Post new topic Reply to topic  [ 6 posts ] 
Author Message
 Post subject: Minimum Wage Debate
PostPosted: Tue Oct 11, 2011 1:35 pm 
Offline
Site Admin
User avatar

Joined: Tue Aug 30, 2011 7:08 pm
Posts: 65
Debate: should we scrap the minimum wage?
As new research shows that job cuts are hitting the lowest paid hardest, we ask: is the minimum wage helping or hindering UK workers?

With unemployment on the rise and new research showing that low-paid workers are being hardest hit by job cuts, the question of how Britain can create new jobs in a stagnant economy is probably the biggest facing the coalition government at present.

As a result, the minimum wage - previously hailed as a triumph of the previous Labour government - has faced small but growing criticism since the coalition took power.

So does it offer much-needed protection to British families, or is the minimum wage simply preventing employers from offering more people work? We asked experts from two leading thinktanks to give their views.

'Why the minimum wage should be scrapped'
By Sam Bowman, head of research at the Adam Smith Institute

Too many politicians have failed to realise that they cannot change the laws of economics any more than they can ban gravity. The national minimum wage (NMW) is one example of this failure.

First introduced by the Blair government, it sets a wage floor under which no person can be employed. The hope was that this would create higher wages for the people at the bottom.

The reality was that it priced people out of work - economic reality trumped political rhetoric. The outcome has been record levels of unemployment among young people, who are most vulnerable to the joblessness that minimum wage laws help to create.

Wages are a function of productivity
What happened? Wages are a function of productivity. Employers want the best employees for the least money, and employees want the most money for the least work. If there was only one employer in the world, they could set wages at whatever they want. But once there are several employers in a marketplace, they have to compete to attract workers to work for them rather than their rivals. That causes a bidding war where wages for jobs rise to roughly correspond to what they are worth in productivity terms - just enough for the firm to make a small profit.

Wages correspond to productivity, but what about those whose productivity is low enough that they fall below the NMW floor? They are priced out of work altogether. Take the example of a supermarket, looking to hire a tenth checkout worker. This extra checkout worker might make the employer the equivalent of £5.50/hour - even if the calculation is imprecise, they usually have a rough idea of the numbers involved.

But with the NMW in place, hiring this person becomes unprofitable: at the current NMW level, they would be losing 58 pence an hour by hiring the extra worker. No firm can do that and hope to survive.

Instead, the job isn't created, the firm loses out and there is one more person in the dole queue who doesn't need to be there. The NMW cannot make people more productive, but it does put people out of work.

Those at the bottom worst hit
The worst-hit people are the ones at the bottom of society - especially young people who lack work experience. Tragically, the NMW prevents them from getting their foot on the ladder, working badly-paid jobs to gain the experience they need.

Economists studying this relationship have estimated that a 10% rise in the minimum wage level causes a 1-3% rise in youth unemployment. With Britain's youth unemployment levels at an all-time high of 19%, it's time for the government to abolish the minimum wage.

'The need for a minimum wage and much more'
By Dr Faiza Shaheen, senior researcher on economic inequality at the New Economics Foundation

A minimum wage ensures a decent pay floor. It means that the market cannot drive wages down to a level where people cannot sustain basic living. After all, what's the point of working when it doesn't even give you enough money to sufficiently feed and clothe your family?

At the end of September, the minimum wage went up to £6.08 from £5.93. Some businesses are complaining that this is too high, especially at a time when many retailers are struggling. However, at 35 hours per week this wage amounts to around £200 a week, or just under £10,000 a year once you take into account tax and national insurance contributions.

With this wage packet you would have to pay your bills, including rent and mobile phone, as well as for food, clothing and transport. Don't forget some light entertainment and squeezing out some savings for a rainy day, or perhaps a holiday. You do the sums.

Yes, there might be some help from the government in the form of tax credits, but surviving on this much money is still a stretch, especially if you have children.

No wonder one in 10 of the poorest fifth of households are behind with at least two bills.

Calls for a 'living wage'
For this reason, community groups, such as London Citizens, have been campaigning for a 'living wage'. A living wage is specific to a place - for example in London, where living and transport costs exceed other parts of the country, it is set at £8.30. This figure is calculated to ensure that people can access the goods and services that the average person in the UK believes to be essential for a decent life. Recent research showed that one in five of the UK working population is paid below a living wage.

So far, there has been little evidence to show that the minimum wage is destroying jobs, leading many to conclude it could be pushed higher. If businesses really cannot afford to pay even the basic minimum wage, then rather than lowering or abolishing the minimum wage, we should ask why it is that our economy is producing jobs that condemn our working citizens to poverty.

_________________
Image
Administrator
I've Got Kids!


Any opinions expressed by me in this forum are my own and not those of I've Got Kids (mEazy Ltd.) unless stated otherwise.


