Minimum Wage,£7 an hour

[mph1977]

Hoofy said:

Wonder if it should be tiered. A small business might struggle to pay someone £8 an hour.

A tiered NMW would distort the labour market excessively. It would also be ineffective anywhere there wad the slightest competition for staff at the bottom end of the pay scale.

Moving to a minimum wage = living wage will require significant hand back employers via lower employer NICs, corporation tax and business rates.

[jonah35]

johnS2000 said:

Will not make any difference whatsoever.

More employers will turn to agency and "0" hour contracts .

Exactly. Or just make do and not recruit/expand.

Small shops, small businesses will just have the owner working longer hours, looking to pay cash and off the books, zero hours or self employed. I'm not saying this is right but to pay £300 plus pw plus a pension, plus holiday pay for some person of limited skill to do something is quite a big chunk.

[Hoofy]

That's why I think it should be tiered. Small businesses would try their hardest to avoid having to pay £8ph in whatever legal way is possible.

[jonah35]

What I know though is how the people not on benefits don't know just how much people on benefits get.

Free cars, free council tax, free housing, free prescriptions, pension credits, tax credits, ESA, DLA. Carers allowance, attendance allowance and so on.

[Hoofy]

I get the jist of what you are suggesting - big business is subsidised by the taxpayer.

[RYH64E]

johnS2000 said:

Will not make any difference whatsoever.

More employers will turn to agency and "0" hour contracts .

Agencies employ the staff and will have to pay the minimum wage, any increase will be passed on.

Zero hour contracts are still subject to the minimum wage, it's the hours worked that vary not the hourly rate paid.

[Stevanos]

It is a self defeating policy that will reduce the number of people in employment.

That said, I don't see why the tax payer should be subsidising companies like Tesco with tax credits for their staff.

[Martin4x4]

Hoofy said:

Wonder if it should be tiered. A small business might struggle to pay someone £8 an hour.

So why should tax payers subsidise unviable businesses?

[RYH64E]

Martin4x4 said:

So why should tax payers subsidise unviable businesses?

It could be argued that a subsidised job will cost the taxpayer less than no job at all, and even an unviable business will still pay business rates, employers NI, corporation tax, VAT etc

[mph1977]

Hoofy said:

That's why I think it should be tiered. Small businesses would try their hardest to avoid having to pay £8ph in whatever legal way is possible.

interestingly with reference to use of agency and/or ZHCs

a tiered minimum wage may reduce the use of agency workers in favour of fixed term contracts employed by the company - particularly for the various 'peak seasons' in different sectors ( i.e.summer / harvest peak in the food industry , christmas peak in retailing and logistics ) - the leisure and hospitality industries have done this for many years (e.g. holidays reps / redcoats etc and there aresome people who make it a year round job by doing both the Seaside / summer seasons and the winter sports seasons)

why ? increasingly the Agencies are larger and larger businesses with many hundreds of staff on their books , so may attract the higher rate of NMW under a tiered system

Pay in the uK is distorted by the be-goatteed and powerfully built company directors who need to have the trappings of success even when their comapny is still relatively small or is not earning that much...

the worst offenders with ZHCs seem to be retail and it;s directly employed staff - this is totally seperate to agency - increasingly agency is used as a prolonged (paid) work trial / interview process as well as demand matching - i.e. you get agency staff in to cover peak and then keep ( and move on to direct employment) the best performers as attrition replacements / to cover expansion ....

It also seems that one ofthe problems with ZHCs has been the mis-use of ZHCs by junior management in some cases supprted by senior management exclusivity clauses, favouritism etc etc ...

[MrOrange]

johnS2000 said:

More employers will turn to agency and "0" hour contracts .

Partly. And also use outsource / freelancers where practicable.

The world of ancient productionised working practices are evolving in our post-industrial society and that's going to have a greater impact than £7 or £8 minimum wage. People are already working more flexible hours, becoming location agnostic and adjusting their expectations so outright cash is becoming less important than working environment, workplace flexibility and social/family empathy.

However, a couple working hard for 37hrs at 7 quid an hour will be touching £30k pa. .

[RYH64E]

There appears to be a misconception about the costs of agency staff, in my experience the cheapest agency staff will cost about £9.50 per hour. The agency will pay minimum wage, employers NI, holiday pay and pension, on top of that they will want to make a profit. The benefit to a company is flexibility, not cost.

If minimum wage goes up to £8 per hour agency rates will go up to £13ish per hour, the costs will be passed on. Not necessarily a bad thing imo.

Edited by RYH64E on Sunday 21st September 11:12

[vanordinaire]

Of course anyone could survive on the UK minimum wage. The worldwide average wage is £928 per month, and at the bottom of the scale more than a third of the worlds workers earn less than £1.50 per day. It's only a matter of having a lifestyle that matches your income. I wouldn't like to do it (bye-bye 6 cars , motorbikes, horses etc) but I'm pretty sure I could if I had to.

