£15 p/h minimum wage?

[Ozzy]

The Labour Party are voting to campaign increasing the legal minimum wage to £15 p/h. That’s about a 50% increase on the current minim wage, quite some hike for many businesses that could make recruiting unaffordable.
What do you think?

 

[Dillon Lawrence Ltd]

The Labour Party are voting to campaign increasing the legal minimum wage to £15 p/h. That’s about a 50% increase on the current minim wage, quite some hike for many businesses that could make recruiting unaffordable.
What do you think?

Another way for Labour to attract younger voters with promises that don’t mean much.

So they up the wage, then what? Everything else will then rise alongside wages and nobody will be any better off. You’ll have burger flippers or other minimum wage employees on £15/hour, everybody else previously above minimum wage will want increases too and the cost of living will go up. Back to square one.

 

[John Hemming]

With inflation increasing it could be close to that figure by 2023 anyway.

The reason there is low pay commission
https://www.gov.uk/government/organisations/low-pay-commission

Is that there is a balance to be struck between banning jobs that cannot pay a certain amount which results in more unemployment (and less economic activity) and subsidising people in low paid jobs through the tax and benefits system.

The underlying issue is technological change which results in many jobs being pushed down in terms of the rate they pay to the minimum wage.

 

[Ozzy]

Oh don’t get me started on that work of fiction called inflation that is used to created the perception of economic growth

I get your point though but jobs create more than just income, they also create a sense of purpose and reason. To hike up this by such a huge leap would make some jobs unviable to sustain, pushing the cost from the business to the benefit system which will also have a health impact on top of the direct society cost.

 

[Deleted member 335660]

The Labour Party are voting to campaign increasing the legal minimum wage to £15 p/h. That’s about a 50% increase on the current minim wage, quite some hike for many businesses that could make recruiting unaffordable.
What do you think?

Well when I started work I was paid £5 a week so somehow business has survived

I guess it depends on how many staff you have on minimum wage. Clearly those paying higher will not be affected.

My step daughter works in a care home as a team leader doing shifts and is on minimum wage. She just gets buy paying her rent, car to get to work and food.

It seems as a nation we are quite willing to let CEO’s earn huge amounts, and yet we moan about giving the lowest paid a decent chance to live decently.

 

[kulture]

So that would work out to about £30,000 a year. I can see significant wage inflation for all supervisors and managers as many will be paid less than this.

I have never been a fan of CEO getting huge payments, but that is not a good reason to lift the wages of everyone else.

I know that the argument that business cannot afford this increase is often said but somehow they manage each minimum wage increase. Often at the expense of each business owner doing more and earning less. If benefits rose in line with the minimum wage then many business owners may well see themselves as significantly better off by simply closing down.

as the public sector employees so many people, their wage bill would almost double with this increase, so our taxes would need to go up to fund it. Coupled with price inflation, I wonder if this would do more harm than good

 

[Mark T Jones]

I wonder how that will tie in with late-life care, which is reliant on minimum wage (mostly overseas) labour and is chronically under funded

 

[Ozzy]

many business owners may well see themselves as significantly better off by simply closing down.

Yes, and then there would be no jobs for anyone. Or at least choose not to employ people and instead keep their businesses small.

I can see significant wage inflation for all supervisors and managers as many will be paid less than this.

That’s the issue I see, it just goes round and round in circles. Wages go up so costs go up so sale price goes up so wages go up to pay higher prices, so costs go up and so it goes on.

 

[cjd]

Someone pointed out that that change would put the minimum wage above the average wage today. It's just dumb and unachievable in the real world.

They would be better advised to have a policy of getting the minimum wage to the Living Wage over a period of time.

We noticed that we've been (more than) a Living Wage employer for years so we fly the flag now.

https://www.livingwage.org.uk/

 

[Paul Norman]

These figures are often put out there for reaction. The reality is this is not going to happen, because Labour are not the government. And by the time there are, this would not be such a massive hike.

I am in favour of a minimum wage. And ideally, it should be enough to live on - a slightly subjective calculation, of course, and very dependant on where you live, amongst other things.

