[Politics] The Breakthrough Party.

[BadFish]

WZ has answered your second question. As to your first, they've always banged on about introducing and raising the minimum wage as being inflationary. It hasn't been thus far.
Hiking it up really quickly would do that though. The logic is quite simple: you increase wages by that amount, you're basically pumping extra money into the economy. But you're not immediately increasing the goods, services, etc on sale. That means there's more money chasing a static range of goods, which induces price increases, hence inflation.

I too am an economics numpty but theoretically does this mean that if a company acan find away to increase wages by cutting costs elsewhere then inflation remains unaffected?

My thinking here is the gap between CEO salary and worker wages. Obviously not so relevant for smaller companies but surely if this gap was closed in larger companies it means more cash on the hips for more workers, this means more money going back into the economy so the smaller companies can increase wages too?

Is it as simple as trying to redirect the money that is sitting in the Cayman islands etc back into the economy through the workers?

 

[Harry Wilson's tackle]

absolutely, because anyone with at least half a brain cell knew whilst acknowledging EU membership wasn't a perfect system the alternative was the current clusterfkc we find ourselves today. Do you think you got value for the FOM you traded in? Or is it the usual keep believing / wait another 20 years?

Even Farage says it's failed

Do you still not have wokewanka on ignore?

It will do a bundle for your blood pressure

 

[pastafarian]

You don't want a bunch of grubby lefties f***ing up the country. That's what your public school toffs are for

Disappointed you are not the messiah i thought you had become.

 

[Harry Wilson's tackle]

A minimum wage is there to stop that pressure at the bottom. Still need quite a lot of those workers, but now the employer has to stump for Visa fees too. Obviously don't need quite as many as before, now that a lot of businesses have moved their warehousing and distribution to Belgium or Holland, ya prick.

You don't have wokewanka on ignore? Sort yourself aaaht mate!

 

[Randy McNob]

Thank you.

Basically if it concerns: CEOs, shareholders, bankers, Politicians, millioinaires, Tory party donors,... plenty of money about and does not tinker with inflation one iota. If it concerns ordinary people on a basic wage, sorry we're poor and any more money would drive up inflation so you have to be poor as well

 

[pastafarian]

A sudden ramp up the the NMW to £16 an hour would see a significant number of people of universal credit no longer entitled.
Is this the plan by this party to get people off benefits? Or would a rise to £16 an hour also be accompanied with universal credit entitlement rates substantially increasing to match the sudden wage increase?
Surely an annual increase to that level is better than such a dramatic surge.

 

[clapham_gull]

Reading a book about left wing politics at the moment and was reminded of how many incarnations it has. Corbyn (and I'd imagine this party) are the "new left" somewhat a product of 1960s student politics even if they don't know it. They didn't invent socialism only somewhat redefined it.

 

[Harry Wilson's tackle]

That’s a £29k salary.

In France it’s (the GBP equivalent) £17.6k, Netherlands £20k, Spain £12k, Italy nil. There must be a reason why this mix of socialist and centre right governments don’t set their at €33.7k.

Should an unskilled or semi skilled 22 year old be guaranteed a £29k salary, should someone of any age changing vocations with no skill set yet receive that salary, what about small employers such as cafes making minuscule profits/losses be required to pay £16ph to all employees?

But £29k does sound right as a minimum imho for someone very experienced in their roles working for employers not on the breadline. It’ll take years to get there though.

Sorry, not following. Are you in favour of a minimum wage, and in favour of increasing it or not, not?

I am in favour. The companies that can't afford it can then go bust, and more efficient companies that can afford it can take up the slack.

I'm not being entirely facetious here.

 

[BadFish]

That’s a £29k salary.

In France it’s (the GBP equivalent) £17.6k, Netherlands £20k, Spain £12k, Italy nil. There must be a reason why this mix of socialist and centre right governments don’t set their at €33.7k.

Should an unskilled or semi skilled 22 year old be guaranteed a £29k salary, should someone of any age changing vocations with no skill set yet receive that salary, what about small employers such as cafes making minuscule profits/losses be required to pay £16ph to all employees?

But £29k does sound right as a minimum imho for someone very experienced in their roles working for employers not on the breadline. It’ll take years to get there though.

Should the question be shifted slightly to: should someone working full time in a job be able to pay their rent, eat, clothes their children and may enjoy a little leisure time once in a while?

