Living Wage 2020... is it right?

[dowie]

Wouldn't the next employer look at your CV and think "why employ this person if it's highly likely he'll bugger off in 2 years' time"?

you'd think that, but I know plenty of people who've gotten away with it... worse case is they need to think up a suitable story to tell at interview


I know of two people who almost essentially swapped jobs

Person A was training up Person B, Person A was on 40-something, new joiner Person B was on 50-something (was on 40-something at his old firm, but moved for more money)... Person A gets wind of the salary difference and asks for more... fobbed off by HR and manager he decides to put his CV out there... ends up getting recruited for Person B's old job at a rival firm... and is given a raise to 50-something

neither company would pay them a decent rise when they were current employees, however both companies would happily pay a new joiner a significant raise to jump ship... resulting in both of them getting the rise they wanted and ending up in new roles they'd have to take a few months to get up to speed in

reality is that unless you're getting promoted then internal pay rises tend to be X% only varying slightly to reflect performance... whereas companies won't even blink when handing over XX% to entice someone to jump ship... with more organisations going for a 'flat hierarchy' jumping ship is sometimes necessary

 

[estebanrey]

You're not wrong, but it's not the greatest model for a successful business!

Yeah but sadly businesses who think paying their staff a decent wage in exchange for highly motivated employees seems to be on the decline.

Businesses tend to see making as much profit as possible by suppressing wages is the sign of a great business. Too much focus on immediate profits rather than the long term affects of demotivated staff.

 

[Rroff]

In reality furniture, technology and most staple foods have stayed the same for donkeys years.

Housing, utility bills, house prices, car running costs, booze and fags have grown exponentially.

Foods are a bit deceptive - ~2008 onwards a lot of food went from say £4 for a 500g packet to £4.20 for a 450g packet then a bit later say £4.30 for 330g while the packaging stays the same size often along with a "new improved recipe" sticker being slapped on.

 

[dunker]

just spend the same, eat less and live longer, win

"living wage" oh 5? years down the line all partys will be taxing more anyone in the living wage i bet.

 

[Kuros]

With regards to the initial question, I'm working in a school as an IT manager.
Whilst I agree that your bog standard run-of-the-mill IT bod only changes printer toner cartridges, resets passwords and turns things off and on again, when you get into management, there are much more considerations.

If you set up a system where people are getting 30-40% less than what they'd get in the private sector, you're gearing towards shoddy work and no real documentation of what's gone on. One of the schools I've worked at had the previous IT manager pretty much do sweet FA for the past 3 years, everything is a quick bodge job and parts of what happened was bordering illegal in terms of safety. Reason for this? He knew he was heading off somewhere else so just did whatever was quickest for him. No reason to do it all properly when you won't be around when it breaks.

 

[Naff8000]

Yeah but sadly businesses who think paying their staff a decent wage in exchange for highly motivated employees seems to be on the decline.

Businesses tend to see making as much profit as possible by suppressing wages is the sign of a great business. Too much focus on immediate profits rather than the long term affects of demotivated staff.

Evidence please.

 

[estebanrey]

Evidence please.

The fact wages at the bottom, for the vast majority, have stagnated and hardly risen in the last 10 years whilst the incomes of those at the top and profits paid to shareholders have risen exponentially.

If businesses put regarded the motivation of their staff as the driver of profits that wouldn't happen.

You know as well as I do the second there is a threat to a medium to large business' profit line the first thing they do is freeze wages and lay off staff.

 

[Naff8000]

The fact wages at the bottom, for the vast majority, have stagnated and hardly risen in the last 10 years whilst the incomes of those at the top and profits paid to shareholders have risen exponentially.

If businesses put regarded the motivation of their staff as the driver of profits that wouldn't happen.

You know as well as I do the second there is a threat to a medium to large business' profit line the first thing they do is freeze wages and lay off staff.

I mean more your idea that businesses do not value highly motivated employees, as with old bureaucratic times. The evidence that I've seen is that more and more successful businesses are the ones who value highly motivated, intelligent employees.

 

[Calabi]

So raising wages in general is pointless, because everything else rises with it. So somehow we've reached this equilibrium state, where things are the way they are meant to be. When did we reach it and how?

 

[crunchman]

The marketplace works both ways.

