[The Economy] 6.2% living wage increase

dharm999

spadoosh wrote: »

The care sector being a massive one.

So minimum wage increase... yay!

Youll need to increase your priavte payment or pay more in tax to give those workers their increase.

So the question is never do these companies have the money, they are simply a middle man wanting to take a cut, the question is, do you have the money to pay for these pay rises?

You don't understand the reality. We won't pay more in tax or pay the increase ourselves, our clients will. We don't make enough to pay it without passing it on. And, yes, we make some money, for the time, effort and cost involved in providing that service to our clients, which is only reasonable. You say, we are simply a middle man wanting to take a cut, surely that applies to every company, so I don't really understand your point. Or is no company allowed to make a profit?

I have absolutely no problem with the minimum wage increasing by 6%, as we, the company, won't be the end person paying it, it will feed in as higher inflation, where it can be passed at the end of the chain. Where it can't be directly passed on, say for example, where we work for government bodies, then they have the choice to go back to their masters and ask for more money, or make savings elsewhere. Either way, someone else pays for the increase, not us.

dharm999

sevenhills wrote: »

There is no reason to believe that once the rise has a year or so to settle in, other workers will get a rise and differentials will go back to normal.

Maybe not for the reasons you think. We have seen differentials being squeezed, and it always ends up with the client paying more to maintain them, but that can take years to happen. The process goes something like this:

Minimum wage increases
Client doesn't maintain differentials
It becomes increasingly difficult to recruit for the supervisory positions
The client complains about poor quality of supervisory staff, or lack of service
We point out it was their choice not to maintain differentials and that we don't make enough to fund the differential ourself - we are in a sector where open book pricing is the norm, so the client knows exactly how much we make
Client is shocked, and then cimes to their senses, and agrees to pay to maintain differentials

All of this can years to resolve, especially when dealing with Procurement people, who often have no understanding of commercial reality, cheapest does not mean best.

Thrugelmir

Cakeguts wrote: »

The problem I see with this is that it is a National Minimum Wage and doesn't take into account the difference in the cost of living in different parts of the country. That in turn doesn't take into account the cost of producing items in different parts of the country. It doesn't help the poorer areas with higher unemployment to be competitive with higher cost areas if employers have to pay the same wages regardless of the top price that people in an area can afford to pay.

Think of it as redistribution. More money in peoples pockets will improve local economies.

Jonathan_Kelvin

Arklight wrote: »

I think you're being somewhat wilfully disingenuous here Hamish. A living wage is considered to be about £10 an hour. Assuming you manage to get a proper permanent job doing this where you're paid for 52 weeks of the year, that's a princely £19k. .

Fifty hours per week for fifty two weeks per year on £10 per hour is £26,000 per year. Two people working on that is a household income of £52,000 per year, which seems reasonable enough. The idea that you can’t get by on less than that is just silly.

It is dishonest or foolish to assume that someone on a low wage would only do 37 hours per week.

snowqueen555

GreatApe wrote: »

Supermarket sales are about £180,000 per worker

If you want to pay workers £1,800 more per year that means Tesco needs to increase prices by 1%

There is no magic money tree. The workers get £1,800 more but the public pay £1,800 more for their supermarket shopping. If a family spends £10,000 on supermarket shopping per year they will be paying £100 more per year. So 18 families pay £100 more per year for one staff to get a £1,800 pay rise

It's of course a benefit for the staff member but a harm to the other 18 families
Maybe you can argue the 18 non min wage families can afford it
I would agree with that assessment

The marginal families who can't really afford the £100 bigger shopping bill would probably buy cheaper brands instead so they will survive

It really depends, that is one option, another option is to find cost savings elsewhere within it's whole business. They are the biggest grocers in the country, can they can eke out savings in a lot places.

Tesco as an example have already preemmpted the rise, which is why they increase pay to £9.30 an hour and cut out annual bonuses. That £9.30 rate will be good for a couple of years.

Another option is to increase sales, which is where real growth comes from.

Thrugelmir

snowqueen555 wrote: »

Tesco as an example have already preemmpted the rise, which is why they increase pay to £9.30 an hour and cut out annual bonuses. That £9.30 rate will be good for a couple of years.

Working bank holidays, shorter night time shifts that benefit from premium rates, demarcation of roles is the offset though.

