Re: Tory minister breaks rank over minimum wage : Thu Apr 04, 2013 9:11 am  

cod'ead wrote:

... JL could probably fund any increase through a ha'penny on a tin of beans or a couple of pence on a pint of milk. Who do you know who actually looks at the price of milk in ANY supermarket, let alone Waitrose?

It could – or arguably even without. It's a very successful business. Which is one of the reasons that it's policy of not putting the cleaners on to the living wage is so irritating. If anything, it may slightly be damaging it's reputation, precisely because the nature of the business means that it is seen as a very fair employer.

Re: Tory minister breaks rank over minimum wage : Thu Apr 04, 2013 2:16 pm  

sally cinnamon wrote:

And then Hancock goes on to rubbish the common myths about the minimum wage being bad for employment:

I’m not passionate about the MW, either for or against, but I do know it’s an area of economic analysis where people can get the ideologically suitable answer they want (for or against) simply by changing their definition of labour demand. Without going into a long winded explanation there are two fundamental ways that studies look at the issue of labour demand (both normally controlled for other factors):

1) Labour demand as numbers in employment, this is best used if you want to show that raising MW doesn’t lead to lower labour demand. Basically this just shows headline numbers of people who are classed as employed, rather than how much they are working, what they are doing, what they are being paid etc. These studies tend to clearly demonstrate that relatively small changes in MW tend not to result in layoffs.

2) Labour demand as payroll receipts/employment hours. This is best used if you want to show that increases in MW does reduce demand for labour, because this is where you tend to see clearly the numbers of hours worked falling (which could be reductions in contracted hours, short-time, overtime bans, zero hour contracts etc…) with increases in MW. So basically this tends to show MW does affect demand for labour.

You pick the one that suits ideologically and then chalk the other one up as a myth, job done.

The exact same fuzziness about what constitutes labour demand can be used to suit the ideological agenda of choice when it comes to looking at unemployment figures. So people fudge around with categories like “seeking employment”, “economically active”, “underemployed”, and also select in/out different categories of benefit claimants to show that numbers are holding up (yay) or are actually much worse than being portrayed (boo). The really amusing thing is when people unwittingly take internally contrarian views of labour demand depending on what ideological position they’re trying to prop up.

Personally I think it may make good sense for many businesses to pay above the MW if they want to encourage staff retention and want discourage absenteeism, fraud, theft and a whole host of other negative behaviours which may commonly manifest amongst poorly treated workers. However, I find the concept of a defined “living wage” nonsensical given that individual "living" circumstances may differ vastly. However, if margins are so tight that MW is all that can be offered whilst allowing the job to be economically viable then that’s probably better than not having a job at all for a whole host of reasons.

[DaveO]

Re: Tory minister breaks rank over minimum wage : Thu Apr 04, 2013 2:17 pm  

sally cinnamon wrote:

Looking at his background he is a former Bank of England economist and his speech makes a lot of sense to me. Time will tell whether he gets shot down and shifted out of government before long but he might be the type of Tory that 'gets it' on social inclusion and wants to move the party back in the One Nation direction it had been under Churchill or MacMillan.

Well he certainly seems more out of that old One Nation sector of the Tory party than the majority in parliament now. In fact I don't class most of them as Conservatives but neoliberal lunatics and that is the problem he faces.

[DaveO]

Re: Tory minister breaks rank over minimum wage : Thu Apr 04, 2013 2:34 pm  

Kelvin's Ferret wrote:

1) Labour demand as numbers in employment, this is best used if you want to show that raising MW doesn’t lead to lower labour demand. Basically this just shows headline numbers of people who are classed as employed, rather than how much they are working, what they are doing, what they are being paid etc. These studies tend to clearly demonstrate that relatively small changes in MW tend not to result in layoffs.

2) Labour demand as payroll receipts/employment hours. This is best used if you want to show that increases in MW does reduce demand for labour, because this is where you tend to see clearly the numbers of hours worked falling (which could be reductions in contracted hours, short-time, overtime bans, zero hour contracts etc…) with increases in MW. So basically this tends to show MW does affect demand for labour.

You pick the one that suits ideologically and then chalk the other one up as a myth, job done.

