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Post by Zany on May 1, 2024 18:03:30 GMT
Its an interesting point. VAT is charged at the same rate whether your takings are for passing a product on or selling a service (Labour) But when you sell labour you don't get to claim VAT against it. Buy £100,000 of goods and sell it to the public for £120,000 and pay £7,300 to HMRC Buy £100,000 of labour and sell it to the public for £120,000 and pay £14,400 to HMRC Then there's living wage. Excellent idea, the government can give millions away without it costing them a penny, more every year. Hey look at us we're such good guys and so generous.
How about if we stop in work benefits and let the market decide pay? Would employers pay more, or would thousands of jobs disappear. Millions of low paid working people would be driven into bankruptcy and homelessness is what would happen. And a situation of old would be recreated where people will be worse off in work than out of it. In it's way that would be a far worse benefits trap than we have now. Why would they? Surely employers would just find the money and pay more? After all they are all rich gits paying low wages while living it up. Are you tacitly admitting that many businesses cannot afford to keep having wages raised by the government? |
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Post by Zany on May 1, 2024 18:12:12 GMT
Let me just point out here that it wouldn't. My company charges the maximum it can for its products. That is to say if we lower the price from its sweet spot we sell more but make less, if we raise it from its sweet spot we sell less and make less. Where anybody gets the idea that a company could just put its prices up but for some reason hasn't done so baffles me. Fair points. But the extent to which this is true varies from business to business, sector to sector. If for example you are selling a commodity that is essential and not discretionary - eg food - and are located in an area where there is little effective competition you have much more potential to raise prices to cover increased costs because customers have no choice but to eat and little effective competition. As an example. My Tesco supermarket workplace is situated in a modest town 15 miles west of Plymouth. There is no other food retailer beyond a small corner shop and a B and M, which has a very limited amount of food for sale as it mostly sells non-food items. The nearest rival food supermarket is 12 miles away, which would be a 24 mile round trip for locals at significant cost in fuel and wear and tear on cars for those who have them, and way too much hassle for those who don't. It is only the fact that standardised prices for products set centrally for most of the country - I think prices are higher in London - that prevents a store like mine from charging more than it could get away with in large cities with multiple options. There is of course an upper limit on how much it could raise prices even if it had the leeway to do so. Raise prices too much and it would be more economical for locals to pay the fuel costs of going elsewhere in spite of the distances. In short, two variables will determine the extent to which a company can pass on costs to customers, firstly the extent of effective local competition, and secondly how essential or discretionary is the product or service you are selling. Yes there are exceptions, though I think Tesco's isn't one, their prices are set centrally so being the only shop in the area doesn't mean they can charge more. The real exceptions are those selling a limited commodity such as gas or oil or land. Pretty much every ill in this country could be eased if the land owners were made to give up land. |
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Post by Zany on May 1, 2024 18:16:49 GMT
Unfortunately, once you get into a situation where large portions of the population rely on state subsidies, the economy adapts to it and untangling the insanity becomes an upward struggle against those new interests. That's the whole point of these subsidies - to make the population dependent on the ongoing 'charity' of the political class. Any such change would need to be tapered and would require determination What's the solution? If you just let things ride without government intervention you end up with lawlessness and eventually revolution. The cycle of greed, loss of community cohesion, lawlessness, suppression, war. So assuming you can't just let the devil take the hindmost what's your solution? |
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Post by Deleted on May 1, 2024 19:13:13 GMT
Millions of low paid working people would be driven into bankruptcy and homelessness is what would happen. And a situation of old would be recreated where people will be worse off in work than out of it. In it's way that would be a far worse benefits trap than we have now. Why would they? Surely employers would just find the money and pay more? After all they are all rich gits paying low wages while living it up. Are you tacitly admitting that many businesses cannot afford to keep having wages raised by the government? I acknowledege that some employers might have a problem paying for that in some sectors. Such employers should be helped to afford paying a living wage by cuts in employer NI payments or rebates from excessive business rates and things like that, rather than acting as the ceiling preventing payment of a living wage across the board. And though there are a minority of "rich gits" as you call them who might be exploitative bastards because there always have been a few such types, you attempt to suggest that I think everyone paying minimum wage is like that which is most unfounded. Most are just people trying to make a living, and the majority of employers are not a left-inspired vision of fat controller type caricatures. Please don't assume or imply that I think in such terms. Abolishing in work benefits for employers who cannot afford to pay their employers more however - as you have suggested - is going to help neither employee nor employer. Unless you see value in having workers utterly desperate and unable to survive, whose mental health is likely to go south, their value to you sharply deteriorating in consequence. I know you don't want that on both business and humanitarian grounds. And so I suspect that was just a grenade you chose to lob into the debate just to see what shakes out of it |
