£10 minimum wage?
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Original post by L'Allegro
Sure. I think a bigger question is the effect this will have on housing, because I think those are people's biggest costs. If wages go up, do you think rents will go up? And does Corbyn's rent control policy not account for this happening?
There are a few too many variables there, interest rates, higher rate income tax deducatability, unemployment, benefit cap level, amount of social house building levels to name a few
All other things being equal then yes, it'd push up rent a tad. But they aren't - Corbyn would promote social house building which would depress rents.
I don't see how it accounts for it, Cameron isn't doing it yet it raising NMW.
Original post by Quady
There are a few too many variables there, interest rates, higher rate income tax deducatability, unemployment, benefit cap level, amount of social house building levels to name a few
All other things being equal then yes, it'd push up rent a tad. But they aren't - Corbyn would promote social house building which would depress rents.
I don't see how it accounts for it, Cameron isn't doing it yet it raising NMW.
All other things being equal then yes, it'd push up rent a tad. But they aren't - Corbyn would promote social house building which would depress rents.
I don't see how it accounts for it, Cameron isn't doing it yet it raising NMW.
Is depressing rents a bad thing? I think creating affordable housing is one of the most important tasks our current and next government should be looking to do.
Cameron's minimum wage is a scam, you're intelligent enough to know that. In real terms it's not an increase at all.
Original post by L'Allegro
Is depressing rents a bad thing? I think creating affordable housing is one of the most important tasks our current and next government should be looking to do.
Cameron's minimum wage is a scam, you're intelligent enough to know that. In real terms it's not an increase at all.
Cameron's minimum wage is a scam, you're intelligent enough to know that. In real terms it's not an increase at all.
No... (didn't say it was...)
Prices aren't going to rise 50% over the parliament. They've been static for the last year, inflation of 6-7%+ continuously for the next five years is pretty unlikely given the likely fiscal and monetary tightening over the period.
How won't it be a real terms increase?
Changing the minimum wage achieves nothing whatsoever. Prices of products everywhere will just rise to accommodate this change.
Original post by Quady
No... (didn't say it was...)
Prices aren't going to rise 50% over the parliament. They've been static for the last year, inflation of 6-7%+ continuously for the next five years is pretty unlikely given the likely fiscal and monetary tightening over the period.
How won't it be a real terms increase?
Prices aren't going to rise 50% over the parliament. They've been static for the last year, inflation of 6-7%+ continuously for the next five years is pretty unlikely given the likely fiscal and monetary tightening over the period.
How won't it be a real terms increase?
I agree.
It's not a real terms increase because it's meant to reach £9 an hour by 2020, which is about in line with inflation. Or perhaps it's more accurate to say it's a very minimal real terms increase, easily cancelled out by tax credit cuts.
http://blogs.spectator.co.uk/coffeehouse/2015/07/why-osborne-is-copying-and-bettering-milibands-minimum-wage-pledge/
'And on today’s GDP forecasts, £9 is in the ball mark of where you’d expect the minimum wage to go anyway.'
Original post by Dark Elixir
Changing the minimum wage achieves nothing whatsoever. Prices of products everywhere will just rise to accommodate this change.
The price of Ferrari's will go up proportionate to the rise?
The price of basic baked beans and basics bread will go up proportionate to the rise?
Why is offal much less expensive relative to other foods wages now compared to 1958...?
Original post by L'Allegro
I agree.
It's not a real terms increase because it's meant to reach £9 an hour by 2020, which is about in line with inflation. Or perhaps it's more accurate to say it's a very minimal real terms increase, easily cancelled out by tax credit cuts.
http://blogs.spectator.co.uk/coffeehouse/2015/07/why-osborne-is-copying-and-bettering-milibands-minimum-wage-pledge/
'And on today’s GDP forecasts, £9 is in the ball mark of where you’d expect the minimum wage to go anyway.'
It's not a real terms increase because it's meant to reach £9 an hour by 2020, which is about in line with inflation. Or perhaps it's more accurate to say it's a very minimal real terms increase, easily cancelled out by tax credit cuts.
http://blogs.spectator.co.uk/coffeehouse/2015/07/why-osborne-is-copying-and-bettering-milibands-minimum-wage-pledge/
'And on today’s GDP forecasts, £9 is in the ball mark of where you’d expect the minimum wage to go anyway.'
So you think inflation will average 6.5% over the next five years?
http://www.bbc.co.uk/news/business-34255161
Given inflation today is 0.0% why do you think that?
Assuming your household qualifies for tax credits mebby...
Original post by Quady
The price of Ferrari's will go up proportionate to the rise?
The price of basic baked beans and basics bread will go up proportionate to the rise?
Why is offal much less expensive relative to other foods wages now compared to 1958...?
The price of basic baked beans and basics bread will go up proportionate to the rise?
Why is offal much less expensive relative to other foods wages now compared to 1958...?
Yes, the price of basics will rise proportionately. How can you expect them not to when supermarkets are having to pay their workers much more?
No, the price of Ferrari's probably won't.
I do not know anything about offal, so can't answer your question.