I am in favour of the principle of increasing it at above the rate of inflation, too. But doubling it in one go would be too disruptive. But back to my point. No one is actually going to do that, least of all a Labour Party lead by someone who is arguably more conservative than the current Tory party.

The affordability of any increase is a different debate. But not one that is had well by people earning more money that they will ever be able to spend. But as low earning people clamour to support the right of their boss to earn £10m, the debate will never generate much light.

For my business, that would not amount to much of a change - most staff earn more than that already. If you are running a care home the economics of it might be tougher. Although I did notice that the care home owner locally appears not to be skint.

 

[Mark T Jones]

Although I did notice that the care home owner locally appears not to be skint.

Specific to that point, the care sector is very much one of 2 halves

Those that rely mostly on fee-paying residents (with a conforming smattering of funded beds) can do extremely well - in some cases pretty much naming their own price.

Those that provide mostly funded beds genuinely struggle to get by - to earn real money you need multiple locations.

Guess which one is most needed?

 

[IanSuth]

It is irrelevant

If someone on min wage today cant afford to live without universal credit then their wage is being topped up anyway and we are all paying that via taxation. By the time you take that into account and a couple of years of inflation it wont mean anything anyway

Also as others have said if the burger flipper goes from £9ph to £15ph and does 30 burgers an hour each burger now needs to cost about an extra 30p (that is 20p + 50% for ni/pension etc), but of course the company delivering the burger has to pay it's driver more and the meat processing plant and the farmhand so you have to add in all those supply chain labour price rises as well

So as i said on another thread yesterday what actually matters is will the increase in take home pay for the average person be more or less than the effect of inflation on the average cost of living for that average person and we just don't know that currently

 

[MikeJ]

It's politics. They'll call for a minimum wage of £15 per hour, but in practice what they'll offer is £15 per hour by the end of the next parliament. That's probably 7 or 8 years away (we're less than two years into this one, but the FTPA is now dead so an election can be called any time) and the 50% increase is much more achievable in that time frame.

As an aside, BBCs Newscast had a young Labour member on the show on Monday and Tuesday, at his first conference. He was surprised to find out how much influence the unions had over Labour. He also thought that GMB were a breakfast TV show.

 

[japancool]

The trouble with a minimum wage is that it has become a de facto wage for many jobs.

 

[The Byre]

Crunch the numbers - That comes to about £35k with NI employer's contributions, pension, etc. Then there's sick leave and holidays and all the other gotchas - you can add another £10k for a healthy margin for all that sort of thing, so now we are at £45k.

I realistic terms, that means each employee must generate an additional £50k gross profit p.a. And I am not including the cost of the workplace - desk, chair, heating, parking, tools, etc.

Fine for a mechanic in a workshop or any other skilled person (except that they do not work for £15 p.h.) but what about the guy who sweeps the yard or the corner shop shelf-stacker? Those people are out of a job.

There are few feelings as good as giving a productive employee a great paycheque. "Hey Jim, that market survey you did - well, we sold it several times over, so here's your cut!"

But what about the rest?

But all this is irrelevant - what is coming down the line for the UK economy will make all that nonsense meaningless. We're playing tiddlywinks on the edge of a volcano.

 

[MBE2017]

I’m sure Keir Starmer did not vote for this, he dodged the question when asked, saying he voted for the official Labour policy, which is lower at £10 hr.

 

[IanSuth]

Crunch the numbers - That comes to about £35k with NI employer's contributions, pension, etc. Then there's sick leave and holidays and all the other gotchas - you can add another £10k for a healthy margin for all that sort of thing, so now we are at £45k.

I realistic terms, that means each employee must generate an additional £50k gross profit p.a. And I am not including the cost of the workplace - desk, chair, heating, parking, tools, etc.

Fine for a mechanic in a workshop or any other skilled person (except that they do not work for £15 p.h.) but what about the guy who sweeps the yard or the corner shop shelf-stacker? Those people are out of a job.

There are few feelings as good as giving a productive employee a great paycheque. "Hey Jim, that market survey you did - well, we sold it several times over, so here's your cut!"

But what about the rest?

But all this is irrelevant - what is coming down the line for the UK economy will make all that nonsense meaningless. We're playing tiddlywinks on the edge of a volcano.

