The living wage failure



There has been growing talk of paying a living wage: http://www.bbc.co.uk/news/uk-politics-27981975

The concept irks me, businesses voluntarily paying good wages is like businesses volunteering to pay tax. Many millionaires have stated they don't mind paying more tax, just they don't want to pay more then their peers.

The living wage is the same problem, you've either got to make it the national minimum wage or not bother.

Personally I would prefer to see the wage increased so we can do away with Working Tax Credit which is at the end of the day a benefit from the state to the shareholders of low paying companies.

Comments

Bob H said…
I was thinking about the fireman retirement problem and it occurred to me that you could replace the pension and benefits with a single unified maintenance fee.

1) You aren't too old to work, you are probably unfit to work because of the effects of aging? So, why not assume everyone can work until they die and just offer them incapacity payments relative to their ability to work? That way people of differing ability can work for as long as viable?

2) There is an assumption that at some point you should no longer work because you've paid your due's, but I don't think the state pension is a substitute for wages and increasingly pensioners are working, so why not acknowledge this.

3) Most people who retire completely seem to do so with a private pension or income, the state pension just seems to allow poor pensioners to barely survive, rather than this why don't we get rid of the pension and replace it with the living/minimum wage? If the government paid the minimum wage, means tested against ability to earn, essentially you get a state top-up for hours you don't work.

4) In fact you could simplify the tax and benefits system entirely by effectively guaranteeing everyone the minimum wage and then just fairly taxing any income above that. Anyone who can't earn applies for relief based on a single policy of "ability vs attempt".

5) If you shirk work you can be excluded and put outside the system. If you are justifiably unemployed you aren't mooching, you are getting a replacement wage for a limited period. If after a period you haven't made efforts you are excluded. But you had your minimum wage.

Watching Hugh F-W's channel 4 documentary about the Nordics shows that they don't mind being heavily taxed when they feel they get value for money. I don't think people in the UK feel they get value for money from our taxes. So the idea of imposing minimum wage increases just seems like another indirect tax. Personally I wouldn't object to more taxes, but I am certain they would be squandered!
Philip Hannent said…
That is kind of unworkable to evaluate people as they age to determine their capabilities. Plus there is the opportunity for corruption and fraud.

I believe in the fear of poverty, its a good motivator and there will always be poverty whilst we have limited resources. Trying to eliminate that motivation is not a good thing.

Everybody should know the state is NOT going to take care of them when they get older, perhaps they'll save more. Plus we are moving from requiring manual labour work force to a service industry. That allows people to work longer.

I find it odd that people expect to work for 40 years then get the next 30 off. Why? Its only a recent concept and which is actually based on the theory that people saved for 40 years into capital investments. People don't save and still expect a retirement.

Fire fighters should work in the same way that the other forces (Army, Navy and Air Force) in that once you get to your 30's you are kind of pushed out and retrained.

I am halfway through my working life and retaining to a completely new profession is actually an intriguing prospect.

To put my stake in the sand
I think we should raise the minimum wage and the rate at which we start paying tax. To incentivise working when the pay is low.

I think that multinational companies should not have corporation tax but a secondary sales tax. This would prevent the likes of Amazon and Google not paying their way.

Companies over 50 employees should pay more council rates.

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