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B341 - National Minimum Wage Rates Bill 2010 Watch

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    (Original post by Thunder and Jazz)
    Well, I like this, but don't we already have legislation that makes this moot?
    Well yes, the Minimum Wage is an anomaly in conjunction with the PAA, but the PAA did nothing about the NMW, and the attempt to abolish it failed, so the least we can do it reduce the damaging effects of it, once any possible benefits are covered by a different system.
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    (Original post by Student2806)
    By all means change the rate of increase, but slashing the rate itself by more than £1 before doing so is simply unfair on millions of employed people who rely on a steady NMW to afford the essentials of living. Someone working a 35 hour week on the current rate of £5.93 could immediately lose nearly £40 a week in wages, a heft sum considering they'd only have been earning ~£207 a week in the first place. I can't support that.
    The 'essentials of living' are paid for regardless of work through PAA payments. Any earnings for anyone on top of that cannot be just for the essentials of living, and thus the NMW cannot be for the essentials of living.
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    (Original post by Don John)
    Are you sure about the macroeconomic consequences of this? It could potentially cause a shortage in the employment market.
    The minimum wage is not the only wage employers are allowed to charge. If they find they have a shortage of workers, they will improve pay (or conditions that are worth the amount of reduced pay) to attract enough workers.
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    you want to lower the minimum wage? no way im supporting this, if anything it should be higher imo
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    (Original post by GreenIsTheNewRed)
    you want to lower the minimum wage? no way im supporting this, if anything it should be higher imo
    Which would cause unemployment as employers would no longer want to hold onto members of staff who they feel do not warrant such a wage.

    With the PAA in place i don't feel there is any reason no to lower the minimum wage.
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    Due to the tax changes also brought in by the PAA, this brings minimum take home pay to 3.08 an hour... this is both a disincentive to work, and an exploitative rate of pay. The overall hourly rate of pay on TSR is less therefore than the real life equivalent, which is something i think needs to be considered by anyone thinking about this bill.

    I still disagree with the assertion that the PAA guarantees a reasonable standard of living (due to its vagueness), and as there is no way in the context of the TSR HoC of seeing the actual effects of the legislation, i have to vote against this for that reason, if nothing else. The fact that it also means a further decrease to hourly take home pay, and because, if the PAA made people decide not to work for that wage, causing the lowest market wage rate to rise as asserted by some, was true, there would be no reason to alter the legislation in the first place, makes me sure there is very little merit to this bill anyway.
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    (Original post by simontinsley)
    The minimum wage is not the only wage employers are allowed to charge. If they find they have a shortage of workers, they will improve pay (or conditions that are worth the amount of reduced pay) to attract enough workers.
    When I meant shortage, I meant shortage of available jobs. Increasing the minimum wage, ceteris paribus, can lead to a rise in unemployment.
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    (Original post by Don John)
    When I meant shortage, I meant shortage of available jobs. Increasing the minimum wage, ceteris paribus, can lead to a rise in unemployment.
    Then you need to read the Bill. This is a decrease in the Minimm Wage.
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    (Original post by cambo211)
    Which would cause unemployment as employers would no longer want to hold onto members of staff who they feel do not warrant such a wage.

    With the PAA in place i don't feel there is any reason no to lower the minimum wage.
    Using the threat of increased unemployment is no justification for allowing the financial exploitation of workers. All workers have the right to a fair and decent wage, and this Bill takes the minimum wage down to a disgraceful and degradingly paltry level. This is deeply unfair and constitutes a savage attack on those who earn least in society, and so are the most vulnerable. A complete no from me.
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    wow, you guys really hate workers dont you? I really hope some of the people in this house end up on JSA at some point and actually realise what the real world is like, clearly most of you are so disconected from reality, bills like this just show your own ignorance and arrogance.
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    (Original post by Olivia_Lightbulb)
    Using the threat of increased unemployment is no justification for allowing the financial exploitation of workers. All workers have the right to a fair and decent wage, and this Bill takes the minimum wage down to a disgraceful and degradingly paltry level. This is deeply unfair and constitutes a savage attack on those who earn least in society, and so are the most vulnerable. A complete no from me.
    It's no threat of unemployment it is simply what would happen.

    If you raise the minimum wage those who remain in employment would receive more money but the number of people in employment would fall.
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    (Original post by SciFiBoy)
    wow, you guys really hate workers dont you? I really hope some of the people in this house end up on JSA at some point and actually realise what the real world is like, clearly most of you are so disconected from reality, bills like this just show your own ignorance and arrogance.
    Pot kettle black.
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    (Original post by simontinsley)
    Then you need to read the Bill. This is a decrease in the Minimm Wage.
    Well in that case, I am now against it for a different reason.
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    I can't accept a reduction in the minimum wage. People need to receive a decent level of reward for the work that they do. Surely this will discourage people from working, and they will just live on their PAA income?
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    (Original post by sandys1000)
    I can't accept a reduction in the minimum wage. People need to receive a decent level of reward for the work that they do. Surely this will discourage people from working, and they will just live on their PAA income?
    People can choose not to take a job, yes. That is why what a decent level of reward is should be left to the individual, and there should be no barrier to two consenting parties willing to enter a contract at a certain wage rate.

