Does a minimum wage hurt unskilled & unexperienced workers?

[dingodan]

Get your point although perhaps I should have said .......It will mainly hurt those looking for work and employers.......Any Worker now paid less than minimum wage will obviously gain..

No, it's those workers who I am talking about. You imagine that the guy who is being paid £6ph will get a pay rise. But it's just as likely that the employer will look to replace the employee being paid £6ph for an employee who's skill and productivity better matches the new wage.

For some people you are right, they will just get a pay rise. But at the very bottom, the borderline, where an employer feels he is getting value at £6ph but not at £8ph, that employee is the one whose job will be at risk, the very same employee you wanted to help with an increased wage.

 

[Diablo]

How does someone on £6ph exist in Brighton ? Only with state help so we subsidise firms to pay low wages so that they can make high profits, brilliant. No wonder the country is in such a state

Surely better to work at £6 hour and get benefits to make up to living wage than do nothing and Live totally on benefits. Self esteem etc....

 

[Hampster Gull]

Yes but you also think the country is doing all right now whereas the 15 years under Labour were "a total disaster" - which is clearly total nonsense.

Firstly, they were the ones who introduced it at the start of their last watch because the Tories had previously refused to do so, so this is something that is a cornerstone of their beliefs. Secondly, there is no way on earth that Labour would raise the minimum wage beyond sustainable levels - because they didn't at any time during the FIFTEEN years they were in power and had a minimum wage in place. To suggest they would is about as lazy and realistic as saying the Tories would DESTROY the NHS if they had outright power.

Labour did leave us in a mess, just as they did the last time they were in power. But this was a good policy, and there are many more. No one party has it right on all issues, they are politicians so by nature will do things to keep power. The point I was making is that labour typically overspend, it is what they do, it's how they get their votes. I hope they don't go here but there is a real risk under pressure they will.

 

[Goldstone1976]

There is a policy in my companies that we will not pay anyone less than £12/hour, irrespective of what role they undertake. This has, very occasionally, meant that we have delayed hiring someone until we are certain that we have the demand for that person (since we consider that laying someone off within a year of employing them is unquestionably a management error - beyond a year and it could be the fault of external factors, but not within 12 months). Very occasional probably equals 4 or 5 prospective employees being not hired for up to 6 months in each case over the last 5 years.

 

[Lord Bracknell]

Surely better to work at £6 hour and get benefits to make up to living wage than do nothing and Live totally on benefits. Self esteem etc....

No doubt. But it's a great way to ensure that the State gets to subsidise businesses who like to keep their contribution to wage costs as low as possible.

 

[Guy Fawkes]

The downside to the minimum wage is that it increases companies operating costs, and businesses that staffing costs make up a high level of it's total costs can suffer as they are less able to absorb the increases without putting up prices to its consumers and pass these costs on.

If they are things that are mainly consumed by the same low earners that are recieving the minimum wage, there isn't that much of a benefit in terms of buying power and it's increased the costs of living.

Secondly, Businesses who were traditionally paid good wages (typically above market value) are less likely to do so in the future as they know that they don't have to pay as much any more and can shrink their costs down to the minimum wage by only paying the minimum wage to new employees, and giving only a very small annual increase in wage or even none at all to those already working there until they match each other.

So it may not hurt those who were being paid less than the minimum wage before it was introduced, or those joining the workforce, but it could detrimentally affect those who already work in a similar environment or in similar circumstances who may find their purchasing power reduced as a result.

An example might be a quite country / village pub with limited potential customers and turnover. The pub would still need to employ staff to serve, but their running costs would have increased and the only way they can recoup this is to pass some of that cost onto the punter by increasing the prices of drinks / food. Go up too much and people look for alternatives or reduce the number of times they visit, possibly leading to a drop in income and suddenly a viable business becomes unable to sustain itself and disappears, affecting the community. (also see village shops and other smaller businesses)

 

[Diego Napier]

Labour did leave us in a mess, just as they did the last time they were in power. But this was a good policy, and there are many more. No one party has it right on all issues, they are politicians so by nature will do things to keep power. The point I was making is that labour typically overspend, it is what they do, it's how they get their votes. I hope they don't go here but there is a real risk under pressure they will.

Can you provide some specifics to back up your sweeping generalisation? I should imagine that income and expenditure under Tory and Labour governments would be comparable (even though the national debt has climbed to dizzying heights under the current administration), it's just that they have differing priorities; Labour administrations seek to redistribute wealth more evenly across the population, the Tories don't.

 

[Pretty pink fairy]

just get more foreigner's into the country ................ sorted
regards
DR

 

[Herr Tubthumper]

My take is that I want the economy built on wages which people can afford to live on. If we can't, then what's the point?

 

[Herr Tubthumper]

The downside to the minimum wage is that it increases companies operating costs, and businesses that staffing costs make up a high level of it's total costs can suffer as they are less able to absorb the increases without putting up prices to its consumers and pass these costs on.

If they are things that are mainly consumed by the same low earners that are recieving the minimum wage, there isn't that much of a benefit in terms of buying power and it's increased the costs of living.

