The Politics Thread

[mummywhycantieatcrayons]

... it would make more sense to introduce what has been called a "living wage" so that the govt doesn't then have to subsidize businesses who pay wages that are too low for people to live on...

Confused here bish (seriously. I'm not point-scoring).

It's Companies who will have to pay this amount, not Government. How are Government subsidising (Engkish spelling) business' to pay low wages ?

because they top-up low wages with income support and in-work benefits.

People working fulltime and earning minimum wage wouldn't qualify for much income assessed income support and in-work benefits though, would they?

[BWFC_Insane]

... it would make more sense to introduce what has been called a "living wage" so that the govt doesn't then have to subsidize businesses who pay wages that are too low for people to live on...

Confused here bish (seriously. I'm not point-scoring).

It's Companies who will have to pay this amount, not Government. How are Government subsidising (Engkish spelling) business' to pay low wages ?

because they top-up low wages with income support and in-work benefits.

People working fulltime and earning minimum wage wouldn't qualify for much income assessed income support and in-work benefits though, would they?

They might if the minimum wage is removed, or lowered......

[mummywhycantieatcrayons]

... it would make more sense to introduce what has been called a "living wage" so that the govt doesn't then have to subsidize businesses who pay wages that are too low for people to live on...

Confused here bish (seriously. I'm not point-scoring).

It's Companies who will have to pay this amount, not Government. How are Government subsidising (Engkish spelling) business' to pay low wages ?

because they top-up low wages with income support and in-work benefits.

People working fulltime and earning minimum wage wouldn't qualify for much income assessed income support and in-work benefits though, would they?

They might if the minimum wage is removed, or lowered......

One at a time, eh?

[thebish]

People working fulltime and earning minimum wage wouldn't qualify for much income assessed income support and in-work benefits though, would they?

plenty of people do... those working minimum wage full-time jobs would earn something in the order of £12,000 per annum - and fall well within the bracket for means-tested tax-credits... effectively, the govt. subsidising low pay with your taxes...

this isn't a lefty idea... righties are advocating it too - f'rinstance, Jeremy Warner, business and economics commentators for ye Telegraph...

he adds the argument that the living wage would also deal with the profit-hoarding that companies have been indulging in - releasing cash to spent which would promote growth...

there may be ideological arguments against this - BUT, why should the govt subsidise low pay to the benefit of the employer?

Jeremy (a righty!) opines about the idea here if you are interested: http://blogs.telegraph.co.uk/finance/je ... d-not-cut/

[mummywhycantieatcrayons]

People working fulltime and earning minimum wage wouldn't qualify for much income assessed income support and in-work benefits though, would they?

plenty of people do... those working minimum wage full-time jobs would earn something in the order of £12,000 per annum - and fall well within the bracket for means-tested tax-credits... effectively, the govt. subsidising low pay with your taxes...

Fulltime on minimum wage is about £12,800 isn't it?

Obviously the calculation depends on a few things, but my impression was that people earning that would be claiming either the lowest amount of tax credit available, or none at all?

Am I just wrong? Is there a table somewhere where the thresholds are laid out?

[Abdoulaye's Twin]

For me, the principle that someone in full-time work should require tax payer assistance (beyond NHS etc) is wrong. It particularly annoys me that some companies that are paying these low wages are the same companies managing not to pay any/much tax. Adding insult to injury, these companies then go on to claim that they add to the economy through the tax revenue from the employment they give. Those employed typically being the ones claiming tax credits or whatever they are branded as these days. The coup de grace would be our beloved MPs earning money from these same corporations for advising or some other nonsense.

Anyway, back to work and staring out the window towards the sea

[mummywhycantieatcrayons]

Ok, so if you don't have kids, working fulltime on minimum wage you're as good as ruled out of tax credits:

http://www.hmrc.gov.uk/taxcredits/peopl ... -child.htm" onclick="window.open(this.href);return false;

I accept that it puts people with children comfortably in the bottom half of the bracket if they have to pay some childcare. Though my girlfriend and I take the view that it will many years before we have kids because we are nowhere near being able to afford it.

there may be ideological arguments against this - BUT, why should the govt subsidise low pay to the benefit of the employer?

I presume the argument is that it is better for people to have some subsidised work than none at all?

[Lord Kangana]

I thought you were ideologically opposed to government subsidised industry, though? Surely the free market rules?

[mummywhycantieatcrayons]

I thought you were ideologically opposed to government subsidised industry, though? Surely the free market rules?

I'm not an ideological person.

If the best solution at any given time is for a person to be in work that wouldn't exist at a higher wage rate, then I'd rather the government subsidise it than bear the entire cost of the person being out of work, for sure.

As I say, by and large people without children are not subsidised, and I appreciate that there is a balance to be struck between trying not to incentivise people having children when they can't afford them and looking after the kids' welfare once they've been had.

[Abdoulaye's Twin]

I thought you were ideologically opposed to government subsidised industry, though? Surely the free market rules?

I'm not an ideological person.

If the best solution at any given time is for a person to be in work that wouldn't exist at a higher wage rate, then I'd rather the government subsidise it than bear the entire cost of the person being out of work, for sure.

As I say, by and large people without children are not subsidised, and I appreciate that there is a balance to be struck between trying not to incentivise people having children when they can't afford them and looking after the kids' welfare when they are around.

I believe many of these tax credits were created by Brown during the 'boom years'. If companies can't support living wages during so called good times, then something is fundamentally broken. Knowing how the likes of Amazon operate with regards to low paid workers (such as warehouse staff), I'm quite confident that it boils down to greed/excessive profit in a decent proportion of cases.

[mummywhycantieatcrayons]

I thought you were ideologically opposed to government subsidised industry, though? Surely the free market rules?

