Will the Business leaders write to stop the Minimum wage rise?

[Titanic99]

I see that Labour have put into their manifesto a commitment to increase the Minimum wage.

 

Whilst welcoming this move I am concerned that those nice Business people will now be writing to the Chancellor to tell us all that this move will cost us jobs.

 

So can we expect a letter to come telling us all that these plans will cost thousands of jobs, or will the same people who are concerned about the N.I increases keep quiet on this one, as they know this increase will be popular with most of the electorate.

 

If they don't then surely it goes to prove that their previous letter was designed to support the Tory campaign.

 

Better still will the Tories oppose these increases?

[Rioja]

Both NMW increasing and NI going up both incur a cost to the employer. The NI rise though also incurs a cost to the employee and so will be less desirable by the electorate and so it's that that the business leaders have siezed upon to make their point over.

 

Of course not all business leaders are opposed to the rise in National Insurance. One of the Dragons Den blokes came out in support of it over the weekend.

[Rupert_Baehr]

How many of the business leaders who signed the letter work in industries which pay minimum wage?

 

There are bound to be cases where increasing the minimum wage payable will reduce the number of jobs. - If the employer can't afford to pay more (if an increase in the wage bill makes the product uncompetitive in the market) then the increased wage bill must be matched by increased productivity or the employer will hire fewer people (and indeed, perhaps go out of business.)

 

I'm not against minimum wage - it makes it rather more difficult for employers to abuse their employees (by under paying them.)

 

BUT: I understand that many people have taken pay cuts because if they didn't, they would lose their jobs. - The employers explained the reason to the employees and the employees accepted that reason (I doubt few were overjoyed by it, but reduced pay is better than no pay - and hopefully, the employers will make it up to those loyal employees when they are able to do so.)

 

You could argue that people who earn the lowest hourly rates should be first in line for a pay raise, but the question which will be asked is: "If we have a law which increases (the admittedly low) minimum wage will this help or harm companies trying to claw their way out of a recession?"

 

AFAIK; there's no statutory minimum wage around here and the effective minimum wage (the lowest wage you will find if you apply for a job) is higher than the UK minimum wage. VAT is higher here than in the UK, employment taxes (taxes which provide medical insurance, pensions, old-age care, unemployment benefit, child care and other welfare payments) are considerably higher than they are in the UK.

 

Does that cause a reduction in jobs? - You bet it does! If a process can be mechanised/automated it will need less expensive labour, so where possible, things are mechanised and there are fewer jobs for people.

 

For example: If you built a house in the UK then a team of people called 'plasterers' would come along with buckets of plaster, floats and trowels and plaster the inside and outside walls. It would take them a number of days.

 

Here, a thing that looks like the back-end of a readymix truck is parked on end outside the house. A couple of guys attach 3 inch hoses to the pump and start squirting. 2 hours later, the job is complete. - 4 man-hours to do the outside of a house (they will apply 2 coats over 2 days [the top coat has the colour in it, so you don't have to spend extra time and money painting the house], so a total of 8 man hours.)

 

Plastering the inside will take (at most) another 8 man hours. Total to plaster a house inside and out: 16 man hours. Labour is expensive, use machines.

 

Labour-intensive jobs are charged at very high hourly rates. (A routine 7500 mile service on my wife's car cost about £450 last month and I supplied the oil.)

 

High job taxes mean far fewer jobs, but fortunately there are plenty of jobs. - Here.

 

If employment costs go up in the UK, where 27% of the workforce doesn't even have part-time work, will that not have an effect on the economic recovery and on the number of jobs?