The labour Leader thread...

OldCoals said:
You said it cost jobs.
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It does cost jobs, the article says as much in the detail - there's a difference between negligible and zero. And there was certainly not a finding of positive benefit of people having more money increasing employment.

And that's with the minor increases that are given every year. What is being suggested is that in effect the minimum wage is massively increased to remove the need for working tax credits and the like.
 
Since the minimum wage was introduced in April 1999, real GDP has grown by nearly 29 per cent. This growth has been reflected in the labour market. Table 2.8 shows that between the introduction of the minimum wage and September 2013, the number of workforce jobs in the UK and the number of people in employment had increased by around 11 per cent.

The number of workforce jobs had grown by more than 3.2 million and there were an additional 2.0 million people in work. Ignoring those unlikely to be directly affected by the minimum wage (the self-employed, unpaid family workers and those on government training schemes), employment growth among employees was not quite as strong but still considerable.

Thenumber of employee jobs increased by 9.3 per cent, nearly 2.4 million, while the number of employees increased by almost 2 million, or 8.5 per cent. At 8.4 per cent the increase in total hours worked was slightly weaker. Together, these suggest that the aggregate labour market has been strong taken over the whole 14 year period, 1999-2013.
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We examined the evidence for any effect of increases in the minimum wage on overall
employment in the low-paying sectors, and found little evidence of employment loss except
in those sectors, such as agriculture, textiles and food processing, which have been shedding
labour for a period that started well before the introduction of the minimum wage.
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https://www.gov.uk/government/uploa...The_National_Minimum_Wage_LPC_Report_2014.pdf
 
As someone with no background in economics, I can only read these articles as a layman, not fully understanding them.

But what's interesting is the number of articles questioning whether current UK and US policy is actually helping create jobs and boost the economy, or actually having no effect, but instead just funnelling more wealth toward investers and stockholders. That policy being to increase company profitability, under the guise that successful corporations and individuals are "job creators". And this is now being challenged in a lot of places, as fundamentally not true.

http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2013/04/on-wage-led-growth.html

This recent paper by Alex coad and others for NESTA looked at the growth dynamics for firms I.e. what comes first sales growth, asset growth, profit growth or employment growth. It finds:

"We also observed that the growth of operating profits either has no causal effect on firm growth (full sample) or a small negative effect on employment growth (for the sub-sample of HGFs)........Put informally, the caricature would be that profits are withdrawn to be spent by investors on champagne, not on new jobs. Policies that are aiming to help firms generate jobs should not focus on helping them to first generate large profits, because the evidence suggests that profits are not reinvested into employment growth"

http://www.nesta.org.uk/publication...rowth_processes_of_highgrowth_firms_in_the_uk
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So making companies more profitable has no causal effect on creating more jobs. Instead, lots of evidence that increasing minimum wage could potentially stimulate more demand. But apparently this depends on businesses being confident in this increased demand, and willing to accept smaller profit margins.

I think. Perhaps I read it wrong :p
 
Why would a company being profitable mean they employ more people? Demand creates jobs, out of a necessity that if you didn't take on more staff you wouldn't be able to meet demand, resulting in your potential clients going to a competitor. A company will operate with as few staff as it possibly can, since that is good business sense.

If a company being increasingly profitable year-on-year is also taking on more staff, then both are a result of increased demand.
 
Caged said:
Why would a company being profitable mean they employ more people? Demand creates jobs, out of a necessity that if you didn't take on more staff you wouldn't be able to meet demand, resulting in your potential clients going to a competitor. A company will operate with as few staff as it possibly can, since that is good business sense.

If a company being increasingly profitable year-on-year is also taking on more staff, then both are a result of increased demand.
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It's often stated around these parts, that wealthy people and companies should not be heavily taxed, but lauded as "job creators" and left to do their thing.

It's a thing people believe - see here:
http://www.businessinsider.com/rich-people-create-jobs-2013-11?IR=T

You'll see it in almost all threads touching on the economy. As these articles point out, the evidence does not seem to support this theory.
 
I don't see an issue with taxing corporations (as a legal entity) lightly, you just need to ensure you have a really sound set of laws to prevent money being transferred from that company into private hands without the relevant taxes being paid on it. Whether that transfer takes the shape of dividend payments or the company buying 'stuff' that then miraculously ends up home and never has any connection to the business ever again.
 
Caged said:
I don't see an issue with taxing corporations (as a legal entity) lightly, you just need to ensure you have a really sound set of laws to prevent money being transferred from that company into private hands without the relevant taxes being paid on it. Whether that transfer takes the shape of dividend payments or the company buying 'stuff' that then miraculously ends up home and never has any connection to the business ever again.
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That sounds like a huge amount of work for an already over-taxed HMRC.

Would be much easier to just tax corporations at least as much as individuals. Then it doesn't matter if you take stock options, goods "in kind", or whatever else. The tax has been paid.

In your scenario you have a gargantuan task to prove that people aren't avoiding tax. Which they will be doing, of course.
 
piggate is hilarious. Even if it's not true it's worth it to see Tories suddenly caring about the accuracy of tabloid articles, and trying to pass off putting your nob into a pig as no big deal.
 
Caged said:
piggate is hilarious. Even if it's not true it's worth it to see Tories suddenly caring about the accuracy of tabloid articles, and trying to pass off putting your nob into a pig as no big deal.
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What's more funny about this is apparently BBC/Sky never mentioned it in their review of newspapers. :D
 
FoxEye said:
That sounds like a huge amount of work for an already over-taxed HMRC.

Would be much easier to just tax corporations at least as much as individuals. Then it doesn't matter if you take stock options, goods "in kind", or whatever else. The tax has been paid.

In your scenario you have a gargantuan task to prove that people aren't avoiding tax. Which they will be doing, of course.
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So your solution is to tax people twice? Corporations don't pay tax, people do, taxing corporations simply means you are taxing people indirectly and hoping they are too dumb to realise it.
 
OhEsEcks said:
Aside from the whole position the tories take and the hypocrisy of their actions, yeah, I guess you're right.
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This. A party with a media machine all too keen to dig up muck from people's university years and parade it as though it's relevant. It's great to see it backfiring.
 
Dolph said:
So your solution is to tax people twice? Corporations don't pay tax, people do, taxing corporations simply means you are taxing people indirectly and hoping they are too dumb to realise it.
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Which people though? If the corporation is paying a significant amount of tax (i.e. it's profitable), the tax will reduce the income of shareholders rather than raising the price of goods/services.
 
Dimi said:
What's more funny about this is apparently BBC/Sky never mentioned it in their review of newspapers. :D
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I've just emailed Corbyn to get him to ask a question at PMQ's about the state of pig farming in the UK :D
 
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