Minimum wage

[tobyaw]

Yesterday the ONS reported a significant rise in the number of people out of work in UK. The government announced that the minimum wage is to get a modest increase in October.

With individuals and businesses suffering from the economic situation, wouldn't it make more sense for the minimum wage to be reduced when unemployment rises? The minimum wage should only rise when the economy is in good shape and unemployment is falling.

Comments

[purpletigron]

I can only see a justification for the minimum wage to fall if it has reached a level which has become comfortably over a basic threshold of decency, and then only if average and maximum wages have fallen further first. The needs of the significant minority for a basic 'enough' outweigh the needs of those with more.

[tobyaw]

But isn't it better to be employed - at a lower wage - than to be unemployed?

[purpletigron]

Employed on a realistic living wage, yes.

Employees are an investment to be cultivated, not an expense to be minimised - savings should be sought elsewhere, perhaps even by altering the business model.

Unemployed versus low wage

[deadnode]

You'd really rather be unemployed, earning a wage of zero, rather than employed on a low wage? In the current system, perhaps that's forced for extreme cases (earning £20/week might lose you £60/week benefits), but that strikes me as a bug which should be eliminated.

Yes, of course it's better to have a better paid job where you're doing something valuable - but when that's not an option, when you're faced with a choice between earning very little and earning nothing at all, should the government really step in to demand the latter?

If you insist on a higher salary or nothing at all, that means that at least some of the time you're forcing no salary at all - which hardly strikes me as an improvement.

Re: Unemployed versus low wage

[purpletigron]

I'm not talking about a 'higher salary' - I'm talking about a basic universal living wage.

I could make better use of my time growing my own food and making and mending my own clothes than doing someone else's bidding for a below-living pittance.

[tobyaw]

I am concerned about the concept of a ‘realistic living wage’. It is obvious to me that different people, in different circumstances, need vastly different living wages. The minimum wage law takes this into account, in a basic crude fashion, by introducing a sliding scale of minimum wage based on age, with the full amount kicking in at twenty two.

But even for an adult, a single person has a very different wage requirement from somebody supporting a (non-earning) partner and children. And if there are two wage earners in a relationship, surely they don’t need to earn as much individually as a single earner with dependants?

The minimum wage doesn’t take into account the geographic disparities in the cost of living. Or the dynamics of the labour market. I find it hard to support a law that gives a one-size-fits-all solution, where people’s needs are so different.

(And when a company’s choice is between solvency or insolvency, or between employing staff or making them redundant, I find your suggestion about ‘altering the business model’ to be somewhat flippant.)

[purpletigron]

The current law could be improved, but not by lowering the minimum wage.

Altering the business model is anything but flippant - read the road ahead, or run the risk of crashing out.