere...

And of course many of those seeing the extra 4.5k will lose 95% of it in less tax credits and housing benefit....

HornetSaver

Thrugelmir wrote: »

Between now and 2020 MW will increase by a minimum of £2.30 per hour. So if somebody works full time say 1950 hours a year. That's an increase in basic wage of £4,485. Would you be happy if say you had 5 years experience in the job to be told you'd now get paid the same. And wouldn't get a differential to somebody starting tomorrow. Staff retention may well be an issue for that employer. .

To answer your question very directly, no I wouldn't. But I'm not arguing against the government's policy on the minimum wage (or whatever they choose to call it).

The argument that people should be paid what they are worth is that an individual's worth is an absolute value based on revenue and productivity, and therefore that a minimum wage restricts an employer's ability or at the very least willingness to create new jobs at the lower end of the earnings scale.

The argument that an individual's salary should increase despite being above the new minimum wage is a direct contradiction to this line of thinking. Make no mistake, I completely agree with you that the secondary effect you mention will happen in most cases, but in every instance where it does, it's an admission that the minimum wage increase was affordable.

All I'm saying is that the reason the argument is not used (or to use your words, is under reported) is that it's contradictory to use this as an argument against the minimum wage increase. To increase wages for those already earning above the planned 2020 levels is to accept that the minimum wage increase itself was affordable.