Should the National Minimum Wage be frozen?

[DanMartin]

The British Chambers of Commerce today called (http://www.businesszone.co.uk/cgi-bin/item.cgi?id=192886&d=1095&h=1097&f=1096&dateformat=) for the National Minimum Wage to be kept at current levels in 2009. Otherwise, the BCC said, hard pressed business owners will be forced to shed jobs amid the economic downturn. But do you agree? Should minimum wage levels be frozen? Vote in the poll above.

[SLF]

I think those business owners wanting the nmw frozen should declare their own personal income on the ballot slip, just to justify their point.

[robokoder]

Statutory minimum wages *always* cause unemployment, because they leave a gap between labour offered at the minimum wage (as it gets higher this increases) and labour demanded at the minimum wage (as it gets higher this decreases). The difference between the workers offering and the workers being demanded? Unemployment.

If it really is true that there is a basic wage below which people cannot survive, then the market will determine it (it will be the wage below which no rational worker would bother to work). You can influence this by setting jobseekers' allowance higher (so people have other options than working £1 ph). This is the way to deal with low wages, NOT market-destroying minimum wages.

[Subbynet]

Shouldn't it be linked directly to the rate of inflation?

[sirearl]

I suspect a more interesting question might be how many members work for the minimum wage.?:)

Earl

[Subbynet]

I suspect a more interesting question might be how many members work for the minimum wage.?:)

Earl

Given this is a business forum, and that many here are ever Self-Employed, Directors, or Investors, I'd assume not many.

[sirearl]

Oh in that case I suspect they may not be qualified to discuss living on the minimum wage.?

Maybe one should ask pensioners.:D

Earl

[sjt]

I suspect a more interesting question might be how many members work for the minimum wage.?:)

Earl


HERE...

(although I earn over the NMW, but this takes into account 'holiday pay')

I'm officially a 'casual worker', and doing this while applying for jobs/setting up in business.....

[sirearl]

HERE...

(although I earn over the NMW, but this takes into account 'holiday pay')

I'm officially a 'casual worker', and doing this while applying for jobs/setting up in business.....

No need to ask how you voted.:D

Don't ya just love the hypocrisy of the human race.:rolleyes:

Don't worry there will be a hundred reasons for keeping TMW as is.

But really there's only one.:)

Earl

[nateski]

yes and the reality is so should the number of annual leave days which are set to increase this year by two days, the government seems to forget the difference between big and small business and sees business as one entity - it isnt like that, i know people who own and run small businesses that earn less than everyone in there company and work twice as hard, minimum wage or etc annual leave doesnt apply to them, they get no extra tax breaks or benefits - the members of this government should be forced to try and run a start up or small business for two years then go back to fantasy land politics!

[Kaos]

I suspect a more interesting question might be how many members work for the minimum wage.?:)

Earl

Im currently about 3p over NMW of £4.74 odd.

Yes im young, but bugger me after fuel and natural expenses i currently get away with about £100 a month pocket money.

hence me moving to more self employment with my skills! funny fact is if i moved the 250 odd miles t'up north i'd be on £8 an hour doing the same stuff i do now( warehouse)

[Tom McClelland]

The government (of all persuasions) gets involved, in all kinds of things where its presence just acts as a needless drag on personal responsibility.

NMW is one of those areas. A contract of employment is an entirely voluntary act between consenting adults. The hourly pay associated with that doesn't need any legislation at all.

NMW is doubly ridiculous, set as it is, well *below* the level at which the government starts taking 30% of our mariginal income (assuming a 37.5 hour week). So, it is the minimum that we're supposed to be able to earn, but the government takes a slice of it for itself. That makes sense, doesn't it. :rolleyes:

So the NMW shouldn't be frozen, it should be abolished, along with much else that is on our statute books.

[Kaos]

But tom if we abolished it, there would be problems, people like me still working full time at the bottom end would probably see my wage go down! and if that happened i would definitly loose my job as it would be come un econimcal to drive to work i do 30 miles a day! that would porbably cut my £100 spendies to about £20! so there should be abottom line Minimum for all age groups i reckon say £5.00 an hour for every age group other wise we'd probably see more unemployment.

[seasonsonline]

I'm not an expert on this matter, but surely freezing the min. wage isn't going to solve our desperate economic situation?? - To me, freezing it would be like making the poor poorer and would kind of add to our problems.

We should be starting at the top of the economic ladder, re-structuring and streamlining businesses to work more efficiently with even tighter legislation. It just seems that the divide between rich and poor is ever expanding, and this needs to be closed a bit if things are really going to improve.

[Matt1959]

dont anyone forget that the minimum wage is almost an irrelevance to many on low wages with families, as the CTC tops your income up by a huge amount and thats tax free as well!

Personally I see the minimum wage causing potential problems for employers as it forces up the wages of everyone else in turn, in order to to maintain the differential in earnings.

