Well, my mother didn't work until after my family started their own business. Mind you, I didn't live in this country then.
And that situation is still not uncommon in other countries.
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Would anyone like a sensible discussion about low pay?
- Thread starter UKSBD
- Start date
Well, my mother didn't work until after my family started their own business. Mind you, I didn't live in this country then.
And that situation is still not uncommon in other countries.
That's what you're implying when you said:
Which means at least one is NOT expected to work if they have children. I don't see how else you expect this to be interpreted.
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It is.
15 hours a week free from 2 years old onwards (means tested)
30 hours a week free from 3 years old on wards (non-means tested).
There is a bit more to pay, usually for meals, but this should make it viable for the other parent to work at least part-time from at least 3 years old, possibly 2 depending on circumstances.
The other complication of course is the school holidays when they then reach primary school age, limited number of 'term time' jobs available, meaning essentially limited to temp / casual stuff during term time so there is somebody to look after the kids(s) for school holidays, with the long summer one being particularly problematic.
In many families this is of course helped by the assistance of grandparents. However, the same people who bemoan their taxes paying benefits to people who don't work are the same people who advocate moving wherever work is to get a job (particularly when in recession and the unemployment rate is high, not so much at the moment). Bit of a paradox really, as to be open to moving wherever the work is means being willing to move away from your free childcare help / babysitters (grandparents!).
The country still hasn't fully adjusted to an environment where both parents need to work in order to live comfortably, its a tough one, we need more people to be economically active or increase their working hours to plug productivity gaps. At the same time, nurseries are struggling to recruit people to work for the low wages that the industry pays to meet current demand and are losing people to Tesco or Aldi... solution to that is better pay in the sector, which only means higher nursery fees, vicious cycle as that then prices more people out of working.
Its a complex issue.
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- Original Poster
- #126
What is the means test criteria though?
If the partner is earning £26,000 are they (as a couple) still eligible?
Does the free childcare stop when the child reaches school age?
Maybe we need state owned run/non profit nurseries so staff can be paid better as a private company isn't making a profit from it?
Same with housing, state owned, cheap but adequate housing non/profit making.
An emotive issue too
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Not really. The existing workforce could become more productive.
It's a sad indictment of society when both partners *have* to work to live comfortably.
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It would help if the government, that is supposed to pay for the 2 year old and 3 year old 'free' childcare, paid the actual cost to the nurseries who supply the care. At the moment they pay about half. The nursery cannot charge the free place parent so they invent 'optional' costs, like food, and charge fee paying parents an extra amount to make up for the loss. Solution: government meets its liabilities.
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I sort of agree with all of this, but would say person B may live in council housing and therefore couldn't easily change living accommodation to work in a low paid job which is probably on low hours and possibly on a short term contract.
Tick to the employer paying a higher rate if he/she can't get staff and tick again to travel allowance, because ultimately this is one of the BIG issues I think.
I think the old Council housing mother and daughter system, that prioritised trying to house daughters with children near their mothers, who could then help them with child care etc., should be brought back in. It worked well for after school, kids being sick, school holidays etc. I think it would also help get young mums back into work if they wanted to and eventually off of Universal Credit
Could I suggest the UC system is a little broken. I worked with a young mum who was topped up by Universal Credit and every time she worked overtime it created mayhem in her life. Her Council Tax went up and her child care allowance was adjusted, leaving her out of pocket every time. In the end she just refused to work overtime because it caused so many problems and put her in debt she struggled to get out of. The Universal Credit people were really unhelpful. I got the impression they simply didn't know the answers to her questions. Once on a set amount people seem to be trapped there, the system is meant to work with them to progress, but it seems to be failing to do that.
