| Minimum wage increasing by 9.8% 08:45 - Nov 22 with 3181 views | geg1992 |
Interested to hear peoples thoughts on this. I'm surprised how high it is, I assume as the election looms.
On one hand I'm happy that those struggling will have more in their pocket.
On the other hand, surely this will put pressure on services inflation again? I must admit that I don't know a huge about economics and I'm just learning so happy to be corrected and hear other peoples thoughts.
Also, I have seen many posts arguing that this makes the average earner worse off, as minimum wage has increased twice by close to 10% in the past 2 years yet many average earners wages have increased below this, some not at all.
On LinkedIn, I have seen many people also argue that this puts more pressure on businesses at a time where many are struggling.
Hopefully this doesn't turn into a 10 page argument. [Post edited 22 Nov 2023 8:46]
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| Minimum wage increasing by 9.8% on 08:49 - Nov 22 with 2558 views | eireblue |
Target is a 12 pager now, I know…, but that’s inflation for you. |  | | |
| Minimum wage increasing by 9.8% on 08:53 - Nov 22 with 2537 views | thebooks |
[shrugs]
It’s not enough to live on considering the cost of things and inflation.
Wage deflation for “average earners” has been a problem for decades in the UK. It doesn’t mean low earners should also suffer (in the same way that pensionsers shouldn’t be made to suffer because pension increases seem high).
It will have zero effect on inflation, which increased due to various international factors. It might mean more people will be able to pay their bills.
The government could do lots of things to better help small businesses. Big business is doing fine. |  | | |
| Minimum wage increasing by 9.8% on 08:55 - Nov 22 with 2531 views | gordon |
The effect on inflation will be pretty much non-existent / tiny. [Post edited 22 Nov 2023 8:55]
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| Minimum wage increasing by 9.8% on 09:05 - Nov 22 with 2469 views | Basuco |
Will these pay increases push inflation up? The main reason inflation dropped is due to energy and car fuel prices dropping on the international market, without these food inflation is still running at around 15% general inflation is around 10%, in the main this is international price rises not UK consumer driven inflation. I can't see this making much difference at all. Consumer spending is now at the lowest since the lockdowns, something has to be done to increase spending otherwise we will see huge numbers of business's failing in the near future. |  | | |
| Minimum wage increasing by 9.8% on 09:10 - Nov 22 with 2438 views | bluelagos |
| Minimum wage increasing by 9.8% on 08:55 - Nov 22 by gordon |
The effect on inflation will be pretty much non-existent / tiny. [Post edited 22 Nov 2023 8:55]
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Yep.
Did a thread on this a while back looking at supermarkets as an example. Typical supermarket has around 10% costs as wages. So whilst a 10% payrise would mean increased costs, a price rise of 1% would leave the supermarkets margins unchanged.
So only businesses where the costs are predominantly wages (care homes?) are likely to be forced to move prices on the basis of an increase in the minimum wage.
And lets not forget that the topups of low wages by the benefits system effectively subsidises businesses. Without these wages would be forced higner (by market forces) as Tescos needs its shelves stacked and would be forced to pay a living wage if they wanted to function. |  |
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| Minimum wage increasing by 9.8% on 09:10 - Nov 22 with 2441 views | _clive_baker_ |
It is tough for a lot of businesses to swallow and will no doubt have to be offset by price to a degree, but given only 5% of the workforce are on minimum wage, I can't imagine it would have too much of an impact on inflation.
Feels like a necessity though to at least help those wages keep pace with inflation. |  | | |
| Minimum wage increasing by 9.8% on 09:12 - Nov 22 with 2423 views | SuperKieranMcKenna |
Inflation is sticky and I wouldn’t expect interest rates to drop materially (if at all) in the next 12 months. Whilst the ongoing disinflation is an improvement, it’s still double what the BoE would consider ‘normal’. The conflict in the Middle East is already putting pressure on the price of crude which will feed through the global economy.
So in short, I think the minimum/living wage increase is going to be absorbed by the ongoing cost of living. Rents and mortgage increases alone will ensure that any increase is not going on excess consumption. [Post edited 22 Nov 2023 9:14]
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| Minimum wage increasing by 9.8% on 09:14 - Nov 22 with 2395 views | geg1992 |
| Minimum wage increasing by 9.8% on 09:10 - Nov 22 by bluelagos |
Yep.
Did a thread on this a while back looking at supermarkets as an example. Typical supermarket has around 10% costs as wages. So whilst a 10% payrise would mean increased costs, a price rise of 1% would leave the supermarkets margins unchanged.
So only businesses where the costs are predominantly wages (care homes?) are likely to be forced to move prices on the basis of an increase in the minimum wage.
And lets not forget that the topups of low wages by the benefits system effectively subsidises businesses. Without these wages would be forced higner (by market forces) as Tescos needs its shelves stacked and would be forced to pay a living wage if they wanted to function. |
Thanks, I will go back and try to find that thread as it sounds interesting. Good to have actual figures to look at. Very interesting information, thanks. | |
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| Minimum wage increasing by 9.8% on 09:17 - Nov 22 with 2374 views | geg1992 |
| Minimum wage increasing by 9.8% on 09:10 - Nov 22 by _clive_baker_ |
It is tough for a lot of businesses to swallow and will no doubt have to be offset by price to a degree, but given only 5% of the workforce are on minimum wage, I can't imagine it would have too much of an impact on inflation.
