New minimum wage

I wonder if it's possible to delete the benefits trap that Nelson is talking about? I don't think its presence is because of and particular flavour of government. I think it has been a problem during successive parliaments for quite a number of years.

Thank you Bags

I suppose one gran's extremist is another gran's social warrior Gracesgran

It is certainly an interesting article thatbags. I think it is a new can of worms and will cause all sorts of problems.

In the "i" this morning there is an article headed "Five unintended consequences of rise in minimum wage" They are:
1. It could encourage further EU migration to Britain.
2. Your 25th Birthday could become a cliff-edge to unemployment
3. Pay rises will be cut back (for higher earners)
4. Unemployment could go up
5. It will exacerbate the crisis in social care

www.independent.co.uk/news/uk/politics/budget-2015-five-unintended-consequences-of-the-new-living-wage-10378857.html

Do I hear the words Omnishambles again?

Excuse me, Anya but how is my post regarding my daughter hijacking? You are the one who complained about the 'far left'.

Do I only have a valid point if I agree with you?

My daughter has a child of six,an 18 month old toddler and a baby on the way. She works 25 hours a week. Her partner is a window cleaner during the day and delivers pizzas at night. I'm not sure what relevance this has but Anya asked.

I, too, would have enjoyed a good sensible discussion but apparently my views are too left wing to be valid although no one seems to willing to discuss alternatives. I thought that the whole point of a discussion was to put forward and consider varying points of views.

Depressing reading, isn't it, GG?

Providing they are not my point of view, of course.
Or even the point of view of the IMF or those who have spent years working on the living wage.

vamp, anya said your post is not hijacking. i believe she was referring to another person's posts.

Let's be honest. George wanted to cut benefits. He's done what he wanted to do. The rest is flannel to try to confuse the issue.

Bags question was can this be right. The Living Wage Foundation and the IMF both say that Fraser Nelson is right, as do many other people knowledgeable about finance.
The way to get rid of the benefit trap is to give more in pay than you take from benefits. Unfortunately, as everyone but the chancellor realises, he has done the reverse.
It's no wonder people think he does not care about the poor.
Although the increase in the minimum wage was Labour's idea, they were not going to cut benefits by 25%+

I have a name, Bags.

VQ I'm glad that Bags explained that to you.

The reason I asked about hours worked is that I'm trying to get a handle on this as far as gains and losses go. By my calculations your DD will be £910 better off on the new 'minimum' wage than the current one (7.20-6.50)x25 hours x 52 weeks.

I understand that as a self-employed window cleaner your SiL cannot award himself a pay rise. Perhaps with his pizza delivery job he earns more than her, perhaps less. I don't know. Both are probably below the present tax threshold or at least the new one.

So, what those of us who have never had or understood Working Tax Credits (because they didn't exist for our generation) is how much a family in this situation would have received in these benefits and others before the budget and how much after.

Only with these facts and figures can we comment on, or understand, how their finances will change. Please don't attribute any sinister motives to the question as I'm sure there are many others on this forum who, like me, haven't a clue.

It is depressing thatbags and quite worrying too. This government has shown themselves to be Lords of the unintended consequence rather more than others I can remember. The problem is that there are people at the end of those consequences. I am someone who thinks we do need to review our benefits system but I have a feeling politics rather than economics was the order of the day here.

I must admit I had already begun to feel split down the middle. I want the lovely carers who look after my mother and many more in even greater need to be well paid, well trained and have a good career path but how are we supposed to pay for that. So much short-term politicising and so little proper management of the economy.

Trouble is exactly that GG - the short-term politicising that you've put your finger on, which is linked to party politics. Each government can only plan ahead 5 years with any certainty, which doesn't really march well with long-term thinking. Added to that, when or if they get things seriously wrong they can then bail out leaving the other side to pick up the pieces the reins of government and try to steer the ship in their preferred direction.

pedants please ignore the mixed metaphors

" The first task is to put the economy at the service of peoples. Human beings and nature must not be at the service of money. Let us say NO to an economy of exclusion and inequality, where money rules, rather than service. That economy kills. That economy excludes. That economy destroys Mother Earth."
- See more at: www.taxresearch.org.uk/Blog/2015/07/10/labour-lodging-land-the-pope-has-created-his-battlecry/#sthash.DBrcnqmu.dpuf

From a speech by the Pope yesterday.

Even if DD's employer will continue to employ her for same number of hours at the new rate and she worked 52 weeks a year the extra £910 is unlikely to replace the money she loses in tax credits.

More likely her employer will stop employing people over the age of 25 to keep his costs down. She works in a city centre pub and he can hardly pass the costs on to his customers because they'll take their business elsewhere.

The sad thing is she works so hard because I brought my girls up to believe that it's important to work and pay your own way as much as possible even if you have to claim top up benefits.

She and her partner are no better off than some of her friends who have never worked and have often been mocked for working so hard when they could live the same way and never work.

All credit to your DD that she and her partner don't let themselves be influenced by the friends who have no intention of working.

Of course if more people had your DD's work ethic and less used the system as her friends do, there would be less need to cut the benefit bill as much.

How do you work that out, Anya?

There have been quite a few programmes about unemployment in Hull that shows that there are many more people looking for jobs than there are jobs available.

Part of the problem is that a lot of the jobs available are on zero hours contracts. The way the benefit system works means it is unable to handle rapid and regular changes in income. It's all very well if you get a 40 hour week and earn £260 but the next week you may have zero hours in which case you get nothing but the system assumes you have money. You can't live on zero even if eventually it catches up and you get paid out. So people don't take the jobs because they can't afford to take the risk that there will be weeks when they have little or no money.

My 22 year old granddaughter has just worked a 70 hour week, zero hours contract, minimum wage, in the Midland Hotel in Manchester.
She's done that lots of weeks since she got her degree over a year ago. Other weeks she has no work, but as you say, vampire, they still have to pay the rent and feed themselves.

www.taxresearch.org.uk/Blog/2015/07/10/not-so-much-a-pasty-tax-budget-more-an-outright-disaster-for-millions/

Dj I was responding to VQ's post where she explains that not all young people are as keen to work as others. I think most people accept this.

I think the Midland Hotel are breaking the law by allowing someone to work a 70 hour week. I'm thinking their HR Manager has questions to answer and wouldn't want this (alleged) breach of uk employment law ought to be reported.

ought

These far left Popes are such a worry.

absent!

from Fullfact.org (and not everyone is unhappy with zero hours contracts)

the facts:

The UK Statistics Authority has written to Labour MPs pointing out that they haven’t been presenting statistics on zero hour contracts entirely clearly.

Contrary to Labour’s suggestions, 1.8 million people are not ‘on zero hour contracts’ but rather around 1.8 million zero hour contracts were in use in August 2014.

The number of people with a zero hours contract in their main job was estimated to be 697,000 in October-December 2014. The discrepancy is explained by the facts that people can have more than one zero hours contract or have a zero hours contract as well as a different main job.

The ONS have pointed out that although the number of zero hour contracts estimated to exist rose from 1.4 million in January 2014 to 1.8 million in August, this may be due to seasonal variations. It certainly doesn’t imply that the number of people on zero hours contracts increased by 400,000.

What's a far left Pope?

A zero hour contract isn't feasible for a lot of people who don't have any other income to fall back on should they have a zero hours week.