National living wage will destroy jobs says ex-sainsburys chief

So you think everyone claiming housing benefits and tax credits would die if those benefits were stopped?

So you are happy for taxpayers to top up low wages are you?

No they can't survive. If they could they wouldn't need housing benefits and tax credits. If you took those things away the result would be pretty desperate.

Looking at it from a very dispassionate view, if you did that the rental market (and many other things) would reset very quickly.

 

Here is an interesting quote from another article about Tesco's wage bill:

 

The UK wage bill at Tesco, Britain’s biggest retailer, is about £4.5bn, which indicates that every increase of 1% to wage costs would cost the company about £45m. The first increase in the national minimum wage to £7.20 represents an increase of almost 11%.

 

So for a big company like Tesco, the new law is going to cost them around £495 million pounds.

 

http://www.theguardian.com/business/2015/jul/13/retailers-supermarkets-expected-raise-prices-cut-jobs-pay-minimum-wage

That just doen't ring true, The overall wage bill includes people on millions, includes milions spent on getting rid of people who don't perform. Even taking that into account their still making profit.

I'm of the opinion that if your going to rapidly increase the upper echelons pay the least you can do is keep the lowest on the ladder from scrapng their ass on the floor each day.

It's unlikely you'll find out the number of employees of nmw at tesco, they've got about 300,000 employees so it wouldn't be a tiny figure but not the one quoted.

---------- Post added 29-08-2015 at 23:23 ----------

Millions of working people can't have the life style they want on their wage alone, but they can survive. Increasing the minimum wage will also increase competition for the jobs available because better wages will attack more people from abroad.

'But they can survive' Well how very elgatarian of you!

That's it, basic survival, the worker reduced to the level of a battery hen. After all there only shop staff why should their lot be any beter than it needs to be for survival.

A better society in general is what attracts more people from abroard, the reason that migrants want to settle here (gold plated benefits aside) is the same reason you don't want to work in the UAE.

If all these businesses would die because of this wage how did they survive when the bosses pay was only 10x the lowest paid worker ?

So you are happy for taxpayers to top up low wages are you?

I didn't say that I was happy or that low wages should be topped up.

3 people leave school at the same time and all work for Tesco on MW and doing the same job.

They each earn £13963 for a 40 hour week.

2 of them are a couple and are buying their own house, they don't receive any benefits but still manage to run a car, go one holidays and the occasional night out, they can't afford everything they want but they are enjoying life and not just surviving.

The other lives with her 2 kids in a rented house, she receives top up benefits of £10,430.50, making her gross income £29,195.80, over double that of the other 2 that are doing the same job for the same hours with the same employer.

Should her employer pay her £29,195.80 a year because that is what she needs to live and if so should the employer also pay the other 2 the same wage because they are dong the same job.

New minimum wage would need to be £14 per hour.

Is it better to have a benefits system that increases peoples income based on need or scrap it altogether and up minimum wage making the couple much better off and the single mum much worse off?

---------- Post added 30-08-2015 at 08:27 ----------

 

'But they can survive' Well how very elgatarian of you!

That's it, basic survival, the worker reduced to the level of a battery hen. After all there only shop staff why should their lot be any beter than it needs to be for survival.

A better society in general is what attracts more people from abroard, the reason that migrants want to settle here (gold plated benefits aside) is the same reason you don't want to work in the UAE.

Working for minimum wage doesn't equal battery hen.

How much do you think Asda should pay their staff?

So you agree then that if the MW is increased it will attract more people to the UK to find work, this will increase competition for the available jobs and leave more people without work, it will also increase demand for housing, schools, NHS and more demand for goods will increase prices.

So you think everyone claiming housing benefits and tax credits would die if those benefits were stopped?

Some people would probably die yeah and that is not being dramatic. You would have a lot of hungry people, homeless people and perhaps mass civil disorder.

You couldn't just remove that support.

---------- Post added 30-08-2015 at 09:06 ----------

Looking at it from a very dispassionate view, if you did that the rental market (and many other things) would reset very quickly.

How would it reset? A large proportion of the rental sector is provided by buy to let landlords leveraged to the Max with a lot of the small fry in the game using their family homes as security.

You wouldn't just have the housing benefit tenants out on the streets but lots of buy to let investors losing the shirts off their backs too if the housing benefit money dried up.

The incremental increase in the NMW towards a living wage is the right thing to do. Both main parties support it - Osborne borrowed the idea from Labour

---------- Post added 30-08-2015 at 09:15 ----------

I didn't say that I was happy or that low wages should be topped up.

 

3 people leave school at the same time and all work for Tesco on MW and doing the same job.

 

 

They each earn £13963 for a 40 hour week.

 

2 of them are a couple and are buying their own house, they don't receive any benefits but still manage to run a car, go one holidays and the occasional night out, they can't afford everything they want but they are enjoying life and not just surviving.

 

The other lives with her 2 kids in a rented house, she receives top up benefits of £10,430.50, making her gross income £29,195.80, over double that of the other 2 that are doing the same job for the same hours with the same employer.

 

Should her employer pay her £29,195.80 a year because that is what she needs to live and if so should the employer also pay the other 2 the same wage because they are dong the same job.