At fault too are companies like the supermarkets who do 17 hour a week contracts which have to include work on a weekend and at least one 9pm finish a week! They also have the right to change your hours at the drop of a hat and move you to a store miles away if they fancy a shuffle of staff. Contracts aimed at working mums with 10am to 2pm working hours would help. There quite simply aren't the full time low paid jobs that used to exist to give people a foot up on the ladder, they're all short term 17 hour a week contracts with awful working hours. They can't get off Universal Credit. It was meant to be a short term leg up till people found a job that paid decent hours, but the others on here are correct I think, the companies are taking advantage of it.
Additionally, there seems to be fewer and fewer paths to improvement, fewer apprenticeships, fewer jobs that offer upward mobility (higher wage structures) within companies to allow people to get off Universal Credit.
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I am still not sure anyone has quoted an actual figure for an actual average annual salary; I see figures have been banded around for suggested for costs. It may vary from place to place, but the overriding issues are, and these are based on the ONS’s own (all averages) figures:
Average rent £7,512.00
Average Council Tax £1,493.00
Utilities Gas electric £3,600.00
Water £240.00
Cost for One Child £1,759.30
Your five-year-old car £4,500 (based on your 0.45 a mile)
General Insurance’s £200.00
Total figure £25,304.00
Average annual salary in the UK (across all full-time employment) £27,756 which means they have a take home figure of £22,898.28
So, it appears a person living in a rented house with one child, no TV, no Internet, no phone, no savings has already got some problems. Hopefully the partner has a part time job average again: £12,247 a year
If you have not got a family member to look after the child when working the average childcare costs are £2,423a year. Things now are looking slightly better as their combined take home pay is £35,145.28 take away the average costs including childcare (£27,547.30) they are now left with £7,597.98 to cover all those little extras ……..
oh, wait we have not thought about how our part time worker is getting to and from work, picking up and dropping off their child at the “local” nursery so maybe we can half this figure and give them a combined disposable income of £3,798.99 circa £316 a month. What could they possibly have to complain about.
So maybe the average annual salary for a full-time worker should be £35k but as we know, and the problem is this, it just does not work across the whole of the UK. If you look at just the average ONS rent figure you will see this just does not apply to the likes of the South and London in my own location a rent of £1,200 for a one bed house, circa £370k plus to buy a starter home if you can find one.
We can see from the government’s own figures (note these below are mean figures so slightly higher than the true average) Now in all my years I don’t think I’ve ever worked for a company who looked at the “cost of living” a rate of pay a person would need to live on in a particular area, in fact I would say I came to learn than many an HR department worked hard to drive down the payrolls of companies.
When on the odd occasion a discussion did take place amongst managers you could see the trend that new “intakes” to the company were on much smaller salaries / packages than those who had come before, a trend I think that has gone on for over 20 years whilst many a company have been making very substantial profits for the owners & shareholders.
Mean average annual pay in GBP (I stuck in the average rents too)
United Kingdom £33,000
London £41,866 (average rent £1,832 a month)
South-East £34,431(average rent £1,240 a month)
Scotland £33,332 (average rent £841 a month)
It’s now become a huge and complicated issue, in the mix we have rising inflation, rising interest rates, those who even dared to think they had “spare” cash to fund the new cars three holidays abroad are in for a very rude awakening in the coming year.
How will the government tackle this mess (they won’t as they have run out of ideas, maybe they will have to borrow even more money) we have already seen from the posts above the funds are just not going to be there. Further over the previous year we have seen how the care, NHS and many other areas have just fallen apart.
So maybe it is time for those companies up and down the UK to look at what a realistic wage should be and step up to the plate, as propping up the “system” with government support I would suggest is well and truly broken my friends.