[matt.chatterley]

Playing devils advocate for a moment, I suspect the argument FOR freezing is to slow inflation - which at first glance seems obvious. Here in Jersey, the minimum wage is higher than on the mainland, and there is a proposal going through at the moment to increase it quite a bit - clearly not going to help the small businesses through the post-christmas lull!

However, the counter-arguments that this will impact on the lower-earners yet again (thanks, Gordon!) is valid as well - and surely if people are (slightly) worse off, consumer spending will drop - essentially either way it will feed one of the negative cycles!

As seasons says above - aren't there bigger fish to fry?

[seasonsonline]

dont anyone forget that the minimum wage is almost an irrelevance to many on low wages with families, as the CTC tops your income up by a huge amount and thats tax free as well!

Personally I see the minimum wage causing potential problems for employers as it forces up the wages of everyone else in turn, in order to to maintain the differential in earnings.

From a totally economic point of view (disregarding individuals circumstances), your point about tax credits to low earners is valid, but it will not help our country climb out of this lull, as any extra money paid out from revenue & customs to low earning families will still have an adverse effect on our economy.

My initial reaction to the question "Should min wage be frozen" was "YES", but the more I think about it the more I think "NO". Start higher up.- The government should come up with an emergency plan for the next 2 years, and scoop some money from other areas. Big supermarkets would be my first choice!!

[Philip Hoyle]

Surely keeping people in jobs and encouraging firms to take on more employees is better for the economy? Surely it is better for more people to be employed earning at 2008 levels than less people being employed at a few percentage points higher wage. By all means increase NMW, but at the same time, reduce corporation tax or employers NIC to compensate. It is not clever to increase a firm's overheads at a time they are struggling to survive.

[sirearl]

Might be an idea to have a freeze on maximum wages.

Oh no I hear cry that would smother innovation and the desire to succeed for our top people,even to the point where such majestic institutions as banks and other major players go broke.:rolleyes:

Of course non of this applies to the serfs on the minimum wage who for some strange reason seem to be mostly employed in essential occupations unlike there master banker cousins.:D

Earl

[Tom McClelland]

But tom if we abolished it, there would be problems, people like me still working full time at the bottom end would probably see my wage go down! and if that happened i would definitly loose my job as it would be come un econimcal to drive to work i do 30 miles a day! that would porbably cut my £100 spendies to about £20! so there should be abottom line Minimum for all age groups i reckon say £5.00 an hour for every age group other wise we'd probably see more unemployment.

You're doing 30 miles a day commuting to get to a minimum wage job? That is exactly the kind of nonsense economic distortion generated by the minimum wage that I'd love to see disappear. Let's suppose that your boss could get someone local to do your job for less money (and the local employee would end up with more money in his pocket because of the absence of travel costs)... since if he couldn't then the minimum wage is irrelevant to your situation. Effectively you're keeping that person out of a job, and the minimum wage is subsidising your costs to travel to and from work. So in the situation you describe the minimum wage is fuelling carbon wastage....

To suggest that eliminating the minimum wage would *increase* unemployment locates you in a different place from planet reality. Reducing the cost of employing people inevitably makes more work available. You personally would be better off in your pocket with a lower wage closer to home and lower travel costs, but the minimum wage legislation insanely makes it illegal for you to strike such a deal with an employer, despite such a deal benefiting both you and an employer closer to your home.

The government has no business getting involved in private contracts between employers and employees. All economic gains that are supposed to accrue from such interference turn out to be illusory when examined more closely.

[Chris Ashdown]

I would get rid of the minimum wage but make a limit on the highest earner in any company only being piad about 12-15 times the pay of the lowest employee, a good incentive to take everybody up with the success of the company

[Alison Jones]

It would be a good idea to freeze the national minimum wage until the economy improves. If businesses can afford to continue their member of staff at the current NMW but not if the increase happens then that member of staff is better off being paid current NMW then being made redundant and living on benefits.

With the rise of NMW those members of staff with more responsibility who were on a little more then the NMW if the NMW increases then most of the time those with more responsibility will expect a pay rise too.

[Esk247]

there should be a cap on the silly wages earned by footballers and the silly wages commanded by so called executives who merely turn up at a meeting once a month and get a nice big fat bonus from it....the amount that some people earn is astonishing considering the little work they do...one person i know earns £60k a year and all he's ever done since the age of 18 was work for his dads company, he's written off 3 top of the range sports cars and travels all over the world, but doesn't do a bloody thing...he's a Co-Ordinator apparently but has yet to actually co-ordinate anything.

frustrates me when so many people on here work hard or have worked hard to achieve what they have.

you cannot abolish the minimum wage due to the fact that if you do...many businesses will simply bring in millions of foreign workers who are quite prepared to work for £1.50 per hour and quite prepared to live 5 to a single room. there needs to be some kind of stable platform.

