[Metrobeans]

B452 - National Minimum Wage (Repeal) Bill 2012, TSR Libertarian Party

National Minimum Wage (Repeal) Act 2012

An Act to abolish the National Minimum Wage to increase the opportunities of those currently priced out of the labour market.

BE IT ENACTED by The Queen's most Excellent Majesty, by and with the advice and consent of the Commons in this present Parliament assembled, in accordance with the provisions of the Parliament Acts 1911 and 1949, and by the authority of the same, as follows:

Part I: Minimum Wage
1 Minimum Wage
(1) National Minimum Wage Act 1998 is hereby repealed.

Part II: Miscellaneous
2 Commencement
(1) This Act comes into force on the 1st January 2013.

3 Short Title
(1) This Act may be cited as the National Minimum Wage (Repeal) Act 2012.

Notes

Current situation:

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There are different levels of NMW, depending on your age and whether you are an apprentice. The current rates (from 1 October 2011) are:
£6.08 - the main rate for workers aged 21 and over
£4.98 - the 18-20 rate
£3.68 - the 16-17 rate for workers above school leaving age but under 18
£2.60 - the apprentice rate, for apprentices under 19 or 19 or over and in the first year of their apprenticeship

If you are of compulsory school age you are not entitled to the NMW.

Why the NMW isn't needed:

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With the introduction of the recent Welfare Bill, all citizens receive the money required for an adequate standard of living. As such, there is no longer the choice between work or die, and thus workers have a much stronger bargaining position within the labour market. It is now no longer possible for companies to exploit the desperation of workers for a job - since workers no longer require one to live a decent life.

Furthermore, often it is argued that the MW is required such that work is 'worth it'. If people aren't willing to work for a wage, then they have no obligation to in order to survive. It also doesn't help at all to get people 'off welfare into work', since people receive the Resident's Income regardless of work status, with no withdrawal, and a 0% income tax up until £10K, and 5% to £20K. Work is worth it, people can keep a huge amount of their wages, and we don't need centrally dictated minimums to get people into work. We need companies offering acceptable wages - with acceptable defined by those who choose to accept or reject - remember they do have a real choice now.

Why the NMW is bad:

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The NMW prices those with the least skills out of the labour market. For those who don't add value at the rates of the NMW (let us imagine they contribute an extra £4 to revenues for each hour of work they do) - they will not be hired. This stops people from getting a foot in the job ladder, and thus gaining new skills and experience. Often, they must resort to voluntary or unpaid work to get this experience - that's right, the NMW forces the most vulnerable people to work for nothing! Unemployment (that is, those who are willing and able to work yet cannot find a job) is one of the largest problems, with effects that go far beyond merely the lack of wage form that job.

Finally, we believe the employment contract should be a matter for the employee and employer to decide. If someone is happy to work for £4/hour, and the employer is happy to employ them at £4/hour, then why should we in Whitehall be stopping these two parties from reaching a voluntary agreement?

[Mr Dangermouse]

Praise Allah no.

[TopHat]

Actually, given in TSR world Citizen's Income exists, I'm fine with this.

[obi_adorno_kenobi]

Even despite the logic of abolishing one minimum wage because of the other, this just feels morally reprehensible for all the reasons you expect me to post.

[Birchington]

It's a no from me as well.

[jesusandtequila]

(Original post by obi_adorno_kenobi)
Even despite the logic of abolishing one minimum wage because of the other, this just feels morally reprehensible for all the reasons you expect me to post.

Naturally. While there is the potential for exploitation - I can certainly see the argument for the minimum wage. However, given the guaranteed income regardless of work, I don't see that potential exists in anywhere near the same form.

Thus, while an individual might consider it derisory to pay £1/hour (to take it to the extreme), the individual working has no obligation to work in order to survive, and thus value that £1 higher than their hour of time. As such, I don't see why we should be stopping it, that is, if they accept it. I see it, within the current TSR framework as stopping mutually beneficial contracts from coming into existence - which I don't believe is a good thing despite the perhaps personal outrage at seeing these wages - they don't drive anyone into poverty.

With that in mind, I'd be interested to see the argument for the NMW in tandem with the guaranteed income.

[jesusandtequila]

(Original post by Birchington)
It's a no from me as well.

(Original post by Mr Dangermouse)
Praise Allah no.

Why?

Bear in mind the two bits in the notes:
"With the introduction of the recent Welfare Bill, all citizens receive the money required for an adequate standard of living. As such, there is no longer the choice between work or die, and thus workers have a much stronger bargaining position within the labour market. It is now no longer possible for companies to exploit the desperation of workers for a job - since workers no longer require one to live a decent life.