Let's say a business currently employs supervisors at £7.20/h. If that business chooses not to increase the supervisors' wage next year then two things will happen:

1. Their existing supervisors will feel devalued, demotivated and productivity will fall.

2. They'll struggle to find anyone to fill supervisor vacancies.

Eventually, the business will have to give the supervisors a meaningful pay rise that is representative of the extra responsibility. How long it takes depends on that business's tolerance for pain.

When I was at JD Sports during uni supervisor pay was 16p/h more then I was being paid as a sales assistant! (was 21)
After I finished I was offered a full time contract, few months down the line I was offered the supervisor position and told I'd have to go on a course for 4 weeks to get 16p more an hour.

Add to that extra hours in work, more responsibility, and getting collared for anything that might happen (Targets missed, theft all the other bs)

I declined and in my extra free time I did freelance work, so was making quite a bit more for less work

So I'd say retail really don't give a **** that the unskilled bottom of the ladder workers get near enough the same as a "supervisor"

 

[BuffetSlayer]

The thing i'd be more worried about is that businesses will be more tempted to hire people under the 25 year old threshold so that they won't have to pay £9 p/h, putting millions of over 25's at risk of struggling to find work. Especially in unskilled positions.

It is basically YTS through the back door. No company in the land is going to pay £9 an hour when they can pay less and get the same work done. I can see a lot of people in their mid 20's struggling to find work come 2019 and because the NLW will be a legal requirement, employers won't be able to offer over 25's less under any circumstances.

that seems to be the problem people have with it - entitlement issues/envy

omg I was significantly better off than poor people now I'm only moderately better off than poor people

I don't think so. I think it is more to do with people feeling they have worked hard to better themselves and in one policy decision the relative benefits from doing so have been taken away. The incentive has been dashed.

For example, my wife has just spent the last 2 years doing college courses and working two jobs (one for free as a volunteer from 08:15-1400 and her second as a paid employee from 15:00-21:00) to get into a school to be a TA. Yes believe it or not full time TA posts are that hard to get into even for someone who has taught performing arts for 20 years (the last 7 at degree level) and has spent 2 years volunteering at the same school.

Her pay is now frozen for 4 years and in 2019 she will be earning less than NLW (which presumably the school with then have to raise by law). She is doing a specialised role in working with autism and given her past teaching experience this makes her very useful to the school. But the school are bound by law to pay a certain wage and will do everything they can not to pay more because year on year they get less funding.

So should my wife decide to move on or retire, who will fill that gap? What incentive will there be for up and coming people who want to be a TA to go through all the stress and hassle of college courses and working for free to possibly maybe get into a role which then pays no more than a job stacking shelves in Tesco? By nature we all like the path of least resistance or we take a more painful path for more gains. Sure, perhaps a person at Tesco won't get as many days off and has to work differing hours but are those negatives worth more or less than working part-time for free for 2 years as well as doing a 2nd job just to be in the position to simply apply for a TA role? (no guarantee you will even find work after it).

It isn't about envy it is very much about incentive. My wife has worked damned hard to get herself into this position, and made sacrifices for a chance to get into a role which better fits around her lifestyle aspirations. In 2019 what incentive will there be for people wanting to do the same when they could earn just as much in Tesco without any qualifications or experience?

There are none and thus it limits the interest in such roles and will eventually lead to a skills shortage. Unless pay increases commesurate with experience and skills. But with ever decreasing school budgets is that likely? Hence 1-2-1 support for autistic children may be shelved or the ratios between TA and pupils increased meaning a lower quality of education for each child overall.

If you are not going to pay over and above NLW for the skills and experience needed to do a job, people won't do it. Sure, in the short term the roles will likely get filled but in long term people will not bother with the hassle (pain) of getting experience and qualifications if there is no commesurate benefit (gain) at the end of it. So you start to get skills shortages in the public sector. This is the exact same thing happening in the NHS with nurses and a big reason why we are having to import them from all over the world.

We will see the same with child care. The burden the government has so flippanlty foisted onto the childcare industry in order to win votes is going to put many places out of business or force them to raise prices for everyone for childcare outside of the free hours. Parents can ill aford the prices as they are and the benefits from the increase in free childcare becomes null and void if prices have to rise. More kids will be taken out of childcare and more parents will stay at home instead of going out to work so everyone loses. The government does not even financially match the working costs of the free childcare which is pretty lame considering it is a policy they have forced on the industry.

