Living wage forcing busineses to cut back on staff and hours?

[Duke]

If businesses can't afford to pay the extra. And have to cut hours or jobs to do it, then the business is close to folding anyway right?

I mean are they purposefully hiring more people than they need while at the same time struggling to pay for it? The work still needs doing, so if they cut hours, who does it?

Thats a very simple way of looking at things, so will give some simple answers...

1. Not all work that needs doing is now worth paying someone to do at the new pay level. Either it will become part of someone elses job to do, done in a different way or not done at all.

2. If you employ say 10,000 people on minimum wage and the company is running on tight margins, then you can see how much this sort of change will affect them.

 

[Deleted member 66701]

I'm curious what business did you run to become such an all knowing guru?

I used to own a very successful campsite.

If we take your line of reasoning and extend it then you just end up paying Tesco the additional money directly in increased prices rather than it going through the tax system

No, because "100% cost of product != cost of labour".

That's always the neoCon argument trotted out when fighting min wage implementations. It's been proven time and time again that there are very, very few products where an increase in labour cost has a significant impact on product retail cost. There are exceptions obviously, and those tend to be areas where labour is the main commodity - like hair dressers, gardeners, locksmiths and other personal service industries - but as the majority of those working in those service areas are self employed, min wage or living wage still has no significant effect anyway.

 

[teaboy5]

I used to own a very successful campsite.

Are you having a laugh?

There is a big difference to running a camp-site compared to a local business.

Your overheads for one would have been nothing compared to a shop in the middle of a high street or say a local engineering firm trying to get in as much business as possible.

 

[Dis86]

"I used to run a patch of grass"

 

[D.P.]

Hate this line of reasoning. I've even seen people at my work claim they should get promotions over other people because they have kids and therefore 'need the money more'.

Your pay should be based on your input to the business not your lifestyle choices outside of it.

Its perfectly normal, its called salary expectations. 50K salary to a single person goes a lot further than to someone with a family. If an employer is trying to attract the best talent then salaries must reflect the requirements of the employees.

Employers don't explicitly pay people with higher living expenses more, but people with higher living expenses have higher salary exceptions and will present their desired salary range to the employer when being hired.


It rarely makes sense to pay people the same salary for the same job because there are so many other variables. E.g., maybe a software company gets a new project and suddenly needs to hire new developers. Good software developers are generally in short supply and if they get an interested applicant then they will need to offer a higher salary to help the prospective employee sign on. Good candidates liekly have multiple job offers after-all, thus the new candidate might start at 20-30% more than the other software developers in the company. that is in the companies best interest so they can fulfill the project. The existing employees have no rights to complain, they accepted the position under the stated terms and have the right to approach their employer for a raise or simply look elsewhere for employment.

Average salaries always raise faster than internal pay rises, which is why the only way to get good pay jumps is to change employers. That is really natural.

 

[D.P.]

I used to own a very successful campsite.



No, because "100% cost of product != cost of labour".

That's always the neoCon argument trotted out when fighting min wage implementations. It's been proven time and time again that there are very, very few products where an increase in labour cost has a significant impact on product retail cost. There are exceptions obviously, and those tend to be areas where labour is the main commodity - like hair dressers, gardeners, locksmiths and other personal service industries - but as the majority of those working in those service areas are self employed, min wage or living wage still has no significant effect anyway.

Even in the labor intensive jobs the business cost doesn't increase that much. I hire a hardening crew to mow our lawn, the guys are undoubtedly on min wage. But I'm paying $80 an hour for them to be here and there are typically 2 of them for about 60-90 minutes. overheads, profit margins, etc fill up the $80, the labour cost will be about $20. If there was an increase in min wage by 50c an hour labour is now $21-$21.50 out of an $80 service charge.

The gardening company will survive quite happily.

 

[Tefal]

my GF's Hotel which is part of the Shearings group have now said they will aim to only employ people under 25

They've publicaly said this?


Well thats them sued into bankruptcy then on discrimination cases.

 

[Rroff]

No, because "100% cost of product != cost of labour".

That's always the neoCon argument trotted out when fighting min wage implementations. It's been proven time and time again that there are very, very few products where an increase in labour cost has a significant impact on product retail cost. There are exceptions obviously, and those tend to be areas where labour is the main commodity - like hair dressers, gardeners, locksmiths and other personal service industries - but as the majority of those working in those service areas are self employed, min wage or living wage still has no significant effect anyway.

