Coffee House

Labour market flexibility and dignity

6 May 2014

6 May 2014

Two front pages today report what they see as bad news, and both stories are certainly ones politicians need to worry about. The Guardian reveals a leaked letter showing jobseekers will face sanctions if they do not apply for or accept ‘certain zero hours jobs under the new universal credit system’, while the Indy splashes on research by the Resolution Foundation which found that self-employed workers are earning 40 per cent less than a typical employee. The paper says these workers are the ‘hidden victims of the recession struggling by on low pay’.

Saying that either of these stories represent ‘good news’ sounds far too flippant – but they do reflect the flexibility of Britain’s labour market which has enabled many people to remain in employment and off the dole during the downturn. The former, even though the conditions of work concerned are far from what most workers would aspire to, is far better than the latter: leaving the labour market entirely damages a worker’s confidence, their soft skills, and naturally prevents them from progressing to better hours and pay, as those on zero hours contracts or low-paid self-employment have a prospect of doing so.

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But behind that academic argument are voters who feel as though their lives are not improving. Labour is much better at expressing concern about the indignity that these workers feel – partly because the party places less emphasis on the importance of labour market flexibility in keeping people in work, although notably Ed Miliband’s big crackdown on zero hours contracts ended up being rather more timid when he actually announced it. Alison McGovern, a thoughtful Labour MP in a marginal seat wrote a pamphlet for the Fabian Society last year in which she examined the importance of dignity. She wrote:

‘We should change our world not just because we see an imbalance in power and resources which restricts global economic growth, but because we value human dignity. We are moral creatures who react emotionally and subjectively to the world, as well as being able to understand it scientifically.

‘Zero hours contracts, low-skilled work, the threat of redundancy used as a management tool: all of these aspects of modern working life demean and undermine the self-respect of the average working British person.’

McGovern’s party’s reaction to what it sees as a loss of dignity is to try to tighten up the labour market. This is not something that necessarily helps people struggling with their self-respect, though, if it means they cannot remain in employment at all because employers do not have sufficient flexibility to be able to take on workers.

But those workers need to feel as though the Conservatives offer them something, too: currently Labour leads the field on the language of compassion. There are some noble exceptions, and not all of them are the usual suspects. Michael Fallon, for instance, frets about the impact of inflexible employment conditions on what he sees as the scandal of youth unemployment. Iain Duncan Smith is working on plans to increase the amount of support and training available for people who have just moved into work so that they improve their skills and can move from ‘underemployment’ in an entry-level job and up the jobs ladder. That sort of focus on dignity is essential in the run-up to an election that Labour wants to make about living standards.


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Show comments
  • Nkaplan

    I hardly see how it helps anyone’s dignity to have big government restrict the terms of contract one can freely enter.

    The rhetoric of compassion and that of dignity do not always sit well side by side. Human dignity primarily resides in the liberty to pursue our own ends in our own way, and taking responsibility for what we do and achieve. The government regulating society in order to feel compassionate, and thereby remove our freedom to run our own lives in our own way, is incompatible with dignity thus understood. Compassion is a virtue of individual people exercising individual judgement; not of grandstanding political institutions (and the people who staff and run them using your money) intervening without knowledge or insight.

  • andagain

    currently Labour leads the field on the language of compassion

    No. They lead the field on the feeling of compassion. Nobody seriously believes that the Tories care more about the people at the bottom of the heap.

    And I’m not sure I’d say thay care more about economic freedom, either. They certainly don’t seem to believe in a property owners right to build a house on his own property…

  • Des Demona

    Eating is better than not eating. Breathing is better than not breathing.
    Having a decent job with decent pay and conditions is better than insecure poorly paid work.
    So instead of spinning it as ”flexibility” Why not campaign for decent pay, decent conditions and an end to the taxpayer subsidising corporate profits.
    We all know some of these companies engaging in zero hour contracts and minimum wages are sitting on mountains of cash. It is very short sighted of them to sit on it rather than paying staff properly, giving them cash to inject directly into the economy and increasing growth and jobs.

