UK The minimum wage problem.

I posted this as a reply in another thread but I think it deserves its own thread.

Minimum Wage.
With hundreds of unemployed people applying for each job vacancy employers have realised they only need to offer the minimum wage.
Because the minimum wage is so low the employee does not pay income tax and they need top-up benefits because without the benefits ALL their earnings would be gone after paying Rent/Mortgage payments and council tax etc.
The benefits are needed to buy food and clothes and to pay extortionate electric and gas bills, and to cover the cost of getting to work etc.

Can you see the problem?
We have a workforce that is paid so little it cannot pay income tax.
On top of that the same workforce requires top-up benefits to survive.
If this workforce cannot pay income tax then from where do we get the money to pay the benefits that they need?
Where do we get the money for our national health service and all the other services?

Where is all the money going?
Its in the bank accounts of all those greedy corporations that only pay minimum wage OR LESS because they have a workforce that’s subsidised with benefit money.

I was sitting in a train station and heard four school children (about 15 years of age) discussing all that I’ve written above. I was impressed; I thought the young were too dumbed down to understand.
On hearing their discussion I couldn’t help but think of all the people I see in these forums who still don’t understand what these young kids have already worked out for themselves, that is…

Forcing people into work does not create income tax, it creates a benefit claim!!


If an employee does an honest weeks work for a large corporation such as tesco for example, then that employee ought to earn enough money to provide for his family without the need for top-up benefits.
BUT!!!
Every year we hear of the £billions of profit earnt by these corporations and then we hear the stories about tesco’s etc who not only pay minimum wage but have started laying off full time minimum wage employee’s and started taking on people who are forced to work just for benefits.
This means that the few people who do have a reasonably well paid job and are paying income tax are paying the wages of the tesco employee’s, tesco etc are paying NOTHING!!

Cameron should be locked up.

The trouble with the UK currently is that minimum wage is nowhere near the minimum living wage standard. I guess you need a minimum of 17k just to get by these days. The UK is a terrible place to live right now, im on 35k and I struggle, so I can only have sympathy for those on lower wages.

I'm a gardener. I take home minimum wage. My missus works 15hours a week -/+ a few hours.
Together we pull in 17k which is shirt buttons. The only way we're surviving is down to the fact that I rent off my dad who gives me a deal like no other.
Since a few months ago, HM revenue stopped my working tax credits because I take home too much. I'm now down roughly £300 a month and this has affected me greatly. We are struggling and I for one am sick to death of it.
SICK TO THE DEATH.

Let me know when the revolution begins. I'll be on the front row.

reply to post by VoidHawk


yo void.
with more and more workers relying on benefits to make up the pittance of wages received, a major shock is in the pipeline for the co-alition when the universal credit system kicks in. what an absolute joke these reforms are.

with the eu pressing for vat on new homes adding at least £30,000 to the cost of an average new dwelling, tents in grandma's garden will become a viable option unless the equity release dragons got there first!
s and f
f.

Originally posted by fakedirt
reply to post by VoidHawk

 

yo void.
with more and more workers relying on benefits to make up the pittance of wages received, a major shock is in the pipeline for the co-alition when the universal credit system kicks in. what an absolute joke these reforms are.

with the eu pressing for vat on new homes adding at least £30,000 to the cost of an average new dwelling, tents in grandma's garden will become a viable option unless the equity release dragons got there first!
s and f
f.

Yep, 2 people in my family will be seriously affected by these reforms. Maybe this is why they are furiously pumping the fluoride.

reply to post by fakedirt


I do not understand this universal credit as I have not seen the details but the ideal of it makes sense, why have multiple welfare payments with multiple departments looking after them when it can all be centralized.

Welfare in the UK was well out of control and it was unavoidable to have to cut it. Unfortunately in the mean time, inflation has rapidly outgrown wages, so you are screwed either way. The UK is part the way to a second world nation and we need to make drastic changes to get back to anywhere near the power house we used to be, first stop, scrap trident and international aid.

Tell me about it - I'm working Monday to Friday 9-5..

I rent A room and that's about it.

I'm still SKINT! lol.

Employers are taking the p##s with wages atm. I work for (don't want to say the name incase i loose me job, but it's a global sandwich chain, on the way to the sub) pays redicules wages. I started at the bottom, on min wage. I have just been promoted to supervisor, which gives me an 8p p/h wage increase. A store manager gets £7 p/h. To put that into perspective, someone on the tills at tesco get £7-£7.50p/h.

This is a deep hole thats getting deeper, employers pay less wages, less people have money to spend, people have less money to pay tax, less money floats around the economy and less products are brought, causing profits to fall, causing big companies to cut staff/lower wages, causing less people to have money to spend, less tax being paid, etc etc.

I say that the min wage should be put to to £7 p/h (including 18-21year olds, they only get £4.98), decrease VAT down to 15% to make it easier for small businesses to stay afloat, as well as prevent big business's from having to spend loads more on wages/prevent them from having the excuse that they need to cut staff due min wage increase.