[graemepirie]

I agree with a "maximum" wage. Not a number as such but by higher tax bands. I'm referring here to the absolutely silly wages that some receive, way above the 150K labour are proposing to tackle. For example I see nothing wrong with 90% tax over £1M per year.

As for the minimum wage, I prefer to let the market take care of this. In times of good levels of employment, wages go up naturaly as employment increases & down as unemployment increases. Surely this is sensible?

If we are to have a minimum wage then there are other things that should be taken into account - for example the state pension & tax thresholds. I can see no justification (from a "fairness" point of view) for taxing people above £2.61 per hour - as they do currently.

[Simon-M]

For example I see nothing wrong with 90% tax over £1M per year.



People earning this kind of bunce are not stupid enough to get caught in the tax trap. High earners always have more options for avoiding tax. They can afford it :)

[Dawg]

People earning this kind of bunce are not stupid enough to get caught in the tax trap. High earners always have more options for avoiding tax. They can afford it :)

As someone said after the last financial statement: people below £150k will pay more tax, those over £150k will pay more accountants.

As to taxing people who earn below the minimum wage: sheer drooling madness. Some of those people probably get benefits of one sort or another too; how much is the administrative cost of all this?

(On high pay, an aside: did you know that the whole board of Honda earn less than the annual bonus of the CEO of GM? Remind me, which one is the successful car maker?)

[graemepirie]

As someone said after the last financial statement: people below £150k will pay more tax, those over £150k will pay more accountants.

As to taxing people who earn below the minimum wage: sheer drooling madness. Some of those people probably get benefits of one sort or another too; how much is the administrative cost of all this?

(On high pay, an aside: did you know that the whole board of Honda earn less than the annual bonus of the CEO of GM? Remind me, which one is the successful car maker?)

Completely agree, that's why we also need to throw away 9,999 pages of the tax legislation & move to a simple flat tax on income.

[Tom McClelland]

there should be a cap on the silly wages earned by footballers
Be careful what you carelessly wish for.

Whether you enjoy it or not, professional club football is one of this countries most successful industries. It generates large amounts of internal economic activity, and is a giant export market for us. People watch English premiership football on TV all over the world. The income generated is gigantic and all that money has to go somewhere. The best players are very rare individuals, and they are free agents (sadly for your proposition) able to negotiate the best deal that they can, anywhere in the world. Their ability is on show for all to see in an environment where success and failure are precisely measured. If the UK were turned into the socialist utopia that you'd presumably welcome the top 500 players would merely go elsewhere in the world, instantly, unless you propose an iron curtain too. No measure could be proposed that would more certainly and completely destroy the value of a large and profitable UK industry than an arbitrary cap on professional football player wages. They all pay PAYE on their large salaries and the TV companies and football clubs are likewise big contributors to the exchequer. I look forward to your plans to make up the shortfall from C Ronaldo's salary alone. No-one is forced to buy an Old Trafford season ticket or a Sky Sports subscription with a gun to their head. :rolleyes:

and the silly wages commanded by so called executives who merely turn up at a meeting once a month and get a nice big fat bonus from it....the amount that some people earn is astonishing considering the little work they do...one person i know earns £60k a year and all he's ever done since the age of 18 was work for his dads company, he's written off 3 top of the range sports cars and travels all over the world, but doesn't do a bloody thing...he's a Co-Ordinator apparently but has yet to actually co-ordinate anything.

These are private arrangements made between consenting adults. What exactly is your proposal? That parents shouldn't be able to give money or jobs to their children? Maybe the lad is poor value. Maybe some nonexecs are also poor value. That is a matter for their employers.

frustrates me when so many people on here work hard or have worked hard to achieve what they have.

What has that got to do with anything? Envy is a useless drain on clear thinking. Demonstrably the countries in the world that are wealthy and successful are also the countries with freedom of contract, freedom of capital. There appears to be a direct correlation between economic freedom to strike whatever deals we find agreeable and the wealth of nations. It beggars my belief that so many people on an internet board that is all about entrepreneurship and enterprise should want to *increase* the amount of state interference and regulation in this country.

you cannot abolish the minimum wage due to the fact that if you do...many businesses will simply bring in millions of foreign workers who are quite prepared to work for £1.50 per hour and quite prepared to live 5 to a single room. there needs to be some kind of stable platform.
There are already separate regulations about non EU workers coming here and "taking our jobs". But never forget, we're in a global market, and many UK businesses are competing with employers paying £1.50/hour to people leaving in conditions that we'd regard as poor. And those workers are very glad to have that work. It is better than what they'd otherwise be doing.

[matt.chatterley]

Completely agree, that's why we also need to throw away 9,999 pages of the tax legislation & move to a simple flat tax on income.

