Politics, politics, politics

[scaramanga]

On the flipside though are people against the new living wage or feel it should have been implemented in a different way e.g. tax credit top up, tax breaks for businesses that pay it etc.

I think the sensible alternative was to keep inflation low by not giving out so much in the way of benefit payments in the first place.

In a global economy we simply cannot price ourselves out of the market with such excessive employment costs.

If you want to pay huge wages in an economy like ours then you have to put up borders and tariffs. I don't think anyone wants to do that.

 

[thfcsteff]

tick

that's what I'm doing

it's not an issue of reduced income for us (my wife wanted to go back to work), it's an issue of small businesses having to make people redundant to cover the enforced wage increase

edit: but it also shouldn't be ignored that it makes it harder for parents to return to work

Genuine question here, nothing else. Would this have to happen in order to maintain a specific profit margin previously achieved, or to simply maintain the running of a profitable business?

 

[Baleforce]

Genuine question here, nothing else. Would this have to happen in order to maintain a specific profit margin previously achieved, or to simply maintain the running of a profitable business?

in this case I have no idea

generally, I'm not sure there is a difference that matters, it's business not charity

 

[scaramanga]

Genuine question here, nothing else. Would this have to happen in order to maintain a specific profit margin previously achieved, or to simply maintain the running of a profitable business?

Most small businesses and SMEs that I know of are owner managed (or once were with the owner(s) now being the only shareholders).

On the whole, they exist purely to secure the futures of, and pay the salaries of the owner (s). We're not talking city type fat cats here, just people with fairly modest lifestyle ambitions - nice house/car/holiday not helicopters and hookers.

Those companies tend to invest most profits and rarely see much more than 0.1-0.5% on the bottom line. Those kinds of figures would be decimated by an enforced wage increase, and there's not enough profit for the decrease in taxation to make it back.

If the government is going to persist with silly notions like increasing pay regardless of talent/ability then they should abolish employers NI to balance it.

 

[scaramanga]

Genuine question here, nothing else. Would this have to happen in order to maintain a specific profit margin previously achieved, or to simply maintain the running of a profitable business?

In larger companies, if the return isn't high enough then nobody will invest.

 

[thfcsteff]

In larger companies, if the return isn't high enough then nobody will invest.

Indeed...I think we are in a society which only gauges extremes. The days of a family run business, happy to make a decent profit yet also happy to pay workers a reasonable living wage, appears to be antiquated. I thought what this bloke tried to do was interesting, as much for the reaction it caused as the results it produced. People within the company got tinkled off that some who had not been working there as long as them were suddenly on the same pay scale. I thought it was a noble and 'money-where-mouth-is' action, but again, it appears society is not interested when push comes to shove.

Again, do take any observations I make as (obviously) outsider ones. I work for myself, I do not own a business and am aware that some on this forum do and as such have far greater practical knowledge than I do (your good self included).

http://money.cnn.com/2015/04/14/news/companies/ceo-pay-cuts-pay-increases/index.html

 

[thfcsteff]

Most small businesses and SMEs that I know of are owner managed (or once were with the owner(s) now being the only shareholders).

On the whole, they exist purely to secure the futures of, and pay the salaries of the owner (s). We're not talking city type fat cats here, just people with fairly modest lifestyle ambitions - nice house/car/holiday not helicopters and hookers.

Those companies tend to invest most profits and rarely see much more than 0.1-0.5% on the bottom line. Those kinds of figures would be decimated by an enforced wage increase, and there's not enough profit for the decrease in taxation to make it back.

If the government is going to persist with silly notions like increasing pay regardless of talent/ability then they should abolish employers NI to balance it.

Replied to your last comment before seeing this one. I would absolutely 100% see that the small business owner absolutely gets the brunt of everything.

 

[the dza]

I dunno why they don't make it so that businesses have to claim tax credits to top up wages, instead of workers. So set an arbitrary minimum wage of whatever (say £10 an hour, which is probably around the level of the actual minimum when in-work benefits are added), then give small businesses a subsidy to pay for it (topping up a £6 an hour wage to a £10 an hour legal minimum, for example). Larger corporations making vast sums can be hammered politically so as not to take the government wage top-ups, or take less of them. The cafe owner gets help to stay in business and pay the waitress, and the workers don't have the hassle of having to claim tax credits to top up their wages, they just get paid a proper living wage. And if big business keeps dodging tax in a way that small businesses cannot, then the government can withdraw wage subsidy for such businesses and still enforce the much higher, legal minimum wage. So in that way, we might also level the playing field between smaller businesses and big corporations. It would also end the discrimination where a worker who is single and childless gets paid less than a worker who has a family, yet they do the same job.

I'm sure there's a ton of reasons why it can't be done, but in a nutshell: tax credits to businesses instead of workers, higher minimum wage to workers.

 

[the dza]

It's amazing how Osborne's brief was to not make any waves with this budget before the EU referendum, and he has managed to send his party into meltdown. And this guy is supposed to be a master strategist?

WAC.

 

[scaramanga]

I dunno why they don't make it so that businesses have to claim tax credits to top up wages, instead of workers. So set an arbitrary minimum wage of whatever (say £10 an hour, which is probably around the level of the actual minimum when in-work benefits are added), then give small businesses a subsidy to pay for it (topping up a £6 an hour wage to a £10 an hour legal minimum, for example). Larger corporations making vast sums can be hammered politically so as not to take the government wage top-ups, or take less of them. The cafe owner gets help to stay in business and pay the waitress, and the workers don't have the hassle of having to claim tax credits to top up their wages, they just get paid a proper living wage. And if big business keeps dodging tax in a way that small businesses cannot, then the government can withdraw wage subsidy for such businesses and still enforce the much higher, legal minimum wage. So in that way, we might also level the playing field between smaller businesses and big corporations. It would also end the discrimination where a worker who is single and childless gets paid less than a worker who has a family, yet they do the same job.

