Living Wage

Whoops, I do apologise for posting this 3 times - my technical skills once more.

I agree with the living wage. People shouldn't have to rely on benefit top ups.

Some employers will say they can't afford to and that people will lose jobs but they used this argument when the minimum wage was introduced. Perhaps there are a few small or newly formed companies that need to pay the minimum wage in the short term but no large company should use the minimum wage to keep their wage bill down.

My husband used to work for a company took over some council in house services under the agreement that they would match the wages paid to other council workers in the same type of job. When the council introduced the living wage the company refused to honour the agreement. This was a very large company that make massive profits every year.

Let's hope they come up with something that doesn't get rejected as unworkable. This should be a fairly quick and easy exercise to complete. Please, politicians and media - don't spin it to suit your own ends. Just let them do their job.

Everyone assumes the 'big companies' only pay minimum wages. That's not the case. Here is a quote from a company who thinks every little helps.
'In July 2012 our established customer assistant hourly rate will be £7.14 per hour, which is 8-10% more per hour for the equivalent role than other major UK retailers'.

I think that things are so price competitive these days that the only way this can work is by making it law. Some companies would lose money if they brought this in by themselves because of the huge increased costs so it is quite understandable they don't even though they might like to.

Does anyone know what effect this might have on our exports? Presumably there are many factors to take into account.

TESCOs might but a lot of other big firms don't especially to their unskilled and part time staff such as cleaners. The other thing some firms do is take people on zero or one hour contracts. This is sold to the employee as flexible working but in effect it means that the worker can have little or no work/pay some weeks and be over worked another. They can't budget or manage their money properly because they never know what they will earn. My youngest daughter is employed on an 8 hour flexible contract. Sometimes she works only 8 hours week whilst other times she can be expected to work 40 hours or more. All for minimum wage.

Before anyone says she could leave....yes she could but they need the money she earns for necessities not luxuries and jobs are hard to come by around here. I sometimes think I did her a disservice when she was growing up as I taught her that work was something to be proud of doing and it was important to pay towards your own way even if you did have to rely on benefits to top up your income esp when she's worked until 2am and is exhausted but has to get up to look after DGD. She has friends who are happy to live entirely on benefits who seem to have much easier life than she does.

At one time I had the misfortune to work in the staff canteen of a local council in Cornwall. We were treated as casual labour with no holiday pay or sick pay, and we could have been "let go" at a moment's notice. Among our customers were officers from Unite who I am sorry to say treated us like dirt. I had always thought that trade unions supported to poor and downtrodden, but apparently not.

Most of our friends were like us and claimed Family Credit. If you applied for a job your prospective employer was quite likely to start working out how much Family Credit you would get and how little they could get away with paying you because of it.

It's a crazy system when large, very profitable organisations can get away with paying the minimum wage, with the government making up the difference with benefits.

I personally don't consider £7.14 an hour to be a reasonable wage, even if it is more than some other organisations are paying.

I feel the main issue that should be addressed is the enormous gap between the richest and the poorest - these huge discrepancies should be addressed through the tax system but the chances of this are zero. Just fiddling about with "minimum" or "living" wage rates doesn't really address the problem.

The sort of conditions that Deedaa talks about - no holiday or sick pay, no job security or guaranteed working hours, etc. - are becoming more and more common now, with "Zero Hours" contracts being introduced into all sorts of areas of employment. I feel lucky never to have experienced these draconian conditions and I feel very angry that working people are being subjected to such insecurity and stress.

In Australia, we've had a 'living wage' for a long time: the 1907 Harvester Judgment ruled that an employer was obliged to pay his employees a wage that guaranteed them a standard of living which was reasonable for "a human being in a civilised community" to live in "frugal comfort estimated by current... standards." It got changed in the 60s to the 80s, but the concept remains in union rates.

Most reasonable employers are glad of the basic union rates, as this stops their rivals undercutting them on wages.

My son changed direction at age 30, and decided to take an adult apprenticeship, as an electrician. His wage is extremely good for a trainee- he brings home between A$850(GBP 513) and A$1150 (GBP693) a week, depending on whether he's only been at TAFE (tech) or been working a little bit of overtime. They've even given him the option to go to university when he qualifies, at their expense, to do electrical engineering. I think the ethos of paying people a decent wage, and looking after the, has survived.

But then again, we didn't have Thatcher.

The gov didn't help when they changed the qualifying rules for family tax credit either.

