Thoughts on new minimum wage rate?

[HFE Signs]

As I'm sure you are all aware, the minimum wage increases to £10.18ph for those 21yrs and over with the National Living Wage increasing to £10.42ph

In principle, I agree that we should all pay a fair rate to our staff across the board, but the difficulty is maintaining differentials with a bottom end jump of 10.9%

What are you guys doing this year?

 

[Newchodge]

As I'm sure you are all aware, the minimum wage increases to £10.18ph for those 21yrs and over with the National Living Wage increasing to £10.42ph

In principle, I agree that we should all pay a fair rate to our staff across the board, but the difficulty is maintaining differentials with a bottom end jump of 10.9%

What are you guys doing this year?

I am still waiting for someone to explain why a 20 year old, doing the same job as a 21 year old, should be paid less. Lower rate during the first year of employment may be valid. Except, of course, loads of unscrupulous employers would then sack everyone after a year's employment.

 

[HFE Signs]

I am still waiting for someone to explain why a 20 year old, doing the same job as a 21 year old, should be paid less. Lower rate during the first year of employment may be valid. Except, of course, loads of unscrupulous employers would then sack everyone after a year's employment.

Totally agree, age discrimination at its finest

 

[simon field]

I am still waiting for someone to explain why a 20 year old, doing the same job as a 21 year old, should be paid less. Lower rate during the first year of employment may be valid. Except, of course, loads of unscrupulous employers would then sack everyone after a year's employment.

I think it might be because they have a year’s more experience, or be a year more mature, and some people see that as a good thing, and therefore worth more money?

Or perhaps a good incentive to keep on working for another year to enjoy the bountiful wonders of extra cash?

Do you not think there needs to be a threshold?

 

[japancool]

I think it might be because they have a year’s more experience, or be a year more mature, and some people see that as a good thing, and therefore worth more money?

So if a 20 year old started at 19, and has a year's experience, should they be paid less than a 22 year old who started at 21 and also has a year's experience?

Of course, people are free to pay the 20 year old the same as a 22 year old. The minimum wage legislation doesn't mean you can't pay them more (yeah, I know, most won't).

 

[simon field]

So if a 20 year old started at 19, and has a year's experience, should they be paid less than a 22 year old who started at 21 and also has a year's experience?

Of course, people are free to pay the 20 year old the same as a 22 year old. The minimum wage legislation doesn't mean you can't pay them more (yeah, I know, most won't).

Not necessarily, no. But if the 22 year old has an extra year of ‘general’ work experience, due to their age- then that could be seen as working their way up the employment ladder, which can often lead to higher rates of pay. If the employer doesn’t like that, they’re free to take on a 19 year old who they simply like more.

 

[japancool]

But if the 22 year old has an extra year of ‘general’ work experience, due to their age- then that could be seen as working their way up the employment ladder, which can often lead to higher rates of pay.

Equally, the 22 year old could have taken a year off to bum around doing nothing, and still be entitled to receive more in pay, while the 20 year old has decided to get into work earlier instead of wasting time.

 

[simon field]

Equally, the 22 year old could have taken a year off to bum around doing nothing, and still be entitled to receive more in pay, while the 20 year old has decided to get into work earlier instead of wasting time.

Fair point

 

[Newchodge]

I think it might be because they have a year’s more experience, or be a year more mature, and some people see that as a good thing, and therefore worth more money?

Or perhaps a good incentive to keep on working for another year to enjoy the bountiful wonders of extra cash?

Do you not think there needs to be a threshold?

I cannot see how a threshold based solely on age is appropriate. A 23 year old may have 7 years' experience or none. A 20 year old may have 4 years' experience or none.

 

[simon field]

I cannot see how a threshold based solely on age is appropriate. A 23 year old may have 7 years' experience or none. A 20 year old may have 4 years' experience or none.

Ok, so on what should the threshold be based?

Work experience? Life experience? Travel experience?

Or just don’t have a threshold?

 

[Newchodge]

Ok, so on what should the threshold be based?

Work experience? Life experience? Travel experience?

Or just don’t have a threshold?

As there is no obvious and fair criterion, don't have a threshold. A 20 year old pays the same for a loaf of bread and pint of milk as a 21 year old.

