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Between Labour and Tories, who do you trust for finding you a job? watch

  • View Poll Results: Who do you think will be the best at preventing unemployment?
    Labour
    46.25%
    Conservative
    31.25%
    Both as bad as each other
    21.25%
    Both as good as each other!
    1.25%

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    At the time the minimum wage was implemented the invested capital per-head of the labour force in Britain was increasing quite quickly mainly due to the policies of Ken Clarke pre 1997.

    It's no wonder the minimum wage hasn't affected employment, wages were increasing anyway!
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    (Original post by c2uk)
    Not really a fact, again just your point of view why you weren't hired. There could've been a thousand different reasons why you weren't hired, even if you were told it's due to the NMW it might have just been an excuse.
    Ok. Is this a fact:

    Employer offering a job. He's willing to pay up to £4 an hour for that job.

    Out of 10 people, 3 are willing to do the job at that pay.

    An NMW is introduced, at £6 per hour.

    He's willing to pay up to £4 an hour for that job so therefore isn't willing to employ anyone for £6 an hour (as clearly, he doesn't believe the job is worth it)

    So 3 people who would otherwise have had the chance of getting a job are instead left unemployed.

    Is this a fact?

    Don't just say "No". Tell me where the logic is flawed.
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    (Original post by Olivia_Lightbulb)
    Is it ridiculous if it ensures you do have a job?
    I'd be the one working and earning money, so for me, no.

    Is it ridiculous for everyone else (other than me)? Yes. They get screwed over as their taxes must rise to finance the spending which goes into providing me with that job.

    So personally, I'd rather society chose short term pain for long term gain, rather than short term gain for long term pain. Gah.
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    (Original post by Olivia_Lightbulb)
    Is it ridiculous if it ensures you do have a job?
    Of course not. You cannot give public sector jobs out for absolutely no reason and then expect alll the private sector workers to pay for it.
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    (Original post by PGtips92)
    I'd be the one working and earning money, so for me, no.

    Is it ridiculous for everyone else (other than me)? Yes. They get screwed over as their taxes must rise to finance the spending which goes into providing me with that job.

    So personally, I'd rather society chose short term pain for long term gain, rather than short term gain for long term pain. Gah.
    But the longer you have that 'short-term' pain, the less likely the country is able to bounce back and achieve those gains. You need quick and decisive action to ensure the recession does not become deeper and more long-lasting than it need be.
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    (Original post by usainlightning)
    Of course not. You cannot give public sector jobs out for absolutely no reason and then expect alll the private sector workers to pay for it.
    That's immaterial.
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    (Original post by Olivia_Lightbulb)
    But the longer you have that 'short-term' pain, the less likely the country is able to bounce back and achieve those gains. You need quick and decisive action to ensure the recession does not become deeper and more long-lasting than it need be.
    What has the recession got to do with it?

    If we weren't in a recession, would you still think it sensible for the government to create jobs using large public spending financed by tax payers present and future?

    To your comment below, how is that immaterial? It's entirely relevant! As he said, You cannot give public sector jobs out for absolutely no reason and then expect alll the private sector workers to pay for it. To do so IS ridiculous.
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    (Original post by c2uk)
    Don't people understand the term fact on TSR? What you present isn't a fact, that's an opinion, your point of view, what you believe is true. It might be factual correct for all we know or it might not. Without actual proof, we cannot say. So also to you, show me proven evidence that less jobs is really down to the minimum wage.
    What I said is a fact, at present many businesses are giving their employees a choice, work for under minimum wage or lose your job. Its not an opinion, its a fact.
    Now ofcourse the root cause is the recession, but during this recession the minimum wage has caused jobs to be lossed. During the boom years it had little or no effect though. That's all I'm saying.
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    (Original post by jacketpotato)
    Who do you trust to find you a job? How about finding a job yourself!!!!
    Always amuses me when kids say this, especially those who are receiving some sort of financial backup whether it's EMA or mummy and daddy's cash. Few companies that I know of can't really be bothered to employ continuing university students because they go back to their studies in September, or in the case with me, October. Why employ university students when you have to re-employ? It takes time and money. Too much hassle. Just like women. Why employ them? They're only going to get pregnant and leave - supposedly. Of course you have your own initiative to use but there is a limit on your own ability by the economical situation. Personally I trust neither. I'd just arrange a coup and let Vince Cable take over purely for a laugh to be honest. Would make a change from the constant ugly sisters always taking over for power.