I assumed that people would realise my comment was largely not serious from the smiley :s

 

[Tefal]

If we take your line of reasoning and extend it then you just end up paying Tesco the additional money directly in increased prices rather than it going through the tax system

Whixh would be cheaper

 

[Rroff]

Whixh would be cheaper

To reiterate as it doesn't seem to have conveyed well over the internet the post was largely tongue in cheek rather than making a serious point hence the

 

[Deleted member 66701]

Are you having a laugh?

There is a big difference to running a camp-site compared to a local business.

Your overheads for one would have been nothing compared to a shop in the middle of a high street or say a local engineering firm trying to get in as much business as possible.

We employed 7 full time staff and 9 part time. That's more than some engineering firms or high street shops round here.

"I used to run a patch of grass"

Ok. You obviously have no clue.

 

[Dis86]

We employed 7 full time staff and 9 part time. That's more than some engineering firms or high street shops round here.

Ok. You obviously have no clue.

It's a joke darling, calm down.

 

[Deleted member 66701]

It's a joke darling, calm down.

Ah good one.

Obviously having a sense of humour failure today - I think I'll trot off to bed.

 

[Caged]

What happens to the under 25s when they reach 26? Replaced by further under 25s? Sounds a little like a classic sci-fi film that.

As long as it's based on the semi-remake where there's a lot of Olivia Wilde and Amanda Seyfried then I'm fine with that.

 

[ThePirateHulk]

If we take your line of reasoning and extend it then you just end up paying Tesco the additional money directly in increased prices rather than it going through the tax system

Basic market economics. I thought right-wingers were all for that?

It seems that personal welfare=bad but corporate welfare=good in the eyes of too many.

 

[Aldav]

if businesses are not able to compete while paying the minimum wage then they go bust and someone more efficient takes over

Or, a company that was just about managing to keep head above water gives in, makes all but a handful of management redundant and joins the huge list of companies in many sectors that have out-sourced production off-shore.

Net result?

UK unemployment +100
India unemployment -100.

Clearly, not all jobs can be off-shored .... but some still can.

 

[Tefal]

Its not about ability but dependency. An 18yo is less likely to be married with kids and mortgage.

By this reasoning you could also argue gay people should be paid less

 

[Freakbro]

No, because "100% cost of product != cost of labour".

That's always the neoCon argument trotted out when fighting min wage implementations. It's been proven time and time again that there are very, very few products where an increase in labour cost has a significant impact on product retail cost. There are exceptions obviously, and those tend to be areas where labour is the main commodity - like hair dressers, gardeners, locksmiths and other personal service industries - but as the majority of those working in those service areas are self employed, min wage or living wage still has no significant effect anyway.

Well, I manage businesses which are exactly in those exceptions (amongst others). Childrens Nurseries. Typically a very low paid sector, with a lot of staff. The main one I look after now has 53 staff and the new living wage is putting £20k / annum on the wage bill - which is going to have a direct impact on the fees charged, they are going up over £50 a month for a full time child in April.

 

[Tefal]

Well, I manage businesses which are exactly in those exceptions (amongst others). Childrens Nurseries. Typically a very low paid sector, with a lot of staff. The main one I look after now has 53 staff and the new living wage is putting £20k / annum on the wage bill - which is going to have a direct impact on the fees charged, they are going up over £50 a month for a full time child in April.

But to cover 20k a 50 pound a month fee raise would only take 33 children.

53 staff and 33 kids?

Or is it being used as an excuse to cream some extra money from tbe customers?

 

[Freakbro]

But to cover 20k a 50 pound a month fee raise would only take 33 children.

53 staff and 33 kids?

Gosh, it's so simple, why didn't I think of that when actually using the real information at hand to calculate what was needed to cover the rise

Because maybe, not all of the 170 children at the Nursery are in day care (and thus paying fees) and of the ones in day care, not all of them are full time, but still block that space as a full timer would.

Since over 100 of them are funded only children and thus pay no fees, and there is no increase in Council Funded rates, unfortunately the working parents paying for childcare are the ones having to cover the cost

Or is it being used as an excuse to cream some extra money from tbe customers?

Since we are a charity, then no, we are not out to 'cream some extra money from the customers' and the £20k increase is more than the surplus we made last year off £600k turnover...because we dont aim to make excessive profits

Like I said in the other thread to you, we're not all as self centered as you are portraying yourself to be.