Minimum Changes

Does raising the minimum wage have good or bad consequences on the whole?

I have always been in favour of supporting those who are on the lower end of the pay scale in society. Well, I have been one of those for most of my life. So, this introduction of raising the minimum wage seems like a good idea. Well In principle it is. To raise from £6.50 to £6.70, and then to £8.00 by 2020. So that those people who earn such wages can live of it – providing a living wage. There have however, been some things which have been brought to my attention which actually sways my opinion on the matter.

So, in principle the idea of raising the minimum wage is a good thing. Well of course it is. It means people who are the most vulnerable in society become more secure, so as to enable better living standards, but also reducing the welfare paid out to these people. The key issue to various people of low pay brackets is that often they obtain more from not working than from working. This seems ridiculous – how is it that if you work for 40 hours a week you have less if you otherwise don't work. This is a difficult conundrum to work. My mother for instance discovered that after taking up work again, that she was worse off – benefits cut across the board, with various level of tax charged. So, it came to a point that she quit because of it. Now, in raising the minimum wage, you should be encouraging more reward than loss.

The problem however, has many atrium's. I first heard of them and begun thinking about them from today when I was listening to the radio. Jeremy Vine has his daily topical chats about current news, and this topic came up. To my surprise, many people calling up were proclaiming that instead of being better off with a higher wage, they were in fact, worse off. The problem comes down to the same problem we witnessed during the long recession of recent years. That of employers taking advantage of a bad situation. How often would we hear of jobs being lost across the board, of pay cuts, of reduced hours, of reduced benefits 'because of the recession'. It essentially gave bosses an excuse to treat their employees with more contempt and cut off many of their lifelines in order to maximise their own individual gains no matter the 'costs'. I have no doubt, that during the recession, business sales of various companies weren't affected, but it was used to encourage more competition with employees to allow for pay cuts and lay-offs. This means that even today, those who were affected are likely still to be.

Now, coming back to the raising of the minimum wage. Like the recession, employers will use the raising of the mandatory wage of some businesses as an excuse to the fact that as a result, they are forced to reduce other benefits. A story on the radio told of a care worker who after receiving the pay rise, had, as a result, everything else cut – holiday pay, sick leave, bonus hours etc... so that, overall, she was much worse off than before. Now, i'm not saying that for all, this is simply a matter of greed for the managerial staff who orchestrate them, but it certainly is for a great number. As an employee you are employed to a position and will only work it if it is suitable for you to do so, or there is no other choice. For the large number, this is a choice, and for the few it isn't, sometimes implementing such measures can actually mean that as a result you become worse off – at the lowest rungs, you are the most vulnerable in not only the wage you receive, but also in the fact that you are likely replaceable. Unskilled jobs have that problem, and because they are unskilled, they are also the ones which are lowest paid, and therefore can lead to problems from forced implementation of laws.

The knock-on affect of raising the minimum wage, is that goods and services become more expensive. Now, when this happens, the consequence is that you essentially get less for your buck because of inflation. If this is the knock-on-affect, then you in fact create a society where goods prices rise along across the board, and that pay rise only plugs the gap. Thus, you are certainly no better off than you were before. On a global level, this also has consequences – not only for prices here to rise meaning that exports will reduce due to competition as prices are too high here, but also it will attract more foreigners wanting to benefit from the raised wage and work here to send money back to their families where it is worth more. Now, I have never been against this kind of thing, and this really isn't a big negative factor in this rant about wages, but it is an affect all the same. Any native is much more at an advantage to get a job than a foreigner – if it comes to 'losing your job' because of a foreigner, it's often because you weren't prepared to do the job to the standards required, or you weren't prepared to do the job full stop. Though, true, there is a factor that foreigners may work 'off the grid' and therefore work for less – meaning illegal work. But that is something else altogether.

So, as you can see, simply raising the minimum wage is not enough to curtail the income deficit between rich and poor and provide a more healthy society across the board. There needs to be more measures in place to ensure that the most vulnerable people of society are protected from the thievery of the money grabbers. Perhaps by raising the minimum wage, other measures are implemented to provide small businesses better perks from doing so. Small businesses may struggle at the best of times, so 20 pence is a lot more to pay per hour of every worker you have under your service. Sometimes the only way these businesses actually manage is by paying their employees a little less. Does this mean that small chains will struggle more under this extra weight of pay increases – more than likely yes. What then? - a monopoly take over? And nobody wants that – only one person is ever happy in a game of monopoly, and for the majority, it only means inferior service and raised prices.

Besides, from the level of inflation, this pay rise only meets it, it doesn't go beyond it. This should be a constant progression, though to mandate this in legislation, it, as i said before, only allows for excuses to be made of those employers not prepared to raise the pay of their employees to cut other benefits back. If a cup of coffee goes up, then the pay of the employees there should go up too - without this measure the trend doesn't match the reality.

There are plenty of other factors too - with age, zero hour contracts, location etc... These of course present issues to boot.

I'm just thinking aloud now, but I would suggest, that instead of demanding the raising of pay, that businesses should just be allowed to run and operate as they do, and it will be the public and the prospective employees who would choose to work or buy from them. It is the mistake of the government to try and take control of everything within the public domain. My favourite political candidates Ron Paul and Bernie Sanders have always been strong campaigners of this – where the government should not intervene. However, Bernie Sanders is wanting to break up the big banks and conglomerates – what Roosevelt was adamant about. But beyond that, businesses should have the autonomy to function independently, because if they don't fulfill customer needs, they will not last. That's why I suppose it's important to ensure monopoly's can't mature. Raising the minimum wage does not solve all the problems, and can in fact encourage some – leave businesses to themselves is what I say.

(i didn't look up any facts during this one - please post below if i got things wrong)