I'm sure there's a ton of reasons why it can't be done, but in a nutshell: tax credits to businesses instead or workers, higher minimum wage to workers.

That would help the differential for small businesses (always welcome) but doesn't do anything to arrest the inflationary pressure of an artificially increased wage.

 

[scaramanga]

It's amazing how Osborne's brief was to not make any waves with this budget before the EU referendum, and he has managed to send his party into meltdown. And this guy is supposed to be a master strategist?

WAC.

He's not a master strategist, he's a wage stealing hippy.

 

[the dza]

He's not a master strategist, he's a wage stealing hippy.

I think he's phucked himself to be the future Tory leader. The interesting thing is, if the 'remain' vote wins and we stay in, then Johnson is on the wrong side of that argument and that might damage his leadership prospects too.

It would not surprise me if Cameron stayed on as leader, else I think the country might vote them out of office (whatever the misgivings people have about Corbyn, Labour could win by default).

 

[the dza]

That would help the differential for small businesses (always welcome) but doesn't do anything to arrest the inflationary pressure of an artificially increased wage.

Maybe if personal debt was harder to accumulate for people on lower wages, it'd help constrain inflationary pressure? (I don't know). So higher minimum wage subsidised by the government (which it already is really, via Tax Credits and housing benefit), with legislation to make borrowing lower...and coupled with a large scale social housing building program (to hold down housing costs, the largest expense for people on low wages).

I dunno really, no easy answers. The government will subsidise someone, one way or another. If there was no minimum wage and no in-work benefits as a top up, then people would strugle to pay the rent, landlords would have to lower rents...but then many landlords wouldn't be able to service their debts and if too many of them default, banks have to start eating big losses...and the government will bail them out. So it's probably more sensible for them to subsidise wages in the way that they do already.

 

[glasgowspur]

So this PIP thing, am I misunderstanding it.
If you need a series of wall handles to your toilet you get paid to have fitted, and then get paid it every week as well?
Please tell me I wrong!

 

[scaramanga]

Maybe if personal debt was harder to accumulate for people on lower wages, it'd help constrain inflationary pressure? (I don't know). So higher minimum wage subsidised by the government (which it already is really, via Tax Credits and housing benefit), with legislation to make borrowing lower...and coupled with a large scale social housing building program (to hold down housing costs, the largest expense for people on low wages).

I dunno really, no easy answers. The government will subsidise someone, one way or another. If there was no minimum wage and no in-work benefits as a top up, then people would strugle to pay the rent, landlords would have to lower rents...but then many landlords wouldn't be able to service their debts and if too many of them default, banks have to start eating big losses...and the government will bail them out. So it's probably more sensible for them to subsidise wages in the way that they do already.

The sensible option was to not artificially inflate wages in the first place with all the top ups. You're right that house price issue needed sorting but that's a huge issue in itself.

There are a lot of people in the South East sitting on houses worth £0.5M and up who are not rich people - that's just some equity in an expanding market and the compound nature of mortgages. Any government not treading incredibly carefully and taking the bottom out of those prices could really screw the whole country. In fact, I suspect most of the middle class in the South East are sitting on property worth £0.5-1M and that's a lot of votes to lose.

 

[the dza]

The sensible option was to not artificially inflate wages in the first place with all the top ups. You're right that house price issue needed sorting but that's a huge issue in itself.

There are a lot of people in the South East sitting on houses worth £0.5M and up who are not rich people - that's just some equity in an expanding market and the compound nature of mortgages. Any government not treading incredibly carefully and taking the bottom out of those prices could really screw the whole country. In fact, I suspect most of the middle class in the South East are sitting on property worth £0.5-1M and that's a lot of votes to lose.

Is it a bit of a chicken and egg situation though, whereby in-work benefits come into being (and then get ever higher) because the cost of living is driven up from all of the easy credit that the world has been awash with for the last couple of decades? Especially true in the case of housing benefit I'd have thought. And now, as you point out, the only 'wealth' that many people have is a house with an ever increasing value that they can borrow against...which then compounds the problem. IIRC, the housing benefit bill has increased under the Tories, despite them wanting to cut the welfare bill -- and that has to be a consequence of increasing house prices and higher rents.


I understand why no government wants to tackle credit/ever increasing house prices/foreign money pouring into London property and mushrooming out through the South East -- as you point out, it's a big vote loser. But it is a problem that needs to be managed somehow. Maybe demographics will solve it, as home ownership becomes less and less and the majority end up spending the larger chunk of their wages on rent. At that point, the votes might be in favour of renters v owner occupiers.

 

[glorygloryeze]

So will Osborne last as Chancellor past the EU Referendum?

 

[StephenH]

So this PIP thing, am I misunderstanding it.
If you need a series of wall handles to your toilet you get paid to have fitted, and then get paid it every week as well?
Please tell me I wrong!

If you have say Motor Neuron Disease, Multiple Sclerosis or Parkinson's, to mention but a few, then yes.

 

[StephenH]

He's not a master strategist, he's a wage stealing hippy.

Hippy.......love it.

looks like an android from Star Trek

 

[scaramanga]

If you have say Motor Neuron Disease, Multiple Sclerosis or Parkinson's, to mention but a few, then yes.

What's the reasoning behind that? Are all payments lumped into one sum or is there a separate "house modification" payment that for some reason continues on?