Here in Jersey, there is only one income band for tax - everyone pays the same. The system is being further rationalised at present, essentially eliminating the notion of allowances - further simplifying the calculation.

The annual return form is frankly a dream compared to the UK self-assessment return, although on balance for middle-earners, the amount of tax paid is not that different - making the system far more "profitable" to administrate!

Was it in one of Pratchett's discworld books where Taxation is compared to Dairy farming - extracting the maximum milk with minimum mooing?

[glennmid101]

Well if we are going down the road, we should freeze exec pay, and Mp's pay, but i don't see the clamour for that strangely enough.

If low pay is going to be the route for workers, then people will happily not work, simple as that.

Also the genuises forget to tell us that the govenrment will end up picking the tab, with having the increase benefits, for people are working. So do we really want to increase governing spending?

The freeze is another gimmick, which is more to do with fighting the battles of the past.

When you get idiots yapping on about how miniumum wage destroys jobs, can someone explain to me about all those people who where thrown on the scrapheap in the 80s, when we didnt have a minimum wage?

I take it people are hankering a return to the good old days of 4 million people unemployed, where training schemes designed purely to keep the unemployed total down.

If we are genuinely serious about this recession, we should be looking at scraping natiional insurance contributions from employers. To me it is a tax on jobs, pure and simple.

[Philip Hoyle]

I see this thread has been hijacked by the usual suspects - i.e. ones who hate private businesses by going on and on about high pay for the bosses. Reality check - it is a VERY small number of businesses who pay their bosses silly amounts of money. Yes, they should be criticised, but you can't tar everyone with the same brush.

A staggering 95% of businesses employ less than 5 people. I'd say few, if any, of those business owners will be raking in hundreds of thousands of pounds a year. Most business owners will be earning around the average wage - the last official statistics I saw showed self employed average earnings actually less than employed average earnings.

Small firms employ more than 58 per cent of private sector workforce and 13.5 million people work in small firms.

So, you can actually forget about the fat cats earning huge bonuses when you talk about small business. The fact is that most small business owners will not even be higher rate taxpayers, yet alone fat cats. Many business owners earn less than their employees. Many business owners actually put more money into their business than they take out just to keep it afloat, especially in these hard times.

There are 4.7 million small businesses in the UK. If government incentivised them to take on more staff, i.e. by scrapping or reducing employers NIC or giving small employers other forms of support, then it is easy to see that you could virtually eliminate current levels of unemployment, even if only 1 in 4 business took on an employee, or if half took on a part-timer.

Most of those 4.7 million small businesses will be having a hard time at the moment. Increases in NMW without any corresponding govt help are likely to result in redundancies and business failures.

I'm all for criticising the big firms that abuse the system and overpay their top staff, but that is the minority. Small business is on a knife edge and need help. What do the government do - increase NMW, increase employers NIC, introduce compulsory employers pension contributions - they havn't a clue what life is like at the sharp end of small business.

[graemepirie]

I don't think it's a case of hijacking, I think people have different views of "high pay". I did say I'd be in favour of some form of pay capping for extreme pay. By this I mean the extreme examples - people earnings millions per year I'd put in this category.

NO-ONE is worth that amount of money & there's also no chance that they'll go elsewhere if they weren't paid obscene amounts of money. Take for example Jonathan Ross - what possible reason is there for him being paid £6M per year? What would happen if he was told he's going to be taxed 90% above a million? Who would care if he left? Who would be daft enough to pay him that much except for a public corporation? I'd also agree with the footballer comments (although I accept their earning lifespan is relatively short).

This is NOT to say that I have any objections to those earning 250K or 500K. The question is how much is enough, there has to be a limit somewhere. It's completely wrong that there are so many loopholes in the tax system allowing those who can pay an accountant to avoid taxes.

But back to the point - employers NI is without a doubt a disincentive to employ people. I'd go further than scrapping it, employers should be able to keep a proportion of the employees NI as payment for all the tax collection work we have to do.

[Tom McClelland]

By all means cap the pay of people earning millions a year. Or tax them at 90%. Competitors all over the world would be delighted to see the UK destroy its extremely successful music, TV, film, and sport industries. You may not think that a premiership footballer is worth the money he is paid, but the people who actually pay his wages, who own the clubs, disagree. Likewise the executives of record companies who pay vast sums to successful performers.

I've no idea what J Ross is worth. Personally I dislike the man. However I do know that private media companies all over the world pay successful stars/artists many times Ross's salary.

Once again. No-one downloads a Madonna track because they've a gun to their head. No-one buys an Old Trafford season ticket or a Sky Sports subscription because they've a gun to their head. No-one watches or listens to Jonathan Ross because they've got a gun to their head.