    It doesn't bother me though because I'm not legally or socially forced to take a job. I receive no state benefits so I'm happy playing computer games all day, every day. It will give me time to get back into web authoring and other computing activities though.
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    (Original post by PGtips92)
    Ok. Is this a fact:

    Employer offering a job. He's willing to pay up to £4 an hour for that job.

    Out of 10 people, 3 are willing to do the job at that pay.

    An NMW is introduced, at £6 per hour.

    He's willing to pay up to £4 an hour for that job so therefore isn't willing to employ anyone for £6 an hour (as clearly, he doesn't believe the job is worth it)

    So 3 people who would otherwise have had the chance of getting a job are instead left unemployed.

    Is this a fact?

    Don't just say "No". Tell me where the logic is flawed.
    Your logic is absolutely correct, it's just that the people you are arguing against have no belief in the application of logic to economic principles; they'd rather look blindly at the 'evidence,' despite the fact that looking at economic data without having an underlying theoretical apparatus is utterly futile.
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    Are Labour and Conservatives not like two sides of the same coin? They preach the same things but preach with different tones. In the end it doesn't matter which is in charge, it's been the same parties quarrelling over each others' mistakes, and they have been the common denominator all the way through.
    I don't care for either, they are just as bad as each other. If the Conservatives aren't in government, Labour are. If Labour aren't running Britain, the Tories are.

    People should stop voting for the same useless, unimaginative parties all their lives.
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    I have absolutley no idea what Cameron's policies are so find it difficult to answer this question.
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    (Original post by Dionysus)
    Labour. Primarily because I'm an active member of the Labour party involved in organising campaigning and should be able to get work with an MP reasonably easily.
    Oh God I can't believe how many people are living on planet crack pipe, this is what the yoof wing of the ZanuLabour believe in. One thousand under 25's are being made unemployment everyday under a Labour government. Every Labour government has ended its term in office with higher unemployment than what it started with.

    I think even Dionysus will struggle to get a job what with all those Labour MPs that will be loosing their seats cometh the election.

    Labour=financial misconduct.
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    (Original post by c2uk)
    I believe this was the article we discussed in my economics lecture, as I said it's quite some time ago now, so I'm not 100% sure any more
    It's an interesting paper. I've never formally studied economics, so I have to keep referencing the textbook every few minutes. :P

    My guess would be simply that the UK minimum wage is below or very close to the market equilibrium. This, coupled with somewhat-inelastic demand for labour could go some way to explain the lack of significant impact on both unemployment and wages.
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    (Original post by PGtips92)
    Ok. Is this a fact:

    Employer offering a job. He's willing to pay up to £4 an hour for that job.

    Out of 10 people, 3 are willing to do the job at that pay.

    An NMW is introduced, at £6 per hour.

    He's willing to pay up to £4 an hour for that job so therefore isn't willing to employ anyone for £6 an hour (as clearly, he doesn't believe the job is worth it)

    So 3 people who would otherwise have had the chance of getting a job are instead left unemployed.

    Is this a fact?

    Don't just say "No". Tell me where the logic is flawed.
    Your logic is flawed because this simply isn't how the labour market works. As employers are large and employees are individuals, employers pay employees based on what they can get away with, not based on what the employees are actually worth to them. Unlike in commodity markets, the supply of labour is relatively fixed. The labour market is almost completely demand based. Even in companies where the pool of labour is pretty small, this is how wages are determined. This is why in a recession employers make workers redundant instead of reducing wages. If you read the annual report of any large company where staffing is an issue, you will see phrases like "competitive market rate". Crucially, this rhetoric is almost always completely detached from the fortunes of the company - wages won't change even if profit does.

    What I'm getting at is that employers tend to have very big margins as to what they could pay their workers. In the real world, your employer would be able to pay those people anything between £3 and £8; and without a NMW would pay £3. There simply are not a bunch of jobs which are only worth £3 or £4 to their employer. This idea that there are a bunch of £3 or £4 jobs which are prevented because of the NMW does not survive scrutiny. When the NMW was introduced, in pretty much every case the wage was increased rather than the employee made redundant.

