Friday, 6 December 2013

Living Wage

"The country-wide threshold, which is calculated annually by the Centre for Research in Social Policy at Loughborough University against the basic cost of living in the UK, rose by 20p to £7.65 ($12.20, €9.03) an hour and the London Living Wage, which is calculated by the Greater London Authority's Living Wage Unit, increased from £8.50 to £8.80 an hour.
The rate is higher than the legal minimum wage , which stands at £6.31 an hour for over-21s.
 "The Living Wage has become a must have badge of honour for employers," said Rhys Moore, director of the Living Wage Foundation.

The Mayor of London Boris Johnson. "Paying the London Living Wage ensures hard working Londoners are helped to make ends meet, providing a boost not only for their personal quality of life but delivering indisputable economic dividends to employers too. This in turn is good for London's productivity and growth."

Which is all well and good except..
 The average salary in Romania is €479 per month before tax, or €347 after tax. (£287 per month)
 The minimum wage is €155 per month or around £36 per week.
If the living Wage was introduced everywhere, as its advocates desire, then the {new minimum}living wage  of £352 a week would be roughly ten times the average Romanian minimum wage.

Employers of low skilled workers already favour Eastern Europeans for their very hard work ethic, low sickness rates, good attitude, good skills and their just general happiness to be at work. 
 When they would be being paid £.90p and hour in their own currency for a waitress job no wonder they can be so.
And every £1 returned home is worth an hours wage, which in this country  only takes 10 minutes to earn. 

If we have open borders what do we think the effect of insisting employers pay more for unskilled workers would be?

Living wage. Has anyone thought it through?

22 comments:

Anonymous said...

Single currency, single living wage and debt mutualisation. These are the three threads to the European project as discussed with a acquaintance of mine with good contract in Brussels.

The first is in place. The second will happen naturally as you have pointed out. The third is currently being planned in "feeder" committees in Brussels.

The solution to a downward pressure on wages is an upwards trading in skills. So tertiary education is not a privilege to pay for - but an economic necessity unless all you want is burger-flippers and Amazon temporary staff status.

And by all accounts being Amazon temporary staff is a status badge in some communities.

Electro-Kevin said...

The employer may be paying their workers £6.31 to £8.80 but they (and their taxpaying customers) are paying £6.31 to £8.80 PLUS the benefits of one out-of-work Brit PLUS all the attendant costs of an open border policy, the extra crime it brings and strain on resources - not to mention the extra difficulties in meeting carbon cutting targets (mass migration and greenism is something of a paradox.)

It must take around 17 minimum wage immigrants to pay the costs of one immigrant prisoner.

It does not stack up - especially if these wages are being sent out of the country.

I do understand 'the Brits are useless arguments but this is my experience:

As a kid they closed my local grammar - built three estates and shipped in gypsies and London overspill and lumped us all together.

Having been a promising middle-school child in the top quartile I left school with NOTHING.

If you want to know what my school was like then watch the film SCUM. We had four kids banged up for murder in my time there.

My IQ is 128. I have educated myself through A levels to degree level in adulthood and at my own expense. Too late for a professional career unfortunately.

It is my firm belief that I was right royally done over by my own country which seems to take delight in cutting the legs from its own lower classes.

Ryan said...

"Employers of low skilled workers already favour Eastern Europeans for their very hard work ethic, low sickness rates, good attitude, good skills and their just general happiness to be at work"

Let me tell you that lasts about 6months. Then they are the same as everyone else.

We employ them because they are cheap.

Ryan said...

@EK: And don't forget, at that wage level you aren't paying anything at all in tax, but you are able to claim working tax credit and child tax credit that can be worth up to £10,000 per year. Of course your health-care and education of your kids etc is free, even though you aren't really paying any tax.

So the employers are not paying the full costs of employing these people - the burden is on the taxpayer.

It's a mess of epic proportions.

Electro-Kevin said...

Ryan - And if they are employed by offshored corporations what do their employers pay towards their upkeep then ?

