Minimum wage

[Cornish Steve]

Should the government be allowed to mandate a minimum wage? If so, what should it be?

As part of looking after the most vulnerable in society, governments like to impose a minimum wage on all employers. This ensures that companies can't take advantage of the young, the disadvantaged, immigrant communities, and more. Why should companies making millions of pounds in profit pay their employees a pittance?

On the other hand, a minimum wage can prevent small businesses from getting off the ground. We're told by pro-business groups that every increase in the minimum wage results in thousands of potential job opportunities going up in smoke. The biggest beneficiaries are often countries that offer outsourcing - since they aren't subject to our minimum wage rules.

What are your thoughts?

[Joyous]

In my opinion the minimum wage rules are a pain in the a*$e. I know of at least one business that wants to employ staff but can’t afford to because of the minimum wage. Rather than increase the lot of the lower paid, it’s more likely to make “employers” start paying people “under the table”.

Noble intentions yes, but I’m not convinced it’s the right answer.

Regards

Joy

[Dawg]

If you increase price you decrease demand. This won't happen straight away, but the last time the minimum wage was increased the number of hours worked by those on the minimum wage went down. So it is not only a pain in the arse for "the 'orrid fat cat bosses", but worse for the poorer parts of society, earning the same not more, when earning more is probably far more important than a few forced hours off..
Another example of the Law of Unintended Consequences.

[CG Effect]

If the wage goes up does'nt that mean people have more cash to spend on products? A lot of companies make a lot of money and the workers who make their business work go home knackered everynight with only just enough cash to live on.

[fastfences]

I see the minumem wage as a tool to get more from my employees. I set their wage as the minumum, but guarantee a bonus based upon work performance. Of course this is not uncommon, and may not work everywhere, but it has certaqinly benefitted my company and my staff.
Cheers, Nigel

[Cornish Steve]

If the wage goes up does'nt that mean people have more cash to spend on products?
If, however, British goods are more expensive because of increased labour costs, isn't the cash more likely to be spent on imports? If not, the increase in wages will be at least partly offset by the increased cost of goods.

I believe the US ice cream maker Ben & Jerry's, before they were sold, enforced a rule whereby the wage of the highest wage earner could not exceed a certain multiple of the wage of the lowest wage earner. Is this a feasible solution? As leader of your company, are you willing to cap your income at 10x what your most junior empoyee earns, for example?

[CG Effect]

I've seen the bonus work well a while ago I worked on a production line making fire surrounds with minimum wage no bonus and a grotty canteen. The factory I worked for after that was a window making factory with a good bonus that later was getting fixed so we didnt get it. At the no bonus factory if the guys at the end of the production line were way ahead they often had no components to work with so they would just talk while they waited or nip over to the brew machine and chat.

The window factory, because of the bonus the more they made the more they got. The team leaders on each line earned £20k a year. The glazers would constantly be shouting down the line for the gearers to get a move on with the team leaders backing them up and sorting out the supply problems. I was the dispatcher and would be going over to team leaders to say your not going to get the bonus if we dont get the driver out in the next 30 mins.

It was a mad rush all day every day. Nobody cared about the fire surround factory they just did enough so they didnt get laid off their were around 4 guys there with experience not many stayed to get good at the job, they knew they could get a better job with their skills.
In the end the production slowed that much at the fire surround factory that all the contracts were being finnished on a lot of overtime the money ran out and we all got laid off. Once the bonuses started to get fixed at the better place the team leaders started slowing things down so they could get the overtime in.

[manchesterhypnosis]

I think its about perspective: If you hire “labour” as a commodity you will want it at the lowest price, if however you hire “skill” you will see it as an investment. I had hoped that as an economy we have evolved past the point of seeing people as machenery, but obviously I was mistaken. Bonus schemes! shame! That's just like saying “lets whip this horse until it falls over 'cos we can always get another”

[Pebble Communications]

I think the minimum wage legislation is a positive thing. Has everyone forgotten all the jobs paying a pathetic £2.50 or so an hour? I agree that it is difficult for small businesses to afford staff, but that is a stage every growing business has to go through wherever the wage is set. At some point it would have been difficult to afford £2 or so as well.

Too many businesses were paying attrocious wages simply because they could. In areas of high unemployment it was a way of exploiting those who lived there. It was also a way to get the taxman/benefits system (us in other words) to pay for their company's labour with top-up benefits.

[Arhiann]

Do you mean black market/cash in hand labour?

I remember reading something a couple of years ago, about a cleaning company that had previously employed their workers PAYE. When the minimum wage came in they made everybody self employed or terminated their contract if they were unwilling to do this, in order to continue paying low wages. I think C4 did something on it as well.

The unscrupulous will always try and find a way to avoid paying what's legal or right but in general is has to be a good thing. It's probably a little harder to claim an employee is self employed these days anyway since the law changed to catch those changing employment status to avoid tax.

[fastfences]

Bonus schemes! shame! That's just like saying “lets whip this horse until it falls over 'cos we can always get another”

Shame? How ridiculous! Your scenario borders on the suggestion that a bonus scheme is enacted to the detriment of the employee, rather than as a reward. The employee does not HAVE to work harder, but if they CHOOSE to, they are compensated for their efforts by way of increased pay.

Cheers, Nigel

[MinuWeb]

Minimum wage is a good thing, it stops people getting ripped off, however in Estonia companies under a certain age (3years) or small employers (under 12 employees) get a rebate from the government for employing new staff for the first 6 months of their employment making it alot easier and affordable to do.

[Pebble Communications]

That sounds like a good scheme. There is some help in the UK too. If you recruit someone on a New Start scheme via the jobcentre you can get help with their wages (but I admit that as long-term unemployed there may often be a good reason why they were long-term unemployed from the ones I've met.
We are in an area of comparatively low unemployment and people who really want a job and are not completely useless should be able to find something within a few months. There are probably very good people on this scheme in other areas).

Also, my boyfriend has just had someone on a 'work trial' through the job centre. They come and work for you for a trial period and still receive their benefits rather than a salary from you. It's only very short term (a couple of weeks I think) but it lets you check them out for free, and it lets them try a job without all the hassle of trying to sign back on if it doesn't work out. She has been fine so he is going to offer her a permanent position.

[bwglaw]

I think you mean New Deal. You get £150 towards a part-time employee and £300 towards a full-time employee and possibly a little towards training.

Yes, there is often a reason they are long-term unemployed; they don't want to work!