    (Original post by DrunkHamster)
    Your logic is absolutely correct, it's just that the people you are arguing against have no belief in the application of logic to economic principles; they'd rather look blindly at the 'evidence,' despite the fact that looking at economic data without having an underlying theoretical apparatus is utterly futile.
    Opponents of the minimum wage tend to insist on completely ignoring the economic data. You can't do this - of course economic data is important, particularly as unemployment figures follow general trends and do not tend to spike over short periods. There are problems with using economic data, but you have massively exaggurated them. Furthermore, the fact that opponents of the NMW don't have any significant evidence from this country to support their thesis is telling: the right has no problem using economic data elsewhere!!!

    It any of the above about £3 or £4 jobs was true, we would expect to see a sudden spike in unemployment figures. Didn't happen. Whilst this isn't totally reliable, we would also expect to see leading business figures saying that they had to lay off staff. Didn't happen either. There isn't even significant anecdotal evidence to support your position.

    The underlying theoretical apparatus isn't one-sided. The only economic arguments being put forward thus far assume somewhat of a perfect competition and model the commodity markets: economics at its most basic. The labour market is not like that. Particularly for unskilled workers, it resembles a monopsony:

    The employer maximises profit where MFC = MRP. In effect, by restraining the number it employs it can keep wages down. If a NMW is set at Wmin, it can no longer do that. It will hire until the costs at which people will provide their labour equals what the labour is worth: where S meets MRP. In short, a NMW has actually caused that firm to hire MORE workers.

    Obviously this makes as many assumptions as commodity market supply/demand analyses do. In the real world, the supply of labour is pretty flat and thus a sensibly set NMW has negligible impact.
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    (Original post by jacketpotato)
    Particularly for unskilled workers, it resembles a monopsony
    There is very very little evidence to suggest that in developed western countries labour markets are monopsonic. On the contrary, most actual studies done into the minimum wage support the classical economic model, or reach a "no effect" conclusion.

    Supply of labour in this country is pretty complex too: someone may choose to be available for work at a given market price for unskilled labour, or they may choose to work illegally (but maybe not in illegal work ), or they may choose to emigrate, or they may choose to play the benefits system instead.

    Whilst the supply curve for labour is most definitely not perfectly elastic, it's not "flat" either.
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    (Original post by jacketpotato)
    Your logic is flawed because this simply isn't how the labour market works. As employers are large and employees are individuals, employers pay employees based on what they can get away with, not based on what the employees are actually worth to them. Unlike in commodity markets, the supply of labour is relatively fixed. The labour market is almost completely demand based. Even in companies where the pool of labour is pretty small, this is how wages are determined. This is why in a recession employers make workers redundant instead of reducing wages. If you read the annual report of any large company where staffing is an issue, you will see phrases like "competitive market rate". Crucially, this rhetoric is almost always completely detached from the fortunes of the company - wages won't change even if profit does.
    No. In a recession you do get redundancies. But you also get wage cuts. I’m not going to read annual reports, but I will look at real data:


    And as for employers paying “not based on what the employees are actually worth”; what ARE the employees worth? It isn’t a value judgement; it’s determined by supply and demand. So if I can get away with paying a worker £3 an hour and they are willing to work at that price, then that is what they are worth!

    (Original post by jacketpotato)
    What I'm getting at is that employers tend to have very big margins as to what they could pay their workers. In the real world, your employer would be able to pay those people anything between £3 and £8; and without a NMW would pay £3. There simply are not a bunch of jobs which are only worth £3 or £4 to their employer. This idea that there are a bunch of £3 or £4 jobs which are prevented because of the NMW does not survive scrutiny. When the NMW was introduced, in pretty much every case the wage was increased rather than the employee made redundant.
    I’m sure many low skilled immigrants and teenagers would be willing to work for £3 or £4 [If you want evidence, ask my friends at school]. So the NMW is currently denying them a job [they were unemployed], because other (more skilled) workers [graduates, say] are employed in preference to these low skilled immigrants and teenagers [my friends, say] at the NMW rate of £5.76 (or whatever it is). [In case you want evidence, i've provided it in "[]" ok :p: ]

    (Original post by jacketpotato)
    Opponents of the minimum wage tend to insist on completely ignoring the economic data. You can't do this - of course economic data is important, particularly as unemployment figures follow general trends and do not tend to spike over short periods. There are problems with using economic data, but you have massively exaggurated them. Furthermore, the fact that opponents of the NMW don't have any significant evidence from this country to support their thesis is telling: the right has no problem using economic data elsewhere!!!