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Post by equivocal on May 1, 2024 19:54:59 GMT
Why would they? Surely employers would just find the money and pay more? After all they are all rich gits paying low wages while living it up. Are you tacitly admitting that many businesses cannot afford to keep having wages raised by the government? I acknowledege that some employers might have a problem paying for that in some sectors. Such employers should be helped to afford paying a living wage by cuts in employer NI payments or rebates from excessive business rates and things like that, rather than acting as the ceiling preventing payment of a living wage across the board. And though there are a minority of "rich gits" as you call them who might be exploitative bastards because there always have been a few such types, you attempt to suggest that I think everyone paying minimum wage is like that which is most unfounded. Most are just people trying to make a living, and the majority of employers are not a left-inspired vision of fat controller type caricatures. Please don't assume or imply that I think in such terms. Abolishing in work benefits for employers who cannot afford to pay their employers more however - as you have suggested - is going to help neither employee nor employer. Unless you see value in having workers utterly desperate and unable to survive, whose mental health is likely to go south, their value to you sharply deteriorating in consequence. I know you don't want that on both business and humanitarian grounds. And so I suspect that was just a grenade you chose to lob into the debate just to see what shakes out of it I can't say I've come across a business owner or director who has paid any more than they had to. That said, I've not come across any who think they might be exploiting their workforce. I'd suggest that unless there is evidence that the minimum wage is causing a net loss in jobs, then it's probably set around the right level. I tend to think, again if there are no net job losses, that employers unable to continue making profits because of the minimum wage are probably best out of the market allowing resources to be used more effectively elsewhere. |
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Post by Zany on May 1, 2024 20:19:23 GMT
I acknowledege that some employers might have a problem paying for that in some sectors. Such employers should be helped to afford paying a living wage by cuts in employer NI payments or rebates from excessive business rates and things like that, rather than acting as the ceiling preventing payment of a living wage across the board. And though there are a minority of "rich gits" as you call them who might be exploitative bastards because there always have been a few such types, you attempt to suggest that I think everyone paying minimum wage is like that which is most unfounded. Most are just people trying to make a living, and the majority of employers are not a left-inspired vision of fat controller type caricatures. Please don't assume or imply that I think in such terms. Abolishing in work benefits for employers who cannot afford to pay their employers more however - as you have suggested - is going to help neither employee nor employer. Unless you see value in having workers utterly desperate and unable to survive, whose mental health is likely to go south, their value to you sharply deteriorating in consequence. I know you don't want that on both business and humanitarian grounds. And so I suspect that was just a grenade you chose to lob into the debate just to see what shakes out of it I can't say I've come across a business owner or director who has paid any more than they had to. That said, I've not come across any who think they might be exploiting their workforce. I'd suggest that unless there is evidence that the minimum wage is causing a net loss in jobs, then it's probably set around the right level. I tend to think, again if there are no net job losses, that employers unable to continue making profits because of the minimum wage are probably best out of the market allowing resources to be used more effectively elsewhere. The problem you have is being squeezed from both sides, on the one side every business is cutting its costs and prices to try and capture a bigger share of the market, so prices are driven as low as commercially viable. That shouldn't matter with something like a minimum wage rise as every supplier is forced to put up prices, but what happens is the product price gets a value. A pint of beer costs A and if you charge B you put some customers off. Doesn't matter if everyone starts charging B you still lose customers. This is particularly true in the leisure industry. The only avenue left is automation and once the jobs have gone they are gone forever. |