Secondly, Businesses who were traditionally paid good wages (typically above market value) are less likely to do so in the future as they know that they don't have to pay as much any more and can shrink their costs down to the minimum wage by only paying the minimum wage to new employees, and giving only a very small annual increase in wage or even none at all to those already working there until they match each other.

So it may not hurt those who were being paid less than the minimum wage before it was introduced, or those joining the workforce, but it could detrimentally affect those who already work in a similar environment or in similar circumstances who may find their purchasing power reduced as a result.

An example might be a quite country / village pub with limited potential customers and turnover. The pub would still need to employ staff to serve, but their running costs would have increased and the only way they can recoup this is to pass some of that cost onto the punter by increasing the prices of drinks / food. Go up too much and people look for alternatives or reduce the number of times they visit, possibly leading to a drop in income and suddenly a viable business becomes unable to sustain itself and disappears, affecting the community. (also see village shops and other smaller businesses)

My take is that there are other ways to save costs as well, by being more efficient, innovative and doing "smarter" business. I think the minimum wage will encourage companies to perform better. And those which are stuck in their ways will struggle...which might not be a bad thing for the customer as it will weed out the dead wood.

 

[Herr Tubthumper]

Surely better to work at £6 hour and get benefits to make up to living wage than do nothing and Live totally on benefits. Self esteem etc....

Surely it's better to build the economy on decent living wages with decent job? This would be my aim...not an economy propped up by tax payers.

 

[beorhthelm]

How does someone on £6ph exist in Brighton ? Only with state help so we subsidise firms to pay low wages so that they can make high profits, brilliant. No wonder the country is in such a state

No doubt. But it's a great way to ensure that the State gets to subsidise businesses who like to keep their contribution to wage costs as low as possible.

what i never understand about this "state subsidy for business" is why anything thinks the state wants to subsidise business. Labour is not in favour of furthering business interests and Conservatives are not in favour of either the state or subsidies. so are they both actually working against key principles? or is the propostion just nonsence and the state subsidises individuals? since we're talking about minimum wage, isnt that contraditory to the business subsidy idea anyway?

from the business side it makes little sense, they pay a wage determined on ecomonic value of that role, productivity, market rate for skills. it doesnt take into account the financial situation of the workforce because it doesnt know. two people interview for a job, they have no idea if one is the other half of an IT consultant and the other the other half of a junior admin. one will likely be getting benefits and not the other, but the same wage is on offer for the job. considering much of the lower paying jobs are part time or temporary, employing those without many commitments or second (third?) earners, then it starts to look daft saying business is setting wages on the basis of what the state benefits provides.

 

[The Spanish]

No doubt. But it's a great way to ensure that the State gets to subsidise businesses who like to keep their contribution to wage costs as low as possible.

what about enterprise zones, or infrastructure projects. just because its actual cash in peoples pockets, is this view of it assisting employers to shirk their responsibilities just personalising a wider issue of state involvement in economic development.

See this sort of worries me. if they were throwing money at bus lanes with a perceived economic benefit then i am sure the line would be different. why shouldnt employers stump up the bill to get their employers to work more efficiently? because its not as visible as personal or 'fat cat' like?

very glib i know, but i am sure you get my point. are peoples views on state intervention on economic development as rational or objective as they could be?

 

[Guy Fawkes]

Can you provide some specifics to back up your sweeping generalisation? I should imagine that income and expenditure under Tory and Labour governments would be comparable (even though the national debt has climbed to dizzying heights under the current administration), it's just that they have differing priorities; Labour administrations seek to redistribute wealth more evenly across the population, the Tories don't.

I don't believe that, they seek to put into place policies that suit the sort of people that vote for them and there are a lot fo people who struggle to get by and don't benefit from their policies.

They tend to create employment in public sectors (whether the roles are actually needed or not and just make good headlines - extra cash for the Police or the NHS or whatever sounds great, but if most of it went on unnessessary bureaucracy and pencil pushers just to give them employment or it gets spent on unnessessary equipment to use up their annual budgets at the end of the financial year rather than where the public tends to think the extra will go, ie. front line services so extra nurses, drs, police officers on the street, etc)

These roles have to be funded by the tax payer, and paid for through tax revenues, the more people in the public sector, the higher it costs the country and the less people there are whose earnings originate from outside the state and therefore its surely better to have businesses that make themselves money to pay for employees and then also pay taxes to the state which can fund the public services we all want.

How do you get private business to thrive? - it's certainly not to tax it to death or complain that any tax cuts the Tories give are just tax breaks to the rich.

A strong private economy should help you have a strong public sector by helping to fund it, but overspend on the public sector whilst strangling the private sector just causes major financial issues and can crash an economy, especially whent he Government coffers run dry (like the struggling European economies that needed bail outs, and even the US who had issues funding their public services and Congress nearly didn't pass the bill that let them pass a spending cap and if they hadn't, then public services would have been shut down to save that money (3 day weeks, etc))

 

[Herr Tubthumper]

what about enterprise zones, or infrastructure projects. just because its actual cash in peoples pockets, is this view of it assisting employers to shirk their responsibilities just personalising a wider issue of state involvement in economic development.