Average rent £7,512.00
Average Council Tax £1,493.00
Utilities Gas electric £3,600.00
Water £240.00
Cost for One Child £1,759.30
Your five-year-old car £4,500 (based on your 0.45 a mile)
General Insurance’s £200.00
Total figure £25,304.00
Average annual salary in the UK (across all full-time employment) £27,756 which means they have a take home figure of £22,898.28
So, it appears a person living in a rented house with one child, no TV, no Internet, no phone, no savings has already got some problems. Hopefully the partner has a part time job average again: £12,247 a year
If you have not got a family member to look after the child when working the average childcare costs are £2,423a year. Things now are looking slightly better as their combined take home pay is £35,145.28 take away the average costs including childcare (£27,547.30) they are now left with £7,597.98 to cover all those little extras ……..
oh, wait we have not thought about how our part time worker is getting to and from work, picking up and dropping off their child at the “local” nursery so maybe we can half this figure and give them a combined disposable income of £3,798.99 circa £316 a month. What could they possibly have to complain about.
So maybe the average annual salary for a full-time worker should be £35k but as we know, and the problem is this, it just does not work across the whole of the UK. If you look at just the average ONS rent figure you will see this just does not apply to the likes of the South and London in my own location a rent of £1,200 for a one bed house, circa £370k plus to buy a starter home if you can find one.
We can see from the government’s own figures (note these below are mean figures so slightly higher than the true average) Now in all my years I don’t think I’ve ever worked for a company who looked at the “cost of living” a rate of pay a person would need to live on in a particular area, in fact I would say I came to learn than many an HR department worked hard to drive down the payrolls of companies.
When on the odd occasion a discussion did take place amongst managers you could see the trend that new “intakes” to the company were on much smaller salaries / packages than those who had come before, a trend I think that has gone on for over 20 years whilst many a company have been making very substantial profits for the owners & shareholders.
Mean average annual pay in GBP (I stuck in the average rents too)
United Kingdom £33,000
London £41,866 (average rent £1,832 a month)
South-East £34,431(average rent £1,240 a month)
Scotland £33,332 (average rent £841 a month)
It’s now become a huge and complicated issue, in the mix we have rising inflation, rising interest rates, those who even dared to think they had “spare” cash to fund the new cars three holidays abroad are in for a very rude awakening in the coming year.
How will the government tackle this mess (they won’t as they have run out of ideas, maybe they will have to borrow even more money) we have already seen from the posts above the funds are just not going to be there. Further over the previous year we have seen how the care, NHS and many other areas have just fallen apart.
So maybe it is time for those companies up and down the UK to look at what a realistic wage should be and step up to the plate, as propping up the “system” with government support I would suggest is well and truly broken my friends.
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T
The Byre
Borrow even more???
The present UK government is lost and drifting and reminds me of the dying days of the Heath and Callahan administrations. What Andrew Marr called "Generals staggering across a battlefield carrying white flags, looking for someone to surrender to!"
The real danger for the UK is that mountain of government debt that has probably reached about £2.5 trillion net and £2.8 trillion gross. The Conservative government inherited a debt of £890bn from Labour, which was already unsustainably high - but has probably gone beyond a debt 'Event Horizon' i.e. it is now arithmetically impossible to repay. But at the same time, it must be repaid.
By their own admission, the government is spending the equivalent of 7% of GDP that it does not have.
The Treasury is already in The Roach Motel - the roaches check-in, but they don't check-out!
Austerity will hit the buffers of 'The Austerity Anomaly' - salami slicing budgets leads to having to spend even more (e.g. saving money by not getting the car serviced). Even higher inflation would lead to civil unrest and strikes and a collapse of large parts of the economy. Default would crash the economy totally by making the pound worthless.
Something somewhere has to give - something will break and when it does, life for businesses will get very interesting.
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It's scary when you see the numbers, Although I should think there's a much stronger word than scary I should be using. A slight aside to this thread, it has been interesting to see (on the wires over the last few weeks) that US traders have started to look at and factor in a reversal of US interest rates in late 2023 due to the US government own borrowing requirements not seen any talk of it for the UK but where the US markets go the UK seem to be not that far behind.