Yeah general ready reckoner is ph to pa is roughly double the per hour to get the yearly in K (so 15ph is 30k) then x1.5 for standard extra costs (and that is before the new NI levy for social care), but as you say tweaking min wage is fiddling while Rome burns really

 

[MikeJ]

It's politics. They'll call for a minimum wage of £15 per hour, but in practice what they'll offer is £15 per hour by the end of the next parliament. That's probably 7 or 8 years away (we're less than two years into this one, but the FTPA is now dead so an election can be called any time) and the 50% increase is much more achievable in that time frame.

In 2013 (eight years ago), the minimum wage was £6.31. It's now £8.91, an increase of over 40%. The labour shortage may make the minimum wage irrelevant anyway.

 

[tony84]

Its a double edged sword isnt it.
Higher wages great for individuals not so great for companies.

McDonalds, you order your food from a touch screen thing now.
Petrol, I cant recall the last time I went inside to pay.
Tesco, self checkouts.

It makes you wonder where we will be in 20 years.

 

[Chris Ashdown]

Its a double edged sword isnt it.
Higher wages great for individuals not so great for companies.

McDonalds, you order your food from a touch screen thing now.
Petrol, I cant recall the last time I went inside to pay.
Tesco, self checkouts.

It makes you wonder where we will be in 20 years.

No shops no supermarkets just online ordering and delivery apart from the shortage of white van drivers

 

[Deleted member 59730]

Well when I started work I was paid £5 a week so somehow business has survived

I can beat that! I still have the letter for my first job. £3-7s-6p

 

[Newchodge]

I think it is time the Labour party tried to do more than stab itself in the back and produce headlines that make it less likely to be elected.

What I have advocated for a long time is not minimum wage. I want proportionate wages. If the CEO is worth 8,000,000 then the lowest paid worker should be worth 80,000. If an organisation can only afford to pay its top earner (including the business owner in that) 20,000 then it probably cannot afford to employ anyone, but, if they do, the minimum wage comes into force, set at a level where the tax payer is not subsidising the business by paying benefits so the worker can afford to live.

There would need to be regulation to try to prevent a level of fraud that would probably exceed the current furlough and minimum wage frauds that go og, but it is doable.

If someone is employed in a business then that someone contributes to the business profits and the business would fail without them (otherwise, why are they there?). So reward them appropriately.

 

[tony84]

What I have advocated for a long time is not minimum wage. I want proportionate wages. If the CEO is worth 8,000,000 then the lowest paid worker should be worth 80,000. If an organisation can only afford to pay its top earner (including the business owner in that) 20,000 then it probably cannot afford to employ anyone, but, if they do, the minimum wage comes into force, set at a level where the tax payer is not subsidising the business by paying benefits so the worker can afford to live.

Im not sure this makes sense as it would be very complicated.

I used to work for a bank, I was pretty much the lowest rung on the ladder (I think there was one 1 grade lower when I started, 2 grades lower when I left). the CEO at the time when I left was on about £4m.

There were about 300 people on my floor doing the same job as me (call centre) - there was also another bigger call centre in Essex. I was paid a basic of £15k give or take when I started, which was about £17k when I left, plus bonuses, pension etc. I was happy with that back in 2007.

You imagine paying 600 people an extra grand, that is £600k. Just for people doing the same job as me. If you multiply that up to everyone on the same grade and it could quite easily be an extra million if not more.

What happens if another banks CEO took £8m, does that mean their staff should be paid double for doing the same job?

 

[DontAsk]

Conference decisions are not binding, so it's completely meaningless until it gets into a manifesto. Then it will be an "aspiration" for "when economic conditions allow" and all the other BS.

I liked Starmer's comment that getting elected was more important than party unity. I think we already have a party in government wracked by infighting. We don't need another.

 

[IanSuth]

Im not sure this makes sense as it would be very complicated.

I used to work for a bank, I was pretty much the lowest rung on the ladder (I think there was one 1 grade lower when I started, 2 grades lower when I left). the CEO at the time when I left was on about £4m.

There were about 300 people on my floor doing the same job as me (call centre) - there was also another bigger call centre in Essex. I was paid a basic of £15k give or take when I started, which was about £17k when I left, plus bonuses, pension etc. I was happy with that back in 2007.