Then we may see increase in high street spending/small business expansion and dig ourselves out of the hole.

reply to post by Trolloks


The minimum wage does need to be increased for all, including the younger workers, why should they get less??

The problem is that the big corpo's have so much info on every individual household that if the minimum wage were increased the big corpo's would do their sums and realise each household has x amount of spare cash, and they'd increase prices to match.
The problem is our government allow the corpo's to fleece us of every last penny and until that stops it wont matter how much we earn.

To be honest if your sigle it's not even worth working for minimum wage.
I have worked since I was 15 now im 27 working 44 hours per week on minimum wage, it's horrible because I feel like such a loser going back living with parents at 27 but living on my own rent/income tax/Council tax/national insurance took up 90% of my wages and that was only living in a small 2 bedroom flat.

I was flat broke every month and had to go with very little food the last week before payday, I feel like it's not fair because I have always worked hard yet people that same age as me who have never worked a singe day in their life where living more comfortably than me.

I don't know about American tax's but here income tax is at 20% then there's local council tax, mine was 12% of my wages, that 32% of my wages taken before I have even paid my rent which was just under 60% of my wage packet, and that was a cheap small flat.
Plus everything you buy has a 20% tax on top.

The government are scratching their heads woundering why shops and businesses are failing and high streets have loads of empty shops, because people have no money left to spend after the high tax's and rent.

Excellent post OP....thank you for pointing this out so clearly. Very scary situation.


reply to post by NeoSpace


You're not a loser...you're being practical, and making the right choice. There is no point in getting all stressed out and in debt over somewhere to live. Living costs are a total nightmare now...so much worse than even 20 years ago. Recetly, I found an old payslip of mine from 1989, and what a shock I got. I thought at the time I was struggling, but now when I look at it, I was living the life of bloody Reilly. I took home about 700 a month, working full time in a gallery, and my mortgage.....yes...I actually bought my own place on that salary....was about 100 a month. Add a few things like rates and electricity and even then, easily half my income was disposable.

Now, thanks to several decades of long long hours, and the fact that I don't have kids, but do have a partner, I can afford to work part time, but only because I moved out of the city and have a much much cheaper place to live out in the sticks. Not for everyone, I understand, but if you can, and there is work available, and maybe you have someone to share with, a relocation to somewhere less urban and cheaper, might provide some solution. Much better quality of life here too.

The property boom in the last two decades has changed the market so much, and made it completely unaffordable for most people, which is really sad. Huge mortgages, big salaries, a very competitive market all resulted in an unsustainable property bubble, at a time when we need more housing, not less. I feel so much for young single people...what the hell are you supposed to do on minimum wage that covers almost nothing? 90% of your income on rent and council tax? What the hell kind of life is that? I would call it slavery actually. Apart from the minimum wage issue, we also need to look at affordable urban housing as a matter of urgency, small decently built, easily affordable, social housing for young people, or single people, or small families.

We all are born here with no choice in the matter. We also have no choice in having to pay for every damn thing that we need to survive...everything. Something about that "agreement" strikes me as terribly wrong. There should be a default minimum housing option that costs very little and makes it possible for people to live properly and work with some money left a the end of the month. And it would also boost the building trade if someone created a solution to that one....so many little apartments to build, but I guess it doesn't suit big business to make it happen.

reply to post by michael1983l


if this was a smooth transition from what exists in the way of benefits right now to a centralised system then i would be satisfied but it seems that is not the case.
perhaps when the dust has settled post-universal credit, they will state it was a good idea at the time.
initially absorbing all benefits into one 'hub' seemed like a good idea at the time for my thinking at least.
as i peeled the layers back (and this ties in with the 'new' welfare bill that assented through parliament not too long ago) it became clear many assumptions have been made.
for instance the majority of claimants will eventually be required to submit all information via online. that seems ok for the many who possess the means to do this but would require many more who do not have access to submit details over unsecured systems ie library?, net-cafe etc.. the problem is that those who have no wish for the internet due to financial constraints may well be penalised/frowned upon and the process somewhat slowed down in reviewing their details for assistance.

the assumption of a 'minimum income floor' for those who are self-employed will cause further problems. their details will be required on a monthly basis (submitted online) such as how much income and certain outgoings as not all expenses and requirements in order to run a business will be recognised. this will cause further disruption in time and effort and two sets of accounts will be required, one for the taxman and the other for the agency. if the assumed 'mif' is not met then it seems that the agency will treat the individual as not running a proper business and the individual will be required to attend training programs similar (if not the same) as jobseekers. further disruption imo.

more and more workers are applying for benefits to fill the hole the nmw has created. this will be imo a fubar system that will be unable to function for the better part of late 2013/early to mid 2014. i would stress to all concerned to have some savings set aside for this period when it kicks in, just in case.

the government has not yet published details regarding the minimum income floor as yet. this is a great worry for many people alike be they self-employed/disabled or both.....

we wouldn't have come to this had the previous governments not raided the resources/infrastructure, sold them off and built up such a fantastic debt with more to come for the younger generations to pay off when they reach working age. they (politicians and the city) have been consistent in ignoring the pension time-bomb/greedy banking practices/deregulation and allowing the hooks unbridled control of the markets.

i have further suspicions regarding the governments flagship new benefit system, however for now i'll leave these potential nuggets alone until i am sure they are valid.

f.

