How do we ensure that people are paid enough?

PippaZ

We seem to have moved on to childcare rather than how we can ensure all employers pay a proper living wage. Perhaps it is because of childcare but I am not sure that it is.

Well, that's part of it. isn't it? What would you expect a 'proper living wage' to enable people to buy? Is there a point in working just to pay off a huge chunk of wages in childcare?

Anyway, now I'm going to try to explain economics to EP...

I think that part of ensuring people are paid enough would be for consumers to not want to buy everything at the cheapest price. I look at the food in shops and sometimes wonder how farmers can afford to pay their workers anything when you can buy a pack of tomatoes from Spain for 75p or less.

My son-in-law farms and the rewards are very small for the hours that he puts in.

If the poorer people get to keep the extra money as they have been, then clearly it has to come from somewhere.

They get it from the state. The state which, contrary to what most of the population believes, does not need taxation to be able to spend anything.

What does happen is that the money that the state spends on things such as wages and benefits is spent in the local economy, thus supporting lots of private businesses, large and small. The money the state has spent eventually returns to the state as it is taxed away on nearly every transaction. The state loses nothing and the economy gains.

Now, if the money is retained by the UC claimants but taken directly and immediately from wealthier people via taxation then it doesn't get to circulate in the economy at all because they don't have it to spend, instead. You've put £6billion 'in' and immediately taken £6billion 'out'.

It's a sum which comes to zero, whichever way you look at it, mine or yours, but in my scenario the £6billion helps to grow the economy while on its way back to the treasury. (It's called the 'multiplier effect')

MaizieD

PippaZ

We seem to have moved on to childcare rather than how we can ensure all employers pay a proper living wage. Perhaps it is because of childcare but I am not sure that it is.

Well, that's part of it. isn't it? What would you expect a 'proper living wage' to enable people to buy? Is there a point in working just to pay off a huge chunk of wages in childcare?

Anyway, now I'm going to try to explain economics to EP...

The tax and benefit systems in any civilised economy recognises that people have differing needs at various stages of life. The IFS did a study on this (which I can't find at the moment), but showed that for most people it's swings and roundabouts. Obviously, there are some losers and some winners overall and there needs to be some tweaking, but for the majority, it works. Incidentally, about 70% of people are "takers" from the system of a lifetime, while 30% are net "givers".

I do think that single parents should be made a special case, at least for a couple of years because of the effect of single parenthood on the children. When children have lost a parent being in the home whether through death or separation, the last thing they need is for the remaining parent to be absent for more hours of the day than they were previously. I think looking after the mental health of children pays dividends in later years and probably saves the state money in the long run.

MaizieD how does that work if people spend money on, say, Amazon, who pay little tax and the profits go overseas? How does the money feed back into the UK economy?

SueDonim

MaizieD how does that work if people spend money on, say, Amazon, who pay little tax and the profits go overseas? How does the money feed back into the UK economy?

Amazon employ thousands of workers, they are paid a salary which they spend in the economy.

GrannyGravy13

SueDonim

MaizieD how does that work if people spend money on, say, Amazon, who pay little tax and the profits go overseas? How does the money feed back into the UK economy?

Amazon employ thousands of workers, they are paid a salary which they spend in the economy.

And of course these employees pay tax.

Ilovecheese

I do think that single parents should be made a special case, at least for a couple of years because of the effect of single parenthood on the children. When children have lost a parent being in the home whether through death or separation, the last thing they need is for the remaining parent to be absent for more hours of the day than they were previously. I think looking after the mental health of children pays dividends in later years and probably saves the state money in the long run.

Totally agree.

Ilovecheese

I do think that single parents should be made a special case, at least for a couple of years because of the effect of single parenthood on the children. When children have lost a parent being in the home whether through death or separation, the last thing they need is for the remaining parent to be absent for more hours of the day than they were previously. I think looking after the mental health of children pays dividends in later years and probably saves the state money in the long run.

You may be right, but as I said, there are couples earning less than single people, so subsidising single parents (as opposed to parents) is divisive. There are plenty of couples working round the clock to keep the family afloat (as represented by the couple in Sorry We Missed You), and it would be very unfair to make a special case of a single parent who is, say, a lawyer, and not them.

It is an interesting subject although I am a Conservative voter I do not think the £20 uplift should be removed at this present time.
As for the minimum wage in my opinion it is far to low and should be increased to at least £10 per hour but ideally £12
Times have changed so much from when we got married now quite honestly in average jobs both parents have to work and ideally provide for their children regardless of if they live together or are separated
My granddaughter is in childcare and has been since she was 6 months old but if my daughter and her husband had minimum paid jobs this would be out of the question.
I have my granddaughter one day a week to help out
Although when we first stated our married life and brought our first home one of us had to have a pretty reasonable income to make this possible

Re the £20 uplift. My money is they will take it off in the budget - saying it cannot be continued as it was "only and emergency measure" or similar, and then immediately alter the UC so most (but I doubt all) are still in the same position. It's all smoke and mirrors and lies about how an economy works.