[Dawg]

Overall, as a percentage of the economy, the amount paid/overpaid to very high earning individuals is minimal. The money is also spread by taxation and investment, the second of which creates value. There is room to argue that the extremely high rewards of some in business represent a market distortion rather than the 'economic rent' paid to people like footballers and film stars. Again it's not that big a deal except to the Envy Brothers. As said above, it is more important as a symbol of a vibrant economic culture where it is possible to amass wealth without being a politician.
The minimum wage has not been shown to cause the loss of jobs in the UK in the last decade. It has however been shown to cause the loss of overtime in low paid jobs, where, like it or not, overtime can be necessary for economic wellbeing. I'd imagine that the recession will make this far more pronounced: basically the poorly paid will be hurt most by a rise in the minimum wage.

Another aside: The three year £18m contract for Jonathan Ross was not £6m a year for him. It was a contract awarded to his production company to produce the programmes he is seen in on the BBC over those three years. It is not an unusual or amazingly generous contract for a production company to land, a good one yes, but not a funny money one. A lot of other wages are paid from it. The reporting of it is just more spewling from the blather monkeys in the tabloids.

[sirearl]

I suspect a much more relevant point is that 2% of the population own 50% of the wealth.

This fact impinges on all areas of society's.

Earl

[Philip Hoyle]

I suspect a much more relevant point is that 2% of the population own 50% of the wealth.

This fact impinges on all areas of society's.

Earl

OK, so find ways of hitting that 2% that you clearly envy. A blanket hit against every employer is a blunt instrument and will hit equally against both the rich and poor employers. It will actually make things worse as those 2% richest will be in the best position to afford higher employer costs so they and their staff will barely be affected at all - the remaining employers and their employees (by and far the vast majority) are already "poorer" than the top 2% and will be made worse off accordingly either by loss of their jobs or loss of business profits.

Surely, with all the alleged wisdom in government and socialist circles, they can come up with a fair way of protecting those lower earners (employees AND employers) by extracting more out of the top earners (employees and employers)!

[sirearl]

OK, so find ways of hitting that 2% that you clearly envy.

Surely, with all the alleged wisdom in government and socialist circles, they can come up with a fair way of protecting those lower earners (employees AND employers) by extracting more out of the top earners (employees and employers)!

I envy no man,but can see the injustice in the current system.

Although it would be nice to be 20 years younger.

As for your second statement.

Ain't happened in the last billion years,so why do you think it could happen now.:D

Earl

[matt.chatterley]

I suspect a much more relevant point is that 2% of the population own 50% of the wealth.

This fact impinges on all areas of society's.

Earl

Heh. True. Thats why some of us focus on madcap ways to get into that 2%. :D

Surely this would be a good time for the government to look inwards - reduce costs - improve efficiency - finally bring the hammer down hard on benefit fraud - and so forth.

All more effective than fiddling about with popularity winners (or losers) like minimum wage?

[Tom McClelland]

Getting into that 2% (that some would like to be forcibly made poorer, to the presumed but unproven benefit of the other 98%) isn't particularly difficult if you have any kind of merchantable skill and/or you're prepared to work hard in a focused goal-seeking way. Indeed it is a certainty that many/most of the posters to UKBF are in that 2% of the population. After all we're talking about more than 1,000,000 people in that 2% in the UK alone.

Certainly most of the top 2% aren't professional sportsmen, captains of industry, city slickers, or entertainers. Most of them are normal working professionals and owner-managers of small businesses who've been a little more successful than the norm (and no, please don't fill the thread with denials of personal wealth. They aren't interesting)

[graemepirie]

The richest 1000 are worth 412B (that's 30% of GDP) & up from 99B when labour came to power. Is that right/fair?

[glennmid101]

The last time i checked it wasn't the minimum wage that cause this recession, it was bad lending practices, financial instruments that nobody really had an handle on, and incompetent regulators.

When people start yapping about the " Usual Suspects " they should how lazy and empty their argument is.

Why is it fair to penalise one element of society, for the greed of another?

Envy gets you nowhere, neither do stupid arguments.

[TaxiDave]

Yes because a rise would cause anyone employing people to suffer even more costs and in this nightmare economy situation we can't afoard it.

[matt.chatterley]

Yes because a rise would cause anyone employing people to suffer even more costs and in this nightmare economy situation we can't afoard it.

If we follow along the lines that to help the country weather the squall which is blowing in, the government should aim to maintain country-wide cashflow, inhibit high unemployment, etc, then would it not be more sensible to:

1. Increase minimum wage if deemed necessary via the standard checks and measures (no comment on whether these are correct or not)

2. Award some degree of relief in terms of taxes paid by SMEs (upto a certain turnover/profit threshold), in order to balance out the extra cost

Simplistic, I know, but theoretical outcome: More cash in lower earners pockets, without doing damage to SMEs - ergo more money in circulation, unemployment not increased by making workers unaffordable?

Hmm. I should rephrase "simplistic" to "extremely simplistic", really..