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Post by Deleted on May 1, 2024 20:21:42 GMT
Fair points. But the extent to which this is true varies from business to business, sector to sector. If for example you are selling a commodity that is essential and not discretionary - eg food - and are located in an area where there is little effective competition you have much more potential to raise prices to cover increased costs because customers have no choice but to eat and little effective competition. As an example. My Tesco supermarket workplace is situated in a modest town 15 miles west of Plymouth. There is no other food retailer beyond a small corner shop and a B and M, which has a very limited amount of food for sale as it mostly sells non-food items. The nearest rival food supermarket is 12 miles away, which would be a 24 mile round trip for locals at significant cost in fuel and wear and tear on cars for those who have them, and way too much hassle for those who don't. It is only the fact that standardised prices for products set centrally for most of the country - I think prices are higher in London - that prevents a store like mine from charging more than it could get away with in large cities with multiple options. There is of course an upper limit on how much it could raise prices even if it had the leeway to do so. Raise prices too much and it would be more economical for locals to pay the fuel costs of going elsewhere in spite of the distances. In short, two variables will determine the extent to which a company can pass on costs to customers, firstly the extent of effective local competition, and secondly how essential or discretionary is the product or service you are selling.
The real exceptions are those selling a limited commodity such as gas or oil or land. Pretty much every ill in this country could be eased if the land owners were made to give up land. I already said that when I pointed out that the only reason my Tesco workplace does not take advantage of the relative lack of local competition, is because prices are set nationally from the centre. It is not that they cannot charge higher prices in places with less competition, more that they choose not to as company policy. They also probably would not want the adverse publicity that could result from a differential charging policy because having a reasonably good image makes good business sense. Also devolving pricing decisions to the local level would likely cause far more problems than it solved. But an independent supermarket in the same location instead of Tesco could easily get away with charging somewhat higher prices than they could in a locale with much more close at hand competition |
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Post by Zany on May 1, 2024 20:26:32 GMT
Yes there are exceptions, though I think Tesco's isn't one, their prices are set centrally so being the only shop in the area doesn't mean they can charge more.
The real exceptions are those selling a limited commodity such as gas or oil or land. Pretty much every ill in this country could be eased if the land owners were made to give up land. I already said that when I pointed out that the only reason my Tesco workplace does not take advantage of the relative lack of local competition, is because prices are set nationally from the centre. It is not that they cannot charge higher prices in places with less competition, more that they choose not to as company policy. They also probably would not want the adverse publicity that could result from a differential charging policy because having a reasonably good image makes good business sense. Also devolving pricing decisions to the local level would likely cause far more problems than it solved. But an independent supermarket in the same location instead of Tesco could easily get away with charging somewhat higher prices than they could in a locale with much more close at hand competition Sorry missed that. And no an independent supermarket could not charge more, it wouldn't be long before competition came in. |
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Post by equivocal on May 1, 2024 20:27:28 GMT
I can't say I've come across a business owner or director who has paid any more than they had to. That said, I've not come across any who think they might be exploiting their workforce. I'd suggest that unless there is evidence that the minimum wage is causing a net loss in jobs, then it's probably set around the right level. I tend to think, again if there are no net job losses, that employers unable to continue making profits because of the minimum wage are probably best out of the market allowing resources to be used more effectively elsewhere. The problem you have is being squeezed from both sides, on the one side every business is cutting its costs and prices to try and capture a bigger share of the market, so prices are driven as low as commercially viable. That shouldn't matter with something like a minimum wage rise as every supplier is forced to put up prices, but what happens is the product price gets a value. A pint of beer costs A and if you charge B you put some customers off. Doesn't matter if everyone starts charging B you still lose customers. This is particularly true in the leisure industry. The only avenue left is automation and once the jobs have gone they are gone forever. If there is an overall net loss in jobs, then the minimum wage level is too high. If, however, there's no net loss in jobs then automation may be the answer for one enterprise freeing up labour to be more productively employed elsewhere.