    • Alexsandr

      so how do you sort out SME’s that are not sitting on mountains of cash and are just scraping along, and the large cash rich corporations? An increase in the min wage would cause mane SME’s to contract and possible cease trading. This is the lefts perception problem. They think most business is large corporations. It isn’t, its mostly small SME’s and smaller.

      • Des Demona

        The vast majority of those on zero hour contracts are not employed by SME’s.
        Further if an SME or any business runs a business model where it can’t survive unless it pays derogatory wages and relies on the tax payer to pick up the bill then perhaps they should re-examine their business model.
        I hear a lot of talk about ”free enter[prise” and ”the market” and a deafening silence on the fact that the taxpayer is subsidising it.

        • the viceroy’s gin

          The taxpayers are paying benefits to people, lad. If you have a problem with that, then you should seek to have government stop paying those benefits, as opposed to blaming somebody else for your decision to pay them (which you are apparently unhappy with, and don’t want to have government pay for, but rather are seeking a free lunch for your “good deeds”).

          • Des Demona

            There is a big difference between paying benefits to people who are out of work and allowing companies to pay slave wages because they know the taxpayer will pick up the tab, sonny boy

            • the viceroy’s gin

              You’re just repeating your disjointed and unconnected nonsense, lad.

              You’re paying the benefits. You want to pay them. If you don’t want, then don’t. Don’t blame anybody else because you have decided to pay them. You are the one responsible for all. Take responsibility. Stop being a socialist nutter.

              The people working decide whether they want to work for the wages paid. You may disagree with them. But if you want to see them paid more, then you can go ahead and give it to them,the extra you’ve decided they should have, and add it to the benefits pile you’ve decided to pay as per above. And don’t blame anybody else for your decisions here, either. You made them. They’re yours to pay for, by rights.

              You’re just a confused socialist, lad. You want to dictate to others, like all socialists.

              • Des Demona

                Good grief. Too much gin, viceroy?

                • the viceroy’s gin

                  Again, is that reply to me meant to communicate something, lad?

                • Des Demona

                  Yes. Do I have to explain it, sonny boy? I think it’s your bed time.

                • the viceroy’s gin

                  Again, is that reply to me meant to communicate something, lad?

      • Des Demona

        The vast majority of those on zero hour contracts are not employed by SME’s.
        Further if an SME or any business runs a business model where it can’t survive unless it pays derogatory wages and relies on the tax payer to pick up the bill then perhaps they should re-examine their business model.
        I hear a lot of talk about ”free enterprise” and ”the market” and a deafening silence on the fact that the taxpayer is subsidising it.

        • Mynydd

          Please stop making such comments you know it upsets the right wingers.

          • Holly

            It doesn’t upset us per say, it has us sitting here shaking our heads in disbelief that you reckon the local hairdresser or sandwich shop should pay more, and risk going out of business…It would serve them right for having the ‘wrong’ business model.

            • Des Demona

              I don’t make the rules. It’s called capitalism apparently.- unless the state picks up the tab to increase the business owner’s profit and then it’s called ?????

      • Mynydd

        If a SME is just scraping along and cannot afford an increase in the minimum wage, should they be in business. Far better they cease trading and put the capital into an SME that’s expanding and can pay its workers a reasonable wage. This it the right wing capitalist solution

        • the viceroy’s gin

          No, it is the socialist authoritarian solution. Take what you want, from whoever you want.

    • andagain

      Eating is better than not eating. Breathing is better than not breathing.
      Having a decent job with decent pay and conditions is better than insecure poorly paid work.

      And insecure poorly paid work is better than no work at all. Give me a choice between a certainty of having difficulty breathing, and a possibility of not being able to breathe at all, and I’d pick the first option.

      Insecure work, as we have in the UK, is better than mass unemployment, as they have in Spain.