You imagine paying 600 people an extra grand, that is £600k. Just for people doing the same job as me. If you multiply that up to everyone on the same grade and it could quite easily be an extra million if not more.

What happens if another banks CEO took £8m, does that mean their staff should be paid double for doing the same job?

Think about it this way around

The bank CEO sees paying staff in the call centre £1k less each might net him an extra £1m in profit which gets him a wedge of profit related pay - what if instead he could see his salary was capped at a multiplier of the lowest (or average) salary in his organisation so if he could find a way to both pay more to his staff and still make profit he could earn more through raising the cap

Now does it make more sense

 

[IanSuth]

Conference decisions are not binding, so it's completely meaningless until it gets into a manifesto. Then it will be an "aspiration" for "when economic conditions allow" and all the other BS.

I liked Starmer's comment that getting elected was more important than party unity. I think we already have a party in government wracked by infighting. We don't need another.

They can just write a manifesto saying "we pledge to raise min wage to £10 within 100 days and continue to raise it to £15ph as soon as practicable" and surely it meets everyone's requirements

 

[Financial-Modeller]

I agree with the many arguments that it is inflationary and in the longer term pointless to those expected to benefit and costly to the rest of us.

In addition increasing employment costs to make employing staff in UK more expensive than doing so everwhere else provides extra incentive for employers to invest in technology to replace workers, and to offshore those roles that can be performed in lower-cost countries.

 

[IanSuth]

I agree with the many arguments that it is inflationary and in the longer term pointless to those expected to benefit and costly to the rest of us.

In addition increasing employment costs to make employing staff in UK more expensive than doing so everwhere else provides extra incentive for employers to invest in technology to replace workers, and to offshore those roles that can be performed in lower-cost countries.

Which is exactly what the ERG said it wanted of Brexit (read Prof Minford's papers)

 

[MBE2017]

Which is exactly what the ERG said it wanted of Brexit (read Prof Minford's papers)

These businesses do not need the ERG to say anything, they will do whatever gives them a competitive advantage, and will do it whether good or bad for the workers of the UK.

 

[tony84]

Think about it this way around

The bank CEO sees paying staff in the call centre £1k less each might net him an extra £1m in profit which gets him a wedge of profit related pay - what if instead he could see his salary was capped at a multiplier of the lowest (or average) salary in his organisation so if he could find a way to both pay more to his staff and still make profit he could earn more through raising the cap

Now does it make more sense

No because if you then give the people at the bottom a £1k pay rise, the people higher up want a £1k pay rise, and the people higher up want a rise and so on.

The bank I worked for has around 60,000 employees (according to google). Lets forget the 60,000 people, lets assume 10,000 people were on the lowest 2 rungs. 10,000 x £1,000... The numbers do not stack up.

Added to that, by the time I left in around 2008 with my wage, bonus, profit share I was probably on around £20k. £20k for working in a call centre 13 years ago, that was a good wage. We all want more money, but I think I was on a good deal - in addition to that I was also getting a pension.

 

[Mark T Jones]

No because if you then give the people at the bottom a £1k pay rise, the people higher up want a £1k pay rise, and the people higher up want a rise and so on.

The bank I worked for has around 60,000 employees (according to google). Lets forget the 60,000 people, lets assume 10,000 people were on the lowest 2 rungs. 10,000 x £1,000... The numbers do not stack up.

Added to that, by the time I left in around 2008 with my wage, bonus, profit share I was probably on around £20k. £20k for working in a call centre 13 years ago, that was a good wage. We all want more money, but I think I was on a good deal - in addition to that I was also getting a pension.

In many environments what actually happens that bottom tier gets £1, mid tier demands £2, and top tier demands £4 to maintain the differential.

 

[Newchodge]

No because if you then give the people at the bottom a £1k pay rise, the people higher up want a £1k pay rise, and the people higher up want a rise and so on.

The bank I worked for has around 60,000 employees (according to google). Lets forget the 60,000 people, lets assume 10,000 people were on the lowest 2 rungs. 10,000 x £1,000... The numbers do not stack up.