GreatApe

snowqueen555 wrote: »

It really depends, that is one option, another option is to find cost savings elsewhere within it's whole business. They are the biggest grocers in the country, can they can eke out savings in a lot places.

Tesco as an example have already preemmpted the rise, which is why they increase pay to £9.30 an hour and cut out annual bonuses. That £9.30 rate will be good for a couple of years.

Another option is to increase sales, which is where real growth comes from.

Tesco already does everything it can given market considering to squeeze their costs

There isn't a magic thing they will just wake up to and say oh guys why don't we do x it will offset the higher wages

More likely is they will figure out ways to have higher sales per worker
Your not going to convince the country to eat more bit you can sell more per worker

This can be either more machines and other productivity and less staff
Or the staff just are expected to perform more eg like Aldi staff


The likely outcome is fewer people employed by Tesco
Maybe their 350,000 staff will go to 300,000 with the remainder working 15% faster

This is 50,000 lost jobs but in this part of the economic cycle that's okay in fact it's positive because hopefully those 50,000 will be employed elsewhere doing more high value things

GreatApe

Thrugelmir wrote: »

Working bank holidays, shorter night time shifts that benefit from premium rates, demarcation of roles is the offset though.

Typically the few min wage people I know work more hours but travel less so it kinda balances out somewhat. Also they often don't have a car because the min wage jobs are within easy walking distance

These two factors help make things work for them

I knew two min wage workers in Telford it's in the Midlands
They were able to buy a 3 bedroom house near the town centre on their min wage work and got married.

An decent life is possible in the UK even if you don't have huge skills or experience

The primary factor seems to be to avoid becoming dysfunctional often due to addictions
In the same town I knew a couple a good deal older and more wealthy had three houses
Very dysfunctional as the husband was a heavy alcoholic. Their money certainly didn't bring them any peace or comfort

Also if you are half decent and stable people will give you opportunity or you will figure out opportunity. Like I keep saying... 3 million companies in the UK that's three million company owners and their families. Another 5 million or so self employed. Another 5 million or so public sector.

The picture of one big boss in town abusing his workers with unsafe low paid work simply doesn't exist. Capatilism in its modern form saved us from the real !!!! that was the local lord or king who owned all the land and your whole being was subject to their whims no land no food no nothing. Life is better today than at any other point in human history. Let's risk this for another experiment at communist ideology..... No thanks

yksi

I think it's a common misconception that people can generally skill themselves to better pay by choice, or that anyone who doesn't, it's their own fault. I work with cleaners. Almost all of them are disabled, or have a social or mental or other similar reason for being in that job a long time, such as lack of childcare, a stutter, they're foreign with an accent, you get the idea, etc etc. It almost NEVER affects job performance. These people earn their money fair and square. They work dang hard.

Not everyone can, or should, need to skill themselves up to something "better". We need cleaners. We all depend on these jobs being done (who's cleaning the hospital, who's making up your hotel room, who's emptying your wheelie bins?)

Is it acceptable that someone can work fulltime on a minimum wage, doing well at that job, and still struggle to do things like raise two children, buy a modest home well outside the M25, drive a second-hand car and shop at LIDL? Does anyone look at those four modest ideals and think those are unreasonable things for someone to want out of life? Do we declare that someone with a disability should just be grateful to clean a loo and shut up about wanting normal things for their hard work?

I'm not suggesting that we have any easy solutions here, but we could certainly start by losing this idea that nobody is actually rich - you know, the great swathes of the country earning more than double the minimum and yet swanning about saying, I'm not rich, I'm middle class, I struggle on this income. Those of us living on four figures hear what the salary is and just think it's deluded.

Malthusian

yksi wrote: »

Is it acceptable that someone can work fulltime on a minimum wage, doing well at that job, and still struggle to do things like raise two children, buy a modest home well outside the M25, drive a second-hand car and shop at LIDL?

Yes, of course it is. Home ownership is a luxury that has never been affordable to the majority of unskilled labourers on minimum wage. That's why we have council housing.

Does anyone look at those four modest ideals and think those are unreasonable things for someone to want out of life?

The third one is if you plan to stay on a single minimum wage your whole life.

Do we declare that someone with a disability should just be grateful to clean a loo and shut up about wanting normal things for their hard work?

I know plenty of disabled people who aren't on minimum wage, and plenty of people with stutters or foreign accents who aren't on minimum wage either, so my suggestion would be to take your anti-disabled bigotry to the Grauniad.