[TaxiDave]

Some days I'd like to earn the minimum wage! No to put it in " extremly simplistc" terms I'd LOVE TO earn the minimum wage!

[sirearl]

Yes because a rise would cause anyone employing people to suffer even more costs and in this nightmare economy situation we can't afoard it.

One would then have to ask the question are you running a viable business.?

I suspect there are many business's that are just about existing due to being able to pay low wages.

Would it not be better for these subsidzed business's to be closed and proper viable business's run by professional people replace them.?

why the 2% owning 50% is so important is that it is a major factor in the high rents and housing costs that befall the rest of society.

Earl

[Esk247]

my point with the executive who employed his son and who has achieved totally zero in his time as co-ordinator was that he earns 60k for doing nothing..even less than a footballer...my point is that yes ok darn it, its a private contract blah blah i'm using it as an example of the stupidity of the current system whereby the more pieces of paper you push the more you get paid.

i have no problem with people earning £5million per year..if they deserve that right, if they have worked for it, if they have achieved something in their life and made a difference, employed hundreds of staff, developed new ideas and have succeeded in international business.

i don't even have a problem with the likes of john terry or wayne rooney earning millions...what i'm targeting in my rant is the players who warm the bench and get paid £1.2 million per year for doing so..they charge ridiculous season ticket prices and stupidly high prices for children and all they do is sit and watch a game of football but get paid for it..if your not playing..you don't get paid because you're clearly not good enough.

i also have a problem with those working for councils in imaginary jobs 'Arts Co-Ordinator for Social Art and Scenery' for example..i mean..WHAT THE HELL!!! £30k a year and they take the money from taxes and don't even achieve anything..they have no CV..they haven't done anything..they just get given silly jobs.

Armed forces and Emergency services..they are the people that see blood, guts and death and should receive more financial support and medical support.

Every multi-millionaire should be made to pay in to a pot for those that do a seriously ugly job on the front line..those that cut people free from cars and save lives.

[ready2mix]

Maybe there are other areas that need improving like the actual cost of products or the mark up on basic business requirements like electricity, rents, interest rates and transportation costs...! then we could all benefit.

[chris nangle furniture]

[quote=sirearl;726389]I suspect a much more relevant point is that 2% of the population own 50% of the wealth.

This fact impinges on all areas of society's.

Good call earl
and you can bet your life ,they all do a bono and pay zilch tax on there bloated bank balance,we need to close the tax loopholes and get the money back into the country I tend to think that we will see a cap on wages for the poor first though

[Cornish Steve]

The British Chambers of Commerce today called (http://www.businesszone.co.uk/cgi-bin/item.cgi?id=192886&d=1095&h=1097&f=1096&dateformat=) for the National Minimum Wage to be kept at current levels in 2009. Otherwise, the BCC said, hard pressed business owners will be forced to shed jobs amid the economic downturn. But do you agree? Should minimum wage levels be frozen? Vote in the poll above.
No. It should be reduced or abolished. Let free market forces do their job. A minimum wage forces companies to pay some employees more than they are worth. If those employees want to earn more, they should learn a new skill, acquire new knowledge, or gain more experience by working a second job.

To protect the most vulnerable, though, we must enforce discrimination laws strictly. Also, it would be wise for the government to offer a wide variety of training courses - which would be free to those who complete them with a satisfactory grade.

[Cornish Steve]

I think those business owners wanting the nmw frozen should declare their own personal income on the ballot slip, just to justify their point.
Wages should not be set based on what others earn. They should reflect what the employee is worth. My salary is my business, and your salary is your business. I should be paid what I'm worth, and you should be paid what you're worth. And our personal information should be kept private.

The alternative is to pay everyone roughly the same wage and for the government to tread all over our right to privacy. They tried this in many socialist and communist countries, and the result is that no one bothers to work hard. Why should they?

[sirearl]

I should be paid what I'm worth, and you should be paid what you're worth.



that be the problem in any society.IE is Ross worth 6 million a year.?

Or maybe a school dinner lady is worth a tad more.:D

It may be an idea to pay people based on what they earn.:eek::p

Earl

[Tom McClelland]

that be the problem in any society.IE is Ross worth 6 million a year.?

Or maybe a school dinner lady is worth a tad more.:D

It may be an idea to pay people based on what they earn.:eek::p

Earl

I wouldn't pay J Ross 6million a year, but that isn't my call since I am not one of his prospective employers. He and his prospective employers are independent agents who in a free society are allowed to come to a mutual agreement. Some authoritarians who seem startlingly thick on the ground in this forum disagree with the idea of freedom of contract.

But freedom of contract (in particular the freedom for an employer to pay their employees whatever the employer deems the employees to be worth) appears to be inextricably entwined with successful commerce and industry. Countries which permit such freedoms have a strong tendency to be wealthy and successful. Countries that restrict such freedoms tend to be poor places. There is a continuum of freedom from completely free to completely state-controlled and to all appearances the correlation between degree of freedom and economic growth/wealth is extremely strong.