Currently working people are relying on food banks and making the choice between heat and food. All in one of the best economies in the world.

Where is the money going?

 

[BadFish]

Disappointed you are not the messiah i thought you had become.

Who says I am not.

It is easier to pass a camel through the eye of a needle . . . .

 

[dsr-burnley]

Should the question be shifted slightly to: should someone working full time in a job be able to pay their rent, eat, clothes their children and may enjoy a little leisure time once in a while?

Currently working people are relying on food banks and making the choice between heat and food. All in one of the best economies in the world.

Where is the money going?

And that's where a case study would be useful. I have still never seen a proper case study of the income and expenditure of a person who needs food banks and yet is receiving proper pay and statutory benefits. Does such a case study exist?

 

[BadFish]

Disappointed you are not the messiah i thought you had become.

A woman at work saw my fish profile pic and thought this was a religious site and thought she had found a kindred spirit

 

[pastafarian]

Sorry, not following. Are you in favour of a minimum wage, and in favour of increasing it or not, not?

I am in favour. The companies that can't afford it can then go bust, and more efficient companies that can afford it can take up the slack.

I'm not being entirely facetious here.

Bit harsh saying the numerous small businesses in this country who have a tiny workforce can go bust.
This country has a large pool of self employed businesses who operate on very thin margins. A sudden rise in the minimum wage to the one being advocated would see many small businesses simply not able to keep employees on in the short term.
Surely its more sensible to increase the NMW each year in smaller increments

 

[beorhthelm]

I too am an economics numpty but theoretically does this mean that if a company acan find away to increase wages by cutting costs elsewhere then inflation remains unaffected?

My thinking here is the gap between CEO salary and worker wages. Obviously not so relevant for smaller companies but surely if this gap was closed in larger companies it means more cash on the hips for more workers, this means more money going back into the economy so the smaller companies can increase wages too?

Is it as simple as trying to redirect the money that is sitting in the Cayman islands etc back into the economy through the workers?

if a company can cut cost that might mean no price increase, so less inflation from supply side. it wouldnt affect demand side because, unless the company was massive proportion of economy, it would be negligable overall. however one company puting up wages puts up wages for others in same industry, then related and eventually wider industry.

the CEO salary is slightly inflationary, however since its for such a small number of people the aggregate affect is also minor. this is the part so many overlook, the aggregate affect of many people suddenly getting a rise, without any productivity to absorb it, would rocket demand and cause inflation. these are recognised principles by about every economist around the world.

we just had a decade of loose monetry policy with QE, which did raise asset prices while we did not see much inflation across major markets (2% targets here, Europe and US about hit or under). then we have a shock where we pumped billions directly into peoples pockets, increasing demand while having a supply constraint (China slow reopen), and lo we have inflation shooting above target. then we have a supply shock to energy and basic prices, so inflation soars. this all demonstrates the theory on inflation is well understood and known from decades of previous observation: numbers moved as expected. when the economic theory says short term substantial rise in pay will lead to more inflation, we can be fairly confident its right.

 

[pastafarian]

I'm waiting for some relatively radical (and non-spiteful) moves from Starmer and Reeves.

Starting to box themselves into a 'little change' agenda, this week announcing no increase in income tax for higher earners. I agree that no tax should be greater than 45% .... it really would only serve to discourage enterprise, graft, go the extra mile through years of difficult professional exams.

New housing should be the number one target, via shared ownership and housing associations. We need 3m new homes. Achieve that and wellbeing goes up in a big way. Just for starters.

What we need is to increase the population and have more people.
That will solve the lack of housing crisis.

 

[beorhthelm]

Sorry, not following. Are you in favour of a minimum wage, and in favour of increasing it or not, not?

I am in favour. The companies that can't afford it can then go bust, and more efficient companies that can afford it can take up the slack.

I'm not being entirely facetious here.

the discussion isnt about a minimum wage in principle. its about >50% increase immediately. if a business major expenditure increases 50%, what do you suppose happens to the business?
assuming others will take up the slack is very neoliberal view, they will, but it will take time.

