living wage or minimum wage ?

Widespread use of a so-called living wage could save the government £2bn a year, according to two think tanks.
The saving has been calculated by the Resolution Foundation and the Institute for Public Policy Research (IPPR).
They say paying staff at least £7.45 per hour outside London, and £8.55 within the capital, would boost the nationwide income by £6.5bn a year.
But the government would collect more income tax and pay out less in benefits and tax credits.

http://www.bbc.co.uk/news/business-20853767

I think the government should seriously look at this as a replacement for the totally meaningless and insulting minimum wage

[papa smurf]

wouldn't it just drive up the cost of goods etc to pay for it ?

Originally Posted by papa smurf

wouldn't it just drive up the cost of goods etc to pay for it ?

Don't forget the living wage is exactly what it says ,a living wage as opposed to a minimum wage .If prices go up then so does the living wage keeping up with price rises meaning that if companies simply put up prices to pay for a wage rise then it is cancelled out by a rise in the living wage

[nomadking]

Originally Posted by papa smurf

wouldn't it just drive up the cost of goods etc to pay for it ?

That would only happen in the real world.

Also there is the old 'differential' issue. That is where those below or above any new minimum level would also want pay increases to restore the differential between them and other people currently on lower pay levels to them. A supervisor/foreman/manager would not want to be earning the same as those they are responsible for.

[Sirius]

Originally Posted by papa smurf

wouldn't it just drive up the cost of goods etc to pay for it ?

Your right i feel, soon as the super markets think we have an extra 2p in our pockets they will put up the price of there goods to take it off us.

Originally Posted by nomadking

That would only happen in the real world.

Also there is the old 'differential' issue. That is where those below or above any new minimum level would also want pay increases to restore the differential between them and other people currently on lower pay levels to them. A supervisor/foreman/manager would not want to be earning the same as those they are responsible for.

A living wage would be the new minimum wage .There is a big difference between the two .

[nomadking]

Originally Posted by martyh

A living wage would be the new minimum wage .There is a big difference between the two .

I referred to it as the 'new minimum level'. Therefore there would be no difference at all, as they would be one and the same thing.

Originally Posted by nomadking

I referred to it as the 'new minimum level'. Therefore there would be no difference at all, as they would be one and the same thing.

A living wage is worked out to give workers a wage they can live off ,worked out to keep up with the cost of living ,rising with the cost of living and meaning less dependence on benefits .
The minimum wage is not even close to that .It is a legal minimum that employers must pay their workers that has no relation whatsoever with the cost of living ,it encourages low pay ,increases benefit dependency and costs the treasury billions of pounds annually in tax credits and benefits .
One thing they are not is the same

[papa smurf]

Originally Posted by Sirius

Your right i feel, soon as the super markets think we have an extra 2p in our pockets they will put up the price of there goods to take it off us.

it won't be an extra 2p in our well paid pockets it'll be funded by the higher earners ie those on more than the living wage ,i'm not sure i want to give up exploiting the benefits of a low paid workforce [bah humbug ]

[Escapee]

My opinion is that although the introduction of the minimum wage put a stop to some employers exploiting workers, employees who have had their wages reduced to match the minimum wage are paying for it.

The minimum wage appears to be the target that employers want to pay at the lower end of the job market.

[nomadking]

Originally Posted by martyh

A living wage is worked out to give workers a wage they can live off ,worked out to keep up with the cost of living ,rising with the cost of living and meaning less dependence on benefits .
The minimum wage is not even close to that .It is a legal minimum that employers must pay their workers that has no relation whatsoever with the cost of living ,it encourages low pay ,increases benefit dependency and costs the treasury billions of pounds annually in tax credits and benefits .
One thing they are not is the same

Isn't the proposal that the so called living wage becomes the new minimum wage and therefore there would end up being no difference between the two.

How can any wage level cope with the huge range of differences of circumstances. You have at one end the teenage single childless person living at home with their parents, and at the other a couple with half a dozen(or more) kids. No wage level can deal with that wide a range of circumstances.

Originally Posted by nomadking

Isn't the proposal that the so called living wage becomes the new minimum wage and therefore there would end up being no difference between the two.

How can any wage level cope with the huge range of differences of circumstances. You have at one end the teenage single childless person living at home with their parents, and at the other a couple with half a dozen(or more) kids. No wage level can deal with that wide a range of circumstances.

I think you are mis understanding the idea of a living wage .A living wage is based on how much a person/family needs to live with a degree of independence free from state subsidies ,being able to afford basic amenities like housing ,heating and food and be able to save some money for retirement,either by means of a pension or simply saving for a rainy day.The minimum wage is no such thing .Most people on minimum wage cannot afford housing and heating and need their wage topped up by state benefits to live on the official poverty line .
The living wage outside london is £7.45p/h ,the minimum wage is £6.19p/h.
This is not about simply changing the name and the amount it is changing the way the figure is arrived at and will always ensure that no matter how much prices go up the living wage will rise to keep track of that unlike the NMW

---------- Post added at 11:50 ---------- Previous post was at 11:45 ----------

Originally Posted by nomadking

How can any wage level cope with the huge range of differences of circumstances. You have at one end the teenage single childless person living at home with their parents, and at the other a couple with half a dozen(or more) kids. No wage level can deal with that wide a range of circumstances.

Which is why we need the living wage ,the NMW does not allow for the childless teenager to leave home ,the living wage will allow that person to afford rent and survive with little or no state subsidy .It is not designed to have different levels to suit a family with 10 kids ,what it means is that companies will not be allowed to pay below the living wage which they can at the moment

People made the same arguments against the minimum wage and it didn't really inflate prices to any real degree. We don't really know what will happen, economics isn't an easy science. People always confidently tell you what will happen as the result of economic policy but it never quite works like that. We're told that too high taxes on the rich destroys growth because these peoples' wealth will 'trickle down' but to a large extent that doesn't happen. The rich became rich and the poor remained poor. We can put taxes up to 50% to get more income but that didn't really work either. I don't think anyone knows what will happen, even in this 'real world'.

But I think it's a good idea. If people are being paid so low that it's not worth them taking the job or they need benefits to top up their income just in order to live an 'acceptable' lifestyle then that doesn't help anyone. Yes, you could argue that you have to pay more the in store for an item (maybe) but more of your tax income in going out to these people anyway. So it isn't as simple as driving up costs for everything else.

[Escapee]

Originally Posted by Damien

But I think it's a good idea. If people are being paid so low that it's not worth them taking the job or they need benefits to top up their income just in order to live an 'acceptable' lifestyle then that doesn't help anyone. Yes, you could argue that you have to pay more the in store for an item (maybe) but more of your tax income in going out to these people anyway. So it isn't as simple as driving up costs for everything else.

But wasn't that the aim of the last government, they encouraged single women with children to work 16 hrs minimum wage and married couples to work on minimum wage topped up with tax credits. This made the unemployment figures look good and the 16 hours was also a bit of a job share in many cases, their approach with single people was that they could just rot in hell.

Originally Posted by Escapee

But wasn't that the aim of the last government, they encouraged single women with children to work 16 hrs minimum wage and married couples to work on minimum wage topped up with tax credits. This made the unemployment figures look good and the 16 hours was also a bit of a job share in many cases, their approach with single people was that they could just rot in hell.

I think,with the last government they took the socialist dogma of cradle to the grave support from the state far too literal without looking to history for examples of failure of that system.