BettyBoop said:
The National Minimum Wage is a joke.
A horrible joke!
Far too may people are being paid far to much money for the miserable efforts they manage to make.
There are people out there who aren't worth a quid an hour but now they get paid a lot more than that.
On paper it looks all very nice - in reality it is despicable!
The national minimum is 4.85 per hour and an employee would have to work exceptionally slow not to make product of less than than that in value in 1 hour.
If a company has its work procedures developed then there is no way anyone should produce less than 4.85 worth of work in an hour.
In some factories I have worked (in the automotive sector) even an exceptionally slow worker would produce a few hundred pounds worth of product in a matter of minutes or thousands of pounds worth in an hour.
The particular company I worked at employed a few hundred workers at minimum wage and made profits in the 100's of million. Possibly equivilent of half a million profit per employee.
In that context 4.85 seems a pittance and in no way can it be said that the employees are being paid their worth.
On the other side of the coin from manufacturing is of course consumption- there is no good producing a product if no one can afford to buy them, increases in the minimum wage above inflation increase purchasing power in real terms. The ability to purchase and the act of purchasing stimulates growth in the retail, distribution, transportation and manufacturing sectors. Thus guaranteeing business for the profiteers.
If you pay workers a quid an hour to make cars you will make cars more cheaply but they will never realise a profit until sold. People on less than a quid an hour do not buy new cars either by cash purchase or by credit arrangement.
I know directors and shareholders seek to maximize their profits but if they cannot show a healthy return after employing people on the 4.85 miimum then they should take a serious look at their business plan and maybe consider
another business.
Much was made of the minimum wage and small businesses. How small business will be hurt. But again it is not the minimum wage that is the problem for small business but intense competition from multinationals that is the biggest problems eg the relationship between milk producers and the supermarkets. If anything the minimum wage often guarantees for small business that at least some people are able to buy the product.
If the minimum wage is cut the effect on purchasing power decreases forcing small business to cut its prices to sell. In the terms of sole traders it may result in them too having to cut their own wage. No one for example is going to pay 25-50% of their hourly wage on a pint of milk. Can farmers really afford to cut prices much further?
As much as I am sure it pains employers to pay 4.85 an hour if they paid much less then many of them (particulary sole traders and small business) would find themselves going to the wall.
It is when you only look at the minimum wage from one side- ie that of the producer discounting the role of the purchaser that it seems like a pure cost, but when it increases purchasing power it should be seens as to the benefit of small business.
While small business is often most vocal about the minimum wage and its effect it is small business that gains most from it. It is big business that gains more from it being cut, ie by increasing market share where small business is forced from the market.
Isn't it like that already? Here, when you fill in your taxes, you are allowed a basic amount that is tax-free and then the percentage of tax you pay is gradually increased based on your income.
