The labour Leader thread...

I'm curious about this tax credit stuff as I've never really paid attention to the details. Surely it's a bad solution to a simple problem? If we can get wages up and provide a decent number of hours of free, quality child care then both parents could start working, both could be contributing to the economy and the family could be better off with no tax credits needed? Surely it can't be better to have someone at home with the taxpayer subsidising living costs?
 
satchef1 said:
I'm curious about this tax credit stuff as I've never really paid attention to the details. Surely it's a bad solution to a simple problem? If we can get wages up and provide a decent number of hours of free, quality child care then both parents could start working, both could be contributing to the economy and the family could be better off with no tax credits needed? Surely it can't be better to have someone at home being paid for by the taxpayer?
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Well, tax credits is a way of the state subsidising **** employers.

Businesses are the biggest benefit scroungers in the country ;)
 
satchef1 said:
I'm curious about this tax credit stuff as I've never really paid attention to the details. Surely it's a bad solution to a simple problem? If we can get wages up and provide a decent number of hours of free, quality child care then both parents could start working, both could be contributing to the economy and the family could be better off with no tax credits needed? Surely it can't be better to have someone at home with the taxpayer subsidising living costs?
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I don't think it's a good idea to have both parents working and dump the children - from as young as 6 months that I've seen - into child care. Yes you can tax another parent and a child care worker, but at what cost...

Myself and my brothers and sisters were brought up by a stay at home mum. I don't offer myself as a shining light of how well this can turn out (I'm an awful human being :p) but I do fear for the kids today who basically only see their parents at weekends...

Perhaps this is also why good parenting is so sorely lacking today. The number of out of control kids everywhere you look is simply astonishing. They can't be disciplined at daycare (lolChildAbuse) and the parents themselves seem to lack the will/ability to keep them under control.

(I think I'm ranting now...)
 
Forcing wages up, just forces prices up, reducing demand (and hence jobs) or just forces the jobs abroad so it's not just a simple case of making employers pay more.
 
Or an increase in the minimum wage could give people more disposable income, so you sell more of your product, and the economies of scale take effect.

It's a huge over simplification to say that a wage increase means a product cost increase which would wipe the increase out. Wages are only one element of the total costs of getting products to market.

Your logic is based on the sale price of things being set as a margin over what they cost to make, as opposed to the sale price being set at whatever you believe the market can handle.
 
Caged said:
Or an increase in the minimum wage could give people more disposable income, so you sell more of your product, and the economies of scale take effect.

It's a huge over simplification to say that a wage increase means a product cost increase which would wipe the increase out. Wages are only one element of the total costs of getting products to market.
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Absolutely. But you also have to remember we operate in a global market these days. So yay if you still have a job, not so yay if you don't.

Everything is a balancing act and when they set the minimum age level they consider all aspects of the potential impact of a wage increase.
 
Which is why productivity is so important. If British goods are expensive but the quality is superior to a similar product from somewhere else then there will always be a market for it.

Productivity seems to be a bit of a government buzzword at the moment but I haven't seen any real efforts made to improve it.
 
Jokester said:
Forcing wages up, just forces prices up, reducing demand (and hence jobs) or just forces the jobs abroad so it's not just a simple case of making employers pay more.
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Correct. More focus should be put on on productivity, if each of us want more we need to produce more then we will see our wages go up.
 
Caged said:
Which is why productivity is so important. If British goods are expensive but the quality is superior to a similar product from somewhere else then there will always be a market for it.

Productivity seems to be a bit of a government buzzword at the moment but I haven't seen any real efforts made to improve it.
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Not sure what the government can do, usually driven by investment in new technology and processes by companies themselves. The theory is that job losses in this past recession were absorbed to a degree by producitivty decreasing.
 
http://www.pbs.org/newshour/making-sense/middle-class-cant-get-ahead/

It's US-centric, but the guy there is saying that wages could increase without affecting the price of goods. Wages have stayed stagnant, he says, whilst corporate profits have doubled, yet he argues that doesn't have to be the case.

From 1950 to 1980, during the good old days of U.S. economic might—the era in which the Great American Middle Class was created—corporate profits averaged a healthy 6 percent of GDP. But since then, corporate profits have doubled to more than 12 percent of GDP.

That’s about a trillion dollars more a year in profit. And since then, wages as a percentage of GDP have fallen, you guessed it, by about the same 6 percent or 7 percent of GDP. Coincidence? Probably not. What very few Americans seem to understand is that that extra trillion dollars isn’t profit because it had to be, or needs to be or should be. That extra trillion dollars is profit because powerful people like me prefer it to be. It could have been spent on your wages. Or it could have gone into discounts to you, the consumer. We capitalists will tell you that our increasing profits are the result of some complex economic force with the immutability and righteousness of divine law. But the truth is, it is simply a result of a difference in negotiating power. As in, we have it. And you don’t.
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The world of economics baffles me. But there does seem to be a small voice among the rich and powerful that warn about a growing wealth divide, and advocate a little rebalancing.

e: Actually that whole article is very informative, and depressing. He's basically spilling the beans as to how the top 1% (himself included) are deliberately ****ing up the economy for their own personal benefit.
 
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Jokester said:
Not sure what the government can do, usually driven by investment in new technology and processes by companies themselves. The theory is that job losses in this past recession were absorbed to a degree by producitivty decreasing.
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I believe they attempted to do it by releasing cash to banks to loan to small/medium businesses so they could invest, but for whatever reason it never worked out that way.
 
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