Toblerone, minimum wage & brexit

pitkin

pitkin

pitkin

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With the recent shrinkage of the Toblerone bars being blamed on the price of ingredients, the falling pound and brexit in general, I was wondering why we don't see a similar a thing happening with increases to the minimum wage?

The effects to a company must be the same? All the mentioned things increase production costs overall, so surely minimum wage increases cause the end product to either become less value and more expensive?

I've started wondering recently if the minimum wage is a good idea on not. A guy I worked with until recently was about 25p an hour above minimum wage. When the last increase happened, a few people at my works got a pay rise to bring them in line. Of course my colleague wanted to know where his pay rise was. He didn't get one in the end, possibly due to the fact that people above him would then be asking for a rise too, and so on.

I realise that it exists to try and give people an acceptable living standard, but if it ends up driving prices of goods up, is it really achieving what it sets out to?
 
Privately owned companies won't decrease the cost of their products based on the cost of production being cheaper (Generally speaking). All that decreasing the minimum wage would achieve is making basic life essentials more difficult to obtain for those in that wage bracket.
 
so you, i mean your mate didn't get a pay rise, but a few others did to bring them up to his standard. Working as intended my socialist comrade.

Labour intensive and service jobs like restaurants cafes bars etc, the prices will go up shockingly, you will notice it overnight. Everything else not so much, depends on a lot more factors than just passing extra costs onto customers.
 
Most companies I've had anything to do with balanced out minimum wage increases by other changes i.e. hiring freezes/redistributing workloads, reducing salary increases/bonus, ceasing to provide additional staff services like subsidised vending machines, etc. etc. rather than passing the cost onto the end product directly.
 
Are you suggesting that people should be paid less in order to be able to buy a normal toblerone?

I think toblerone sales would go down if zillions of people at the bottom end were paid, idk, a third less wages?

But the well heeled could now buy a normal toblerone much eaiser, so I'm sure we will see that agument on the side of a campain bus somewhere soon.
 
shauncr91 said:
Privately owned companies won't decrease the cost of their products based on the cost of production being cheaper (
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Errr hasn't that been the main feature of consuner goods in the last few decades?

Prices crashing due to cheaper production in places like china
 
Short answer is that (using toblerone as an example but this is transferable) staffing costs probably represent a smaller proportion of the cost of creating an individual toblerone than ingredients do. Add that to the fact that NLW is a more predictable expense (once this increase is done companies will still have more control over staffing costs than they do currency fluctuations) and you'll find organisations more willing to restructure or identify efficiency in order to absorb costs, especially if they believe the long term impact to be negligible (companies could theoretically offset post 2020 by not offering inflationary payrises).

The guy above had it spot on, wages are a big factor in service industries, less so in manufacturing (at least as a proportion of unit cost).

On the other hand, wagon wheels be gettin' smaller brah, amirite?
 
Surely it only impacts business where they are already paying minimum wage to people?

If the lowest paid person in a company is £1 above the minimum wage, and min wage increases 50p, net impact on the business is?
 
krooton said:
Surely it only impacts business where they are already paying minimum wage to people?

If the lowest paid person in a company is £1 above the minimum wage, and min wage increases 50p, net impact on the business is?
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Depends if the business wants to retain it's differentiation in comparison to other industries. A lot of companies would view that £1 differentiation as a unique selling point re: recruitment.

IMHO all companies should be reviewing their pay structures in line with NLW, even if they don't have anybody who would be automatically affected.
 
Does the need for a minimum wage push more people into the lowest paid workers bracket?

My workmate, for example was 55p above min wage at 7.25 per hour, now he's pretty much on it. Personally a think he's very good at what he does, compared to some of the people who've received quite a nice rise. I think he has every right to be disgruntled, although it's down to the company to recognise his skills and pay him more I guess.
 
Wage cost only makes up a very small cost of manufactured goods. I remember seeing a report by Ford a few years back that only something like 3% of the cost of a new car is a result of wages, so even if the wage increased by 5%, that's only 5% on top of 3%, so a 5% increase in the wage bill only result in the cost of the end product increasing by 0.15%.

Of course, wages are a higher proportion in service industries, but even then it's not as high as you might think.

FortuitousFluke said:
IMHO all companies should be reviewing their pay structures in line with NLW, even if they don't have anybody who would be automatically affected.
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They should, but they don't. It's the same when the holiday entitlement went up by three days a few years back. How many companies added three days to employees holiday entitlement where they were already above the legal entitlement? I'd hazard a guess at none, so instead the gap just narrowed. Still, it's better for the floor to be raised rather than seeing the ceiling move ever further away.
 
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pitkin said:
Does the need for a minimum wage push more people into the lowest paid workers bracket?

My workmate, for example was 55p above min wage at 7.25 per hour, now he's pretty much on it. Personally a think he's very good at what he does, compared to some of the people who've received quite a nice rise. I think he has every right to be disgruntled, although it's down to the company to recognise his skills and pay him more I guess.
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Yes you're absolutely right, the only people who would be upset about the minimum wage increases are those who are only slightly above the NMW.

As you've described, because it's not a flat rise for everyone - i.e. everyone gets an extra 47p an hour for example, it will mean that some who were slightly above NMW will now find themselves falling in-line with NMW.

I guess the only thing your colleague can do is push for a pay review if he feels he's now underpaid for his skills.
 
The trouble with minimum wage is that it causes employers to cut jobs, so although the workers are paid more, there are less of them to share the load.

You have this situation in America right now where McDonalds workers are demanding $15 dollars an hour, which sounds great until you realise how many jobs pay less. This is why McDonalds are pushing hard on self service kiosks. Don't have to pay them an increasing hourly wage.
 
mejinks said:
This is why McDonalds are pushing hard on self service kiosks. Don't have to pay them an increasing hourly wage.
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And Supermarket self service checkouts I guess - makes sense when you can have 1 member of staff supervising 4 self service checkouts, rather than having 4 checkout staff.
 
Armageus said:
And Supermarket self service checkouts I guess - makes sense when you can have 1 member of staff supervising 4 self service checkouts, rather than having 4 checkout staff.
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But then the old people try to go on them and spend 10 minutes trying to scan and item then 10 minutes at the end trying to pay cash when it clearly stated it only takes card. :p
 
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