Why don’t we increase the Minimum Wage to cut the Welfare Bill?

[Titanic99]

Do you honestly expect your pathetic evasions to convince anyone this most recent thread of yours is anything but yet another attempt at party political point scoring from one of the boards most abject party hacks.

 

There you go again lowering the tone of a civilised conversation!

 

What exactly is your problem with this thread, with the exception of you it has been a sensible exchange of opinions from people with opposing viewpoints.

 

Now go and watch the Tennis or participate in a grown-up manner.

[Titanic99]

No he isn't. But some jobs are like that.

 

Do you only take what you want from posts and not read them properly?

 

No I don't, I'm trying to understand the argument.

 

Simple question then.

 

Should taxpayers perpetually support specific types of jobs via the Welfare system?

[discodown]

No I don't, I'm trying to understand the argument.

 

Simple question then.

 

Should taxpayers perpetually support specific types of jobs via the Welfare system?

Whats to understand? If you increase the NMW you might make labour undesirable and therefore people won't be employed and employed people might be put out of work. Whats difficult to understand about that?

 

Simple answer no.

 

Simple question to you.

 

Instead of increasing minimum wage why not reduce income tax and do away with tax credits entirely?

[Rupert_Baehr]

So are you arguing that some types of jobs will always be dependent on financial assistance from the state, irrespective of how much money the owner of the Business makes?

 

Where did I say that?

 

Managerial Accountancy 101:

 

Consider a company which (currently) makes 3 products:

 

Product A. An established, profitable product, about mid-way through its product life cycle. Sales of this product generate about 75% of the company's income and all of the company's operating profit.

 

Product B. A newly-developed product. Doesn't yet make a profit, but is expected to become a big seller.

 

Product C. No longer makes a profit, but keeps more than 50% of the workforce in employment and makes a contribution to the cash flow of the company.

 

If the company decided to scrap Product C, then it will have to lay off more than half of the workforce. It will then have difficulty in expanding production of Product B (because it won't have sufficient people with the skills it needs to make Product B.) The company may well fail if it is unable to manufacture Product B.

 

Your logic suggests that the company should scrap Product C.

 

Low-paid workers who are paid in part by their employer and in part by the state are making a contribution. Unemployed people who are paid solely by the state may well get less (particularly if the state doesn't have enough money to pay them) and do not make a contribution.

[plekhanov]

The Pub is a good example, some Pubs will pay above minimum wage whilst others don't.

 

Why should those earning the higher figure subsidise those who aren't when they are effectively doing the same job.

1. Where was your outrage at this situation when your party exacerbated the situation you are now whining about?

2. How is this supposed to be a response to my pointing out to you how your proposal will hit some businesses much harder than others?

 

Lots of pubs are already struggling and they go out of business all the time. An increase in the minimum wage would substantially increase the wage bill of many pubs pushing them beyond the brink and putting all their employees out of work. Have you factored this into you scheme "to cut the Welfare Bill"?

 

How does making more people entirely dependent upon welfare cut the welfare bill?

[Tony]

It always seems ridiculous to me that we have a Welfare System that supports those in low-paid jobs, instead of the lower paid job paying enough to avoid the necessity of Benefit.

 

So rather than us all arguing for cuts in Welfare, why don’t we argue that employers are forced to pay a decent wage to people instead of paying them a pittance and letting the Welfare make up the difference.

 

What you are advocating here is essentially communism when you strip it down. Previous experiments haven't been too successful.

[plekhanov]

I think you display a lack of understanding of how the Benefit sytem works,

Oh this is just hilarious someone who doesn't even understand why some businesses are less able to cope with increases in the minimum wage that others is attacking me for "a lack of understanding"

 

quite simply if you increase someones net wages then you decrease the amount of Benefits and Tax Credits you pay out to them.

 

So Yes is the answer if the rules have been applied correctly.

But reality isn't that simple is it, if you increase the minimum wage you raise the cost of employing people and amongst other things you risk:

1. previously viable businesses failing leading to a loss of job, fall in tax receipts & increase in the welfare bill
   
2. jobs not being created as they are too expensive to be economically viable for employers.
   

Far from being "simple" the economy is far more complicated that you realise.

 

Besides the whole basis of your argument is that the benefit bill will be reduced if the minimum wage is increased is it not? If your argument is valid then surely you can point to a fall in the welfare bill whenever the minimum wage was increased, why can't you point to evidence of this happening?

[Vague_Boy]

why don’t we argue that employers are forced to pay a decent wage to people instead of paying them a pittance.

 

They would then probably just reduce staff numbers. Or outsource more.

 

Perhaps you should be asking why everything is so expensive in this country, after years of "low" inflation.

[studentbob]

They would then probably just reduce staff numbers. Or outsource more.

 

Perhaps you should be asking why everything is so expensive in this country, after years of "low" inflation.

 

I would say free market competition must take it's fair share of blame for the cost of living in this country. How much is spent by energy companies and telecommunications companies in promoting their products - and how nonsensical is this when you consider that the gas and electricity is the same whoever you buy it from?

The myth that competition brings efficiency and ultimately benefits the consumer has been shown up for what it is - a myth.