      • Des Demona

        Which is essentially a race to the bottom. A few grains of rice are better than no grains of rice. Empirically yes, but do you really want to live like that?

  • Wessex Man

    Why no chance to pass a comment about Gerry Adams helping the Police with their inquiries?

    • the viceroy’s gin

      You were probably wanting to mention how generous and civic-minded he was, Mr. Adams, for helping the constables sort it all out…

  • Mynydd

    Flexibility of Britain’s labour market, how is this defined. At the beginning of the world wide downturn, responsible employers sat down with responsible unions and discussed the company’s response to its reduced order book. The usual outcome being; no or limited wage increases, reduced working hours and no redundancies. As a result there was no massive increase in the unemployment figures. This is how Britain’s flexible labour market should and must work.
    Flexibility of Britain’s labour market should not be about the massive increase in insecure employment, such as zero hour contacts which ties the worker to one employer. It should be noted that when on these contracts you cannot; obtain a bank loan, a mortgage, often unable to rent, have a private life when on call 24 / 7.

    • DWWolds

      Whilst zero hours contracts that tie someone to one employer are wrong, you fail to understand the point made above that zero hours arrangements have been around for decades. Anyone who has at any time in their working life registered with a temping agency will know that is the case. However, the positive sides of working for a temping agency, which incorporates zero hours arrangements, are that it provides people with a bridge between permanent jobs. It can also facilitate a change of career and a return to work for people who have taken a career break.
      As for your comment that “responsible employers sat down with responsible unions”, well many firms that adopted flexible policies to cope with the downturn did not have employees who were unionised.
      You might also like to consider the detrimental effect that inference from Brussels with regulations that affect working flexible have had.

      • Alexsandr

        some people actually like temp contracts. Not tied into a strict regime, and you can move easily from one contract to another. And you avoid all the appraisals and stuff like that – a process most people regard as a waste of time.

      • Mynydd

        A number of points:
        Because zero hour arrangements have been around for decades, does not make them suitable terms of employment then or now. Further more my comment was about the massive increase in such contracts.
        All the contracts I have been offered by an employment agency have been for a specific job, with specific hours, and for a specific duration. A long way from a zero hour contract with a 24/ 7 standby clause.
        You are just wrong, management and unions did in fact sit down together and produced a flexible working policy.
        If Brussels interference have built a rigidity into the labour market, how come there are temporary and zero hour contracts. Surly in a rigid labour market there would only be permanent jobs from which you cannot be sacked.

        • DWWolds

          Oh do wake up to realities. If zero hours contracts have increased it is partly because employers face so many restrictions when people are not up to the job.
          And do you really expect employers to pay wages to people when there is no work available for them to do? That’s the way to national bankruptcy. But, of course, Labour supporters do not worry about such things.

  • Holly

    How can making people go to work be a negative thing?

    From what bits I have heard about this, the employee can refuse these if they do not match what they are capable of, so no one should be made to work in car garage fixing cars if they are more suited to a ‘salt of the earth’ supermarket position.
    Yet visa versa is doable.
    Giving the long term unemployed an excuse so they take the easy cop out is detrimental to them.
    There is NOTHING mean or nasty in working, whatever the contract, type of job, salary, hours or shit*y boss you may encounter on the road to a better job, hours, pay & conditions, Or wanting people to work.

    The politician’s role is to get you on the road, it is the individuals role to steer their own course once on it.

    • fundamentallyflawed

      tell that to people who worked in our car plants, steel industry etc in well paid technical jobs who are now told by people like yourselves that everything is fine as Asda will pay you minimum wage.

      • Holly

        The calibre and character of the people who worked in our car plants, steel industry ect do not want to be left to rot, and seeing as the last Labour government did so much to try and save/bring back the industries you mention, they are of a generation who are willing to re-train….IF ONLY Labour had given them the option instead of throwing their hands in the air and imported millions of foreign workers.
        Asda is not a scum of the earth employer, they give their workers incentives, on top of the, Labour implemented, minimum wage.