I'm not an ideological person.

If the best solution at any given time is for a person to be in work that wouldn't exist at a higher wage rate, then I'd rather the government subsidise it than bear the entire cost of the person being out of work, for sure.

As I say, by and large people without children are not subsidised, and I appreciate that there is a balance to be struck between trying not to incentivise people having children when they can't afford them and looking after the kids' welfare when they are around.

I believe many of these tax credits were created by Brown during the 'boom years'. If companies can't support living wages during so called good times, then something is fundamentally broken. Knowing how the likes of Amazon operate with regards to low paid workers (such as warehouse staff), I'm quite confident that it boils down to greed/excessive profit in a decent proportion of cases.

Is the fundamental point for British policymakers not that we have to compete for these greedy companies with the rest of the world?

[Lord Kangana]

Surely the rest of the world isn't trying to make itself poorer?

[Abdoulaye's Twin]

Is the fundamental point for British policymakers not that we have to compete for these greedy companies with the rest of the world?

For me, many of these companies don't really add much to the UK, in terms of economy or socially. Maybe a little naive on my part, but lets take Starbucks...

Through their organisation (tax planning etc) they extract the maximum amount of cash from a geographic location. They tend not to use local suppliers and services and the pay is relatively low. Chains like these tend to take trade from more local establishments that are more likely to use local suppliers and services. This to me means people are employed in these local suppliers and within the cafe. Even if the wages paid are similar, far more money stays within the economy and tax paid. I'd argue that the government should be promoting small businesses like these and making it more difficult for the Starbucks of the world. At the end of the day, Starbucks can make money here and pay taxes etc. That being possible, they are not likely to walk away if the government makes it more difficult.

[Lord Kangana]

We're too big a market for companies like Starbucks to just walk away from. There are more McDonalds in France than in Britain, and even with a supposedly more aggressive tax scheme, the company is more profitable than McDonalds UK. Its preposterous to suggest they would up sticks at a change in their tax position.

[Hoboh]

I thought you were ideologically opposed to government subsidised industry, though? Surely the free market rules?

I'm not an ideological person.

If the best solution at any given time is for a person to be in work that wouldn't exist at a higher wage rate, then I'd rather the government subsidise it than bear the entire cost of the person being out of work, for sure.

As I say, by and large people without children are not subsidised, and I appreciate that there is a balance to be struck between trying not to incentivise people having children when they can't afford them and looking after the kids' welfare once they've been had.

Bang on and it would reduce the levels of cash the government are handing out now. This would help genuine unemployed and get the other tossers out of their pit!

[mrkint]

In other events...

http://www.bbc.co.uk/news/uk-england-berkshire-22017567" onclick="window.open(this.href);return false;

[thebish]

Ok, so if you don't have kids, working fulltime on minimum wage you're as good as ruled out of tax credits:

http://www.hmrc.gov.uk/taxcredits/peopl ... -child.htm" onclick="window.open(this.href);return false;

I accept that it puts people with children comfortably in the bottom half of the bracket if they have to pay some childcare. Though my girlfriend and I take the view that it will many years before we have kids because we are nowhere near being able to afford it.

we deal with the world we live in. In the world we live in - lots of people on full time minimum wage jobs have kids and so qualify for government subsidy on their wages through means-tested tax credits.

it might be theoretically interesting to imagine a world of you and your girlfriend where people decide not to have kids until some notional date where they decide they can afford it - but we don't live in that world. more importantly - that is not the world George Osborne has to deal with when he makes his decisions about the minimum wage...

Like the chief economics commentator from the Telegraph - I think there is merit in the idea of a "living wage" even if you only consider cold, hard economics.

[thebish]

I thought you were ideologically opposed to government subsidised industry, though? Surely the free market rules?

I'm not an ideological person.

If the best solution at any given time is for a person to be in work that wouldn't exist at a higher wage rate,

hmmm... that's the argument that was made when the minimum wage was introduced... have you any evidence or research to show that the number of jobs would fall significantly over time? the bloke from the Telegraph didn't seem to think that would happen...

[mummywhycantieatcrayons]

Ok, so if you don't have kids, working fulltime on minimum wage you're as good as ruled out of tax credits:

http://www.hmrc.gov.uk/taxcredits/peopl ... -child.htm" onclick="window.open(this.href);return false;

I accept that it puts people with children comfortably in the bottom half of the bracket if they have to pay some childcare. Though my girlfriend and I take the view that it will many years before we have kids because we are nowhere near being able to afford it.

we deal with the world we live in. In the world we live in - lots of people on full time minimum wage jobs have kids and so qualify for government subsidy on their wages through means-tested tax credits.

it might be theoretically interesting to imagine a world of you and your girlfriend where people decide not to have kids until some notional date where they decide they can afford it - but we don't live in that world. more importantly - that is not the world George Osborne has to deal with when he makes his decisions about the minimum wage...

Some people who have kids at the moment must factor in the support that's available from the welfare state when they make that decision.

As I say, striking the balance between not providing the wrong incentives and looking after kids when they are born is difficult. I accept that.

[mummywhycantieatcrayons]

I thought you were ideologically opposed to government subsidised industry, though? Surely the free market rules?

I'm not an ideological person.

If the best solution at any given time is for a person to be in work that wouldn't exist at a higher wage rate,

hmmm... that's the argument that was made when the minimum wage was introduced... have you any evidence or research to show that the number of jobs would fall significantly over time? the bloke from the Telegraph didn't seem to think that would happen...

Kangana and I were just discussing the current situation, not a hypothetical increase in minimum wage.

I have no idea what the price elasticity of demand at the bottom end of the UK labour market is.