New minimum wage £9

[TJC1]

It is interfering in the market place and I disagree with it strongly. However, because inflation is so low, I can see why they are doing it. It will inevitably lead to higher inflation. It could be a clever ruse.

As to whether businesses make money and pay tax - that depends on the costs of production including human resources. If it costs 5£ to produce something and you sell it for 7£ then you should be able to make a profit, pay taxes and have job security for your staff if you are clever enough to market it, sell enough of them all of which takes hard work and skill.

If the government increases your costs of production so it costs you £7.01 to produce, you will either go bust or have to increase your prices (hence the inflation). Not everyone can increase their prices. No profit is made, jobs are lost and no tax is paid. It is a very high risk strategy it seems to me.

 

One good side I can see is that it has shut up the people going on about the "living wage" - it really has shot that particular fox.

 

As for the John Lewis principle for a business model - get cracking - there's nothing stopping you from setting one up, but there is a reason there are very few of these types of business, traditional structure works much better for all concerned.

 

Its not a living wage. Its an increase in minimum wage.

 

John Lewis makes profit in a competitive marketplace.

 

They reward staff better with profit sharing etc. and achieve better loyalty and output as a result.

[Cyclone]

You've said it's not living wage...

 

The UK Living Wage for outside of London is currently £7.85 per hour.

 

It's not, it's above it, for everywhere except London. It's only just below the current London LW, although by 2020 that will obviously have increased.

[RonJeremy]

Its not a living wage. Its an increase in minimum wage.

 

John Lewis makes profit in a competitive marketplace.

 

They reward staff better with profit sharing etc. and achieve better loyalty and output as a result.

 

John Lewis does indeed do very well I think. I admire them.

 

Better loyalty than what? Better than Virgin? Better than Apple? Better than Barclays?

 

I don't get your point? You think all businesses should give their capital away to temporary employees? Or should the employees be investing their capital to support and help run the business?

 

Entrepreneurs invest their own money to make a return, it's the way the world works, except in countries that try to stamp down on natural human behaviour. This is why socialism/communism won't work anywhere, ever.

[Cyclone]

Socialism isn't incompatible with capitalism, they can co-exist in a way that stops the wildest excesses of capitalism which can cause huge amounts of harm to individuals.

[TJC1]

John Lewis does indeed do very well I think. I admire them.

 

Better loyalty than what? Better than Virgin? Better than Apple? Better than Barclays?

 

I don't get your point? You think all businesses should give their capital away to temporary employees? Or should the employees be investing their capital to support and help run the business?

 

Entrepreneurs invest their own money to make a return, it's the way the world works, except in countries that try to stamp down on natural human behaviour. This is why socialism/communism won't work anywhere, ever.

 

From what I know from a retired employer at john lewis is because staff have a stake in the business, they tend to stay. Staff retention is ridiculously high.

And because they all get seasonal bonuses based on profits, they are incentivised to work harder, give better service, less absenteeism. Greater loyalty to the company and each other.

[RonJeremy]

Socialism isn't incompatible with capitalism, they can co-exist in a way that stops the wildest excesses of capitalism which can cause huge amounts of harm to individuals.

From wiki

 

"opposed to the principle of production for profit and accumulation of capital."

 

https://en.wikipedia.org/wiki/Socialism

 

---------- Post added 14-08-2015 at 11:27 ----------

 

From what I know from a retired employer at john lewis is because staff have a stake in the business, they tend to stay. Staff retention is ridiculously high.

And because they all get seasonal bonuses based on profits, they are incentivised to work harder, give better service, less absenteeism. Greater loyalty to the company and each other.

 

Greater loyalty than what?

My staff don't have equity in my business but they are very very loyal and I have an extremely high staff retention. This is actually a problem sometimes cause some of the less good ones don't actually leave. And I don't like sacking people and putting them on the streets.

[TJC1]

I know what youre saying about the company retaining profits ron. But employees dont see it like that. John Lewis do make profit, its just some of it is distributed amongst its members.

 

---------- Post added 14-08-2015 at 11:31 ----------

 

 

Greater loyalty than what?

My staff don't have equity in my business but they are very very loyal and I have an extremely high staff retention. This is actually a problem sometimes cause some of the less good ones don't actually leave. And I don't like sacking people and putting them on the streets.

 

Thats just what i know first hand. Cant speak for virgin, barclays etc. Although there will be retention stats somewhere...

 

---------- Post added 14-08-2015 at 11:33 ----------

 

John lewis staff get great pensions too!!!

[El Cid]

And because they all get seasonal bonuses based on profits, they are incentivised to work harder, give better service, less absenteeism. Greater loyalty to the company and each other.

 

Large companies should be forced to share their profits with their workers, at least when they have been employed for over 2 years; company ethics should be enshrined in law.

[TJC1]

Large companies should be forced to share their profits with their workers, at least when they have been employed for over 2 years; company ethics should be enshrined in law.

 

I think some companies do, unofficially.

I certainly like to give out bonuses although im not a big business by any means. Im not sure I agree with enshrining in law, i think theres a place for all types of model. Ron says he does well, and I believe him.

 

I do think John Lewis model highly incentivises partners. Even the rhetoric is empowering..partners not staff or employees.

[RonJeremy]

Large companies should be forced to share their profits with their workers, at least when they have been employed for over 2 years; company ethics should be enshrined in law.

 

Many large companies offer share options which in effect is the same thing. I strongly disagree that private companies should be forced to do anything like this. If they want to run their business badly that's down to them. I don't pay a bonus out of altruism, I pay it cause I think I get the best out of my staff that way.

 

Oh and cause I love them all of course