        • Mynydd

          Labour did not import millions of foreign worker, employers did that.

          • Holly

            It was the Labour government that implemented the open door policy, with no delays or restrictions on new EU member countries, just to ‘rub the right’s noses’ in diversity.

            Today, the same useless Miliband, Balls & Co want to dictate to businesses, large and small, what they can & can not do, so why didn’t they put policies/conditions in place to curb the number of foreign workers employers could hire?

            I have not heard any Labour bod saying they will put an out & out ban on this type of contract, they will simply tinker around the edges.

  • sarahsmith232

    people were in far more secure employment pre Labour’s flooding of the job market with people only too happy to undercut and live 2 to a room to survive. Split shifts ended with the 1970s but they came with a vengeance during the Labour years. Nobody bothers to talk about the increase in split shifts, I don’t know why, these have had a far more pernicious effect on the low skilled jobs market than the zero hrs thing. Zero hrs has been around for decades, pre the flooding they weren’t noticed, the employer needed reliable employees that were guaranteed to show up and not go and do anything like nick everything. Those employees were valued and were on regular hrs. There was never an issue. Then there was the flooding and the split shifts came in, only the immigrants were desperate enough to do them, then agencies took over and the zero hrs became the very least of it.
    It was Labour that did this, not the Tories. Labour are showing their empty vessel, have long since become obsolete, only motivated by the latest opportunist, headline grabbing (i’m nabbing, this was from another poster, spot on if you ask me) – wheeze ( wheeze def’ sums up the substance behind their policy agenda).

    • Mynydd

      The free movement of labour was agreed to when Mr Edward Heath the than Conservative Prime Minister sign the Treaty of Rome. The Labour party give a in / out referendum when the people voted to stay in, thereby accepting the free movement of labour. It was not a Labour party invention. Again it was not Labour that flooded the job market with people only to happy to undercut and live 2 to a

      • Holly

        OMG!
        Do you honestly believe that if Labour had put in place the same delays/controls as other EU countries did for new members employers would have been able to hire them in the numbers they did?

        If that is the case how come this country has never seen such an unfetted increase, on the scale seen under Labour, before?

        Like I have said in another comment, the politicians put people on the road to work, it is the individual who steers their course. If Labour had not made it possible, it would not have happened.

  • Tony_E

    I know for certain that since going self employed again in 2005 (I left the chemical industry to return to building and repairing guitars), my income has dropped substantially. Not in the first four years – 2010 was the turning point as the public sector started to be squeezed and the media talked up the loss of confidence into a self fulfilling prophecy. This year I have an ‘order book’ that stretches into the autumn for the fist time since the crash. The margins are very tight, and I live very frugally – but I’m pretty busy as it stands.

    All self employed people are ‘zero hours’ – but many of us prefer it that way for many reasons. In my case, it allows my much better qualified wife to have her career and have children – because I’m the main carer.

    What needs to be addressed is imbalances in the power structure between employers and employees that create a defined unfairness. Exclusivity of zero hours, and the ability of the employer to discriminate against employees that have more than one zero hours employer would be the starting point.

    However, it’s difficult to create any balance in a market which is constantly rigged by the importation of cheap unskilled labour, effectively making it constantly an employer’s market. Especially in an environment when there are many skills in short supply which our education system is not able to instil in it’s wards, while huge amounts of money is wasted imparting information which has little relevance to the working world. We simply end up with too many unskilled entrants, and too many well educated but unemployable entrants.

    This whole market situation was Labour’s doing. It’s amazing to me that the population has not registered this and thrown it back in the faces of the smug Islington liberal left that pushed it’s heel in their faces for a decade, largely for the purely political causes of keeping the Tories from power by expanding their own base, and reducing wage inflation in a loose money boom.

    • Hexhamgeezer

      Indeed. Employers get their cheap labour and Liblabcon have an instant remedy to their failure to educate the population properly.