 

[IanSuth]

Rate for apprentices on an approved course

Rate for others

That is all that is needed in legislative terms

 

[simon field]

As there is no obvious and fair criterion, don't have a threshold. A 20 year old pays the same for a loaf of bread and pint of milk as a 21 year old.

Not really. They live with mummy and daddy until they’re 43!

 

[simon field]

Rate for apprentices on an approved course

Rate for others

That is all that is needed in legislative terms

I agree, a school leaver should get the same as a 59 year old ?

 

[japancool]

I agree, a school leaver should get the same as a 59 year old ?

If they're doing the same job and are equally productive, why not?

 

[simon field]

If they're doing the same job and are equally productive, why not?

Experience?

 

[Newchodge]

Not really. They live with mummy and daddy until they’re 43!

If they have a mummy and daddy. Many don't.

 

[Newchodge]

Experience?

If experience matters they will not both be equally productive.

 

[japancool]

Experience?

If they're both equally productive, then why should one of them be paid more because they've been doing the same job for longer?

In fact, the one who's been doing the job for less time should be paid more, since clearly, they have more potential!

 

[fantheflames]

I am still waiting for someone to explain why a 20 year old, doing the same job as a 21 year old, should be paid less. Lower rate during the first year of employment may be valid. Except, of course, loads of unscrupulous employers would then sack everyone after a year's employment.

I agree. I think if you're out of out of school (18+) you should be paid the same as a 25 year old with no experience. Obviously, the older you are - in theory - the more experienced you are, but it age-based wages seems discriminatory.

 

[simon field]

If they're both equally productive, then why should one of them be paid more because they've been doing the same job for longer?

In fact, the one who's been doing the job for less time should be paid more, since clearly, they have more potential!

Nope. The more experienced person won’t have to keep asking what to do.

 

[Newchodge]

If they're both equally productive, then why should one of them be paid more because they've been doing the same job for longer?

In fact, the one who's been doing the job for less time should be paid more, since clearly, they have more potential!

Also, bear in mind we are only talking about minimum wage, not higher level jobs.

 

[BubbaWY]

Nope. The more experienced person won’t have to keep asking what to do.

Well, maybe the more experienced person should get paid more because of their experience, regardless of age?

 

[Newchodge]

Well, maybe the more experienced person should get paid more because of their experience, regardless of age?

Absolutely, as opposed to the younger (although potentially more experienced) person being paid less.

 

[HFE Signs]

My feeling is the minimum wage shouldn't be age dependent, it's a starting point for everyone - more experience and more productivity warrants more pay. I do wonder if the starting point is slightly too high though but I guess this has to be the case to stop employers abusing it and keeping people on lower rates.

 

[IanSuth]

without going over old ground the issue is we have a NATIONAL minimum wage but no national rents/housing benefits/utility bills or even bus fares.

In many ways either min wages ought to be set more locally (by regional assemblies/LEP's ?) or some other ubiquitous costs ought to be more equal.

 

[DontAsk]

Perhaps the minimum wage should start at the lower rate and increase each year you stay in a job to reflect the experience gained and showing the ability to hold down a job.

 

[HFE Signs]

without going over old ground the issue is we have a NATIONAL minimum wage but no national rents/housing benefits/utility bills or even bus fares.

In many ways either min wages ought to be set more locally (by regional assemblies/LEP's ?) or some other ubiquitous costs ought to be more equal.

Agreed, businesses have larger rents/mortgages/utility too - why do people look upon businesses as having unlimited funds? It's not really down to businesses to solve all the problems, some businesses can't afford it and are likely to collapse (thankfully not us)

 

[IanSuth]

But businesses have larger rents/mortgages/utility too - why do people look upon businesses as having unlimited funds? It's not really down to businesses to solve all the problems, some businesses can't afford it and are likely to collapse (thankfully not us)

I am arguing the same as you.

Local economy groups could set a min wage suitable for their local economy. What is a min wage in Surrey should not necessarily be the same as Cleveland, it could be tailored by those who understood the local variables

 

[HFE Signs]

I am arguing the same as you.

Local economy groups could set a min wage suitable for their local economy. What is a min wage in Surrey should not necessarily be the same as Cleveland, it could be tailored by those who understood the local variables

Updated, I didn't quite start that off right!

