End of the Minimum Wage?

What can we do to change the minds of decision makers and people in general to actually do something about preparing for the forthcoming economic/energy crises (the ones after this one!)?

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DominicJ
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Post by DominicJ »

We can ritually behead some bankers though, and that will at least provide the public with some justice/entertainment.
And that will bring high paying jobs to the UK will it?

I think we're getting away the minimum wage here...

Fact
I worked for less than minimum wage and it was the best thing I ever did.
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woodpecker
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Post by woodpecker »

DominicJ wrote:CLV
Minimum "wage" might be £5.93, but minimum labour cost is much higher.
Remember, that comes with an additional 8% holiday entitlement and 13% Employers national insurance.
Thats £7.23 before you look at any other costs.
No it's not. The NI tables for an hourly rate of £5.93 at 35 hours per week, at the employers 'contracted in' A rate (highest rate, where the employee does not have another pension scheme and is contracted into the state scheme) is £38.91 per month, which works out at 4.4% of pay. NOT 13%. The reason being that you pay nothing at all on the majority of that pay as most of it is below the threshold. 13% is the marginal rate, 4.4% at that rate of pay is the average/total rate.

I leave to one side the issue of why people on these rates are paying any tax or NI at all (the thresholds will be rising further next year to take more people out), but you really don't seem to have a grasp of basic facts.

Worth noting that a country that would rather put a left-winger up against the wall and shoot him than allow him to run the country, the good old US of A, has had minimum wage legislation for far longer than we have.

And worth noting also that it's perfectly feasible to circumvent minimum-wage laws by, for example, using volunteers or interns. Internships are now pretty standard in many sectors e.g. for new graduates.

In my own experience, the decision to hire is exclusively related to (a) money coming into the business and (b) things that need to be done, which of course are inter-related, and *never* to pay rates. I've often been approached by people wanting to do (free) internships (by people with, as a minimum, a Master's degree providing good domain knowledge), but have never taken them on, even though they were free. But I have paid people (several times minimum wage) to do particular roles at given times, for periods up to two years.

Firms that are paying minimum wage - and would be happy to pay less - are not, for the most part, stony-broke: they are the big supermarket chains, the fast-food chains and the big banks (armies of cleaners and caterers in the City for example) and similar of this world, making vast sums and paying very high salaries and bonuses at the top, with many shareholders to keep happy. They are the same people that pay farmers less than cost for supplying milk, or that charge you £50 for sending you a letter about your bank account.
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DominicJ
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Post by DominicJ »

http://listentotaxman.com/index.php

So it is, oh well, changes the numbers a bit, doesnt really alter the main thrust though.

Why is it better to beg for pennies than earn £4 an hour?
In my own experience, the decision to hire is exclusively related to (a) money coming into the business and (b) things that need to be done, which of course are inter-related, and *never* to pay rates
Well, its not in mine, and since my job and training are on cost/benefit analysis, I'm afraid I may have to pull rank here...
Firms that are paying minimum wage - and would be happy to pay less - are not, for the most part
I'm afraid firms that would pay less than minimum wages are the assembly jobs that moved to the far east. Most big supermarkets and banks pay above minimum wage.
But that doesnt fit with your rant does it?

And you say I dont know the facts.....
http://uk.answers.yahoo.com/question/in ... 123AAO1VzQ
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RenewableCandy
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Post by RenewableCandy »

DominicJ wrote:Well, its not in mine, and since my job and training are on cost/benefit analysis, ...
then we really are fncked :(

I find it amazing that you didn't realise what Biff does for a living (i.e. runs own business). And the grammar (oh heck here she goes)...it's always worth re-reading what you've just written...I hope you do that with the said c-b analyses :)

Having said all that, it's possible that there would be more jobs if people were allowed to accept lower wages. But not for long...because, in a consumer economy like ours, these low-paid people would not consume (non-essentials): they couldn't afford to. Which would put out of work all the people involved in providing the said non-essentails. And crash the economy. In fact, it could be argued that even with the minimum wage (because it's quite low in relation to, say, land prices or rents), that's what's happening at the moment.
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DominicJ
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Post by DominicJ »

RC
We've already been there.

Your arguement is its better to force people to beg for pennies than allow them the CHOICE to earn them.

As I said, my first "proper" job was below minimum wage, £5 an hour *including* my holiday entitlement.

Best thing I ever did.
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biffvernon
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Post by biffvernon »

I think I've decided to be against the minimum wage. It's a bad thing, just a sticking plaster hiding the evil cracks of capitalism. What we need is a maximum wage.
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JohnB
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Post by JohnB »

biffvernon wrote:I think I've decided to be against the minimum wage. It's a bad thing, just a sticking plaster hiding the evil cracks of capitalism. What we need is a maximum wage.
I'd like a wage!
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biffvernon
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Post by biffvernon »

No you wouldn't :wink:
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JohnB
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Post by JohnB »

biffvernon wrote:No you wouldn't :wink:
Oh OK. I'd like some income :D.
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woodpecker
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Post by woodpecker »

DominicJ wrote:http://listentotaxman.com/index.php

So it is, oh well, changes the numbers a bit, doesnt really alter the main thrust though.