I apologise to all for my digression at 6.56. It is my firm belief that our people were made to be useless quite deliberately.

Anonymous said...

EK,
you have provided some evidence of a great crime perpetrated against the British people.I try to tell my children how the Country has changed over 40 years and they are simply unable to comprehend it. I'm a rational professional but trying to explain how we have been sold out to the Globalists is not easy.Quite uncomfortable in fact given that our children's future is so uncertain and potentially so awful. The price of everything and the value of nothing.

Anonymous said...

Cor.... Happy bunch tonight ?

Unintended consequences, you gotta laugh (well not at the film 'scum' .... With the quote "I'm the daddy now, next time, I'll fucking kill ya")

But

“A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools.”
- Douglas Adams, Mostly Harmless

Enjoy the weekend

Anonymous said...

Hence why I prefer us seeing introduce a Universal Base Income for British citizens only, and dropping the minimum wage for British citizens whilst retaining it for economic migrants.

If it's cheaper to employ Brits all of a sudden, then Brits will be employed in many cases.

We're past Peak Jobs, and unemployment is only going to get worse - immigration has merely accelerated the situation, automation and technological advancements were always going to do that.

More people than jobs, then we need a system to deal with that. The current one won't do it.

Anonymous said...

Anon 11.43
I get that.
But if the Govt know this and they must(and have done for many years)why encourage/continue with mass immigration or not change the rules?

DJK said...

Anon 12:17:

Because the interests of the individuals who make up the government are not the same as the interests of the individuals who make up the governed.

Anonymous said...

@Anon 12:17

Tax income. An ageing population means an imbalance in the taxbase and those on pensions, needing the NHS more, etc., etc.

So immigration expands the working population without, in theory, expanding the permanent population base. Poles will go back to Poland to grow old and die on their system, meanwhile they've been milked to fund our social system during their working life.

Think of it as imperialism in reverse - instead of going over to foreign lands to raid them, we simply take the working life of their inhabitants, charge them via tax for that privilege of working here and they willing come to us.

Without those immigrants we'd actually be in a worse position, having had to borrow more to bridge a wider income/outcome gap, as I somewhat doubt Labour would have chosen to spend less.

The government got it horribly wrong though, as governments are wont to do.

Where do we go from here? I'll leave that to any Haircut 100 fans!

Bill Quango MP said...

We seem to be concerned by the EU. That is expected. The EU are a concern.

But the thrust here is that paying people more, without first generating the profits to do so, will cause businesses to reduce employment or possibly just cease trading.

The arguments of the living wage people are quite sound. They are aware that making a hairdresser pay £10ph to a trainee will mean no trainees, so they suggest the whole thing is voluntarily.
What they really mean is government should pay more and hope big business will follow suit.

Naturally such things as wage inflation are not discussed. It is assumed that paying at the bottom does not effect the top, which it surely would. A cook must earn more than a waitress. A chef more than a cook, etc
And living wage seems to assume people never progress. That is the argument. How can anyone buy a house on minimum wage? Well..they probably can't. But then they couldn't in the 1980s either. Only after a certain level of income is being earned.

Also it isn't often mentioned that inflation will strip out most of the gains in a very short time anyway. It always does.

And , thew point of the post, a minimum wage job in london is not attractive to a UK resident, So we must pay more.
But the same job is attractive to a migrant worker for reasons discussed. Making it even more attractive to migrant workers will just attract even more of them. How it would help UK unemployment figures or UK earners is a bit of a mystery to me.

Bill Quango MP said...

EK - We have looked at this before on your blog. I can't see how a migrant contributes, except through the work they actually do. One trip to the doctors or a child at school and the tax take vs benefits accrued must be negative.

But I am not against migrant workers. we have loads and most are terrific. Some of them on their 4th or 5th year. If I have the choice, we take overseas as on balance it works out better for us re longevity, skills, attitude and attendance.