    It any of the above about £3 or £4 jobs was true, we would expect to see a sudden spike in unemployment figures. Didn't happen. Whilst this isn't totally reliable, we would also expect to see leading business figures saying that they had to lay off staff. Didn't happen either. There isn't even significant anecdotal evidence to support your position.

    The underlying theoretical apparatus isn't one-sided. The only economic arguments being put forward thus far assume somewhat of a perfect competition and model the commodity markets: economics at its most basic. The labour market is not like that. Particularly for unskilled workers, it resembles a monopsony:

    The employer maximises profit where MFC = MRP. In effect, by restraining the number it employs it can keep wages down. If a NMW is set at Wmin, it can no longer do that. It will hire until the costs at which people will provide their labour equals what the labour is worth: where S meets MRP. In short, a NMW has actually caused that firm to hire MORE workers.

    Obviously this makes as many assumptions as commodity market supply/demand analyses do. In the real world, the supply of labour is pretty flat and thus a sensibly set NMW has negligible impact.
    All i'm going to say is that a quick glance at the empirical evidence, for which you are so fond of, suggests in some cases that a minimum wage doesn't raise unemployment but in other studies it does raise unemployment

    Couple of quotes:
    In a 2008 book, David Neumark and William L. Wascher described their analysis of over 300 studies on the minimum wage.[3] The studies were from several countries covering a period of over 50 years, primarily from the 1990s onward. According to the Neumark and Wascher, a large majority of the studies show negative effects for the minimum wage; those showing positive effects are few, questionable, and disproportionately discussed.

    Based on the published studies they considered, Neumark and Wascher conclude that the minimum wage is not good social policy. They emphasize three especially salient conclusions: First, while acknowledging Card and Kreuger, they found that studies since the early 1990s have strongly pointed to a "reduction in employment opportunities for low-skilled and directly affected workers." Second, they found some evidence that the minimum wage is harmful to poverty-stricken families, and "virtually no evidence" that it helps them. Third, they found that the minimum wage lowers adult wages of young workers who encounter it, by reducing their ultimate level of education.


    OR

    A 2000 survey by Dan Fuller and Doris Geide-Stevenson reports that of a sample of 308 American Economic Association economists, 45.6% fully agreed with the statement, "a minimum wage increases unemployment among young and unskilled workers", 27.9% agreed with provisos, and 26.5% disagreed.
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    (Original post by PGtips92)
    No. In a recession you do get redundancies. But you also get wage cuts. I’m not going to read annual reports, but I will look at real data:


    And as for employers paying “not based on what the employees are actually worth”; what ARE the employees worth? It isn’t a value judgement; it’s determined by supply and demand. So if I can get away with paying a worker £3 an hour and they are willing to work at that price, then that is what they are worth!
    Your graph does not look actually quantify anything. Whilst a lot of firms are freezing pay at the moment, very few are actually reducing it by any significant amount. This is common no matter where you look: at the car plants, the tendency is to lay off workers rather than slash wages. The same with top law firms: salaries have been frozen, or, more often, had modest increases, with the same firms laying off up to 10% of their work force. The point is that redundancy is a much more important cost-controller than wages, wages being fairly inelastic.

    £3 is not what the worker is worth to the employer: it is simply what the employer is forced to pay by the market. There is a fairly large discrepancy between the two; hence the need for Trade Unions and a NMW. There is a very large margin of difference and a large producer surplus in the labour market. The phrase "everything is worth what people will pay for it" only accurately applies to the commodity markets where elasticity in supply and demand, and a very competitive market, lead to there being little surplus and price mechanisms being effective. None of that holds true in the labour market.