Top
 Profile  
 


 Post subject: Re: Minimum Wage Debate
PostPosted: Tue Oct 11, 2011 10:05 pm 
Offline
Site Admin
User avatar

Joined: Tue Mar 29, 2011 11:38 pm
Posts: 204
This is a really interesting topic.

When I got my first Saturday job, I was paid £4 a day. Yes, not an hour, a DAY. I worked from 7:30am until 6pm washing hair and sweeping floors and doing it well in the hope I'd get tips to make up more money!

This was at a time when my then boyfriend was earning £40 a day, so we're not talking in the time when the £ was worth a lot more...

I did quite a few different jobs paying maybe not quite that bad, but certainly lower than anyone would expect compared to today's equivalent and it taught me to aim higher. I also got valuable experience in a working environment which helped make me the person I am today.

Would I have got these jobs now? No. I was young, inexperienced and had no life experience either.

Today's youth miss out IMO due to lack of opportunities. That's my tuppence (or is that now £5.50 due to minimum wage?!)!

Aly

_________________
Image
Image Image Image

Any opinions expressed by me in this forum are my own and not those of I've Got Kids (mEazy Ltd.) unless stated otherwise.


Top
 Profile  
 


 Post subject: Re: Minimum Wage Debate
PostPosted: Wed Oct 12, 2011 9:48 am 
Offline

Joined: Wed Sep 28, 2011 4:06 pm
Posts: 67
When i started working I was on £2.50 an hour and used to do 12 hour shifts but that was just pocket money for me as a kid... However the problem I have is that they don't help people who want to get a proper job... I'm on sickness benefits ATM cause of my epilepsy and on how unstable it is... However if I was to go to work I'd actually be worse off unless I was to go for a job that is well over the top paid

I know someone who gets paid more than the minimum wage, they just started work but they are actually lot worse off now than they were before on benefits .. Now they wish they didn't take the job.. So yea I think minimum wage should be up to help people who actually want to work ... My ickle rant over


Top
 Profile  
 


 Post subject: Re: Minimum Wage Debate
PostPosted: Wed Oct 12, 2011 12:22 pm 
Offline
User avatar

Joined: Sat Sep 24, 2011 11:45 pm
Posts: 52
Location: West Yorkshire
I must say that as far as minimum wage goes, my first job paid me £20 per day (working 9 hours) back in 2003.

I am currently earning well above minimum wage at £7 an hour and £10.50 for sundays which I honestly think is ridiculous.

There should be a minimum wage for the reasons that Fallyn highlighted above, that a lot of people would be far better off on benefits than earning minimum wage and that is totally wrong!

The key here that the government doesn't seem to grasp is that you need to reduce benefits so people are encouraged to go back to work - 2.7 million unemployed in this country so it said on todays news. I appreciate as well that some are on long term sick either from a job or from finding work.

My brother is one of the NEETs (Not in Employment, Education or Training) because noone will take him on, although he is technically working (7 hours a week) and its well depressing for him, so he busies himself doing DIY projects lol since he's a trained joiner

_________________
My name is Kirsty and I am a fully trained languages teacher and currently going into retail management
Speaks English, French, Spanish and a wee bit of German (learning Italian)


Top
 Profile  
 


 Post subject: Re: Minimum Wage Debate
PostPosted: Wed Mar 18, 2015 10:18 am 
Offline

Joined: Wed Mar 18, 2015 9:12 am
Posts: 1
However the problem I have is that they don't help people who want to get a proper job... I'm on sickness benefits ATM cause of my epilepsy and on how unstable it is..

_________________
We provide guarantee to pass test-king gmat with online exam training itil and you can also get best quality test-king toefl test mcat along with newhaven.edu mcat for your guaranteed success. artinstitutes.ed


Top
 Profile  
 


 Post subject: Re: Minimum Wage Debate
PostPosted: Sat May 02, 2015 1:12 pm 
Offline
Site Admin
User avatar

Joined: Tue Mar 29, 2011 11:38 pm
Posts: 204
I think there's a difference between not wanting people to work and then making it too easy not to bother. EG, quite often benefits are paid at a much higher rate than minimum wage. Why would someone want to earn minimum wage, when benefits give so many more benefits?

_________________
Image
Image Image Image

Any opinions expressed by me in this forum are my own and not those of I've Got Kids (mEazy Ltd.) unless stated otherwise.


Top
 Profile  
 


Display posts from previous:  Sort by  
Post new topic Reply to topic  [ 6 posts ] 


Who is online

Registered users: No registered users


You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum

Search for:
Jump to:  
cron




© Meazy Ltd.
"I've Got Kids" is a trading name of mEazy Ltd. Some images are © Dreamstime.com, with thanks.
Terms & Conditions | Privacy Policy | About Us | Advertise with Us | Contact Us

Our forums are powered by phpBB © 2000, 2002, 2005, 2007 phpBB Group
The theme and graphics are the sole property of Meazy Ltd. All rights reserved!
[
SEO MOD © 2007 StarTrekGuide ]