Original post by Quady
So you think inflation will average 6.5% over the next five years?
http://www.bbc.co.uk/news/business-34255161
Given inflation today is 0.0% why do you think that?
Assuming your household qualifies for tax credits mebby...
http://www.bbc.co.uk/news/business-34255161
Given inflation today is 0.0% why do you think that?
Assuming your household qualifies for tax credits mebby...
Not based on inflation, as the article I posted stated, but GDP growth.
Original post by Dark Elixir
Yes, the price of basics will rise proportionately. How can you expect them not to when supermarkets are having to pay their workers much more?
No, the price of Ferrari's probably won't.
I do not know anything about offal, so can't answer your question.
No, the price of Ferrari's probably won't.
I do not know anything about offal, so can't answer your question.
Because people will buy better quality stuff.
The supermarket wage bill isn't entirely NMW staff, corporation tax is being cut, goods are made outside the UK, staff costs aren't even half a supermarket store's running costs... so there are a fair few reasons why they wouldn't rise proportionately.
Original post by L'Allegro
It's not a real terms increase because it's meant to reach £9 an hour by 2020, which is about in line with inflation.
Could you make your mind up?
Original post by L'Allegro
Not based on inflation, as the article I posted stated, but GDP growth.
Do you think GDP growth will more than double to over 6% then?
Original post by Quady
Could you make your mind up?
Sure, sorry for the confusion. The articles I've read point out GDP growth.
Do you think GDP growth will more than double to over 6% then?
Sure, sorry for the confusion. The articles I've read point out GDP growth.
Do you think GDP growth will more than double to over 6% then?
I mean, I'm not an economist. Again, the article I shared suggests that £9 an hour is an increase in line with expected GDP growth.
Original post by Quady
Could you make your mind up?
Do you think GDP growth will more than double to over 6% then?
Do you think GDP growth will more than double to over 6% then?
Sorry for double quote, but over five years that's in line with Piketty's predictions for UK GDP growth in Capital and the 21st Century, too. Don't have the book to hand right now but can upload pictures of the relevant pages later.
Original post by L'Allegro
I mean, I'm not an economist. Again, the article I shared suggests that £9 an hour is an increase in line with expected GDP growth.
Actually (going by the graph) it suggests it'd be 5% higher than it should be, taking the increases starting from 2011, making an unspecified assumption of GDP growth for the next five years.
Original post by L'Allegro
Sorry for double quote, but over five years that's in line with Piketty's predictions for UK GDP growth in Capital and the 21st Century, too. Don't have the book to hand right now but can upload pictures of the relevant pages later.
Cheers please do, sounds high.
According to the last budget
https://www.gov.uk/government/publications/summer-budget-2015/summer-budget-2015
The Office for Budget Responsibility (OBR) forecasts GDP growth of 2.4% in 2015, 2.3% in 2016, and 2.4% for the remainder of the forecast period.
Which is quite a massive amount lower than 6.5%. If GDP were to grow 6.5% we'll be out of austerity in no time.
Original post by Quady
Actually (going by the graph) it suggests it'd be 5% higher than it should be, taking the increases starting from 2011, making an unspecified assumption of GDP growth for the next five years.
I confess I've been trying to negotiate four threads at once and start a petition for my tutor. Let me do you the credit you deserve and sort out my position:
Osborne's LMW increase is either slightly in line with, or just ahead of, GDP growth. This will make working families slightly better off.
However, this doesn't take into account the above-GDP-growth increases (or so I assume) in housing prices, and other goods.
It also doesn't take into account Osborne's tax credit cuts/other benefit cuts.
Therefore, I still don't see it as a helpful policy for working families, because of these other variables.
I apologize for being all over the place, but it's kind of hard to negotiate these things all at once.
As for Piketty, I think his point is about cumulative growth - only 2.3% or so per year, yes, but the net effect of that means a large proportional GDP increase by 2020 from 2015. Hence the LWM's effect is more or less a proportional increase, rather than a real terms one. Does this make more sense?
Original post by L'Allegro
As for Piketty, I think his point is about cumulative growth - only 2.3% or so per year, yes, but the net effect of that means a large proportional GDP increase by 2020 from 2015. Hence the LWM's effect is more or less a proportional increase, rather than a real terms one. Does this make more sense?
Not really...
NMW today = £6.50
NLW 2020 = £9
Increase = 38.5%
GDP growth 2.3% x 5 years = 12%
How is a 38.5% increase in NMW proportional to a 12% increase in GDP?
Original post by The_Internet
The thing is it's actually not. This is "by 2020" By 2020, the minimum wage will probably be around £8.50 or £9 or so any way, so in real terms, it's not actually going up by much. It just sounds good for labour to say "This will happen by 2020"If this was ..by 2016, then yeah Id agree. But as it's 2020, they're basically saying "Minimum wage will be just a bit higher than it was (in real terms)"
Do you take economics?
Original post by p3ssimist
Do you take economics?
Nah, Im just more in to politics, and I've seen the minimum wage go up every year in line with inflation or beyond sometimes
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