    I’m sure many low skilled immigrants and teenagers would be willing to work for £3 or £4 [If you want evidence, ask my friends at school]. So the NMW is currently denying them a job [they were unemployed], because other (more skilled) workers [graduates, say] are employed in preference to these low skilled immigrants and teenagers [my friends, say] at the NMW rate of £5.76 (or whatever it is). [In case you want evidence, i've provided it in "[]" ok :p: ]
    People had exactly the same problems finding these jobs before the NMW. The simple fact is that these jobs don't and never have existed: not that many people need a unskilled student at random intervals, whether it be for £3 or £5. The NMW did not alter unemployment figures: this idea that a bunch of low-paying jobs would spring up if you got rid of the NMW is a myth.

    All i'm going to say is that a quick glance at the empirical evidence, for which you are so fond of, suggests in some cases that a minimum wage doesn't raise unemployment but in other studies it does raise unemployment

    Couple of quotes:
    In a 2008 book, David Neumark and William L. Wascher described their analysis of over 300 studies on the minimum wage.[3] The studies were from several countries covering a period of over 50 years, primarily from the 1990s onward. According to the Neumark and Wascher, a large majority of the studies show negative effects for the minimum wage; those showing positive effects are few, questionable, and disproportionately discussed.

    Based on the published studies they considered, Neumark and Wascher conclude that the minimum wage is not good social policy. They emphasize three especially salient conclusions: First, while acknowledging Card and Kreuger, they found that studies since the early 1990s have strongly pointed to a "reduction in employment opportunities for low-skilled and directly affected workers." Second, they found some evidence that the minimum wage is harmful to poverty-stricken families, and "virtually no evidence" that it helps them. Third, they found that the minimum wage lowers adult wages of young workers who encounter it, by reducing their ultimate level of education.


    OR

    A 2000 survey by Dan Fuller and Doris Geide-Stevenson reports that of a sample of 308 American Economic Association economists, 45.6% fully agreed with the statement, "a minimum wage increases unemployment among young and unskilled workers", 27.9% agreed with provisos, and 26.5% disagreed.
    You have to be careful with this comparitive survey. The issue isn't minimum wages in general, its our particular NMW. Of course if you set the NMW too high, you'd get a lot of unemployment, as has happened in many States in the past. I reckon if you put a "significant" provisio and focused the question on the UK, the percentages would change.

    (Original post by Sconzey)
    There is very very little evidence to suggest that in developed western countries labour markets are monopsonic. On the contrary, most actual studies done into the minimum wage support the classical economic model, or reach a "no effect" conclusion.

    Supply of labour in this country is pretty complex too: someone may choose to be available for work at a given market price for unskilled labour, or they may choose to work illegally (but maybe not in illegal work ), or they may choose to emigrate, or they may choose to play the benefits system instead.

    Whilst the supply curve for labour is most definitely not perfectly elastic, it's not "flat" either.
    I don't pretend that the labour market is a monopsony, but it most certainly isn't in a state of perfect competition, particularly in areas of high unemployment like County Durham and South Wales where a small number of large employers dominate. The point I'm trying to make is that just looking at pure micro-economic theory doesn't really get you anywhere: one has to focus on the evidence.
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    (Original post by jacketpotato)
    The issue isn't minimum wages in general, its our particular NMW. Of course if you set the NMW too high, you'd get a lot of unemployment, as has happened in many States in the past. I reckon if you put a "significant" provisio and focused the question on the UK, the percentages would change.
    I guess what you've got to do is ask yourself what problem you're trying to solve with the Minimum Wage. Are you trying to raise wage levels? Are you trying to prevent people being paid for menial tasks (i.e. tasks that would attract a pay below minimum wage) ?

    Then you ask yourself if a national minimum wage achieves these goals. With respect to raising wage levels, I would argue that the wage rises noted with respect to the introduction of the UK NMW were insignificant in comparison to the wage rises brought about by economic growth over the past ten years.

    With respect to preventing people being employed at low-wage levels, I would argue that those employed in such tasks have always been criminals and illegal immigrants, and so remain unaffected by the minimum wage. Indeed, much of the factory work that used to provide a great deal of employment in the UK (albeit at low wage levels) has now been exported to other countries where governments are corrupt and the Rule of Law is weaker.
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    (Original post by jacketpotato)

    it most certainly isn't in a state of perfect competition, particularly in areas of high unemployment like County Durham and South Wales where a small number of large employers dominate.
    That large employer being the government, about 60% of the North Easts jobs are public sector.
 
 
 
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