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Post by Deleted on May 1, 2024 20:41:42 GMT
On the competition front I shall provide a real life example from my own locale.
For many years the only supermarket in my immediate area of Plymouth was a Coop, which was notoriously expensive. Within relatively close driving distance were a Lidl, a Tesco, an Asda and a Morrisons. Those of us with cars found it easy to go to these but none of them were easily accessible by bus, and taxis cost a lot for people with little money. So most of the poorer pensioners and low income families without their own transport in my area were stuck using the Coop. Internet shopping alleviated some of this but many of the older folks struggled to get their heads around the internet. The Coop relied on these.
Then an Aldi opened it's doors on the other side of the road, at much cheaper prices than the Coop. The Coop now lost most of it's poorer customers and closed the branch down within a year. And I have since noticed that the Coop outlets that still thrive tend to be smaller supermarkets in strategic locations where competition is limited. There is for example a thriving Coop in the relatively small Cornish town of Lostwithiel, where it is pretty much the only food and grocery outlet in the town. It is typically expensive, so if somewhere much cheaper were to open around the corner it would fairly quickly be driven out of business.
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Post by Orac on May 1, 2024 20:45:52 GMT
Unfortunately, once you get into a situation where large portions of the population rely on state subsidies, the economy adapts to it and untangling the insanity becomes an upward struggle against those new interests. That's the whole point of these subsidies - to make the population dependent on the ongoing 'charity' of the political class. Any such change would need to be tapered and would require determination What's the solution? If you just let things ride without government intervention you end up with lawlessness and eventually revolution. The cycle of greed, loss of community cohesion, lawlessness, suppression, war. So assuming you can't just let the devil take the hindmost what's your solution? The 'solution' is to reduce those costs at the base of the economy and let people build their own communities. I'm just explaining why what is being suggested here is just 'more of the same' (turning everything into a giant, subsidised state plantation) and will likely make things worse. |
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Post by Deleted on May 1, 2024 20:49:28 GMT
I already said that when I pointed out that the only reason my Tesco workplace does not take advantage of the relative lack of local competition, is because prices are set nationally from the centre. It is not that they cannot charge higher prices in places with less competition, more that they choose not to as company policy. They also probably would not want the adverse publicity that could result from a differential charging policy because having a reasonably good image makes good business sense. Also devolving pricing decisions to the local level would likely cause far more problems than it solved. But an independent supermarket in the same location instead of Tesco could easily get away with charging somewhat higher prices than they could in a locale with much more close at hand competition Sorry missed that. And no an independent supermarket could not charge more, it wouldn't be long before competition came in. If they charged ridiculous amounts then yes you are right. But there would be less competitive downward pressure on their pricing in an area with less competition. If they took too brazen an advantage of that they'd lose customers travelling much further and make it more likely that someone else would come along to compete. But any potential newcomer would have to weigh up the size of the local market and if there is a situation where this town aint big enough for both of us, this might only be viable if the competition can be put out of business by stealing many of their customers. The existing business could get away with charging a little more in such circumstances but would invite its own destruction if it went into too much profiteering. |
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Post by Zany on May 1, 2024 21:27:21 GMT
The problem you have is being squeezed from both sides, on the one side every business is cutting its costs and prices to try and capture a bigger share of the market, so prices are driven as low as commercially viable. That shouldn't matter with something like a minimum wage rise as every supplier is forced to put up prices, but what happens is the product price gets a value. A pint of beer costs A and if you charge B you put some customers off. Doesn't matter if everyone starts charging B you still lose customers. This is particularly true in the leisure industry. The only avenue left is automation and once the jobs have gone they are gone forever. If there is an overall net loss in jobs, then the minimum wage level is too high. If, however, there's no net loss in jobs then automation may be the answer for one enterprise freeing up labour to be more productively employed elsewhere.