It would appear the consensus at the moment is borrow, borrow and borrow some more, certainly seems what the market makers are factoring in ...... god help us all
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- Original Poster
- #133
If you look at what I said in post 107
I worked that out (very roughly) as
1 bed apartment and associated costs (rates, council tax, insurance, etc.) = £1000
Keep 5 year old car on road and 10k miles = £400
Energy costs = £200
Living costs = £500
Allowance for saving = £200
Total = £2300
2300 x 12 / 52 = £535 a week
I said they should work 40 hours but didn't allow for lunch break so really 37.5 hours a week = £14 an hour minimum wage (probably closer to £15 when tax taken in to consideration)
You could say someone on minimum wage shouldn't be able to save the £200 a move, remove that and it comes to £13 (£14) an hour minimum wage
Is that fair and practical though for employers?
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The Byre
Ah yes, the infamous pivot! I mention it here https://www.ukbusinessforums.co.uk/threads/byretorial-mayhem-for-2023.420927/
The Fed has a very narrow task - inflation first and then employment so it will only pivot when something big breaks. Here the BoE has a somewhat broader mandate - but here, the danger of something breaking is far greater as we do not have the world's reserve currency.
After deducting £300bn in cash and other liquid assets, this means public sector net debt stands at somewhere North of £2.4trn, of which in the order of £930bn is owed to UK banks and other financial institutions, £635bn to UK institutional investors (pension funds and insurance companies), £215bn to UK individual investors, and £620bn to foreign investors, including foreign central banks and governments as well as private sector investors.
Despite the efforts of the Treasury’s Debt Management Office to lock in fixed interest rates for long periods, the government is exposed to significant interest rate and inflation exposure, because the BoE has swapped a significant proportion of government debt from fixed-rate gilts into variable rate bonds through its QE programmes.
So now public debt is exposed to changes in interest rates or, in the case of index-linked gilts, to changes in retail price inflation, driving interest costs higher and higher each time the Bank of England raises its benchmark central bank deposit rate to fight inflation.
And yet this Chancellor continues to borrow substantial sums to cut taxes, cap energy prices for households and businesses and increase defence spending. All nice and cosy, but are luxuries we just cannot afford!
Most of the extra borrowing will be financed by issuing new government securities at a time when the BoE is starting quantitative tightening by selling some of its stock of fixed-interest gilts back into the market.
There is no need for an official OBR forecast to be confident of two things: public debt and the cost of public debt are both going up.
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If an employer needs employees to make their profits for them, is it fair to pay an employee less than a single employee needs to exist on? That brings me back to my original argument. If there is no government support to allow an employee to survive, the employer would not have any employees (as they would not exist) and would not make any profit. Therefore the government support for the employee is actually support for employers profits and (potentially) shareholders' dividends. Is that appropriate? And, if it is, should it not be recognised as such?
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Are they luxuries, given that a proportion of the population would die without that government support?
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No, I think the answer is fo rthe government to be honest that they are giving invisible financial support to small businesses. Then take the debate from there.
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What the state requires is viable businesses that employ people. A business that can't employ people without a state subsidy isn't viable.
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The Byre
Yes, but not the way you mean. They are dying right now in every country on Planet Earth WITH government support!
Government spending falls (from a macroeconomic PoV) into two categories -
1. Essential infrastructure and public services such as roads, education, defence, etc.
2. Waste such as vanity projects and idiotic blunders.
We can start by listing all the waste and blunders - masks never used, £100bn every year in interest payments, 60,000 civil servants at the MoD (and similar parasitic numbers throughout government) the Elizabeth Line, HS2, The Scottish Parliament building, rescuing RBS, BBLs and grants, the list grows and grows! It never stops!
Now this government has become simultaneously the most wasteful and the deepest in debt in all history of Britain. My wild guesstimation is that two-fifths of this government's spending is vanity projects, waste and idiotic blunders.
Councils are failing to care for the elderly but have to plant dead trees to keep to their green project quotas. So the elderly block up hospital beds needlessly at many times the cost of care within the community. So hospitals are erecting Portacabins to house the extra elderly in those beds. Madness!