[mph1977]

RYH64E said:

There appears to be a misconception about the costs of agency staff, in my experience the cheapest agency staff will cost about £9.50 per hour. The agency will pay minimum wage, employers NI, holiday pay and pension, on top of that they will want to make a profit. The benefit to a company is flexibility, not cost.

If minimum wage goes up to £8 per hour agency rates will go up to £13ish per hour, the costs will be passed on. Not necessarily a bad thing imo.

Edited by RYH64E on Sunday 21st September 11:12

for the first 12 weeks an agency worker does not have to be paid the same rate as an employee doing the same same job . so even with the Agency commission / profit this can be substantially cheaper. in some places the difference between agency workers and legacy company workers can be pounds an hour after bonuses etc.

even after the 12 weeks the agency staff are not entitled to bonus payments etc - even though in some cases the agency staff are the ones who prop the bonus up ( yes Parcelforce hubs ... it's you we are looking at here - legacy CWU staff higher rate of pay, uniform (despite not beign public facing) and up to 100 gbp / week bonus where PFW casuals and agency no bonus, no uniform or clothing allowance and no bonus despite the bonus being on things the agency and casuals do ) the small numbero f PFW casuals means agency can be kept on lower rates of pay ...

there are also other practices which mean agency workers can be kept on a lot lower money after the 12 week period is up ( assuming they last that long)

an agency worker can have htier work ended without any kind of disciplinary process , the engaging organisation just needs to indicate 'don't send this person again ' absolutely no come back whatso ever unless someone is stupid enough to make a statement that it;s aobut a protected characterisitic under the equality act.

[Hoofy]

Martin4x4 said:

Hoofy said:

Wonder if it should be tiered. A small business might struggle to pay someone £8 an hour.

So why should tax payers subsidise unviable businesses?

We're not talking about unviable businesses but small businesses that can happily operate with a cheaper rate but instantly making things 15% more expensive would just make things more difficult. Not only is it keeping the employee or two in employment but it's keeping the business owner (or director) in employment.

[RYH64E]

mph1977 said:

for the first 12 weeks an agency worker does not have to be paid the same rate as an employee doing the same same job . so even with the Agency commission / profit this can be substantially cheaper. in some places the difference between agency workers and legacy company workers can be pounds an hour after bonuses etc.

even after the 12 weeks the agency staff are not entitled to bonus payments etc - even though in some cases the agency staff are the ones who prop the bonus up ( yes Parcelforce hubs ... it's you we are looking at here - legacy CWU staff higher rate of pay, uniform (despite not beign public facing) and up to 100 gbp / week bonus where PFW casuals and agency no bonus, no uniform or clothing allowance and no bonus despite the bonus being on things the agency and casuals do ) the small numbero f PFW casuals means agency can be kept on lower rates of pay ...

there are also other practices which mean agency workers can be kept on a lot lower money after the 12 week period is up ( assuming they last that long)

an agency worker can have htier work ended without any kind of disciplinary process , the engaging organisation just needs to indicate 'don't send this person again ' absolutely no come back whatso ever unless someone is stupid enough to make a statement that it;s aobut a protected characterisitic under the equality act.

This is a discussion about minimum wage, how can agency workers be paid less than someone doing the same job on minimum wage>

[Roverload]

I'm all for that, I earn less than 250 a week and I'm getting fed up with it considering I work my bks off!

[Countdown]

vanordinaire said:

Of course anyone could survive on the UK minimum wage. The worldwide average wage is £928 per month, and at the bottom of the scale more than a third of the worlds workers earn less than £1.50 per day. It's only a matter of having a lifestyle that matches your income. I wouldn't like to do it (bye-bye 6 cars , motorbikes, horses etc) but I'm pretty sure I could if I had to.

Not sure how your maths stacks up to be honest.

Worldwide average wage is irrelevant because worldwide living costs will be lower than cost of living in the UK.

[turbobloke]

Hoofy said:

Martin4x4 said:

So why should tax payers subsidise unviable businesses?

We're not talking about unviable businesses but small businesses that can happily operate with a cheaper rate but instantly making things 15% more expensive would just make things more difficult. Not only is it keeping the employee or two in employment but it's keeping the business owner (or director) in employment.

Exactly.

On a wider perspective, Labour politicians and their spinners don't understand economics anyway, as we've seen at various times from the 1970s to 2010 and on.

The timing of this announcement on their latest spending spree using other people's money / pushing up costs for businesses and households shows that the most important point for them in all this is English politics and devo-max which has skewered Labour.

They can't answer a straight question at the best of times and admitting they now face potential political oblivion (ably assisted by Miliband and Winky) calls for an eye-catching diversion to grab headlines. £8 NMW anyone?

[rover 623gsi]

£8ph for NMW by 2020 isn't that much of an increase on what it is now. The rate is going up in October to £6.50ph from £6.31 so to get a rate of £8ph by the end of the next parliament only requires an increase of 25p each year - more than the inflation but hardly ground-breaking. It will probably go up by nearly as much even if the Tories win the next election.

Edited by rover 623gsi on Sunday 21st September 13:15