 

New minimum wage would need to be £14 per hour.

 

Is it better to have a benefits system that increases peoples income based on need or scrap it altogether and up minimum wage making the couple much better off and the single mum

The living wage should not use a couple who both work full time on minimum wage as the benchmark.

It should use the actual (or future projected) cost of living as the benchmark

If that benchmark indicates the wage should be £14 then it is time to rectify issues causing it to be so high. If you use what a corporate business is willing to do drive the benchmark then nothing will ever get changed. They don't care about society. They care about profits.

So, if it was £14 make a start with taking the heat out of the housing market.

Some people would probably die yeah and that is not being dramatic. You would have a lot of hungry people, homeless people and perhaps mass civil disorder.

 

You couldn't just remove that support.

 

---------- Post added 30-08-2015 at 09:06 ----------

 

 

How would it reset? A large proportion of the rental sector is provided by buy to let landlords leveraged to the Max with a lot of the small fry in the game using their family homes as security.

 

You wouldn't just have the housing benefit tenants out on the streets but lots of buy to let investors losing the shirts off their backs too if the housing benefit money dried up.

 

The incremental increase in the NMW towards a living wage is the right thing to do. Both main parties support it - Osborne borrowed the idea from Labour

How much is a living wage, the example I gave above would need £14 per hour for a 40 hour week to get what she gets now, someone with 3, 4, 5 kids would need more. Is that what you expect employers to pay so that workers have no need for means tested benefits.

---------- Post added 30-08-2015 at 09:24 ----------

The living wage should not use a couple who both work full time on minimum wage as the benchmark.

 

It should use the actual (or future projected) cost of living as the benchmark

 

If that benchmark indicates the wage should be £14 then it is time to rectify issues causing it to be so high. If you use what a corporate business is willing to do drive the benchmark then nothing will ever get changed. They don't care about society. They care about profits.

 

So, if it was £14 make a start with taking the heat out of the housing market.

Evan at £14 per hour some people will still need top up benefits, there is no way to increase MW to the point that tax credits and housing benefits can be scrapped, and living costs aren't going to fall they are going to rise unless the population falls significantly.

---------- Post added 30-08-2015 at 09:25 ----------

 

It should use the actual (or future projected) cost of living as the benchmark

 

The cost of living is different for everyone.

The only way is to have a NMW and then top up the wage of those with the greatest need for more money, or stop topping up wages and force people to makes decisions based on the money they can earn.

How much is a living wage, the example I gave above would need £14 per hour for a 40 hour week to get what she gets now, someone with 3, 4, 5 kids would need more. Is that what you expect employers to pay so that workers have no need for means tested benefits.

 

---------- Post added 30-08-2015 at 09:24 ----------

 

 

Evan at £14 per hour some people will still need top up benefits, there is no way to increase MW to the point that tax credits and housing benefits can be scrapped, and living costs aren't going to fall they are going to rise unless the population falls significantly.

 

---------- Post added 30-08-2015 at 09:25 ----------

 

 

The cost of living is different for everyone.

 

The only way is to have a NMW and then top up the wage of those with the greatest need for more money, or stop topping up wages and force people to makes decisions based on the money they can earn.

You're not getting this at all. The reason the living wage would be so high now is because living costs are so high.

It doesn't matter how much you try and contrive example situations, the fact is that current minimum wage is not enough for many people to afford necessities like housing and transport.

So, the government plan is to gradually increase the minimum wage. At the same time it should be introducing measures to bring down living costs. If it works correctly the two strands should meet at some future point greatly reducing the requirement for state support for things the state should never be supporting for most people.

At that point it really makes no difference to business. The money in the economy is the same and instead of taxes going to government (i.e. we pay less tax) to then be redistributed, the money flows through businesses instead and is redistributed as wages.

How anybody can argue for the current state of play with Labour's disastrous legacy of tax credits and extensive housing benefits is beyond me. To their credit the Tories are actually seeming like they want to start fixing it.

http://www.bbc.co.uk/news/business-34090038

Spoken like a true millionaire

We are forgetting the welfare system reforms- it had to change at some point..removal of tax credits bill, the living wage is a purely ideological move.

unfortunately, a number of people will be worse off immediately because of it.

Although I feel neutral about it to some extent, because the welfare system was a mess. Labour had many years to put it right. There was nothing stopping new labour pushing a living wage...they pandered around the city and are to blame.

Will they need to increase that £7.20 to keep differentials tho, £7.20 will be the new minimum wage.

I don't understand your question. Tesco currently pay their lowest level staff £7.39 per hour (my partner works there). They will not be impacted by the minimum wage rising to £7.20. I can't see them voluntarily raising their rates of pay because Sainsburys have been compelled to catch up. They will, however, have to accomodate the future planned rise to £9 per hour in 5 years time.

Of course jobs will go if a living wage comes into force. Companies cannot ,and should not be expected to absorb the extra costs. The are only two ways cover this. one is to pass the costs onto the comsumer or cut jobs. passing the cost onto consumers leads to price rises where we all suffer, so cutting jobs is the inevitable result of a living wage.