I think here too, we have to consider the 'Caring' professions. As I understand it in some areas, people who run residential homes sometimes now have to 'tender' to care for someone, so it is not always the people who can provide the best care, but the best that can be provided at the cheapest rate, so labour costs are cut, and as always it's the those at the lower end of the scale, who keep the system going come off worse. Big conglomorates can always pay more, other organisations are restricted by all sorts of legislation, and peoples lives can be put risk.

My husband worked for a smallish cleaning services company that used to service some well known stores. A very large company tendered a much lower amount at renewal and won the contract. My husband and the cleaning staff were transferred over to the new company under EU work regulations which are designed to safeguard jobs when a contract is won or lost. The first thing the new company did was cut the hours of all the cleaners. My husband spent the first month visiting people he'd worked with for years to break the news personally. Of course many took their frustrations out on him but he felt they deserved a face to face explanation rather than by letter or text. Many of the cleaners needed all the money they could earn and the store managers expected the same level of cleanliness they'd had before the hours were cut. Of course this wasn't possible so my husband had many fraught conversations with them too.

The situation got so bad that most of the experienced cleaners, who had worked with the small company for many years, found work elsewhere and the pressure to constantly fill vacancies that no one wanted (usually around 5 to 8 hours a week) was intense. As one of his experienced cleaners pointed out when her hours were reduced to 1 hour a day it cost her £3.80 to travel to and from work on the bus which meant that the travel costs took up almost two thirds of her daily pay.

Of course the company didn't care because part of my husband's job was to ensure the stores were clean even if it meant doing it himself which, because he was conscientious, he did even though he still had to do the managing bit too. The cleaning was supposed to be in emergency situations but became daily events often at several stores.

The company had it's money, made it's profit and to hell with it's workforce.

Following the break-up of her marriage my daughter had to cut her working hours drastically in order to look after her girls. She needed housing benefit in order that they had a roof over their heads. Rather than paying such a benefit on a sliding scale relating to earnings the rule is 'you can't work more than 16 hours'. She is in a 'Catch 22' situation and being given a 'Living Wage' would not make any difference as her other benefits would be reduced. This situation has been thoroughly checked and there is no way she can increase her income by working longer hours it would merely be reduced and she is in a tight situation as it is.

Child support from ex-husband?

That would be classed as income and deducted from any benefits she gets so she'd be no better off.

I have sympathy with those caught in the grey area and can understand why the fathers pay maintenance in less upfront ways by paying for clothes, shoes, school trips, classes etc. That way the child benefits directly from the father's payments.

I have sympathy for those who are struggling on basic incomes to try and raise families. There is so much money having to be spent on other, preventable things that there just does not seem to be enough to help
those in genuine need.

He pays the barest minimum Aka

Meanwhile there are women with more money than they know what to do with paying thousands of pounds for a handbag!

All this outsourcing allows big rich companies to claim they pay everyone good wages. But what about the cleaners in, say, the big accountancy firm office. Cleaning will almost certainly be contracted out.
It is also a neat way of transferring responsibility to the tax payer - because many of the people on such low wages will get top up benefits like housing benefit etc
Meanwhile the owners of the company benefit in increased profits. So yes, transfer the responsibility to the businesses and cut out this nonsense of the taxpayer subsidising them in this way.

It's a double whammy for the Government if they introduce the Living Wage, because they will be paying out less in benefits, and the Exchequer will receive more in NI contributions from both the employer and the employee.
And while the large companies could undoubtedly afford this, small businesses could find themselves in difficulties.
Not sure what the effect on inflation would be either, as the costs to the employer would undoubtedly be transferred to the consumer.
Important to get the right balance.

Economics is so hard isn't it. Maybe they could support small businesses in some other way though. Incentives for employing NEETS etc maybe. Government always seem to be obsessed with big business but in fact most people working in private sector work for small ones.

My own feeling is that the minimum wage or the living wage may help alleviate poverty in the short term but these sorts of initiatives don't address the central issue, which is the massively disproportionate distribution of wealth to a very small number of people.

The living wage is supposed to be £7.61 or £8.80 in London.

The introduction of a living wage of £7.61 per hour, less tax and NI (or £289.18 per week based on a 38 hour working week) will do nothing at all to alleviate poverty and whilst it may reduce the level of benefits paid out it certainly won't take a family out of the benefit system. Our company only employ qualified engineers so neither the minimum or living wage will effect us but there are small businesses who operate on minimum returns and have no choice but to pay the basic minimum wage (plus jobs tax of course).

I have to agree with Eloethan in saying that it is the massively disproportionate distribution of wealth that is the problem. I attended at seminar a couple of weeks ago and those whose supply and/or distribute luxury goods (I am talking the real top end here)are reporting massive increases in profits, so what does that tell you?