Feels like a necessity though to at least help those wages keep pace with inflation. |
Wow, interesting that only 5% are on minimum wage but also very good as people should be able to afford to live!!
Further to that, I guess that if they're already struggling to afford to live, then this increase won't put inflationary pressures up based on excess spending / supply & demand issues as they won't be splashing cash on goods. | |
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| Minimum wage increasing by 9.8% on 09:19 - Nov 22 with 2359 views | Crawfordsboot |
The question really is whether minimum wage should be increased by more than inflation. I believe it should be so as to help those at the margins.
Someone on say £100k a year getting a 10% increase gets £10k extra pay. Someone on £20k also getting a 10% increase gets just £2k extra pay. So the guy already on a very fat salary gets moved an extra £8k ahead of his or her lower paid colleague.
As a COO in a business where we had a mix of low and high earning staff I always felt that a flat percentage increase was unfair for the reason outlined above. Instead if we were looking at say a 4% increase we used a system of awarding the greater of £800 p.a or 4%. This meant that anyone on less than £20k got a higher percentage increase than everyone else. We found that the higher paid staff accepted this approach as fair and reasonable. |  | | |
| Minimum wage increasing by 9.8% on 09:21 - Nov 22 with 2344 views | geg1992 |
| Minimum wage increasing by 9.8% on 09:19 - Nov 22 by Crawfordsboot |
The question really is whether minimum wage should be increased by more than inflation. I believe it should be so as to help those at the margins.
Someone on say £100k a year getting a 10% increase gets £10k extra pay. Someone on £20k also getting a 10% increase gets just £2k extra pay. So the guy already on a very fat salary gets moved an extra £8k ahead of his or her lower paid colleague.
As a COO in a business where we had a mix of low and high earning staff I always felt that a flat percentage increase was unfair for the reason outlined above. Instead if we were looking at say a 4% increase we used a system of awarding the greater of £800 p.a or 4%. This meant that anyone on less than £20k got a higher percentage increase than everyone else. We found that the higher paid staff accepted this approach as fair and reasonable. |
That makes a lot of sense and is interesting to hear it implemented this way! | |
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| Minimum wage increasing by 9.8% on 09:22 - Nov 22 with 2336 views | _clive_baker_ |
| Minimum wage increasing by 9.8% on 09:12 - Nov 22 by SuperKieranMcKenna |
Inflation is sticky and I wouldn’t expect interest rates to drop materially (if at all) in the next 12 months. Whilst the ongoing disinflation is an improvement, it’s still double what the BoE would consider ‘normal’. The conflict in the Middle East is already putting pressure on the price of crude which will feed through the global economy.
So in short, I think the minimum/living wage increase is going to be absorbed by the ongoing cost of living. Rents and mortgage increases alone will ensure that any increase is not going on excess consumption. [Post edited 22 Nov 2023 9:14]
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I think interest rates will have to come down at some stage, but it'll be slow and only be when there's firm evidence that inflation has eased off to sensible levels for a decent period of time. At that point I can see a small reduction, more for sentiment than anything, and an attempt to increase consumer confidence that rates have 'topped out'.
Maybe Spring 2024, might drop back to 5%. I can't see anything starting in a 3 until at least late 2025. | | | |
| Minimum wage increasing by 9.8% on 09:26 - Nov 22 with 2291 views | nodge_blue |
Paying the lowest paid a wage increase will probably have minimum impact in the sense that they just have a little bit extra to pay for electricity etc rather than purchase more expensive items or employ builders. |  |
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| Minimum wage increasing by 9.8% on 09:27 - Nov 22 with 2283 views | _clive_baker_ |
| Minimum wage increasing by 9.8% on 09:19 - Nov 22 by Crawfordsboot |
The question really is whether minimum wage should be increased by more than inflation. I believe it should be so as to help those at the margins.
Someone on say £100k a year getting a 10% increase gets £10k extra pay. Someone on £20k also getting a 10% increase gets just £2k extra pay. So the guy already on a very fat salary gets moved an extra £8k ahead of his or her lower paid colleague.
As a COO in a business where we had a mix of low and high earning staff I always felt that a flat percentage increase was unfair for the reason outlined above. Instead if we were looking at say a 4% increase we used a system of awarding the greater of £800 p.a or 4%. This meant that anyone on less than £20k got a higher percentage increase than everyone else. We found that the higher paid staff accepted this approach as fair and reasonable. |
This is a key point. In cash terms you only need a rise in line with inflation if your earnings only just match your expenses. If you earn £100k and spend £50k a year, and your cost base is increasing by 10%, you only 'need' a 5% increase in earnings to maintain the same £ disposable cash. The lower your headroom between earnings and expenses, the higher % uplift you need to offset.