Governments are by definition unproductive when they go beyond essential infrastructure and public services. That is a huge cost that only the poor and middle classes have to pay.
One-seventh of all government spending is borrowing!
And government spending right now is 47% of Britain's entire GDP - 47%. As a consequence, GDP is falling! And guess who suffers first - yes, you've got it in one go!
The Poor.
Followed by the Middle Class.
Topping up poor people's pay is both immoral and uneconomic.
It is immoral because it makes them dependent on the state and is a subsidy for bad employers. It is also immoral because the fall in purchasing power is CAUSED by governments indulging in waste and financing that waste with QE - leading to even more debt and more poverty and even more government waste.
It is uneconomic because it is financing jobs and companies that should either pay properly by being more efficient or go out of business, thereby leaving a space in the market for businesses that do know what they are doing!
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Don't agree with this. One of the reasons for the fact that people are spending so much on travel (as discussed above) is the poor state of travel infrastructure in this country.
Well, I sort of agree on the Elizabeth Line. It's not like London needs more transport investment compared to, well, literally everywhere else in the country.
I mean, I can get anywhere in Eastern Japan in about a day by public transport without having to plan it and buying a super-duper-advanced-mega-special-exclusive-bogoff-saver-only-valid-if-the-driver's-name-is-george ticket, being sure that the train will actually run and be on time. It's actually viable to live miles away from where you work.
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"Close down"? No. If they want to continue, let them raise their prices, pay a fair wage and then we can stop living in a low wage society.
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But the alternative is that the poor die. That is not an alternative that I find acceptable.
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I feel like you could google this all yourself within 2 minutes to be honest, to save me typing.
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What is it that you are claiming has changed here?
The statutory levels of child support owed is very clearly layed out and there is an online calculator, and if they don't pay HMRC can claim it directly from their PAYE or tax returns through a tax code.
The Child Support Agency is simply now called the Child Maintenance Service. You can get them to pursue for payment without having to disclose your address etc to the other party also.
A man with taxable income of £700 a week who has 1 child with 1 mother, with that child never staying at their house is required by law to pay a minimum of £72 a week in child maintenance. What are you claiming has changed?
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T
The Byre
I'm hardly wild about the idea either! But a nation and every nation on Earth needs less government and less meddling by governments.
When a government fiddles with the economy it only causes damage. Yes, we need a welfare state and yes, we should support the poor when that support is needed, but now we are supporting people in work! What's next? Support for the middle classes - lawyers and junior doctors and teachers? Just where does this madness stop?
People need support because of government meddling. They need support because this and previous governments have debased the currency. They need support because £20k just is not enough to live on! £20,000 - bloody hell! What comes next? £50,000? £100,000?
They need support because this government does not know what it is doing. They need support because of all the absurd blunders that successive governments have been making. They need support because this government believes in trickle-down economics and the Magic Money Tree.
They need support to protect them FROM the government!
In 1500 a simple worker's cottage cost £10. A pound was a pound of gold. A worker's cottage therefore cost 160 ounces of gold. After the war, you could buy a simple house for about 160 ounces of gold. Today you can buy a simple house or flat for 160 ounces of gold.
But we do not pay the workers in gold, we give them these stupid tokens that are created out of thin air and we have the cheek to call them pounds as if they still represented a pound of gold.
My first task as dictator of the UK would be to go back to the gold standard and abolish the Bank of England and replace it with nothing - let the market set interest rates. We need a stable currency and DEFLATION!
Things should be getting cheaper and not more expensive with every visit to the shops.
I have ceased to value things in pounds, dollars or Euros as there is no point; the BoE, the Fed, or the ECB will just print more numbers and devalue whatever number I put against any object, good or service. Last year a single beef sausage at a US Aldi cost $1. This year it costs $2. Business has become almost impossible in a world where whatever number you place upon anything is wrong by this time tomorrow.
How much child support? £100? £1,000? £10,000? How about £1m? We'll print it and make you feel happy!