See this sort of worries me. if they were throwing money at bus lanes with a perceived economic benefit then i am sure the line would be different. why shouldnt employers stump up the bill to get their employers to work more efficiently? because its not as visible as personal or 'fat cat' like?

very glib i know, but i am sure you get my point. are peoples views on state intervention on economic development as rational or objective as they could be?

I see where you're coming from but one would expect that "enterprise zones, or infrastructure projects." are strategically chosen for benefit above and beyond just directly putting wedge in people's wallets. Propping up Tescos low-paid staff only seems to benefit Tesco shareholders.

 

[Herr Tubthumper]

I don't believe that, they seek to put into place policies that suit the sort of people that vote for them and there are a lot fo people who struggle to get by and don't benefit from their policies.

They tend to create employment in public sectors (whether the roles are actually needed or not and just make good headlines - extra cash for the Police or the NHS or whatever sounds great, but if most of it went on unnessessary bureaucracy and pencil pushers just to give them employment or it gets spent on unnessessary equipment to use up their annual budgets at the end of the financial year rather than where the public tends to think the extra will go, ie. front line services so extra nurses, drs, police officers on the street, etc)

These roles have to be funded by the tax payer, and paid for through tax revenues, the more people in the public sector, the higher it costs the country and the less people there are whose earnings originate from outside the state and therefore its surely better to have businesses that make themselves money to pay for employees and then also pay taxes to the state which can fund the public services we all want.

How do you get private business to thrive? - it's certainly not to tax it to death or complain that any tax cuts the Tories give are just tax breaks to the rich.

A strong private economy should help you have a strong public sector by helping to fund it, but overspend on the public sector whilst strangling the private sector just causes major financial issues and can crash an economy, especially whent he Government coffers run dry (like the struggling European economies that needed bail outs, and even the US who had issues funding their public services and Congress nearly didn't pass the bill that let them pass a spending cap and if they hadn't, then public services would have been shut down to save that money (3 day weeks, etc))

I agree Labour do create more public sector jobs. But only because they need to employ more staff as the Tories usually run public services into the ground and strip them down. Well this, or flog them cheaply.

 

[Soulman]

I don't believe that, they seek to put into place policies that suit the sort of people that vote for them and there are a lot fo people who struggle to get by and don't benefit from their policies.

They tend to create employment in public sectors (whether the roles are actually needed or not and just make good headlines - extra cash for the Police or the NHS or whatever sounds great, but if most of it went on unnessessary bureaucracy and pencil pushers just to give them employment or it gets spent on unnessessary equipment to use up their annual budgets at the end of the financial year rather than where the public tends to think the extra will go, ie. front line services so extra nurses, drs, police officers on the street, etc)

These roles have to be funded by the tax payer, and paid for through tax revenues, the more people in the public sector, the higher it costs the country and the less people there are whose earnings originate from outside the state and therefore its surely better to have businesses that make themselves money to pay for employees and then also pay taxes to the state which can fund the public services we all want.

How do you get private business to thrive? - it's certainly not to tax it to death or complain that any tax cuts the Tories give are just tax breaks to the rich.

A strong private economy should help you have a strong public sector by helping to fund it, but overspend on the public sector whilst strangling the private sector just causes major financial issues and can crash an economy, especially whent he Government coffers run dry (like the struggling European economies that needed bail outs, and even the US who had issues funding their public services and Congress nearly didn't pass the bill that let them pass a spending cap and if they hadn't, then public services would have been shut down to save that money (3 day weeks, etc))

A sensible post.

 

[The Spanish]

I see where you're coming from but one would expect that "enterprise zones, or infrastructure projects." are strategically chosen for benefit above and beyond just directly putting wedge in people's wallets. Propping up Tescos low-paid staff only seems to benefit Tesco shareholders.

or generating additional economic activity in the wider economy, unless of course the employees spend all their wages in Tesco. See thats exactly my point, its too personal to be effectively dispassionate or objective about.

 

[Herr Tubthumper]

or generating additional economic activity in the wider economy, unless of course the employees spend all their wages in Tesco. See thats exactly my point, its too personal to be effectively dispassionate or objective about.

But if the money is spent on a new road, we get a new road plus the "additional economic activity in the wider economy."

 

[beorhthelm]

heres a question, are benefits propping up low-wage business, or are businesses propping up benefits with low-paid jobs?


thinking about the apparent conflict between minimum wage and benefits, i wonder how many would support a natural conclusion: state funded minimum income, provided to all set at the living wage rate. people would be able to chose whether they go to work or not, and apparently those chosing not would be able to live pleasantly. wages would be pushed up for those that wish to work as the labour market would drastically shrink. productivity in theory would go up as only those keen and interested in work would do so, so business and industry would benefit. interesting proposition i read recently which is essentially a take on Green's minimum income. would it work or would everyone still want more and therefore just create a massive raise in state liability?