There's of course a further consideration around the variability of peoples costs. | | | |
| Minimum wage increasing by 9.8% on 09:32 - Nov 22 with 2244 views | SuperKieranMcKenna |
| Minimum wage increasing by 9.8% on 09:22 - Nov 22 by _clive_baker_ |
I think interest rates will have to come down at some stage, but it'll be slow and only be when there's firm evidence that inflation has eased off to sensible levels for a decent period of time. At that point I can see a small reduction, more for sentiment than anything, and an attempt to increase consumer confidence that rates have 'topped out'.
Maybe Spring 2024, might drop back to 5%. I can't see anything starting in a 3 until at least late 2025. |
The Fed is projecting interest rates will be unlikely to drop <5% in 2024, so if that prediction plays out it’s incredibly unlikely we’ll see anything other than a marginal reduction - the BoE will follow their lead to protect Sterling. | | | |
| Minimum wage increasing by 9.8% on 09:32 - Nov 22 with 2240 views | bluelagos |
| Minimum wage increasing by 9.8% on 09:14 - Nov 22 by geg1992 |
Thanks, I will go back and try to find that thread as it sounds interesting. Good to have actual figures to look at. Very interesting information, thanks. |
I posted it on twitter - will dig it out and pm you a link | |
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| Minimum wage increasing by 9.8% on 09:43 - Nov 22 with 2179 views | bluelagos |
| Minimum wage increasing by 9.8% on 09:19 - Nov 22 by Crawfordsboot |
The question really is whether minimum wage should be increased by more than inflation. I believe it should be so as to help those at the margins.
Someone on say £100k a year getting a 10% increase gets £10k extra pay. Someone on £20k also getting a 10% increase gets just £2k extra pay. So the guy already on a very fat salary gets moved an extra £8k ahead of his or her lower paid colleague.
As a COO in a business where we had a mix of low and high earning staff I always felt that a flat percentage increase was unfair for the reason outlined above. Instead if we were looking at say a 4% increase we used a system of awarding the greater of £800 p.a or 4%. This meant that anyone on less than £20k got a higher percentage increase than everyone else. We found that the higher paid staff accepted this approach as fair and reasonable. |
Bloody accountants with a social conscience. Will no one think of the shareholders ;-) | |
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| Minimum wage increasing by 9.8% on 09:46 - Nov 22 with 2169 views | GlasgowBlue |
There goes the last of the staffed checkouts at our local Tesco. |  |
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| Minimum wage increasing by 9.8% on 09:47 - Nov 22 with 2163 views | GlasgowBlue |
| Minimum wage increasing by 9.8% on 08:53 - Nov 22 by thebooks |
[shrugs]
It’s not enough to live on considering the cost of things and inflation.
Wage deflation for “average earners” has been a problem for decades in the UK. It doesn’t mean low earners should also suffer (in the same way that pensionsers shouldn’t be made to suffer because pension increases seem high).
It will have zero effect on inflation, which increased due to various international factors. It might mean more people will be able to pay their bills.
The government could do lots of things to better help small businesses. Big business is doing fine. |
It’s double the current rate of inflation. | |
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| Minimum wage increasing by 9.8% on 09:49 - Nov 22 with 2157 views | Crawfordsboot |
| Minimum wage increasing by 9.8% on 09:43 - Nov 22 by bluelagos |
Bloody accountants with a social conscience. Will no one think of the shareholders ;-) |
😂 it was a not for profit organisation! | | | |
| Minimum wage increasing by 9.8% on 09:55 - Nov 22 with 2124 views | bluelagos |
| Minimum wage increasing by 9.8% on 09:46 - Nov 22 by GlasgowBlue |
There goes the last of the staffed checkouts at our local Tesco. |
You still believe the minimum wage is a bad thing then Glassers? | |
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| Minimum wage increasing by 9.8% on 10:11 - Nov 22 with 2077 views | GlasgowBlue |
| Minimum wage increasing by 9.8% on 09:55 - Nov 22 by bluelagos |
You still believe the minimum wage is a bad thing then Glassers? |
No. I don’t believe I ever said it was. I pay above the minimum wage and pay 16 year olds the 23 and above rate. | |
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| Minimum wage increasing by 9.8% on 10:15 - Nov 22 with 2067 views | bluelagos |
| Minimum wage increasing by 9.8% on 10:11 - Nov 22 by GlasgowBlue |
No. I don’t believe I ever said it was. I pay above the minimum wage and pay 16 year olds the 23 and above rate. |
Good man - your conversion from Tory party member (They very much opposed it when introduced) to man of the people is almost complete :-) | |
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| Minimum wage increasing by 9.8% on 10:43 - Nov 22 with 1951 views | Pinewoodblue |
Looks like there may be a deduction in National Insurance rate announced in Lunchtimes autumn statement,
Treasury revenue from both NI and income tax must be well ahead of budgeted expectations.
As a pensioner would be better off if they increased tax allowances but since triple lock looks like giving an above inflation increase then to cut NI is probably fairer.
Wishful thinking on my part but I would like to see them plan to merge the two into one tax. |  |
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