Added to that, by the time I left in around 2008 with my wage, bonus, profit share I was probably on around £20k. £20k for working in a call centre 13 years ago, that was a good wage. We all want more money, but I think I was on a good deal - in addition to that I was also getting a pension.

You start with the people at the top. If you cannot afford to pay the people at the botom properly, how can you afford to pay the people at the top a fortune that they have not earned (because you cannot afford to pay the people at the bottom properly.)

 

[NickGrogan]

You start with the people at the top. If you cannot afford to pay the people at the botom properly, how can you afford to pay the people at the top a fortune that they have not earned (because you cannot afford to pay the people at the bottom properly.)

What makes you think the people at the top haven't earned it?

You can make the minimum wage as high as you like, but if automation or offshoring is cheaper/better then the low wage jobs will disappear anyway. You will end up with people who won't be employed because they are too expensive - what do you do with them?

If a job is made WFH (a big step) then moving that home to another country is a very small step.

 

[Deleted member 59730]

Dare I say that in the EU it is the norm to pay one or two Euro above the minimum. There is a sense of pride in saying "I'm on 2 Euro above". There is a very good reason why UK pensions and benefits are at the bottom of major country's.

 

[IanSuth]

No because if you then give the people at the bottom a £1k pay rise, the people higher up want a £1k pay rise, and the people higher up want a rise and so on.

The bank I worked for has around 60,000 employees (according to google). Lets forget the 60,000 people, lets assume 10,000 people were on the lowest 2 rungs. 10,000 x £1,000... The numbers do not stack up.

Added to that, by the time I left in around 2008 with my wage, bonus, profit share I was probably on around £20k. £20k for working in a call centre 13 years ago, that was a good wage. We all want more money, but I think I was on a good deal - in addition to that I was also getting a pension.

Except bank call centre staff are still on £20k 13 years later - A M S are Alexander Man who run the outsourced recruitment function for lloyds and £10..33 is just over £20k and it isnt even a perm role initially so no decent pension either

https://www.totaljobs.com/job/call-centre-agent-inbound/lloyds-banking-group-cws-job94776311

 

[UKSBD]

It's only really in the news because some from the left of the party are trying to put Starmer down

 

[Financial-Modeller]

...If the CEO is worth 8,000,000 then the lowest paid worker should be worth 80,000...

Has Diane Abbott crept in under a nomme de plume?

 

[Pezza55]

My wife works in the care industry. They pay their carers over minimum wage and charge nearly £30 an hour for care. It would be nearly double this if they make this increase. This is going to cripple an already struggling social care industry.

 

[tony84]

You start with the people at the top. If you cannot afford to pay the people at the botom properly, how can you afford to pay the people at the top a fortune that they have not earned (because you cannot afford to pay the people at the bottom properly.)

I was paid properly.
It was my first proper job. I had no experience apart from working on a market, getting sacked from Royal mail (I didnt deserve to get sacked from here) and sacked from UGC cinemas (I did from this job).
I started on £15k basic and within 12 months I was earning around £20k.

I think you are intentionally missing the point. If you have one person at the top and 1,000 people at the bottom. A £1,000 increase at the top is £1,000. At the bottom it is £1 million (£1,000 x 1,000 people).

I am honestly not against paying people a fair wage. But a CEOs job is to increase profits.
So what will the CEO do if they have 1,000 people getting paid big wages for a job that can be automated?

Look at my call centre job. You can press 1 to make a payment over the phone, that is keeping people out of work. Chat bots, that is keeping people out of work. The higher call centres staff wages are, the more companies will see the benefit in automating things.

 

[tony84]

Except bank call centre staff are still on £20k 13 years later - A M S are Alexander Man who run the outsourced recruitment function for lloyds and £10..33 is just over £20k and it isnt even a perm role initially so no decent pension either

https://www.totaljobs.com/job/call-centre-agent-inbound/lloyds-banking-group-cws-job94776311

I started on £15k (I actually think it was £14,700 but could be wrong). Within 12 months, I had been "promoted" which just means customer adviser to senior customer adviser. I was then on about £17k, with bonuses and my profit share (bank were profitable then) I was on £20k.

In all honesty I think £20k now for that job is still alright. There was no stress and once you have learnt the systems you can do the bulk of the job on auto pilot.