Minimum wage increases... and so will everything else (again)

[Grumpy Owl]

In the Chancellor's Autumn Budget Statement issued today, it was announced that the National Minimum Wage will be increasing in April 2023.

 

Quote

The National Living Wage will increase from £9.50 to £10.42 an hour in April.

That is the UK's legal minimum wage for workers aged 23 or over. There are lower rates for younger workers.

The minimum wage goes up in April every year, boosting the pay of about two million people. But the new rates are announced in advance to allow firms to prepare.

The increase in the minimum wage for over-23s will be 9.7% to help them cope with rising prices.

From: https://www.bbc.co.uk/news/uk-politics-48445674

 

Now on the surface, this all sounds very nice and "good", after all with the 'cost of living crisis' and everything going up in price due to inflation, those on minimum wage will think that they'll be getting more money in their pockets for their endeavours.

There is always one aspect to this that is always overlooked, and the BBC article merely glosses over this:

Quote

Before the minimum wage was introduced, there was concern that it would cost jobs, because employers would compensate for their higher wage bill by hiring fewer people.

But this didn't turn out to be the case.

There's no evidence of an overall loss of jobs linked to the minimum wage, and only weak evidence of negative impacts on some groups of workers.

I believe that if you look hard enough, there is plenty of evidence to suggest that ever since Labour introduced this in 1998, it has merely contributed to making things 'more expensive'.

Employers soon realised that they couldn't maintain operating costs by getting fewer people to do the same jobs, but it did mean that their operating costs increased as a result.

Companies that employ large numbers of staff who are usually paid the minimum wage, see their operating costs increase everytime the minimum wage rate is increased. All that happens is the price of that company's 'output', whether it be the cost of using their services, or the cost of buying the goods they manufacture/distribute, goes up, so the end consumer ends up paying more as a result.

It becomes a vicious circle - people 'can't afford to buy things' so the minimum wage increases, but then eventually people still 'can't afford to buy things' because everything continues to increase in price as a result.

Now I'm not saying that the minimum wage is a 'bad thing' and it shouldn't be increased, I think employees are entitled to receive a fair salary for their work, and some big companies that make huge profits could probably afford to pay their lower-skilled workers more than the bare minimum they are legally required to.

 

[Campion]

10 minutes ago, Grumpy Owl said:

It becomes a vicious circle - people 'can't afford to buy things' so the minimum wage increases, but then eventually people still 'can't afford to buy things' because everything continues to increase in price as a result.

 

Unless they make up the difference by suppressing middle-class salary rises. Combined with 'targeted support for the poorest', it takes us towards the goal of a two-tier society. 

[bamboozooka]

minimum wage is a  tool to get rid of small business

[Mr H]

the minimum wage disadvantages poor people. In the sense that many will be priced out of the market as a result who would be willing to work and therefore miss job opportunities. The market should determine prices. Also just puts the cost of goods up which means more inflation. It also causes distortions and inefficencies which can effect the buyers, as effectively in some cases an employee will be forced to pay someone the minimum wage of £10.40 when the actual value of the task maybe £5.

Edited November 17, 2022 by Mr H

[Sanityisgone]

8 hours ago, Grumpy Owl said:

In the Chancellor's Autumn Budget Statement issued today, it was announced that the National Minimum Wage will be increasing in April 2023.

 

From: https://www.bbc.co.uk/news/uk-politics-48445674

 

Now on the surface, this all sounds very nice and "good", after all with the 'cost of living crisis' and everything going up in price due to inflation, those on minimum wage will think that they'll be getting more money in their pockets for their endeavours.

There is always one aspect to this that is always overlooked, and the BBC article merely glosses over this:

I believe that if you look hard enough, there is plenty of evidence to suggest that ever since Labour introduced this in 1998, it has merely contributed to making things 'more expensive'.

Employers soon realised that they couldn't maintain operating costs by getting fewer people to do the same jobs, but it did mean that their operating costs increased as a result.

Companies that employ large numbers of staff who are usually paid the minimum wage, see their operating costs increase everytime the minimum wage rate is increased. All that happens is the price of that company's 'output', whether it be the cost of using their services, or the cost of buying the goods they manufacture/distribute, goes up, so the end consumer ends up paying more as a result.

It becomes a vicious circle - people 'can't afford to buy things' so the minimum wage increases, but then eventually people still 'can't afford to buy things' because everything continues to increase in price as a result.

Now I'm not saying that the minimum wage is a 'bad thing' and it shouldn't be increased, I think employees are entitled to receive a fair salary for their work, and some big companies that make huge profits could probably afford to pay their lower-skilled workers more than the bare minimum they are legally required to.