 

[BadFish]

if a company can cut cost that might mean no price increase, so less inflation from supply side. it wouldnt affect demand side because, unless the company was massive proportion of economy, it would be negligable overall. however one company puting up wages puts up wages for others in same industry, then related and eventually wider industry.

the CEO salary is slightly inflationary, however since its for such a small number of people the aggregate affect is also minor. this is the part so many overlook, the aggregate affect of many people suddenly getting a rise, without any productivity to absorb it, would rocket demand and cause inflation. these are recognised principles by about every economist around the world.

we just had a decade of loose monetry policy with QE, which did raise asset prices while we did not see much inflation across major markets (2% targets here, Europe and US about hit or under). then we have a shock where we pumped billions directly into peoples pockets, increasing demand while having a supply constraint (China slow reopen), and lo we have inflation shooting above target. then we have a supply shock to energy and basic prices, so inflation soars. this all demonstrates the theory on inflation is well understood and known from decades of previous observation: numbers moved as expected. when the economic theory says short term substantial rise in pay will lead to more inflation, we can be fairly confident its right.

The main problem with this idea is the speed that we are assuming they want to bring it in.

I haven't read the manifesto for this party but perhaps the £16 figure is not an immediate hike and more a medium term goal with a plan of how to achieve it without causing issue.

Essentially surely a living wage is a reasonable goal for a political party. There may be some discussion about how to get there but as a goal it seems sensible.

Do any other parties have this as a goal? I am guessing the Tories don't.

 

[The Clamp]

And that's where a case study would be useful. I have still never seen a proper case study of the income and expenditure of a person who needs food banks and yet is receiving proper pay and statutory benefits. Does such a case study exist?

In order to receive access to a food bank a person has to have an assessment which will include all the above criteria and more.

It’s a myth that benefits cover everything. For example if the government decide that your private rented accommodation is worth £500 a month but your landlord decides it’s worth £750, there’s £250 you have to find each month.

I think it’s all covered in one payment on UC these days .

A few years ago when I had to use benefits it was all separate and I was actually paid more housing benefit than I paid in rent. The benefits office told me to keep the difference or split it with my landlord!

Those days are well and truly over. Which is good but it seems to have now swing the other way.

Anyway, sorry, I’ve got off the point .

Access to food banks is means tested and I imagine it’s rather strict. Tory’s will be trying to exclude as many as possible to keep stats low.
So I’m imagining you have it be in pretty dire straits before the government gives you access to food.

 

[Weststander]

Should the question be shifted slightly to: should someone working full time in a job be able to pay their rent, eat, clothes their children and may enjoy a little leisure time once in a while?

Currently working people are relying on food banks and making the choice between heat and food. All in one of the best economies in the world.

Where is the money going?

Then it’s a regional problem too. Far, far cheaper by a mammoth amount to meet basic housing costs in Teesside than Brighton. £29k or £58k for a working couple in Teesside will be laughing and some. In Brighton that’s surviving.

Answering your final point, the two biggest bills are:
Groceries - 18% inflation in the last 12 months, on top of a base that was already accelerating away. 16.4% in the EU, so not a Brexit issue. A perfect storm that started with the pandemic. Haven’t an answer.
Rent or mortgage interest - many Brits have lived on a low interest rates boom largely for 25 years. There was little benefit unless downsizing two years ago, it only served to increase house prices by 6x or 7x, screwing people who wanted to be first time buyers. Now higher rates will destroy households, renters aren’t immune. Where’s that money going … lost into the ether as central banks have taken that money (mortgage interest) out of the economy forever. But part of this is a rip off by mortgage lenders who’ve dramatically increased the margin they make on mortgage > savings rates.

Widening the discussion, when its said we’re the x biggest economy, they mean the churn/production of goods and services. More salient to the man on the street is that the low interest rates led to 2.5m paper millionaires, 280,000 households have wealth of £3.5m plus. In real estate and vast funds with wealth managers.

To tap into this, I really wonder if we now have to implement a small wealth tax, something for many reasons I was against.

 

[pastafarian]

The main problem with this idea is the speed that we are assuming they want to bring it in.

I haven't read the manifesto for this party but perhaps the £16 figure is not an immediate hike and more a medium term goal with a plan of how to achieve it without causing issue.

Essentially surely a living wage is a reasonable goal for a political party. There may be some discussion about how to get there but as a goal it seems sensible.

Do any other parties have this as a goal? I am guessing the Tories don't.

seems like an immediate pledge

"Increase the minimum wage to a true living wage of £16, regardless of age or type of employment."

https://breakthroughparty.org.uk/policy/work/

also

"Introduce a maximum wage for companies, capping pay (including bonuses) at 20 times the salary of the lowest paid worker."