Can anyone explain the logic of this please?

M0nica

What about companies that are not profitable? Company profit levels vary from losses to very profitable but everyone is assuming that all public quoted companies are immensely profitable. They aren't.

Not every company gets a bail out when needed, only when the country and worldwide effects of their collapse is greater than the personal loss does the government step in.

Look at all the companies that have gone bust without government intervention. Philip Green's empire, Debenhams, all those small energy companies, and many more.

But M0nica that doesn't answer the question; I specifically asked about companies that do make huge profits.

I don't actually mind that some businesses are helped out by the government, but why, if they do become profitable again, is there no mechanism for repaying the bailout costs?

And again, why don't we ever hear the same disparaging terms about these business scroungers that cost the country billions upon billions of pounds, but we do hear of individuals who collectively cost the country far less? The question needs to be asked: Is someone controlling the narrative to keep eyes on the poor, so we don't look at where the big money is being siphoned off to?

A very good post, grannyactivist.

the y deliberately keep most staff at under 16 hours a week too

I've never even considered this angle.
It is weird, that companies which are doing well can just let the system prop up their employees.

They have done this for years, though. Working Tax Credits encouraged it, if I remember rightly, and it's continued since. They allowed companies to suppress wages, knowing that the taxpayer would pick up the tab and bring them up to a basic level of subsistence.

This is one of the reasons why I have little patience with companies saying that they can't afford to pay the living wage. I would much rather see a system whereby the company had to apply for a subsidy, rather than the employees. Under the Doodledog Scheme, they would have to show that the turnover (or profit - whichever would show up the money paid to owners/directors) was under a set amount, and measures would have to be put in place to stop them from simply closing one company and opening a new one in order to keep claiming the subsidy.

It certainly is, isn't it, MissAdventure!
And at the same time, that these low-paid workers are demonised for it, as if it is their fault and they are just feckless scroungers.

MamaCaz

It certainly is, isn't it, MissAdventure!
And at the same time, that these low-paid workers are demonised for it, as if it is their fault and they are just feckless scroungers.

I was trying to find a picture I've frequently seen on twitter, and maybe someone has posted on on here at some time. Many of you probably know it. But I can't find it. I think it's apt here

It's of a rich man with a plate full of biscuits in front of him (who looks a little like Rupert Murdoch) a person on the other side of the table with one biscuit on his plate, and a hungry looking person hovering around. The man with the full plate is saying to the man with one biscuit "He's trying to take your biscuit"

I know.
I'm one of them!

I think when I renew my yearly bus ticket, I'll just decide to pay a couple of hundred, and the state can fund the other £300.

It’s an interesting comparison and I’m sure it’s accurate but that’s not how it works, companies pay the lowest wages they can to attract a worker capable of doing the work. If that worker can get better elsewhere she/he will leave, the only way to increases wages of the low paid is to raise the national minimum wage. Then everyone in the retail, hospitality and care industries will get a better deal, albeit at the consumers expense because companies still need to make a profit.

That only works if there are people available to do the work. If there aren't, all that happens is that the wage bill rises, but there are still vacancies.

The dwp will expect people to apply for low paid jobs, and to keep applying until they get one.

But Boris has announced that we are going to be a high salary economy! I take this to mean that that those who are poorly paid will be replaced by robots, drones, etc., and the managers will be paid more. Thousands more will be unemployed, but average salaries of those in work will have risen.

Another pledge honoured.

It's to massage the unemployment figures by having a large number of people employed for very few hours per week.

FarNorth

It's to massage the unemployment figures by having a large number of people employed for very few hours per week.

Yes, and the taxpayer, who has been taught to complain about 'paying for' those on benefits, is still paying the bill, but instead of their taxes benefiting society, they are going into the pockets of unscrupulous employers.

FarNorth

It's to massage the unemployment figures by having a large number of people employed for very few hours per week.

Yes, I think even if it's one hour per week it is counted as 'employee' if it is paid.

'employed'

Autocorrect again

Callistemon

FarNorth

It's to massage the unemployment figures by having a large number of people employed for very few hours per week.

Yes, I think even if it's one hour per week it is counted as 'employee' if it is paid.

Technically, it's 2 hours per fortnight. I've looked it up a time or two and am shocked each time.

I’m trying to understand this. Supermarkets often employ people for about 16 hours a week ( the number of hours that must be worked to claim working tax credit? ) on minimum wage. The amount these people earn is not enough to live on so they can claim various credits. If they were on 35 hour week contracts would that take them above the wage to get these benefits ?

So is the answer to only employ staff full time which will disadvantage people who want part time work, maybe around school hours or while studying?

Apologies if I’ve misunderstood the economics, I’m just trying to get my head around the issue.

I wonder if the carers at my Mums care home, who are paid the living wage which is more than minimum wage, still get these benefits from the government to top up their income.

It is to the employers advantage to keep hours to 16 pw if the employee is on minimum wage because neither has to pay NI contributions. They are also earning below the income tax threshold, so the employer doesn't have to collect that, either.

This may alter slightly when Johnson's minimum wage increase is implemented as it is a rise of 70p per hour.

Universal Credit doesn't work the same way Working Tax Credit did. Claimants are expected to work or to look for work for 35 hours a week (unless you are the primary carer for a child aged under 5, a disabled worker or a carer). There is no advantage or disadvantage to working 16 hours a week. It's the amount of money you earn, your commitments (eg children) and rent which matter.

MaizieD

It is to the employers advantage to keep hours to 16 pw if the employee is on minimum wage because neither has to pay NI contributions. They are also earning below the income tax threshold, so the employer doesn't have to collect that, either.

This may alter slightly when Johnson's minimum wage increase is implemented as it is a rise of 70p per hour.

NICs depend on the amount a person earns.

My employer and I both paid NICs when I briefly worked part-time (under 16 hours) because I was earning over the lower earnings limit.

grumppa

But Boris has announced that we are going to be a high salary economy! I take this to mean that that those who are poorly paid will be replaced by robots, drones, etc., and the managers will be paid more. Thousands more will be unemployed, but average salaries of those in work will have risen.

Another pledge honoured.

That's exactly how it will work.

Doodledog

FarNorth

It's to massage the unemployment figures by having a large number of people employed for very few hours per week.

Yes, and the taxpayer, who has been taught to complain about 'paying for' those on benefits, is still paying the bill, but instead of their taxes benefiting society, they are going into the pockets of unscrupulous employers.

Most of the money is actually going to landlords.

A person with no children working 20 hours a week on minimum wage will only receive help towards rent, which possibly won't be covered anyway.

growstuff

grumppa

But Boris has announced that we are going to be a high salary economy! I take this to mean that that those who are poorly paid will be replaced by robots, drones, etc., and the managers will be paid more. Thousands more will be unemployed, but average salaries of those in work will have risen.

Another pledge honoured.

That's exactly how it will work.

I was doing my (rough) calculations on someone earning the current minimum wage, growstuff

Oh, sorry, growstuff, I've somehow quoted the wrong post. It was your post at 23.15 I was responding to.