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B341 - National Minimum Wage Rates Bill 2010 watch

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    B341 - National Minimum Wage Rates Bill 2010, GovernmentAn Act to readjust the national minimum wage to the rate it would have been at if it had grown with inflation since it's initial introduction, so reducing unemployment and aiding the economic recovery and long-run performance. It then creates a tapering of the minimum wage up to the age of 25, to help reduce the problem of youth unemployment. It's a model tried in Holland that works better than the distinct rates.

    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:

    1 National Minimum Wage
    (1) The national minimum wage shall be according to Schedule 1.
    (2) The national minimum wage shall increase each year on October 1 by the highest of the following measures:
    (a) Retail Prices Index
    (b) Consumer Prices Index
    (c) 0%

    2 Apprenticeships
    (1) The National Minimum Wage shall not apply to apprentices.
    (2) For the purposes of this Act "apprentice" is defined as "A person who agrees to work for a specified time in order to learn a trade, craft, or profession in which the employer, assents to instruct him or her."

    3 Short Title
    (1) This Act may be cited as the Minimum Wage Rates Act 2010

    Schedule 1
    Adult Rate: £4.88 per hour
    Development Rate (16-24 year olds): £(4.88 * 4% * Age) per hour, rounded to the nearest penny.

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    Are you sure about the macroeconomic consequences of this? It could potentially cause a shortage in the employment market.
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    I don't see the need for this.
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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.
    If it did that, wages would go up, rendering this irrelevant - so no big deal either way
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    (Original post by Cardozo)
    I don't see the need for this.
    The global economic crisis has hit the youth unemployment rate which is expected to stay at a high level over the next two years and so many unemployed youth are likely to experience a prolonged period of joblessness.

    The OECD published a report explaining that countries could alleviate youth unemployment by lowering the cost of employing low-skilled youth. One way this could be done is by lowering the National Minimum Wage (NMW) as this Bill provides.
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    I'd support a slight reduction in the development rate, or at least the ratio, but i don't feel we need to reduce the adult minimum wage. All it would do would be to encourage people to go back onto benefits.
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    (Original post by Joluk)
    I'd support a slight reduction in the development rate, or at least the ratio, but i don't feel we need to reduce the adult minimum wage. All it would do would be to encourage people to go back onto benefits.

    (Original post by Anony mouse)
    The global economic crisis has hit the youth unemployment rate which is expected to stay at a high level over the next two years and so many unemployed youth are likely to experience a prolonged period of joblessness.

    The OECD published a report explaining that countries could alleviate youth unemployment by lowering the cost of employing low-skilled youth. One way this could be done is by lowering the National Minimum Wage (NMW) as this Bill provides.
    It is these two arguments which really leave me undecided on this. I will follow the debate and comment where necessary.
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    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.
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    This is a poorly written Bill by Economic standards.

    Firstly I do not see why you are using RPI/CPI in such an arbitary manner. The national minimum wage isn't like the State pension. The NMW guarantees the wage rate of the individual, no matter the economic circumstances. In no sense of the term should a minimum guaranteed wage be determined by market growth - Because this is oxymoronic.

    Secondly - You Bill is meaningless to Apprenticeships as the NMW for Apprenticeships is £2.50
    Source -
    (Original post by Apprenticeships.org.uk)
    The new National Minimum Wage (NMW) came into force on 1 October 2010 where all apprentices will be paid a minimum of £2.50 per hour*.
    Finally, I inherently disagree with lowering the National Minimum Wage - Frankly, the NMW (for 19+) should be at least equal a living wage standard. The two are not the same. And lowering the minimum wage will effect a huge number of lower income groups who could then be further exploited by firms against the value of their labour.

    A no from me.
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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.
    Did someone repeal the Poverty Abolition Act whilst I wasn't looking?
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    (Original post by Stricof)
    Firstly I do not see why you are using RPI/CPI in such an arbitary manner. The national minimum wage isn't like the State pension. The NMW guarantees the wage rate of the individual, no matter the economic circumstances. In no sense of the term should a minimum guaranteed wage be determined by market growth - Because this is oxymoronic.
    Stricof, you haven't understood the purpose of Section 1(2).

    The value of the NMW rate is, by the inherent nature of inflation, determined by economic circumstances. Section 1(2) guarantees a NMW, adjusted for inflation.
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    (Original post by L i b)
    Did someone repeal the Poverty Abolition Act whilst I wasn't looking?
    Well this is what I was confused by as well.
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    I can't contemplate this unless the additional cost has been calculated in relation to the PAA.

    :hide:

    Only kidding.
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    Well, I like this, but don't we already have legislation that makes this moot?
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    (Original post by Stricof)
    Firstly I do not see why you are using RPI/CPI in such an arbitary manner. The national minimum wage isn't like the State pension. The NMW guarantees the wage rate of the individual, no matter the economic circumstances. In no sense of the term should a minimum guaranteed wage be determined by market growth - Because this is oxymoronic.

    <snip>

    Frankly, the NMW (for 19+) should be at least equal a living wage standard.
    I don't understand your first point, because of your second. The intent of the minimum wage, as you say, is to ensure that workers have enough to live on. (The PAA renders that irrelevant, of course, but we've tried to make that argument to the House before without success.) How much is "enough to live on" is dependent on prices. So tying the NMW to price indices seems obvious to me. (Plus: RPI/CPI are tied to market growth in the sense that growth drives inflation through demand, but RPI/CPI are not themselves measurements of market growth.)
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    I express my sincerest apologies. I will reply, properly, tomorrow. I am feeling so ill at the moment :sad:
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    Obviously I support the Bill overall, but I'd prefer to see 1 (2) (c) removed. As per what anony said earlier and I just said to Stricof, the point of tying it to price inflation is to keep the NMW at a fixed value in terms of goods and services. If prices go down, the NMW should go down too to achieve that - only logical.
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    (Original post by Stricof)
    I express my sincerest apologies. I will reply, properly, tomorrow. I am feeling so ill at the moment :sad:
    :nurse:
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    (Original post by Cardozo)
    I can't contemplate this unless the additional cost has been calculated in relation to the PAA.

    :hide:

    Only kidding.
    I saw that you're only kidding, but what extra cost would there be? If anything it would be a money saver as costs of production go down and thus the prices of goods & services that the PAA covers go down.
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    (Original post by Joluk)
    I'd support a slight reduction in the development rate, or at least the ratio, but i don't feel we need to reduce the adult minimum wage. All it would do would be to encourage people to go back onto benefits.
    Go onto benefits? We have a universal benefits system whereby every single citizen is paid the minimum for a decent life (as determined by a basket of goods & services) no matter what their income. Reducing the wage floor may decrease short-run labour supply at a lower wage rate, but if it is below equilibrium, businesses will offer higher wages in order to attract workers.

    More to the point, people can't leave or return to benefits, everyone is constantly on benefits here.
 
 
 
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