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

[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.