 

 

This is factual but really shows there is no such thing as an economy, its a free market. If it was so regulated how they say it is, why does this reaction happen, why would they need to say "oh we'll just give 2 million people another £1 every now and again" 

 

What the minimum wage increase does is negated yes. So what actually happens is everyone who was on more than minimum are now earning less in comparison, so I would go to say the minimum wage increase is just to hurt people earning that bit more...

 

We're being priced out of everything now, the most scary thing should be driving. Lots of people can't afford to live where they work, so they live somewhere cheaper and drive, as driving gets more uneconomical people will be forced to live closer to work, so they will have to pay more rent instead and won't be able to drive anymore.. quite obvious to see what's happening.

 

Its all good bending over and getting rid of your car, but in 10 years time when nobody has any cars because some people started bending over... nobody will be able to leave their smart city gulag, you'll be completely trapped in the modern hunger games society.. everything will be a catch 22 situation forcing you to take the only option in front. 

 

Scary times but how do we oppose what futuristic technocratic bullshido laws that are permanently popping up in our news feeds. We don't get a say at all, the only time you get a say is to vote which corrupt puppet goes in next. 

 

 

[Grumpy Owl]

22 hours ago, bamboozooka said:

minimum wage is a  tool to get rid of small business

 

It is certainly a kick in the teeth for smaller businesses who are already struggling to compete due to other increased operating costs such as the price of fuel or gas/electricity.

 

Small business are faced with the choice of either going under, or putting up their prices.

 

Just recently in my local Birmingham Mail, there has been a series of articles basically slating the small independent supermarkets in the Alum Rock area, saying that they are more expensive to shop at compared to Tesco or Aldi. I'm seeing this as a media attack on small business, with the message being "we need more Tescos and Aldis".

 

20 hours ago, Mr H said:

the minimum wage disadvantages poor people. In the sense that many will be priced out of the market as a result who would be willing to work and therefore miss job opportunities. The market should determine prices. Also just puts the cost of goods up which means more inflation. It also causes distortions and inefficencies which can effect the buyers, as effectively in some cases an employee will be forced to pay someone the minimum wage of £10.40 when the actual value of the task maybe £5.

It disadvantages poor people in this country, but it also becomes an attractive magnet for foreign workers who want to come to the UK.

 

I remember reading years ago about how Eastern Europeans were being attracted to the UK because of the 'potential' that they could earn. There were stories about how highly qualified Polish doctors were coming to the UK to work as coffee baristas or bricklayers, because they could earn more doing such 'menial' jobs in the UK than they would have done doing their profession back home.

 

The whole point of increasing the minimum wage in the UK was that the money would then be spent by those people in the UK, and thus 'prop up' our economy, not for it to be 'siphoned off' out of the country, as has happened in some cases, where earnings have been 'sent home' and thus made those foreign workers and their families quite wealthy back home.

 

(Of course I don't begrudge anyone who has done this legitimately, I'm sure we'd all do the same given the opportunity)

[Heidi Gillen]

Their game always involves playing with the numbers, trying to convince the common folk that they're getting a good deal, and the government actually care about the working class, whose labour is the backbone of the economy. Take covid, for example. The government increased universal credit payments by £20 a week. When they stopped the £20 payment, the national minimum wage was increased by about 60 pence per hour. Do the maths and (based on a 37.5 hour working week) the amount was practically the same. Give with one hand and take with the other. You don't need a think tank, or a degree in maths to work it out.

[Campion]

49 minutes ago, Grumpy Owl said:

It disadvantages poor people in this country, but it also becomes an attractive magnet for foreign workers who want to come to the UK.

It also subsidises black market companies who don't pay the minimum wage and employ migrant workers who have less choice where to work, thereby making them more competitive relative to legal companies. 

 

53 minutes ago, Grumpy Owl said:

I remember reading years ago about how Eastern Europeans were being attracted to the UK because of the 'potential' that they could earn. There were stories about how highly qualified Polish doctors were coming to the UK to work as coffee baristas or bricklayers, because they could earn more doing such 'menial' jobs in the UK than they would have done doing their profession back home.

I also heard a similar story about call centres in India (working for offshoring Western companies) hoovering up lots of graduates because of the high salaries relative to local industries. 

 

1 hour ago, Grumpy Owl said:

The whole point of increasing the minimum wage in the UK was that the money would then be spent by those people in the UK, and thus 'prop up' our economy, not for it to be 'siphoned off' out of the country,

There's a trend of large global corporates taking over from locally owned family businesses, meaning that even when us locals spend our money in our own areas, there's a proportion of the profits being creamed off to the financial hubs which could be anywhere in the world. Many well known 'brands' are just names owned by global conglomerates.