    • sarahsmith232

      Spot on post, laughable that Labour are trying to capitalise on the exploitative work conditions that were nowhere pre ’97 and only exploded due to their open-door. Frustratingly there are so many on the Left that are not aware that zero hrs, agency work, split shifts had become an issue by 2002, they think this is a recent phenomenon.

      • Holly

        Labour and the left would have us believe that everything bad only happened since May 2010.
        The financial mess, the NHS mess, the corrupt police mess, the education mess, the defence mess, the child protection mess, the lack of work for our own, mess…..The list of Labour messes is long, and will take at least three terms of Parliament without them anywhere near power to sort out.
        They think they are good when in government, but their repeated failures and dismal ability proves them wrong.
        They are unfit to govern.

  • HookesLaw

    Would the lefties of the Indy and Guardian rather these people were unemployed? Would they have us all poorer as we pay the price of paying more for services we cannot afford. Would they rather Britain was less compertitive compared with the low paid low cost workers of the rest of the world. Would they rather we exported our jobs?

    They probably would – because they are thick.

    • Mynydd

      In China I worked along side an Electrical Engineer (MSC) who was paid the equivalent of £100 / month plus board and lodge. That was for a 60 hour week with one weeks leave / year. Would you, I repeat you, work for these terms and conditions, so that, Britain can be more competitive with the low cost workers of the rest of the world.
      The only way to stop the export of jobs is to reduce our unit costs. Britain cannot and should not compete on labour costs alone, therefore the government and industry must increase investment in automatic manufacturing systems. The car industry is a prime example of this. This then would have a knock on effect to the lower levels of employment.

      • Alexsandr

        the decline in manufacturing jobs is largely due to mechanisation, and indeed robotics.

        • Des Demona

          No. The decline of heavy manufacturing is down to that. Britain is still the 6th biggest manufacturer in the world – it has simply been a move towards more highly skilled manufacture.

          In fact UK manufacturing output reached an all time high in 2007.

        • Mynydd

          Not so; Nissan in the North East built on a green field site a highly mechanised plant, with what is it, 6000 workers, and four times that amount in the supply chain. This would not have happened without government support to private investment.

          • Alexsandr

            but 6000 is a small number compared to the thousands employed at ford Dagenham, Longbridge, in the steel industry in Sheffield, and ICI in Teeside, wiki says longbridge had 250000 workers in the 60’s. The plants employing many tens of thousands of workers have gone.

            • Mynydd

              These plants went under due to the lack of investment in up-to-date industrial control and automation systems. The rest of the world invested we didn’t, they have gained the market we lost.
              The British car industry built cars with manpower, The Japanese car industry built cars on automated lines. There are no longer a British car manufacturers, whereas the Japanese car manufacturers rule the world.

              • the viceroy’s gin

                You’d have to quantify that.

                In other places, the US and Canada and the like, they are approaching a peak capacity produced, but employ far less people to do it than historical. They are selling all they can, in other words. It’s not “market lost”. But it is jobs disappeared, and the automation you speak of is what caused it, and that same automation could have had nothing to do with a solution. You can’t “save” what you are eliminating.

          • the viceroy’s gin

            Sure it would have. If import restrictions and currency exchange demand manufacturing capacity be built, it will be, no matter “government support”.

      • the viceroy’s gin

        What puts the kibosh on your argument is that government is soaking up about 50% of GDP, and it is apparenlty nothing but a great big cash incinerator and useless git employer, that can’t or won’t be automated, because you socialists don’t want it to be.

    • Wessex Man

      Hooky, you old bore, would you have liked to plan and pay for your mortgage on zero hours pay? no lender will give someone on zero hours a mortgage anyhow! I’m not a left wing luuvie reader of the Indy or Guardian but your comment is the crass stupid comment of a Tory boy, whose papa probably bought him his first house!

      I can just see you working for the minimum wage in a zero hours job!

      • the viceroy’s gin

        …are you sure he’d qualify?