How can you justify ether of those stances? Changes in MW would have to be the only variable in play that affected one of the measures you mention above. For example if it the case we had the number of hours worked falling why would it be possible to lay the blame solely at the door of an increase in minimum wage (had their been one)? Also have their been times when hours have fallen without increases in minimum wage? If so then isn't using the hours worked figures just pure spin?

The exact same fuzziness about what constitutes labour demand can be used to suit the ideological agenda of choice when it comes to looking at unemployment figures. So people fudge around with categories like “seeking employment”, “economically active”, “underemployed”, and also select in/out different categories of benefit claimants to show that numbers are holding up (yay) or are actually much worse than being portrayed (boo). The really amusing thing is when people unwittingly take internally contrarian views of labour demand depending on what ideological position they’re trying to prop up.

I think people take unemployment figures with the same pinch of salt as those on inflation.

Personally I think it may make good sense for many businesses to pay above the MW if they want to encourage staff retention and want discourage absenteeism, fraud, theft and a whole host of other negative behaviours which may commonly manifest amongst poorly treated workers. However, I find the concept of a defined “living wage” nonsensical given that individual "living" circumstances may differ vastly. However, if margins are so tight that MW is all that can be offered whilst allowing the job to be economically viable then that’s probably better than not having a job at all for a whole host of reasons.

Well a living wage in the UK is defined as a person working forty hours a week who with no additional income should be able to afford a certain levels/quantities of housing, food, utilities, transport, health care, and recreation. If someone working 40 hours doesn't get paid enough for that then IMO we have a fundamental problem.

Re: Tory minister breaks rank over minimum wage : Thu Apr 04, 2013 3:16 pm  

DaveO wrote:

How can you justify ether of those stances? Changes in MW would have to be the only variable in play that affected one of the measures you mention above. For example if it the case we had the number of hours worked falling why would it be possible to lay the blame solely at the door of an increase in minimum wage (had their been one)? Also have their been times when hours have fallen without increases in minimum wage? If so then isn't using the hours worked figures just pure spin?

I'm not justifying them, I'm just pointing out the two main ways in which MW is analysed, as it is studies based on some variant of these that people use as evidence to support their ideological position on MW, and to claim alternative position to be myth. Also as I pointed out these studies would control for other factors, but that's just basic methodology, so doesn't really add or detract anything from either position.

DaveO wrote:

I think people take unemployment figures with the same pinch of salt as those on inflation.

I agree, you need to be really careful about what precisely is being measured. Same with MW and labour demand.

DaveO wrote:

Well a living wage in the UK is defined as a person working forty hours a week who with no additional income should be able to afford a certain levels/quantities of housing, food, utilities, transport, health care, and recreation. If someone working 40 hours doesn't get paid enough for that then IMO we have a fundamental problem.

Yes, but what are these certain levels? It's all a bit abitrary isn't it, albeit no more abitrary than the MW itself? If I'm fit and healthy and have no dependents who is happly to live in a cheap area, then my living wage is going to be different than if I'm a heavy smoker with asthma, who has 10 kids and wants to live in a more expensive area. Also, what about the trade offs people regularly accept i.e. spending more time and money commuting so you can live in a nicer area? It just a bit too flakey for me to take seriously as a standard.

Re: Tory minister breaks rank over minimum wage : Thu Apr 04, 2013 3:39 pm  

rover49 wrote:

Apart from cleaners and possibly the odd trainee receptionist, would KPMG have that many minimum wage employee's. A good stance to take never the less.

Could depend what proportion of their employees are early in their training. When I was studying, fellow students working for the big accountancy firms tended to be amongst the lower paid of us. I was amazed to realise that I was earning more than a couple of classmates at the same stage of their studies who worked at PWC. Once they qualified was when the big pay kicked in. No idea if this is still the case or if KPMG follow the same trend, but it's possible.

Re: Tory minister breaks rank over minimum wage : Thu Apr 04, 2013 4:52 pm  

carl_spackler wrote:

Could depend what proportion of their employees are early in their training. When I was studying, fellow students working for the big accountancy firms tended to be amongst the lower paid of us. I was amazed to realise that I was earning more than a couple of classmates at the same stage of their studies who worked at PWC. Once they qualified was when the big pay kicked in. No idea if this is still the case or if KPMG follow the same trend, but it's possible.

In London they start on mid-£20,000s.

