Minimum and living wage brackets set to receive large raises Watch

CatusStarbright
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The government has announced the new brackets set to come in from April 2020. The new rates are:
  • The National Living Wage for ages 25 and above - up 6.2% to £8.72
  • The National Minimum Wage for 21 to 24-year-olds - up 6.5% to £8.20
  • For 18 to 20-year-olds - up 4.9% to £6.45
  • For under-18s - up 4.6% to £4.55
  • For apprentices - up 6.4% to £4.15

The BBC reports that the rise in the living wage is more than four times the rate of inflation.

Do you think that this is a positive thing to reduce income inequality, or will it merely cause in increase in prices and/or other negative impacts?
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Andrew97
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It’s a significant rise and I can’t see it ending brilliantly for already struggling business.
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The Mogg
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How very conservative of the Conservative Party.
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Rakas21
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While I share the concern for some small firms (they may defer hiring or only hire part time) I actually support the increase overall. The UK economy generates well over 250,000 full time jobs each year if memory serves and the pace of employment growth has not slowed significantly as the minimum wage had risen.
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Smack
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(Original post by Rakas21)
While I share the concern for some small firms (they may defer hiring or only hire part time) I actually support the increase overall. The UK economy generates well over 250,000 full time jobs each year if memory serves and the pace of employment growth has not slowed significantly as the minimum wage had risen.
I suspect the more likely option is that companies will have to increase the price of their goods and services to make up for the higher costs of wages (if applicable, as many companies will likely not have anyone on the minimum or living wage anyway), rather than reduce their hiring - particularly if the positions need filled. I agree, I don't think there is much evidence that a minimum wage actively reduces employment.
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CatusStarbright
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(Original post by Smack)
I suspect the more likely option is that companies will have to increase the price of their goods and services to make up for the higher costs of wages (if applicable, as many companies will likely not have anyone on the minimum or living wage anyway), rather than reduce their hiring - particularly if the positions need filled. I agree, I don't think there is much evidence that a minimum wage actively reduces employment.
I would suppose that this is because if you need an employee, you need an employee. A company would hire anyway and would just increase the prices to compensate for the wage increases.
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Quady
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(Original post by The Mogg)
How very conservative of the Conservative Party.
#sarcasm
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Quady
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(Original post by Andrew97)
It’s a significant rise and I can’t see it ending brilliantly for already struggling business.
Perhaps they shouldnt struggle then?
0.75% base rate, no business should struggle when money is practically free.
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CatusStarbright
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(Original post by Quady)
[...]money is practically free.
How do you figure that?
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999tigger
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Easy to counteract by keeping more people at this level and also the expansion in part time and zero hour contracts.
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Rakas21
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(Original post by CatusStarbright)
How do you figure that?
He's suggesting that firms should take on additional leverage while capital is cheap.

Capital is not always that easy to access for small firms though.
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Rakas21
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(Original post by Kitten in boots)
The last increase was in 2016. In real terms the rise is not significant at all.



British businesses should focus on addressing their appalling inefficiencies that see us with a productivity rate that lags behind comparable economies rather than complaining about paying a wage that allows their workers to just scrape by.
Andrew was speaking of the minimum wage rise which increases faster than inflation each year. Not sure where 2016 has come from.
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londonmyst
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Not a great move considering many people are tightening their belts, Brexit is getting closer and most people are expecting the economy to slow down for at least six months post-Brexit .

Half my colleagues paid on hourly rates are very worried about these above inflation rises in the minimum wage and living wage.
The over 25s fear being laid off or not being offered new contracts after their existing ones expire and being left out of work.

One of my zero hours contract jobs, I get paid per dog instead of per hour to keep costs down.
Different rates according to shift, size of dog and if the dog has a history of aggression or unpleasant habits.
Doubt any coworkers would dare to mention the rises, too many people got fired or stopped being allocated hours in 2019.
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ByEeek
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(Original post by Smack)
I suspect the more likely option is that companies will have to increase the price of their goods and services to make up for the higher costs of wages
Or, make slighly less profit. We forget that many companies that employ minimum wage workers are highly profitable. Tesco for example made £1.69 billion! If a company is so on the edge that paying your workers a few quid more is going to break it, perhaps it was going to fold anyway? As for all the extra money - that gets spend in the economy so companies like Tesco and their huge supply chain actually benefit!
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Quady
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(Original post by CatusStarbright)
How do you figure that?
I see you redacted the quote :-)
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Quady
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(Original post by ByEeek)
Or, make slighly less profit. We forget that many companies that employ minimum wage workers are highly profitable. Tesco for example made £1.69 billion! If a company is so on the edge that paying your workers a few quid more is going to break it, perhaps it was going to fold anyway? As for all the extra money - that gets spend in the economy so companies like Tesco and their huge supply chain actually benefit!
Tesco profits are rubbish!
Net profit margin of 2%!

Are you a Tesco shareholder? If not then why the ramping!
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LiberOfLondon
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(Original post by Quady)
when money is practically free.
If money is free, I'm sure you'll have no problem giving me yours.
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Quady
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(Original post by LiberOfLondon)
If money is free, I'm sure you'll have no problem giving me yours.
Take yours from your bank?

I'm busy taking mine and investing it. 1.4k£ up today.
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Jammy Duel
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(Original post by Rakas21)
While I share the concern for some small firms (they may defer hiring or only hire part time) I actually support the increase overall. The UK economy generates well over 250,000 full time jobs each year if memory serves and the pace of employment growth has not slowed significantly as the minimum wage had risen.
Well actually it has slowed considerably given we went from about 350k a year when there was a lot of slack to now be gaining very few, you're getting some part time converting to full time but you don't have the hundreds of thousands of new jobs a year.

But unlike you I can actually read the studies that don't look at the UK where the underlying state of the economy obscures any impact and instead look at places where the underlying strength or weakness of the economy can be controlled for and there it is not such a good picture for you and your highly regulated state
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Quady
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(Original post by Jammy Duel)
Well actually it has slowed considerably given we went from about 350k a year when there was a lot of slack to now be gaining very few, you're getting some part time converting to full time but you don't have the hundreds of thousands of new jobs a year.

But unlike you I can actually read the studies that don't look at the UK where the underlying state of the economy obscures any impact and instead look at places where the underlying strength or weakness of the economy can be controlled for and there it is not such a good picture for you and your highly regulated state
Which state?
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