Osbornes medicine is working!

[Hillpig]

Please correct me if I am wrong, is the consensus that we should not increase the minimum wage?

 

I realise this question opens up a whole hornets nest regarding Bankers Bonuses etc but on the basis that all income was frozen (or in the case of the bankers subtantially lowered) this would be good for the country?

[Obelix]

Not if the pay rise goes to public sector works, that would increase GDP without affecting prices because they don't produce anything. Obviously the countries debts would increase which would be really bad.

 

This sounds horribly familiar. I seem to recall this happening once upon a time....

[MrSmith]

This sounds horribly familiar. I seem to recall this happening once upon a time....

 

Surely no one would be that stupid, would they:confused:

[Obelix]

Surely no one would be that stupid, would they:confused:

 

Well, you may well think that, I of course could not possibly comment...

[MrSmith]

Please correct me if I am wrong, is the consensus that we should not increase the minimum wage?

 

I realise this question opens up a whole hornets nest regarding Bankers Bonuses etc but on the basis that all income was frozen (or in the case of the bankers subtantially lowered) this would be good for the country?

 

I don't think increasing the minimum wage is on the cards.

 

Minimum Wage Could Be Cut Or Frozen Under New Government Plans.

[I1L2T3]

Not if the pay rise goes to public sector works, that would increase GDP without affecting prices because they don't produce anything. Obviously the countries debts would increase which would be really bad.

 

Firstly, nobody should disagree with the idea that the public sector could be made more efficient.

 

But the argument that the public sector is a drag on the economy because it doesn't produce things is wrong. It isn't meant to produce things, it's meant to facilitate production, keep the population healthy, educated, mobile, safe etc...

 

If these things were provided by the private sector would you still argue they didn't produce anything?

[MrSmith]

Firstly, nobody should disagree with the idea that the public sector could be made more efficient.

 

But the argument that the public sector is a drag on the economy because it doesn't produce things is wrong. It isn't meant to produce things, it's meant to facilitate production, keep the population healthy, educated, mobile, safe etc...

 

If these things were provided by the private sector would you still argue they didn't produce anything?

 

If these things were provided by the private sector GDP would be lower because unproductive private sector wages don't increase GDP. If we set 10,000 public sector workers on as daisy counters and paid them £20,000 each, GDP would rise by £200,000,000 if we did the same but employed them in the private sector, GDP would rise by zero.

 

In many cases the public sector is an hindrance to private sector.

[Hillpig]

I don't think increasing the minimum wage is on the cards.

 

Minimum Wage Could Be Cut Or Frozen Under New Government Plans.

 

The government have already announced an increase from £6.19 to £6.30 in October this year.

[I1L2T3]

If these things were provided by the private sector GDP would be lower because unproductive private sector wages don't increase GDP. If we set 10,000 public sector workers on as daisy counters and paid them £20,000 each, GDP would rise by £200,000,000 if we did the same but employed them in the private sector, GDP would rise by zero.

 

In many cases the public sector is an hindrance to private sector.

 

If the private sector provides services such as education, healthcare, policing etc... the value of those services is counted in GDP.

[MrSmith]

If the private sector provides services such as education, healthcare, policing etc... the value of those services is counted in GDP.

 

Yes and the value is based on what someone will pay and not what it costs to provide, so a private sector service wouldn’t increase GDP just by employing extra staff or paying the staff more, unlike the public sector, the government can just borrow more money and employ more people to do very little or pay its staff an higher wage and GDP increasing by the extra amount being paid in wages regardless of whether the service they provide is better or worth more.