I have to be careful here as I don't want to imply I'm against the minimum wage as I am not. What I'm against is the government passing on the responsibility to feed the poor to small business. When the reason wages are too low is about not having enough houses and the rich maintaining land values. As for automation, its what has lead to there only being low wage jobs. How many semi skilled jobs have gone to software. Everything from online banking to accounts packages. From cars that don't break down to email killing off printing. Millions of jobs gone. Any well paid job is prime target for automation and the more automation the more the money goes to a smaller group of people. But these are not the ones employing people and they are not the ones the government pick on. |
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Post by equivocal on May 2, 2024 6:01:41 GMT
If there is an overall net loss in jobs, then the minimum wage level is too high. If, however, there's no net loss in jobs then automation may be the answer for one enterprise freeing up labour to be more productively employed elsewhere.
I have to be careful here as I don't want to imply I'm against the minimum wage as I am not. What I'm against is the government passing on the responsibility to feed the poor to small business. When the reason wages are too low is about not having enough houses and the rich maintaining land values. As for automation, its what has lead to there only being low wage jobs. How many semi skilled jobs have gone to software. Everything from online banking to accounts packages. From cars that don't break down to email killing off printing. Millions of jobs gone. Any well paid job is prime target for automation and the more automation the more the money goes to a smaller group of people. But these are not the ones employing people and they are not the ones the government pick on. I'm not sure you've been careful enough when suggesting the government is picking on small businesses to feed the poor. 
I am not attempting to argue against or in support of the structure of the economy, nor the pros and cons of automation. (In any event, I assumed you were referring to automating minimum wage jobs.) All I am arguing is that if the minimum wage does not cause a net loss of jobs, enterprises unable to trade profitably whilst paying two thirds of the median wage to their workers need to change their business models or step back to allow resources to be used more efficiently elsewhere.
Just to clarify, by 'trade profitably' I don't mean only over a particular period. There may be longer term issues where paying the minimum is an investment decision for future returns.
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Post by Zany on May 2, 2024 8:26:05 GMT
I have to be careful here as I don't want to imply I'm against the minimum wage as I am not. What I'm against is the government passing on the responsibility to feed the poor to small business. When the reason wages are too low is about not having enough houses and the rich maintaining land values. As for automation, its what has lead to there only being low wage jobs. How many semi skilled jobs have gone to software. Everything from online banking to accounts packages. From cars that don't break down to email killing off printing. Millions of jobs gone. Any well paid job is prime target for automation and the more automation the more the money goes to a smaller group of people. But these are not the ones employing people and they are not the ones the government pick on. I'm not sure you've been careful enough when suggesting the government is picking on small businesses to feed the poor.
I am not attempting to argue against or in support of the structure of the economy, nor the pros and cons of automation. (In any event, I assumed you were referring to automating minimum wage jobs.) All I am arguing is that if the minimum wage does not cause a net loss of jobs, enterprises unable to trade profitably whilst paying two thirds of the median wage to their workers need to change their business models or step back to allow resources to be used more efficiently elsewhere.
Just to clarify, by 'trade profitably' I don't mean only over a particular period. There may be longer term issues where paying the minimum is an investment decision for future returns.
I don't think its as simple as 'does the minimum wage cause net loss of jobs. The net loss of jobs is due to two things. Firstly moving manufacturing to lower paid countries and then to automation of the jobs left here. Neither of those are caused by the minimum wage but they do cause the only jobs available to be in the lower paid sectors. Service, pubs, clubs, leisure. All of which are discretionary spend and all of which have limits on what people will pay. So a pub seeing its costs sky rocket to the point of near collapse is not able to also take the hit of another minimum wage rise. Customers simply wont just pay more. So the levelling out effect everyone expects from minimum pay rises is not happening because the industries it most effects were the ones who were tightest in the first place. And yes when a pub closes some minimum wage jobs go, alongside some non minimum wage jobs. And there is another aspect of the minimum wage. Try paying your cook £12.50 an hour when the table clearers are on £11.44. Fact is the minimum wage accelerates the gap. Your cook wants £15.00 your manager wants £22.00 an hour. Now your pubs wage bills are sky rocketing in an industry that barely scrapes by in the first place. And as I say, unlike an importer you don't get to claim back the VAT on your manufacturing costs as the labour needed to pull a pint with a cheery smile is not considered to be part of the manufacture of that pint. (no I don't run a pub) |
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