Re: Tory minister breaks rank over minimum wage : Thu Apr 04, 2013 4:54 pm  

Dally wrote:

In London they start on mid-£20,000s. On qualification, mid-£40,000s.

I think I am undestating the figures on reflection.

Re: Tory minister breaks rank over minimum wage : Thu Apr 04, 2013 5:31 pm  

Are those with a degree though?

[DaveO]

Re: Tory minister breaks rank over minimum wage : Thu Apr 04, 2013 5:52 pm  

Kelvin's Ferret wrote: I'm not justifying them, I'm just pointing out the two main ways in which MW is analysed, as it is studies based on some variant of these that people use as evidence to support their ideological position on MW, and to claim alternative position to be myth. Also as I pointed out these studies would control for other factors, but that's just basic methodology, so doesn't really add or detract anything from either position. I am sceptical you can control for other factors. At the moment we seem to be going through a period of increasing casualisation of labour and increasing numbers zero hours contracts. How would you take into account the apparent fact that this seems to be occurring simply because employers can get away with it as opposed to there being any influence on it by the minimum wage? Also give the cuts and recessions in certain parts of the economy e.g. construction I just don't see how it wouldn't be swamped as a factor and in any case many jobs in recession hit areas normally play more than MW anyway. Yes, but what are these certain levels? It's all a bit abitrary isn't it, albeit no more abitrary than the MW itself? If I'm fit and healthy and have no dependents who is happly to live in a cheap area, then my living wage is going to be different than if I'm a heavy smoker with asthma, who has 10 kids and wants to live in a more expensive area. Also, what about the trade offs people regularly accept i.e. spending more time and money commuting so you can live in a nicer area? It just a bit too flakey for me to take seriously as a standard. It isn't arbitrary at all. It's a product of research not some arbitrary figure plucked out of thin air. Like anything else it isn't going to cater for all circumstances but given it is based on the Minimum Income Standard (MIS) which does try and cater for differences I think it is quite a reasonable concept and figure. In simple terms items have been identified that people need in order to give them a minimum standard of living and those items are costed to derive the hourly rate which is currently £7.45 an hour outside London (MW is £6.19). You can see the background here The MIS is discussed here and an overview of what goes into the MIS is given (no Sky TV should satisfy some people) here You can calculate if you have enough to live off (according to MIS) here So the MIS is less arbitrary then a flat rate figure but if you look into those documents you can see how it is used to derive the LW.

Kelvin's Ferret wrote: I'm not justifying them, I'm just pointing out the two main ways in which MW is analysed, as it is studies based on some variant of these that people use as evidence to support their ideological position on MW, and to claim alternative position to be myth. Also as I pointed out these studies would control for other factors, but that's just basic methodology, so doesn't really add or detract anything from either position. I am sceptical you can control for other factors. At the moment we seem to be going through a period of increasing casualisation of labour and increasing numbers zero hours contracts. How would you take into account the apparent fact that this seems to be occurring simply because employers can get away with it as opposed to there being any influence on it by the minimum wage? Also give the cuts and recessions in certain parts of the economy e.g. construction I just don't see how it wouldn't be swamped as a factor and in any case many jobs in recession hit areas normally play more than MW anyway. Yes, but what are these certain levels? It's all a bit abitrary isn't it, albeit no more abitrary than the MW itself? If I'm fit and healthy and have no dependents who is happly to live in a cheap area, then my living wage is going to be different than if I'm a heavy smoker with asthma, who has 10 kids and wants to live in a more expensive area. Also, what about the trade offs people regularly accept i.e. spending more time and money commuting so you can live in a nicer area? It just a bit too flakey for me to take seriously as a standard. It isn't arbitrary at all. It's a product of research not some arbitrary figure plucked out of thin air. Like anything else it isn't going to cater for all circumstances but given it is based on the Minimum Income Standard (MIS) which does try and cater for differences I think it is quite a reasonable concept and figure. In simple terms items have been identified that people need in order to give them a minimum standard of living and those items are costed to derive the hourly rate which is currently £7.45 an hour outside London (MW is £6.19). You can see the background here The MIS is discussed here and an overview of what goes into the MIS is given (no Sky TV should satisfy some people) here You can calculate if you have enough to live off (according to MIS) here So the MIS is less arbitrary then a flat rate figure but if you look into those documents you can see how it is used to derive the LW.