Furthermore, often it is argued that the MW is required such that work is 'worth it'. If people aren't willing to work for a wage, then they have no obligation to in order to survive. It also doesn't help at all to get people 'off welfare into work', since people receive the Resident's Income regardless of work status, with no withdrawal, and a 0% income tax up until £10K, and 5% to £20K. Work is worth it, people can keep a huge amount of their wages, and we don't need centrally dictated minimums to get people into work. We need companies offering acceptable wages - with acceptable defined by those who choose to accept or reject - remember they do have a real choice now."

and

"The NMW prices those with the least skills out of the labour market. For those who don't add value at the rates of the NMW (let us imagine they contribute an extra £4 to revenues for each hour of work they do) - they will not be hired. This stops people from getting a foot in the job ladder, and thus gaining new skills and experience. Often, they must resort to voluntary or unpaid work to get this experience - that's right, the NMW forces the most vulnerable people to work for nothing! Unemployment (that is, those who are willing and able to work yet cannot find a job) is one of the largest problems, with effects that go far beyond merely the lack of wage form that job.

Finally, we believe the employment contract should be a matter for the employee and employer to decide. If someone is happy to work for £4/hour, and the employer is happy to employ them at £4/hour, then why should we in Whitehall be stopping these two parties from reaching a voluntary agreement?"

Why do you consider this argument to be wrong?

[internetguru]

With the citizen's wage in place this seems entirely justified. This is good for economic growth and eliminating unemployment therefore I support it.

[JPKC]

Right, I can see your argument for doing this.

However, you shouldn't exaggerate what the basic income does. It would provide an adult with £162 per week. So a person on the minimum wage as it currently stands would get £453.80 for a 48 hour working week, and your belief is that they don't really need this guaranteed minimum because whatever happens they have £162. In principle, that's no different from the welfare system as it stands in real life - people can fall back on JSA and use the 'safety net' to argue for a higher wage by threatening to not work for anything more than x amount (assuming we have decent workers' rights).

So your second argument is that unskilled workers are priced out due to the market assigning a lower value to unskilled work than the NMW's £6 an hour. Needless to say I don't agree. The workers set the price of their pay just as much as their employers do. As far as I'm concerned, the introduction of a living wage looks very good now. If £162 was enough to live in a certain area with a certain quality of life then there wouldn't need to be a minimum price for labour, the point of the NMW/living wage is that this is not the case in most places (London!) and so for people living in the high-cost locales, society needs to ensure that working in these places is worth the living costs, which is why a minimum price for work should exist in these areas. Of course, your counter will be that if the market needs to pay people more for working in these areas then it would do so in order to keep its employees from leaving for an area where they can get the best living conditions for £162 - the state doesn't need to do anything because it's already in the interests of employers yadda yadda yadda. Obviously I think this is an area where the market proves itself to be too daft and too blunt. Research (I'll find it if you dispute) shows that unskilled workers, when paid a living wage, work better and are generally more productive - despite this, businesses seek to lower the amount they pay these workers, because doing so is in their (short-term) interest.

[Moleman1996]

I'm torn on this, it could work but its risky.

However, with the citizens wage in place on TSR i suppose im happy to support it.

[Rakas21]

I actually agreed with a minimum wage and supported a reduction of about 20% however your welfare does give people a safety net even if it does not match the potential earnings of somebody earning the minimum wage.

I shall probably vote Aye.

[jesusandtequila]

(Original post by JPKC)
Right, I can see your argument for doing this.

However, you shouldn't exaggerate what the basic income does. It would provide an adult with £162 per week. So a person on the minimum wage as it currently stands would get £453.80 for a 48 hour working week, and your belief is that they don't really need this guaranteed minimum because whatever happens they have £162. In principle, that's no different from the welfare system as it stands in real life - people can fall back on JSA and use the 'safety net' to argue for a higher wage by threatening to not work for anything more than x amount (assuming we have decent workers' rights).

Not quite.

Let us not exaggerate the working week. The average working week in the UK is well below 48 hours. It's 36.3 hours (http://www.guardian.co.uk/news/datab...-working-hours) - so this comes out at a weekly pre-tax rate of £220.70, and even with a 48-hour working week it's £291.84. I don't know where you got the £9.45/hour NMW from. Taking the after-tax RL figures (since the current NMW relates to that), it's £195.51 and £243.88 per week. So let's not overestimate what the NMW does.

Oh, and the key difference is two-fold. The first is that JSA - £65/week doesn't provide enough to adequately live. The second is that JSA is conditional on looking for and taking work. So I'm not sure how JSA provides the stopping of the choice between work or die. The Resident's Income is substantially different.

