Good thing/Bad thing?
So why are the Tories are rebranding the National Minimum Wage, currently £6.70 per hour as the National Living Wage? Increasing it to £7.20 per hour in April 2016 and then further to an impressive sounding £9.00 per hour by 2020. Of course the National Living Wage should not to be confused with the Living Wage Foundation 'Living Wage' which is already £8.25 per hour and £9.40 per hour in London.
Excuse me for being sceptical about whether any good will come out of this for many.
First of all remember how this idea came about. The Tories didn't agree to these changes to help the poor. They did it as part of the "jam tomorrow" deal to reduce working tax credits now and increase the National Living Wage in stages by 2020. The House of Lords blocked the plan to reduce Working Tax Credits now so all's good? Definitely no bad thing for people relying on tax credits. But what about in 2020?
From what I understand the tax credits will be cut then and everybody will be entitled to be paid at least £9.00 an hour. Apart from the full Minimum Wage applies to people over the age of 21 and the Living Wage only applies to people over the age of 25. So people under 25 will have to stick with the NMW.
So assuming that the majority of workers in places such as fast food outlets like McDonalds or Nandos are under the age of 25 (I think it's a fair assumption) I'm guessing the living wage might not even be relevant there. Will they even employ people over the age of 25 in the future?
Fellow socialists may not agree but I have serious concerns as to how this 34% pay rise (£6.70 to £9.00) is going to be funded in certain industries such as the care industry. I think it is mostly privatised nowadays but funded by local authorities. Will local authorities be able to afford to pay increased fees? From what I have seen the care industry is no longer the cash cow it once was. What will happen if the companies running care homes/home helps decide to just walk away?
And what about small family businesses such as shops? Take local hairdressers, cafes, newsagents, florists, pubs and the like. I can't remember how these businesses looked like to me (I probably just thought all businesses were out to exploit their workers) in April 1999 (when the NMW came in) but I'm I won't have been too concerned about how small businesses would manage to pay the NMW. Maybe I'm going soft but they don't look awash with cash now.
And what of the big employers, the national store chains, logistics companies, the factories, those employing the support staff in our hospitals etc? They will still need to employ people for now (until the robots take over) and they won't be able to manage just employing people under the age of 25 (will they?) but I don't see them passing the additional labour costs onto their shareholders. I can see cuts to employees benefits/rights becoming even more the norm. Are there any pension schemes left? Overtime rates of pay will become a thing of the past. Cuts to paid holidays. Cuts to guaranteed working hours (more zero hour contracts). 40 hours x £9.00 sounds ok but any less hours, not so.
They have arrived at £9.00 per hour as 60% of median earnings at 2020. So presumably that mean every time somebody in the country gets a pay rise the NLW will go up. Sounds like business in general has an incentive not to give anybody a pay rise.
On the face of it the policy is right and if Labour had brought it in I'd be relatively comfortable with it but I just don't trust the Tories. They really don't give a monkeys about the lower paid and in my opinion have no interest (social or business reasons) in making things better for them.
The crystal ball is read. Lets see what happens?
No comments:
Post a Comment