 

[LeeUK]

People on minimum wage get their wage topped up with tax credits. Employers should pay a decent wage in the first place so employees don't need to rely on government top ups.

It stinks when huge multi million pound companies are paying their employees the legal minimum they can get away with while paying their exces million pound bonuses. When they could pay the recommended living wage which would only make a small dent in their huge profits.

Also benefits/tax credits rises are going to be capped, so by 2020 the people on the new minimum wage are going to be either in the same position or worse off than now.

 

[estebanrey]

So raising wages in general is pointless, because everything else rises with it. So somehow we've reached this equilibrium state, where things are the way they are meant to be. When did we reach it and how?

We need to rebalance wages and close the wealth inequality gap. If the rises at the bottom came from reductions at the top then prices would stay they same, the majority would be better off and you'd still have the ability get rich (just not to the silly levels now).

 

[Freakbro]

<snip>
I don't think so. I think it is more to do with people feeling they have worked hard to better themselves and in one policy decision the relative benefits from doing so have been taken away. The incentive has been dashed.

<snip>

It isn't about envy it is very much about incentive. My wife has worked damned hard to get herself into this position, and made sacrifices for a chance to get into a role which better fits around her lifestyle aspirations. In 2019 what incentive will there be for people wanting to do the same when they could earn just as much in Tesco without any qualifications or experience?

Good post Buffet, I reduced it to just highlight the points i was trying to say yesterday, but unfortunately I feel it will still fall on deaf ears as they seem to incalcitrant to change their point of view.

 

[LordSplodge]

So much butt hurt in this thread.

Think your being underpaid? Get a new job.
Can't get a new job? Brush up on your skills / interview technique.
Worried people who are going in at the new living wage in 5 years time are too close to your earnings? Should have tried harder at school.
Struggling to find an actual job? should have tried harder at School/ College/ University.
Moaning private sector gets more? Join private sector.
Moaning public sector gets more? Join public sector.

Moaning about it on a forum isn't going to do much.

1. It's obviously that easy, right?
2. How do you get these nee skills when you have to work all the hours just to keep a roof over your families head?
3. Hindsight, a wonderful thing and everybody has a sable enough life to do well at school, right?
4. See 3.

Anyway, your post doesn't address the fact that a lot of unskilled labour is needed to support the economy.

 

[estebanrey]

I mean more your idea that businesses do not value highly motivated employees, as with old bureaucratic times. The evidence that I've seen is that more and more successful businesses are the ones who value highly motivated, intelligent employees.

I never said "businesses don't value highly motivated staff"

I said that providing decent pay rises which would improve motivation comes a long way down after protecting the current short-term profit margin and maintaining share dividends.

 

[dowie]

1. It's obviously that easy, right?
2. How do you get these nee skills when you have to work all the hours just to keep a roof over your families head?
3. Hindsight, a wonderful thing and everybody has a sable enough life to do well at school, right?
4. See 3.

Anyway, your post doesn't address the fact that a lot of unskilled labour is needed to support the economy.

I thought the issue was zero hours contracts and people not getting enough hours....

plenty of people working 50-60 hours a week still manage to acquire skills

getting some skills is possible, not everyone needs to have a degree, but people can acquire skills if they try

 

[BuffetSlayer]

plenty of people working 50-60 hours a week still manage to acquire skills

getting some skills is possible, not everyone needs to have a degree, but people can acquire skills if they try

I agree which is why my wife has been working 2 jobs and weekends for the best part of the last 2 years. But as I mentioned earlier, if the benefits gained from going the extra mile and putting in the effort get you no more than someone on NLW in a supermarket or working in a bar, for example, where is the incentive to do it?

 

[dowie]

completely depends on the scenario, if you're doing a skilled job that only pays minimum wage then you'd need other incentives, perhaps that role is less stressful or you get a lot of satisfaction from it etc.. money isn't the only factor here - for example plenty of reservists in the armed forces technically earn less than minimum wage if you were to count up the hours they actually put in... they just get arbitrary days, half days, quarter days... getting a 1 day of pay when you've probably worked 20 hours or so that day can easily equate to a very low hourly rate

if money is important then perhaps don't chose that route and acquire some skills that pay

 

[Spacedeck]

The incentive shouldn't be based upon what somebody else makes. It should be set on your life term ambition/goals to do well. If she doesn't want to pursue them anymore and go onto NLW, then fair doe's. There will always be someone else out there with that ambition still to better themselves.