Not so long ago a large section of the developed world tried an experiment whereby the state controlled many more aspects of contract freedom than is customary in developed countries. They impoverished their people as a result. Then the Berlin Wall came down, and we can already see the results of rapidly improving wealth in the ex-Eastern-bloc.

Now you may disagree with the process by which the BBC is funded, but that is a whole different argument. Many entertainers are paid vast sums by private TV companies too, but when its the BBC it tends to be more transparent.

[tom111]

There seems a strong presumption on this thread that a national minimum wage actually increases the wage costs to small business. I'm not convinced this is actually the case. It's rather like speed limits on motorways, in reality everyone looks on the speed limit as a minimum speed... so, on some motorways the speed limit actually increases average speeds.

In order for a national minimum wage to remain credible, it needs to reflect the minimum costs of living. The reality is, the national minimum wage on its own does NOT reflect the minimum cost of living. The government subsidises a large part of the living wage for national minimum wage workers through the tax credit schemes.

Since the tax credit schemes are a subsidy to business, I would suggest that if we abolish the national minimum wage - which in effect sets a minimum contribution by business to a living wage, we should also abolish the tax credit scheme.

[adam]

there should be a cap on the silly wages earned by footballers and the silly wages commanded by so called executives....you cannot abolish the minimum wage due to the fact that if you do...many businesses will simply bring in millions of foreign workers who are quite prepared to work for £1.50 per hour and quite prepared to live 5 to a single room. there needs to be some kind of stable platform.

On the first point, it is crazy that "one" goes to these games and spends so much money the bosses think they can afford to pay footballers this amount. But then the likes of Gillette pays some footballer to advertise its products for millions and that puts 20p on each razor blade for me. Solution - I now have a beard! **** em!

Did we have that many foreigners living 5 to a room earning £1.50 an hour before the legislation came in? I never had a problem finding a job for a decent wage!!

As to taxing people who earn below the minimum wage: sheer drooling madness. Some of those people probably get benefits of one sort or another too; how much is the administrative cost of all this?


Yes stupid. On one hand the Govt says you paying me under £11k a year is wrong and shameful, then it says but bugger that we will tax you on half of it! We spend a huge percentage (unknown by me exactly) on processing the tax we take.

Once again. No-one downloads a Madonna track because they've a gun to their head. No-one buys an Old Trafford season ticket or a Sky Sports subscription because they've a gun to their head.

But as I said above, the knock on effect is a spiralling out of control of our economy. Look at where we are today QED!

One would then have to ask the question are you running a viable business.?

Earl, in response to the poster saying his business earned him only around NMW the issue here is this is the best for him. He is better self employed for a variety of reasons not just financial.

We think of the bosses as fat cats but very often if not most the time they are people like US not earning huge amounts. Some weeks you can earn less than the bloody staff. They are guaranteed their so called meagre wages. We are not guaranteed our so called obscene amounts of money that in reality is pretty average,

[Subbynet]

In order for a national minimum wage to remain credible, it needs to reflect the minimum costs of living. The reality is, the national minimum wage on its own does NOT reflect the minimum cost of living. The government subsidises a large part of the living wage for national minimum wage workers through the tax credit schemes.

Since the tax credit schemes are a subsidy to business, I would suggest that if we abolish the national minimum wage - which in effect sets a minimum contribution by business to a living wage, we should also abolish the tax credit scheme.

Doesn't having to subsidise wages in general say something has gone seriously wrong?

The Government has no money, so they're not really bringing anything to the table other than raising taxes in other areas. Tax Credits are not a subsidy, but a redistribution of wealth. Some would argue Tax Credits are a Labour trap - how would society (realistically the Tories) ever go about scrapping them now? Its a burden we've been dumped with.

We have an ever increasing and older population, and a unsustainable Pension Ponzi scheme. This is already costing us billions each year without other burdens like Tax and Family Credits. Most of these Credits are unclaimed, and you have to ask if the government really wanted to help they could do it via your Tax Code, scrapping the Tax Credits Department which is an enormous waste of money and resources. I think the unclaimed monies come in handy for Gordon tho....

The Credits system is nothing but black magic! (Your money disappears!)

[Cornish Steve]

There seems a strong presumption on this thread that a national minimum wage actually increases the wage costs to small business.
It does. Let's say the minimum wage in a country is $8.00/hour. Joe earns $8.00; Sally earns $10.00; Jerry earns $12.00. The government decides to increase the minimum wage from $8.00 to $10.00/hour. This means the company is forced to pay Joe $10 instead of $8, even though he's not worth that rate. It gets worse. Sally starts complaining because she's now a minimum wage employee, so the company has to increase her wage to $12.00 so we won't quit. That makes Jerry unhappy because he's more senior than Sally; and so on it goes.