So your second argument is that unskilled workers are priced out due to the market assigning a lower value to unskilled work than the NMW's £6 an hour. Needless to say I don't agree. The workers set the price of their pay just as much as their employers do. As far as I'm concerned, the introduction of a living wage looks very good now. If £162 was enough to live in a certain area with a certain quality of life then there wouldn't need to be a minimum price for labour, the point of the NMW/living wage is that this is not the case in most places (London!) and so for people living in the high-cost locales, society needs to ensure that working in these places is worth the living costs, which is why a minimum price for work should exist in these areas. Of course, your counter will be that if the market needs to pay people more for working in these areas then it would do so in order to keep its employees from leaving for an area where they can get the best living conditions for £162 - the state doesn't need to do anything because it's already in the interests of employers yadda yadda yadda. Obviously I think this is an area where the market proves itself to be too daft and too blunt. Research (I'll find it if you dispute) shows that unskilled workers, when paid a living wage, work better and are generally more productive - despite this, businesses seek to lower the amount they pay these workers, because doing so is in their (short-term) interest.

The MW is not the answer to the problem mooted here - but rather making the Resident's Income vary by region. The point is that a guaranteed income is better than minimum labour prices - and the single rate is a problem in both systems - not just this one. As for the living wage - if it's in business interests, then we don't need to legislate for it. If some are badly managed - let the others read the research and reap the long-term benefits.

[toronto353]

(Original post by jesusandtequila)
QFA

You give the current situation, but could you give us the proposed situation with regards to how this would work coupled with the welfare Bill let's say for the average worker and a worker currently on minimum wage please? I understand that this may be difficult, but it would help me to vote because I'm currently moving towards a yes vote on this.

[obi_adorno_kenobi]

(Original post by jesusandtequila)
With that in mind, I'd be interested to see the argument for the NMW in tandem with the guaranteed income.

Well, as I said in my post, it morally reprehensible for all the things you'd expect me to post. Since you've already anticipated what I might say, I can't really go much further than that. I found your previous "Poverty Abolition Act" a disgrace, frankly, and since this is basically the same thing only without the evil man pushing it all the time I really cannot go along with it.

[SciFiRory]

even with the basic income, people still deserve a decent remuneration for the work they do, so this is a no from me.

[MacDaddi]

Aye, with the Welfare Bill.

[cl_steele]

id preferre a simple reduction in it, bannising it altogether could prove to be mistake but for the sake of arguement and baring in mind the citizens wage bill aye from me

[Keckers]

(Original post by SciFiBoy)
even with the basic income, people still deserve a decent remuneration for the work they do, so this is a no from me.

I fail to see what a blanket minimum wage has to do with decent remuneration for work.

[JPKC]

(Original post by jesusandtequila)
Not quite.

Let us not exaggerate the working week. The average working week in the UK is well below 48 hours. It's 36.3 hours (http://www.guardian.co.uk/news/datab...-working-hours) - so this comes out at a weekly pre-tax rate of £220.70, and even with a 48-hour working week it's £291.84. I don't know where you got the £9.45/hour NMW from. Taking the after-tax RL figures (since the current NMW relates to that), it's £195.51 and £243.88 per week. So let's not overestimate what the NMW does.

A guy on NMW working the average week would get £380.88 (including CI), compared to the CI figure of £162 - half! My only mistake was assuming more work hours, though that in itself might not be too foolish in the case of unskilled workers. I know my aunt works two jobs, as would most of her coworkers - the workforce is "flexible", part-time work is all that's available so multiple jobs are a requirement and thus the workhours get pushed up.

Oh, and the key difference is two-fold. The first is that JSA - £65/week doesn't provide enough to adequately live. The second is that JSA is conditional on looking for and taking work. So I'm not sure how JSA provides the stopping of the choice between work or die. The Resident's Income is substantially different.

If the basic income provided enough to "adequately live" then there would be no need for a minimum wage. This is a difficult argument for me because I don't believe in the NMW, I believe in a living wage. Getting rid of the NMW is a step away from this, which is why myself (and probably most on the left) will be voting against.

The MW is not the answer to the problem mooted here - but rather making the Resident's Income vary by region. The point is that a guaranteed income is better than minimum labour prices - and the single rate is a problem in both systems - not just this one. As for the living wage - if it's in business interests, then we don't need to legislate for it. If some are badly managed - let the others read the research and reap the long-term benefits.

Having a varying CI would just defeat the point of it. Egalitarian treatment by the state is one of the very principles behind having one IMO; additionally, it'd create an extra layer of complication for the distributors. And the fact that you trust business to act like that is a point on which we will never agree I'm afraid.

[MacDaddi]

I don't know why people are wetting their pants at any sign of changes to the NMW.

With the Welfare Bill and this - we have stopped the "work or die" option. This means that people could not work if they wanted to, so companies will need to make work attractive to people, by therefore setting a good salary and hours - therefore, nobody should be manipulated or taken advantage of.