Minimum wage- what's the catch?

almoststew1990 · 3 Oct 2012 at 15:11

Hey all, just wondering what the catch is here:

My girlfriend is Finnish. The minimum wage there is 9.70e. She works 40h a week (gets paid for 1h of breaks a day). Every month (x12) she takes home 1400e. That's £1120.

I am English. The minimum wage is £6.19. I work 40h a week, paid for 37.5h. Every month (x12) I take home £895.

What's the catch? How can it be so mucher better in Finland? Is their tax structure different?

The cost of living is not THAT much higher in Finland. Bread is 1.30e, milk is 0.80e per litre. A 4 bedroom house in an unremarkable town is 250,000e. But, they have to pay "accident insurance" and have permenant "lawyer insurance", and one other pretty strange insurance that I can't remember. It's 12e a month. Which I think is the same as I get back for having to wash my uniform.

The population in Finland is 10 million. We have 60 million, so we're taxing 6x as many people. I suppose we have to cater for 6x as many people too, but still, if the idea is to make a profit / improve services, you're going to get a bigger surplus from 60 million than you are from 10 million.

So how come it's so good in Finland?

Ahleckz · 3 Oct 2012 at 15:12

What's their tax rate?

eatcustard · 3 Oct 2012 at 15:15

If its so good in Finland, who do all the Euro Immigrants come to the UK to work.
(excluding benefits)

almoststew1990 · 3 Oct 2012 at 15:15

she earns 1552e before tax, at minimum wage. I'm not sure where the tax boundaries are, or how much they increase for increased earnings...

Cuchulain · 3 Oct 2012 at 15:16

eatcustard said:
If its so good in Finland, who do all the Euro Immigrants come to the UK to work.
(excluding benefits)

Would you rather live in a temperate climate or next to the North Pole?

almoststew1990 · 3 Oct 2012 at 15:16

Sorry, I phrased the last sentence in my opening post badly. I mean it in a "what's the catch?" kind of way?

Cuchulain · 3 Oct 2012 at 15:17

From what I can see income tax rates in Finland are a lot lower, but I suspect the cost of living is a lot higher.

Beerbaron · 3 Oct 2012 at 15:17

eatcustard said:
If its so good in Finland, who do all the Euro Immigrants come to the UK to work.
(excluding benefits)

Its probably good for the workers but as the UK gives it away for free us tax payers get the bill.

Ahleckz · 3 Oct 2012 at 15:17

Ahleckz said:
What's their tax rate?

It's actually lower than it is here.

kitch9 · 3 Oct 2012 at 15:17

almoststew1990 said:
Hey all, just wondering what the catch is here:

My girlfriend is Finnish. The minimum wage there is 9.70e. She works 40h a week (gets paid for 1h of breaks a day). Every month (x12) she takes home 1400e. That's £1120.

I am English. The minimum wage is £6.19. I work 40h a week, paid for 37.5h. Every month (x12) I take home £895.

What's the catch? How can it be so mucher better in Finland? Is their tax structure different?

The cost of living is not THAT much higher in Finland. Bread is 1.30e, milk is 0.80e per litre. A 4 bedroom house in an unremarkable town is 250,000e. But, they have to pay "accident insurance" and have permenant "lawyer insurance", and one other pretty strange insurance that I can't remember. It's 12e a month. Which I think is the same as I get back for having to wash my uniform.

The population in Finland is 10 million. We have 60 million, so we're taxing 6x as many people. I suppose we have to cater for 6x as many people too, but still, if the idea is to make a profit / improve services, you're going to get a bigger surplus from 60 million than you are from 10 million.

So how come it's so good in Finland?

Not so long ago you could get nearly 2 Euros for every pound.....

Doesn't seem so good now does it?

Exchange rates are temporary, we have low interest rates which makes investing in the great british quid not that exciting hence the relatively poor exchange rates.

almoststew1990 · 3 Oct 2012 at 15:19

BeerBaron, are you saying that In Finland they don't have as many/much benifits; instead not taxing it away from people in the first place? That sounds confrontational but I don't mean it confrontationally lol

almoststew1990 · 3 Oct 2012 at 15:23

kitch, thanks for the insight, I hadn't considered exchange rates.

But how does it affect the disparity of wages? If one hours work used to be worth £4.50 (based on 9.70e today, divided by two because exchange rate used to be half,ish) their food also used to cost about half too? so wages vs living cost remains the same regardless of exchange rate... They don't import British food or anything, it is all Nordic, Scandinavian and Eastern European. A fair amount of it is Finnish, somehow...

p1RATE · 3 Oct 2012 at 15:31

almoststew1990 said:
But how does it affect the disparity of wages? If one hours work used to be worth £4.50 (based on 9.70e today, divided by two because exchange rate used to be half,ish) their food also used to cost about half too? so wages vs living cost remains the same regardless of exchange rate... They don't import British food or anything, it is all Nordic, Scandinavian and Eastern European. A fair amount of it is Finnish, somehow...

Average wages are probably about the same. Its more about having a competitive labour market, lower minimum wage makes you more competitive and helps to support things like manufacturing.

I doubt there is much difference between earnings or the cost of living between the UK and Finland

Pawnless Endgame · 3 Oct 2012 at 15:32

Another thing to consider is Finland's health system. How much are their prescriptions? Do you have to pay for operations? Do you have to pay to go into casualty?

almoststew1990 · 3 Oct 2012 at 15:37

Their health is free upfront. Perscriptions are not flat rate; for example the pill is 14e a month. Operations are as free there as they are here (i.e. not cosmetic stuff). They pay the dentist for procedures, not for checkups. They dont pay for A and E visits, it is taken out already as Having an Accident cover. It isnt essential. I'm not sure if you have to pay for ops/ A and E if you dont have the cover, you most likely do. It is 12e a month, apparently.

almoststew1990 · 3 Oct 2012 at 15:40

Oh and, petrol is about the same, 1.75e per litre. They have a massive con going on that they NEED to put 95 octane in the tank, not 92, (both are available at the pump) which I find kind of amusing, as Americans put in 88 or something.

Alcohol is taxed more, it is more expensive there. So is smoking, to such an extent that alternatives to smoking like electric cigarettes cannot be sold in Finland as it is such a money earner.

Souleh · 3 Oct 2012 at 16:05

95 RON is what we run here. Do the americans not use MON as their rating?

[TW]Fox · 3 Oct 2012 at 16:16

kitch9 said:
Not so long ago you could get nearly 2 Euros for every pound.....

Doesn't seem so good now does it?

Exchange rates are temporary, we have low interest rates which makes investing in the great british quid not that exciting hence the relatively poor exchange rates.

When could you get nearly 2 euros to the pound?

Jono · 3 Oct 2012 at 16:30

He must be thinking of USD... The lowest I remember pound > euro was 1e = 67p. Whatever that is.

ChilledLJ · 3 Oct 2012 at 16:30

Using exchange rates to compare wages does not work at all