 

[Newchodge]

I am arguing the same as you.

Local economy groups could set a min wage suitable for their local economy. What is a min wage in Surrey should not necessarily be the same as Cleveland, it could be tailored by those who understood the local variables

I don't think there is much wriggle room. £10.42 @ 40 hours work is £21,730. Tax, NI and pension is about £4,000. Rent and council tax £9,000. Gas, electricity, water, say £3,000. That leaves about £5,350 (about £102/week) for transport, food, clothing, entertainment, holidays, saving for emergencies (SSP is less than £100/week). And that's for Cleveland. In Surrey the costs would be much higher.

 

[HFE Signs]

I don't think there is much wriggle room. £10.42 @ 40 hours work is £21,730. Tax, NI and pension is about £4,000. Rent and council tax £9,000. Gas, electricity, water, say £3,000. That leaves about £5,350 (about £102/week) for transport, food, clothing, entertainment, holidays, saving for emergencies (SSP is less than £100/week). And that's for Cleveland. In Surrey the costs would be much higher.

There you have it, the problem isn't the pay rate, its the living costs - we're just mopping up the mistakes of others

 

[japancool]

Nope. The more experienced person won’t have to keep asking what to do.

Then they wouldn't be equally productive.

 

[BubbaWY]

Then they wouldn't be equally productive.

And productivity isnt necessarily measured by experience. Someone might be more experienced, but generally work slower.

 

[IanSuth]

There you have it, the problem isn't the pay rate, its the living costs - we're just mopping up the mistakes of others

Yes unless we get into rent control which is never going to happen in the UK or we seriously change housing benefit rates (even as part of UC) then the only way to equalise "buying power" is by allowing regional pay disparity and NMW level - we have it in the NHS etc with various bandings for high costs areas (they arent just inner & outer London) I am basically talking about the equivalent of doing London weighting to NMW which would help the levelling up as well, but have it set by local people who know the local economy not a mandarin in London who has no idea

 

[HFE Signs]

Yes unless we get into rent control which is never going to happen in the UK or we seriously change housing benefit rates (even as part of UC) then the only way to equalise "buying power" is by allowing regional pay disparity and NMW level - we have it in the NHS etc with various bandings for high costs areas (they arent just inner & outer London) I am basically talking about the equivalent of doing London weighting to NMW which would help the levelling up as well, but have it set by local people who know the local economy not a mandarin in London who has no idea

In principle I agree, but then the issue on businesses is that some mail order businesses like us, have a flat rate across the UK meaning it's very difficult for the business to be competitive if they are based in a higher cost location (where you pay much more in wages). In turn this could cause a shift and be very damaging for businesses in the likes of London. Which brings me back again to the problem not being the responsibility of businesses

 

[Newchodge]

Yes unless we get into rent control which is never going to happen in the UK

It worked well until Thatcher did away with it. I expect it to be back by 2026.

 

[simon field]

Then they wouldn't be equally productive.

They might work faster

 

[MBE2017]

Yes unless we get into rent control which is never going to happen in the UK ….

Let’s hope rent control never gets introduced, it doesn’t work. Ask the Finns, they had rent controls and found it stifled investment and made the situation much worse, 11% of the rental stock was removed from their market over several years.

Once they removed rent controls and encouraged Landlords to invest, the situation improved, a 45% increase in a decade, their conclusion, based on facts, the only way to make things better for renters is to stimulate a large increase in the housing stock. The deal has to work for both the renters and landlords.

A guy I know is being made homeless, the landlord is fed up with losing money with huge increases in utilities, threatened imposed improvements in the near future which could cost him £15k per property plus the threat of rent controls, not forgetting tax changes where he can be taxed even when he makes no profit.

The landlord had asked for a 10% increase to help offset gas, electric etc, the tenant thought it was expensive, he now finds out after the eviction process has started he was paying £4-500 per month less than similar properties. The landlord had tried to help with the rental charges over the last few years, to keep a good tenant, but every camel back breaks eventually if you add to much straw.

 

[simon field]

Well, maybe the more experienced person should get paid more because of their experience, regardless of age?

Absolutely. 20 years experience trumps 2 years experience.