    If people do not wish to work at this statutory minimum, companies will offer higher wages. You do not see chefs earning minimum wage, for example. So, yes, lower wages would discourage people from working, but if companies cannot secure workers, wages go up. Now, this allows wages to fall where workers cannot secure jobs, the opposite effect.

    Now, since the NMW didn't have a massive employment effect when it was first introduced is down to a number of factors, the rate of the NMW, the economic conditions and spare capacity in the economy. This adjusts the NMW back to its original rate with inflation, to address part of the unskilled unemployment problem currently occurring in the UK. Further to that, it tapers the NMW to 25, not 22 and the taper is more gradual in order to help address youth unemployment as caused by the NMW. We'd like to abolish it because it does so much more harm than good, unfortunately, the rest of the House did not agree - so the least we can do is mitigate some of the harmful effects.

    I mean, it really it baffling in the context of TSR why we have a NMW. Even if we accept the very dodgy premise that it does raise anyone's wage (rather than just pricing out the bottom), so that they earn enough to live a decent life, the PAA gives those payments anyway (at a higher rate than standard weeks on NMW), regardless of work, and so any need for it is absolutely 100% gone.
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    (Original post by Don John)
    Well in that case, I am now against it for a different reason.
    Hmm, that's odd. So you'd be against it if it were going up - because it'd cause greater unemployment - and against it were it going down - presumably because some workers would be getting less. So you really think the NWM is at a perfect level of equilibrium right now? You think it's maximising earnings for people who's labour isn't worth it, whilst simultaneously minimising unemployment due to higher cost of employment?

    Hmmm, I love partisanship.
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    (Original post by sandys1000)
    I can't accept a reduction in the minimum wage. People need to receive a decent level of reward for the work that they do. Surely this will discourage people from working, and they will just live on their PAA income?
    No one doubts that minimum wages cause unemployment though, do they? The leftist arguments tend to be about a decent wage for those employed, whilst acknowledging that it will cause some unemployment - they just see the benefits of this higher standard of living to be more beneficial than the subsequent unemployment bump. This is, whilst disagreeable to me, understandable.

    But that's not really the case here. The PAA ensures a minimum income that's capable of supporting a certain quality of life for everyone. Essentially, it does what the NMW does. So all that's left is a barrier to entry for employment for those will low skills. Again, it's important to note that everyone has a minimum standard of living. As such, maintaining a NMW at all is a question of whether you'd rather have some people earning a lot* more above PAA, or a lot of people earning a bit more.

    * By a "lot" I mean the difference between, say, £5 an hour and £3 an hour. Hardly gangbusters, but it's not insignificant as a percentage.

    In short, in TSR land, with the PAA, the more you increase the minimum wage, the greater income disparity you get from those in the lower end. Reductio ad absurdum, raise it to £20 an hour and 5% of those who used to be on NMW would perhaps still have a job, if that. The other 95% would be markedly worse off. Abolish it altogether, and there's a much smoother gradient of people getting paid what their skills deserve whilst the PAA maintains an absolute minimum income. Given the PAA, I know which I'd choose.

    (And, of course, this bill isn't even seeking to remove it, merely reduce it to what New Labour thought was the minimum wage when it was first brought it, brought up to modern costing standards.)
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    How would you prevent the lowering of the NMW serving as a disincentive to work given the existence of the PAA?
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    (Original post by toronto353)
    It is these two arguments which really leave me undecided on this. I will follow the debate and comment where necessary.
    (Original post by sandys1000)
    I can't accept a reduction in the minimum wage. People need to receive a decent level of reward for the work that they do.
    I don't blame you Sandys. I used to think the NMW was just obvious common sense but after being persuaded to the contrary by other Libertarians a couple of years ago, I became quite interested in this area.

    The reality is that millions of people are still paid below the NMW for the same reason that the illegality of selling cannabis hasn't resulted in a shortage of the drug: that is, it still goes on only that now it goes on illegally which means such workers are are not protected by other employment rights entitlements whilst working in dangerous conditions with no proper training.

    The importance of lowering the NMW is to prevent it hitting employment. As the Work Foundation had already warned prior to the global financial crisis, the rate of growth in the NMW should be no faster than that of average earnings. Otherwise where the NMW is too high for the market, especially for particular regions across the country, it can lead to job losses.
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    As someone who was priced out of finding work for an entire summer a few years ago (between secondary school and university) I strongly agree with this bill. It made no sense to hire me when an illegal immigrant can do it cheaper. Now I'm lucky because I'm from a well off family, and I didn't really need to make any money during the summer. I did some reading and watched some porn. Got boring after a while, but the only consequence of being jobless was boredom, and an empty CV.

    Now had I been from a less well off family I might have been expected to fund my own university accommodation. That'd have been impossible because I'd have no money to pay for it. Had I had my own family, I'd have struggled to put food on the table. It's better to be earning a little bit less than not earning at all.
 
 
 
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