Living wage.

[Consumer dude]

What is the point in introducing a living wage, if there is no legal obligation to pay it ?

[becky2585]

There will be a legal obligation to pay it from next year.

 

It'll be called the national living wage.

[Consumer dude]

Will it replace the minimum wage ?

[unclebulgaria67]

Will it replace the minimum wage ?

 

Not sure it does. Might be wrong, but living wage may only apply to certain people e.g over 25 years old. There may be other qualifying terms.

 

The national minimum wage will still apply to those not covered by living wage.

 

Not studied it, but there should be full details online. This is just from what i remember.

[Consumer dude]

Just been confirmed on radio, the increase is 25p. Wow, think of what you could do with that..

[Conniff]

That's £10 per week on a 40 hour week and you can buy lots of Smarties with £10.

[Consumer dude]

That's £10 per week on a 40 hour week and you can buy lots of Smarties with £10.

 

Before tax ?

[citizenB]

That's £10 per week on a 40 hour week and you can buy lots of Smarties with £10.

 

Before tax ?

 

I would think there are very few people on the minimum wage who are actually paying tax ? As the tax threshold is also to be increased, then hopefully those on this pittance will still be free of tax contributions.

[blondebubbles]

It doesn't replace national minimum wage, it's essentially a top up for those over 25. This is compulsory from April 2016.

 

So they currently get £6.70 ph and the top up will take them to £7.20 ph so an increase of 50p per hour.

 

For someone working 40hrs that's a gross increase of £20 per week.

 

News stories today are about the voluntary living wage which is different.

[Consumer dude]

Isn't the voluntary living wage over £9.00 and from next April, this would be a legal requirement and thus making the minimum wage defunct by default ?

[blondebubbles]

Isn't the voluntary living wage over £9.00 and from next April, this would be a legal requirement and thus making the minimum wage defunct by default ?

 

The voluntary living wage and compulsory living wage are different rates.

 

The compulsory one is the one that will be a legal requirement from April 2016.

[Consumer dude]

I think I understand. Sounds confusing to me..

[AndyOrch]

I think I understand. Sounds confusing to me..

 

Well you started the discussion

 

Andy

[Consumer dude]

Well, I do like the challenge of trying to understand things that don't appear straight forward..

[blondebubbles]

Well, I do like the challenge of trying to understand things that don't appear straight forward..

 

Basically if your over 25, from April 2016 you must be paid at least £7.20 per hour.

 

If you are under 25, there is no change to the current NMW.

[unclebulgaria67]

Why not increase living wage to say £12 an hour, but cut employers national insurance further. Give companies an incentive to see labour as attractive by offering other incentives, such as higher tax deductions on training, employee shareholder schemes participation, staff passing professional exams.

 

Companies waste money on many things and if labour was more expensive there are other budgets that can be cut. I have seen companies spend ridiculous sums on mundane stuff such as office furniture, when there were cheaper alternatives. Give employees incentives to save their employers money.

 

In Sweden they are trying lots of new ideas, with the latest being 6 hour working days. They work 3 hours in the morning, an hour for lunch and 3 hours in the afternoon. The companies trying this are finding a much more productive happy workforce, with less sick leave. The staff are finding it easier to manage their home lifes and their children benefit from seeing their parents. Therefore happier children getting help with their homework, which could lead to better education standards, great future employees.

[Nystagmite]

Where will the extra money come from? I mean for small businesses who are struggling, what happenes to them?

 

What Sweden are doing sounds interesting. I also imagine for parents of young children, it also means there isn't as much of an issue with childcare.

[Consumer dude]

The idea may be that if people were paid more, then the welfare bill wouldn't be so high as top ups wouldn't be needed so there could be savings in this area. Big corporates could easily suck up £15 an hour in London with all the tax advantages they have at their disposal..

[SabreSheep]

Cutting wages to the bone has been a self defeating cycle.

 

More Poverty = Less Wellbeing = More sickness + Lower productivity.

 

We have one of the worst productivity rates in Europe

 

Reversing this trend would increase social cohesion and reduce costs on the NHS and Crime related costs as well. Increase standards in schools.

 

Problem is, Corporation just want human battery farms

[unclebulgaria67]

Where will the extra money come from? I mean for small businesses who are struggling, what happenes to them?

 

What Sweden are doing sounds interesting. I also imagine for parents of young children, it also means there isn't as much of an issue with childcare.

 

If a small business can only run, based on low wages, you would question what they could do, so they could pay more. It might be that government offers more help to small business, with business rates relief. There has to be a way, so that people are paid the value of their labour.

 

Problem with government is that they never think outside the box. They are constrained by civil servants who like to tinker around with the current system, making it even more complicated. Perhaps there are other ways to make the UK economy more successful financially and for quality of lifes of people. The UK should be seeing an increase in GDP commensurate with population growth. If you have almost 31 million working, the government should be seeing record tax revenues and there should be no current budget deficit. Why is this not the case ?