  • you_kid

    “Iain Duncan Smith is working on plans to…”
    We eagerly await his retirement as many have zero time for people who do not deliver either on time or in budget. He is no rated planner or manager of any sort. He is an ‘inadequacy’.

    • HookesLaw

      No, thats you

      • the viceroy’s gin

        …look who’s talking.

    • Mynydd

      Upon Iain Duncan Smith’s retirement will he be replace with zero hour contract workers?

  • anyfool

    So according to this Labour MP workers are reduced to grubbing around for scraps of underpaid work.
    Surely that can have nothing to do with the wrecking of the economy by the witless fools she is now praying wins the next election.
    Does she not also think that reduced wages for work which started when the same witless fools opened the door to millions of unskilled Third World immigrants, might have a great deal to do with the problems of lower rewards Labours ex core supporters are now getting.
    Until you address the causes, no solution will be found, the cause is still poor quality immigration, but lets not offend their sensibilities, instead drive the indigenous population into permanent poverty
    ,.

  • Count Dooku

    Simple solution to youth unemployment. Scrap the NMW for under 25s and watch the rate plummet.

    • Mynydd

      Quite right, let us bring back slave labour.

      • Count Dooku

        Yes, because before 1999 we were all working as slaves in the UK.
        Not to mention those slave-owning countries of Finland, Norway, Austria and Switzerland with their massive levels of youth unemployment (/sarcasm).

        • sarahsmith232

          Actually, millions were being exploited, were you in a coma during the 90s?

          • Count Dooku

            What are you on about? 93-99 were probably the most prosperous years the UK has ever had.

            And you have nicely dodged the second point on extremely wealthy countries in Europe with no NMW and very low youth unemployment.

            • sarahsmith232

              Is that supposed to be a wind up joke response? Is it just that there’s nothing much on the telly?
              For one, if there are European countries with low youth unemployment you can bet your life that this will be because of highly restrictive, either ungenerous or non-existent youth benefits. I know that in the 80s Norway’s youth unemployment was running at 40%. Presumably they’ve since stopped incentivising that. Nothing to do with NMW.
              Also, GDP is an irrelevance. This has been acknowledged. If this doesn’t result in greater prosperity then it’s only enriching the top tier in society. This took place in America during the last decade, pre the crash the average member of the American middle-class was worse off in 2007 than they had been at the beginning of the decade. Japan’s GDP is low but their income per capita was rising at a faster rate than the rest of the G7 (so ends the immigration is needed for the economy argument).

              • Count Dooku

                Do you know much about economics at all?

                You seem to grasp that jobseekers will reduce their supply of labour if they have a reasonable alternative (generous welfare), but you don’t seem to understand that employeers will reduce their demand for unskilled labour (mainly the young) if its cost is set too high.
                Supply and demand is one of the few undisputable laws in economics. Even left-wing economists will readily admit that the minimum wage causes some unemployment.

                And the real term increase in GDP per capita in the 90s was probably the highest we have ever had in the UK. Immigration was low and so was inflation (goods and housing).

                • Des Demona

                  Actually the peak of GDP per capita was 2008. Probably not what you want to hear but true.

                • Count Dooku

                  “…the real term increase in GDP per capita in the 90s was probably the highest we have ever had in the UK”
                  Where did I state peak?

                • Des Demona

                  Well, I was trying to be kind and not point out that your original assertion is nonsense.
                  GDP per Capita 1990 – 17687
                  1999 – 25625 a 44.8% increase
                  GDP per Capita 2000 – 26997
                  2007 (peak) 46330
                  A 71.6% increase
                  so 44.8% over 10 years or 71.6% over 8 years?
                  Which would you say was the highest real terms increase?

                • Mynydd

                  Please stop introducing facts, it upsets people.

                • Des Demona

                  Mmmm yes I have noticed the debating style on here tends to lean towards the ” Liebour, immigrants, shirkers and skivers, leftards, socialist scumbags” variety with not much emphasis placed on actual facts :-)

                • Count Dooku

                  Speak for yourself. I don’t need to resort to abuse to prove a point.