On the other hand, the company is still selling the same products for the same prices and the same margins. Its costs have increased dramatically, but the competitors down the street, with different business models, don't have to adjust prices. The company has three options: (i) Fire some staff to cut costs; (ii) Fire all local staff and outsource work overseas; (iii) Continue the way things are and slowly go out of business.

From a business perspective, it's hard to find a single reason why a minimum wage is good. Frankly, it's interference in the free market and social engineering by the government - and it hurts the economy.

[Subbynet]

It does. Let's say the minimum wage in a country is $8.00/hour. Joe earns $8.00; Sally earns $10.00; Jerry earns $12.00. The government decides to increase the minimum wage from $8.00 to $10.00/hour. This means the company is forced to pay Joe $10 instead of $8, even though he's not worth that rate. It gets worse. Sally starts complaining because she's now a minimum wage employee, so the company has to increase her wage to $12.00 so we won't quit. That makes Jerry unhappy because he's more senior than Sally; and so on it goes on.

On the other hand, the company is still selling the same products for the same prices and the same margins. It's costs have increased dramatically, but the competitors down the street, with different business models, didn't adjust prices. The company has three options: (i) Fire some staff to cut costs; (ii) Fire all local staff and outsource work overseas; (iii) Continue the way things are and slowly go out of business.

From a business perspective, it's hard to find a single reason why a minimum wage is good. Frankly, it's interference in the free market and social engineering by the government - and it hurts the economy.

Steve - What's those little squiggles in-front of the numbers? Is your keyboard playing up :p

[Cornish Steve]

Steve - What's those little squiggles in-front of the numbers? Is your keyboard playing up :p
The example country in my story happens to use a strange currency with squiggles. Sorry. :)

[tom111]

It does. Let's say the minimum wage in a country is $8.00/hour. Joe earns $8.00; Sally earns $10.00; Jerry earns $12.00. The government decides to increase the minimum wage from $8.00 to $10.00/hour.

However, lets say that the minimum wage in Squigglyland is set at $7 an hour. When Joe leaves he company, they advertise a replacement at the minimum wage... and, since most of the companies now offer entry level positions at the minimum wage, the replacement ( Sandra ) has to take the offer.

In effect, if you set the national minimum wage substantially below the average wage, it offers employers the opportunity to set (what would otherwise be an illegal) wage cartel.

Of course, once the NMW is introduced it offers politicians an opportunity to score cheap points by raising the national minimum wage faster than inflation. Iin which case it will sooner or later start costing businesses money.

However, in the UK due to tax credits, the national minimum wage at the moment allows businesses to offer wages lower than ,I suspect the market would set. In addition, the difference between a £5 and a £7 salary is minimal, since the additional money would be taken off benefits.

Of course, as someone rightly said, the Tax Credit scheme is a way of redistributing wealth from high wage earners to low wage earners.

[Blush]

I was discussing this with some friends actually.One runs a small shop, he doesnt actually take a wage anymore from his business, hasn't for several months due to current climate.He won't shut up as he has one loyal employee.He can't afford to pay more than minimum wage.He says if it increases he will have to reduce her hours or close down and then she will have no job.So form the small business side of things I can see why it shoud be frozen.Maybe if more help was given to small businesses to help with wages? As for large companies, surely the fatcats can take a paycut??
We also have a lot of 'cash in hand' workers where we live too because of the minimum wage which is another downside to it.A local car wash was prosecuted not long ago for this, plus the workers were illegal immigrants!!

[adam]

So Tom is agreeing that the NMW is a sham and should be abolished as it allows people to either pay lower wages than the market would allow (bad for the workers) or it forces wages up unsustainably (bad for the economy overall).

I cannot disagree Tom, let's get rid of it.

As Martin says, tax credits are a bit of a scam. Gordon Brown taketh and Gorden Brown Giveth (less a 50% admin charge) comes to mind. No one here or in the UK at all would need tax credits if we had a fairer system of support and let business make the money. Again Martin, with 100%, the Government does not create wealth, it just takes it of those that cannot afford to then give a little back when you come begging and jumping through hoops.

The so called rich either bugger off abroad or pay accountants to avoid the taxes so me and you get hammered.

Whetever you earn unless you live completely on benefit (and there may be a reason for this) whatever you get "given" is far less than you have paid in tax.

So if you want to get rich, give me £1,000 a year and I will give you a credit of £70 each and every month of FREE MONEY.

Now tell me you support tax credits!!

As for NMW, I think the point has been made and my big fat cat executive's case is now rested.

[ready2mix]

why not ask to decrease capital gains instead , why take money away from workers its not the minimum wage or the working time directives or any legislation from Europe its how fairly the government amend there policy to counter the extra burden.