MaizieD

PippaZ

We seem to have moved on to childcare rather than how we can ensure all employers pay a proper living wage. Perhaps it is because of childcare but I am not sure that it is.

Well, that's part of it. isn't it? What would you expect a 'proper living wage' to enable people to buy? Is there a point in working just to pay off a huge chunk of wages in childcare?

Anyway, now I'm going to try to explain economics to EP...

I haven't gone into that in detail Maizie but it would think something like the JRT calculates would be close.

It wasn't the amount I was comenting on, it was the fact that no one checks how unequal the incomes are in the companies where people need to claim benefit? How much are other company employees getting including any bonuses and how much are the shareholders getting?

If that company can pay more by leveling out one or more of those areas then they should be - not expecting the government to basically top up extremely high incomes.

GrannyGravy13

Ilovecheese

I do think that single parents should be made a special case, at least for a couple of years because of the effect of single parenthood on the children. When children have lost a parent being in the home whether through death or separation, the last thing they need is for the remaining parent to be absent for more hours of the day than they were previously. I think looking after the mental health of children pays dividends in later years and probably saves the state money in the long run.

Totally agree.

I think every parent is a special case in the first year. All countries are seeing a drop in births. Norway pays 100% of income for a year or 80% for, I think it is 15 months and I think it can be divided how the parents choose but I would need to check that.

I think the childcare problem should be looked at outside the box too. More flexible hours, working from home where possible and even a shorter working day. We have see that productivity generally goes up if there is a level of flexible working.

SueDonim

MaizieD how does that work if people spend money on, say, Amazon, who pay little tax and the profits go overseas? How does the money feed back into the UK economy?

It's not just Amazon. Many of our utility companies and transport, healthcare and even education providers are foreign-owned. It's true that work is provided in the UK, but the profits are leached off overseas. The only way to ensure that their workers are paid reasonably is to impose and enforce a minimum pay level. Otherwise, the UK becomes no different from Indian call centres, where work is outsourced for financial reasons. Unfortunately, there is then the risk that work will be outsourced to countries with cheaper labour costs, which is why it's important that UK workers have skills which can't be outsourced.

It really worries me that people who work hard, harder than some people in well paid cushy numbers,, but hard manual work and long hours, also care workers, yet they cannot support their families . it is a great injustice and we should be ashamed.

PippaZ

I think the childcare problem should be looked at outside the box too. More flexible hours, working from home where possible and even a shorter working day. We have see that productivity generally goes up if there is a level of flexible working.

My guess is that some of the biggest users of paid childcare are health and education workers (it was certainly the case when my children were in full-time nurseries). It's not easy to work from home or have a shorter working day, if your job is in a school or hospital.

Allsorts

It really worries me that people who work hard, harder than some people in well paid cushy numbers,, but hard manual work and long hours, also care workers, yet they cannot support their families . it is a great injustice and we should be ashamed.

I agree. It is impossible for some people to earn as much through paid work as others do from interest on capital or owning property.

100% of the mother's income, or the father's?

I think it's a good idea to give the parents time with the baby, and I think the government should pay, rather than the employer. It might be better if it were based on an average of both partners, though, and based on their NI contributions, rather than length of service with their employer at the time of the birth.

Oh - that was in response to the post about Denmark!

PippaZ You have a good point. The billionaire Warren Buffet made the same point when he supported the raising of incomes for the lowest paid.

If private landlords were forced to lower their rents then less housing benefit would need to be paid.

Lets see how unpopular that statement is...

Doodledog

100% of the mother's income, or the father's?

I think it's a good idea to give the parents time with the baby, and I think the government should pay, rather than the employer. It might be better if it were based on an average of both partners, though, and based on their NI contributions, rather than length of service with their employer at the time of the birth.

Oh! I wish! I probably wouldn't have needed to go back to work when my children were born. I'm afraid I don't think that's very fair because it would disadvantage people on low incomes. It would be effectively yet another subsidy by the lower paid to those who could afford to take more time off.

JaneJudge

If private landlords were forced to lower their rents then less housing benefit would need to be paid.

Lets see how unpopular that statement is...

It would be popular with me.

I think it's wrong that people can cash in on property, while making it more difficult for others to get a foot on the ladder. There should be a return to rent caps, and/or more tax on income earned through renting.

I would apply that even more rigorously to Air B&Bs, which reduce the housing stock in areas that attract tourists, too.