We print larger numbers and kick the can down the road. Well, 2023 is the year when irresponsible politicians and central bankers all run out of road.
William Wordsworth wrote "It is not the crook who is to be feared but the man who does not know what he is doing."
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A curve ball here- it really wouldn’t take much of an increase in both minimum wage and technology before things like a McDonalds have one employee overseeing a team of robots.
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The Byre
I sometimes have students visit our studio and one of my gags is to get them into the audio control room and get one of them to sit behind the mixing desk and ask the others to make the boy or girl point at the most expensive object in the room.
In variably, they want him or her to point at the 60-channel mixing desk as it is very large and very expensive.
No, I tell them. Once they have graduated, they will be the most expensive item in any studio. "Jane there should be pointing at herself and not at a desk as she will cost about five or ten times as much as a mixing desk!"
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What would this mean in practice though.
Higher infant mortality rate means a much higher birth rate. Hence why almost all global population growth is expected to be in Africa over the next few decades.
Healthy society = lower birth rate, some would argue that this is what is needed because more and more people jostling for finite resources is only going to lower living standards further and result in greater poverty.
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Lower birth rate = aging population and shrinking workforce = fewer people to support a non-productive sector of society = greater poverty.
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There is a "demographic dividend" associated with having a large number of 18 year olds.
But don't forget that this is how we got into this problem in the first place, a baby boom.
There are 147,000 fewer 45 year olds than 55 year olds in the UK. The problem starts to naturally correct itself by virtue of life expectancy (which is falling, as it happens) in about 20 years time which would make having lots of babies in 2023 utterly pointless in terms of trying to address the issue, the ship has sailed.
In Japan of course the issue is worse. They will have to be more open to immigration from countries with a higher birth rate or oversupply of labour.
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The youngest boomers are 58 and can be expected to die in 22 years (average).
Having more babies today doesn't really help the problem of their not being enough careworkers for boomers, that boat has sailed. The youngest boomers will be 76 when they are 18.
But as this thread has shown, very little appetite to help people afford to have children. In fact, most seem to begrudge it.
I'm in my 30s, live in a 4 bed house in Harrogate that I own (need the 3rd and 4th bedroom as both me and the wife are 100% remote, both of our employers closed their offices during covid to save money), household income pushing 6 figures. I'm not having a second child due to cost, we can't afford it. Interest rates, food inflation, fuel prices, nursery fees, don't quality for anything means tested. We could have one but it would mean not saving enough to heat and eat upon retirement.
That's despite running just the 1 car now. Only optional luxury really is the dog.
It will ironically be some of those in this thread who might need the NHS and care homes adequately staffed when my child is of working age, so begrudging the creation of the future workforce is up them really isn't it. My plan is to retire to Bulgaria, Poland, Lithuania, Latvia or Hungary, we had sufficient Labour before Boomers decided they didn't like Eastern Europeans so I won't have any sympathy for any problems that decision causes them. Was it really a demographic crisis when other countries in Europe could provide their surplus Labour in return for us throwing their governments a bit of cash for development?
Or is it only really a serious one now that entitled Brits find their grandchildren are too spoiled and mollycoddled to get their hands dirty and don't care about anybody but themselves do won't do jobs which involve caring for other peoples granddads?
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It still causes demographic collapse in the long term, even if the problem is reduced for one generation.
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I would like to see the birth rate in Europe increase, and Japan has even greater issues, as does China on the horizon.
Don't forget that AI is going to replace potentially millions of jobs over the next couple of decades though. There are already chat bots which are incredibly convincing, looking at probably half a million plus call centre employees who will be free to take up jobs in the NHS, carehomes and food production within 5-10 years. The technology is progressing rapidly.
But there seems to be little appetite on this thread for policies which encourage child birth, in fact some seem to suggest that having a child when you aren't wealthy is some sort of cardinal sin.
They ought to consider whether the child of a rich person would work for £11 an hour to wipe their bums when they are in a hospice.
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