Originally posted by NeoSpace
To be honest if your sigle it's not even worth working for minimum wage.

And people wonder why we use the word SLAVERY! We do so because thats precisely what it is.

I don't know about American tax's but here income tax is at 20% then there's local council tax, mine was 12% of my wages, that 32% of my wages taken before I have even paid my rent which was just under 60% of my wage packet, and that was a cheap small flat.
Plus everything you buy has a 20% tax on top.

If anybody needs it, there the proof. NeoSpace works a full week and at the end of the month he's left with nothing! Tell me how that differs from slavery?

reply to post by fakedirt


Hi Fakedirt.
Nice post. Keep us informed if you get any new info

Originally posted by SilentE
Let me know when the revolution begins. I'll be on the front row.

I'll be with you, and I know loads more who feel the same way. I honestly believe if they dont get seriously sensible about the way they're ripping ALL of us off it just may come to fisty cuffs in the street.

reply to post by VoidHawk


Again?

Originally posted by caitlinfae
Excellent post OP....thank you for pointing this out so clearly. Very scary situation.


reply to post by NeoSpace

 

You're not a loser...you're being practical, and making the right choice. There is no point in getting all stressed out and in debt over somewhere to live. Living costs are a total nightmare now...so much worse than even 20 years ago. Recetly, I found an old payslip of mine from 1989, and what a shock I got. I thought at the time I was struggling, but now when I look at it, I was living the life of bloody Reilly. I took home about 700 a month, working full time in a gallery, and my mortgage.....yes...I actually bought my own place on that salary....was about 100 a month. Add a few things like rates and electricity and even then, easily half my income was disposable.

Now, thanks to several decades of long long hours, and the fact that I don't have kids, but do have a partner, I can afford to work part time, but only because I moved out of the city and have a much much cheaper place to live out in the sticks. Not for everyone, I understand, but if you can, and there is work available, and maybe you have someone to share with, a relocation to somewhere less urban and cheaper, might provide some solution. Much better quality of life here too.

The property boom in the last two decades has changed the market so much, and made it completely unaffordable for most people, which is really sad. Huge mortgages, big salaries, a very competitive market all resulted in an unsustainable property bubble, at a time when we need more housing, not less. I feel so much for young single people...what the hell are you supposed to do on minimum wage that covers almost nothing? 90% of your income on rent and council tax? What the hell kind of life is that? I would call it slavery actually. Apart from the minimum wage issue, we also need to look at affordable urban housing as a matter of urgency, small decently built, easily affordable, social housing for young people, or single people, or small families.

We all are born here with no choice in the matter. We also have no choice in having to pay for every damn thing that we need to survive...everything. Something about that "agreement" strikes me as terribly wrong. There should be a default minimum housing option that costs very little and makes it possible for people to live properly and work with some money left a the end of the month. And it would also boost the building trade if someone created a solution to that one....so many little apartments to build, but I guess it doesn't suit big business to make it happen.

You mention building small cheap affordable homes. I worked on a housing project building homes for a housing association. I was quite pally with the site agent so was able to find out the total cost to build the houses. There was a mix of two three and four bed houses, the cost when averaged was 28k per house. That was 12 years ago.
Its easily possible to build small one bed units (if built in blocks) for about 10k each.
The problem is, as soon as you start making cheap housing available it causes a drop in property prices and hence a drop in profits for the banks.
When a house is built, the banks make twice the build cost!! hence they want to keep the prices high.

reply to post by VoidHawk


Life is tough and unfair.
I have always thought those who do the most unpleasant dangerous jobs if we lived in a fair world yet how much does a toilet cleaner oran aged care worker receive?

Whilst people who play the stockmarket (basically gambling with other peoples money are the ones pulling in the big mullah.

Life is a hard slog if you work jobs where it takes little training or experience to do.

I worked as a cab driver whilst studying years ago I was treat like garbage and paid like a newspaper dlivery boy.

Some people have to drive cabs all their lives but they manage.

The best thing is for people to think of a way out of the poverty cycle and not get bitter and twisted...do not envy visit India and see how hundreds of millions live so much materially poorer lives than even the poorest in Britain.

THe minimum wage is low....I always dream of working for myself full time for the rest of my life.

That way you are only your own slave.

The greedy are always trying to push down the minimum wage so they can get bigger bonuses and perks.

reply to post by VoidHawk

Its in the bank accounts of all those greedy corporations

Actually it's in the bank accounts of shareholders and high level management.

Originally posted by ChaoticOrder
reply to post by VoidHawk

 

Its in the bank accounts of all those greedy corporations

Actually it's in the bank accounts of shareholders and high level management.

I stand corrected
Still not in MY pocket though, which is where it should be if I slaved for it.