Why is it better to beg for pennies than earn £4 an hour?
In my own experience, the decision to hire is exclusively related to (a) money coming into the business and (b) things that need to be done, which of course are inter-related, and *never* to pay rates
Well, its not in mine, and since my job and training are on cost/benefit analysis, I'm afraid I may have to pull rank here...
Pull what rank? I run businesses, am a company director, MD, and have chaired two companies, several registered charities, sit on the board of others... So when I say 'in my own experience' I mean 'when I am taking the decision to hire people or not', either for my own businesses or for organisations that have appointed me to board level/chair; and where I have had to make decisions about organisation growth and risk, finance, the salary/package to offer people that is within the constraints of the organisation etc.; whether the organisation or firm can work with interns and under what conditions, how to work with volunteers ethically; in other words, deciding what is paid for and what isn't; and all the rest. It probably helps that I did accountancy (ACCA) back in the early 80s when I was doing financial management for large corporates.

You don't seem to indicate any familiarity with hiring/expansion decisions in the context of wages and payroll taxes, which is what this thread is supposedly about.

Nor do you seem to have much idea of what payroll taxes actually are in this country. (I, on the other hand, am very aware because I do various payrolls every month and send all the forms and cheques off to HMRC.) It seems bizarre to spout invented numbers, which you have a habit of doing. And I'd love to see your CBAs if you don't even understand the difference between marginal and average rates!
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RenewableCandy
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Post by RenewableCandy »

DominicJ wrote:RC
...Your arguement is its better to force people to beg for pennies than allow them the CHOICE to earn them.
With the exception of the small number of low-paid jobs which offer genuine opportunities to better one's knowledge/training (as yours evidently did), that "choice" is an illusion. I think you fail to realise that your situation is atypical.
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DominicJ
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Post by DominicJ »

WoodPecker
I've never claimed to be a payroll clerk, have only the vaguest knowledge of it.
I went CIMA, so I think I'll remain on my "pulling rank" point about cost, since, you know, thats my field.
You don't seem to indicate any familiarity with hiring/expansion decisions in the context of wages and payroll taxes, which is what this thread is supposedly about.
What, do you mean like?

We have received an order request for 10,000 Widgets a month.

A widget requires raw materials x/y/z, 0.0047 hours of machine time and 0.0667 hours of assembly time, along with any other costs.
At what price can we meet this order?

And so off I toddle with my copy of excel and work out what it would cost the company to build these things.
If the assembly staff earn £60 an hour, and the machine staff earn £600 an hour, the direct Labour costs of each widget are almost £7 a widget, if they earn a more reasonable £6 and £12, the direct labour costs would be a little under 5p a widget.

And then you have to start doing the annoying things like apportioning the cost of the canteen cleaner and business rates.

And then using that information, the important people decide wether to hire another 200 staff, rent the next four industrial units and spend a couple of million on new equipment to fit it out.

Projects that are profitable at £10 an hour can be loss making at £10.01
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DominicJ
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Post by DominicJ »

RenewableCandy wrote:
DominicJ wrote:RC
...Your arguement is its better to force people to beg for pennies than allow them the CHOICE to earn them.
With the exception of the small number of low-paid jobs which offer genuine opportunities to better one's knowledge/training (as yours evidently did), that "choice" is an illusion. I think you fail to realise that your situation is atypical.
But your ham fisted "Government knows best" solution wouldnt recognise my situation was atypical and would have happily thrown me onto the scrap heap and locked me there.


And again, I'm stilll asking, why is it better for someone to not work and be entirely reliant on the government, than to work and be partialy reliant on the government as well?
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JohnB
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Post by JohnB »

DominicJ wrote:And so off I toddle with my copy of excel and work out what it would cost the company to build these things.
Excel!!! That's luxury. When I were a lad, we had very wide specially printed forms where we had to enter all the numbers with a pen, and do the calculations with a hand operated adding machine :roll:.

Just because you're CIMA doesn't mean you don't get sidetracked into financial accounting, or if you're one of the other lots you don't do cost accounting.
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woodpecker
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Post by woodpecker »

DominicJ wrote:WoodPecker
I've never claimed to be a payroll clerk, have only the vaguest knowledge of it.
I went CIMA, so I think I'll remain on my "pulling rank" point about cost, since, you know, thats my field.
You may or may not know that in many SMEs (up to several thousand people employed) the COO or FO or similar signs off the payroll. And is therefore very aware of payroll taxes. And that any board reviews both payroll and HMRC/taxes, as totals, as part of monthly review of management accounts sitting around the board table. And in those organisations, it's usually the COO or CFO that signs the cheques for HMRC. Standard CIMA stuff, no?

Which is why I find it so strange that you seem to know nothing about what the average payroll rates are in the UK. I mean a lot of people know what they are, right from clerk level to board level, and the chairman will definitely know. And yet you, doing your CBAs, and supposedly with CIMA, haven't got a clue??
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