Anon 2:13 {sort yourselves out anons! just pick a name - or collection of letters or numbers *Note Timbo614 is taken}

I would like to give you an economic history lecture and show that migrants rarely go back. That Boston is still Irish from the 1830's migration.
New York still Italian from the 1900's.
There are 1.4 million British Indians in the UK and that figure does not include any mixed marriage second generationers.

All of these groups + many many more never went home. Why would they?

But, in the case of the EU migrants, you might be on to something. They are more like Britons working in Saudi Arabia. They are there because they can earn a fortune in a short period and go back to their cultural norm richer and tanned.
The Poles in the UK today are being paid, by their own nation's standards, well. They are not like the immigrants in America in the 1920's who had to take the very lousiest jobs, if they could even get them, or become self employed in a country prejudiced against them.

So they may go back as they have earned enough to get started in their homeland and would not be heading to a third world country.

So, yes, probably, many will return
and maybe the whole thing is for the best after all.

Timbo614 said...

BQ: Immigration to one side, Timbo614 is not just a set of jumbled up letters and numbers it is a carefully constructed nickname.

In the early 90's there was a kids program called "Jimbo the Jumbo" some idiot turned it into "Timbo the Techno", Timbo stuck.

As Timbo was taken as a google nickname I added the family "Lucky Numbers" which originated from the days of my Dad being a copper(DS before he left) and 614 was his number.

:)

Bill Quango MP said...

I never thought it was a random Assortment timbo.
Just wanted to show the anons the possibilities.

Btw - apple auto correct switches you to Either Tibet or Timbal.

Anonymous said...

@BQ

There is pretty large difference between migration in the 19th and early 20th centuries and today, returning to Ireland from Boston, for example, necessitated a long and either pricey or uncomfortable journey with reasonable odds of reaching the sea floor instead, and there were a lot of political reasons people may have been happier remaining in Boston and discussing killing the English in a bar rather than the actualite of walking the walk if they went back... Up until the 1970's emigration was always going to be more of a one-way affair.

In addition there are the prices in the UK, I'm fairly certain if we were not so bad at teaching foreign languages we'd see more natives leaving the UK (I've certainly no desire to remain here once retired). English, being the lingua franca of the world, has somewhat imprisoned us linguistically.

For a months earnings there are parts of Poland I could keep myself in beer, strippers and pizza for a sizeable chunk of the year. I expect the Poles will come to much the same conclusion.

Same for many of the other East European nations, our grass must seem terribly green from their side of the fence, it will become less so as they experience it and the cost of the upkeep.

They're not stupid - they'll do the sums, income tax, VAT, petrol and beer duty... And realize the government are seeing more of their wages than they are.

Of course there'll be some working cash in hand, but they're in the minority.

Timbo614 said...

@BQ: hint - "Add to Dictionary"

Do Apples have that?

Back on Immigration I have employed my first Indian guy. I dropped him off the other night on my way to save him one leg of the train fare.

Just talking and immigration came up. He has been here 4 years, his relatives 40 years. He is almost "Anglicised" in most things, bit of an accent. But he is not really a stranger in our land, he considers himself English.

He (and he said his family) have the same opinion on the recent spate of immigration as the "native brits" do - It'll all end in tears...

Timbo614 said...

Oh, an I am paying him well above the living or minimum wage. He is quite well qualified and educated, and I did not want to insult his intelligence with the minimum, even if I could have got away with it.

Blue Eyes 6847285 said...

EK is spot on. You only have to learn about the Utopian social planners in the postwar era to see what happened. They got rid of ambition in education and they knocked down perfectly good neighbourhoods to build dual carriageways and concrete palaces.

It might not have been as damaging if we hadn't simultaneously become a global, hyperconnected economy. The combination of a collapse in UK educational standards and the ability to supply any market from anywhere in the world trashed any hopes of "social mobility" in Britain.

Meanwhile the grammar-educated generation paid themselves extraordinarily well and left the country in a terrible situation for the next generation.

I don't think the postwar generation will be treated kindly by the history books.

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