                • Des Demona

                  To be fair that comment wasn’t aimed at you in the slightest, but I’m sure a reading of the entire thread will bear out my contention of where it tends to lean. – see Holly above! lol

                • Holly

                  The debating ‘style’ on here is usually, the normal folks who see, and understand who/what caused the problem, yet did sod all to fix it/stop it getting worse…
                  And those who think it is ALWAYS someone else’s fault, never Labour’s.

                • Count Dooku

                  That is veeeeery sneaky of you. You’ll notice that I said 93 to 99 in my original post. So have added 90-92 which included a very sharp recession. Might as well extend your own data points up to 2009.
                  You are also quoting absolute changes in GDP per capita. You should know that you would need constant prices to control for inflation, especially as it shot up from 2005 to 2007.
                  Also, what currency are you quoting? And what source? There’s no chance that the UK GDP per capita was 46k Sterling in 2007. That would have made it top 5 highest in the world.

                • Des Demona

                  Sorry I just read this bit ”And the real term increase in GDP per capita in the 90s was probably the highest we have ever had in the UK.”

                  Source index mundi. Should have made it clear it is dollar values.

                  http://www.indexmundi.com/facts/united-kingdom/gdp-per-capita
                  If you want to take it from 1993 only and do it GDP PPP (current international dollar) the figures are
                  1993 – 17,668
                  1999 – 24,269
                  37%
                  2000 -26,039
                  2007 – 38,887
                  49%

                • Count Dooku

                  This discussion has massively side tracked but a couple of points to note:
                  1) Sterling appreciated massively in the noughties, hence the massive increase in USD values. Use GBP to compare like for like.

                  2) It was our dear friend sarahsmith232 that brought up GDP per capita. I don’t know why I went along with her argument as it’s irrelevant to unemployment.
                  3) My point still stands. The NMW causes unemployment among unskilled people and the young

                • Des Demona

                  ONS data here

                  http://www.theguardian.com/news/datablog/2009/nov/25/gdp-uk-1948-growth-economy#data

                  This report from the low pay commission says the uprating of the NMW has a negligible effect on unemployment. I’ve seen nothing giving a coherent argument that it does.

                  https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/227028/National_minimum_wage-_impact_on_earnings__employment_and_hours_in_the_recession.pdf

                • Count Dooku

                  Interesting. Going by the figures on the guardian both periods are basically the same for GDP per capita growth. Strange scale though. Doesn’t make sense at all.

                • Des Demona

                  Well as we both know there are lies, damned lies and statistics. :-)

                • Count Dooku

                  True story!
                  So, a question for you. Do you agree that the NMW causes unemployment for unskilled workers and the young? With all this back and forth on stats we haven’t really answered that point.

                • Des Demona

                  On balance, and if the Low Pay Commission report is to be believed I would say no. Or at least not of any significance.
                  The NMW at the current rate for under 18 is £3.72 and for under 20 is £5.03
                  That equates to £148.50 and £201.20 respectively for a 40 hour week.
                  21 and over is £6.31 an hour or £252.40 a week.
                  In all honesty, if a business can’t afford to pay an adult worker £250 for a full 40 hour week then I have doubts if there is any viable business actually there.
                  In the USA, hardly a bastion of socialism, the Federal minimum wage for under 20 (after 90 days probation) is $7.25, however many States and even cities have the power to raise this -and many are/have.

                • Count Dooku

                  You are looking at the headline rate without looking at unemployment accross various skill groups and ages.
                  A major reason why migrants and older brits have been able to hoover up jobs in recent years is because employers can almost guarantee their level of productivity and their work ethic. They usually have a word record.
                  This is not the same for the native young who have missed out on uni.

                  Employers do not employ out of charity. They compete for workers in a market place and sans minimum wage, would have to pay a market appropriate level. If they paid exploitative wages, they wont get any staff. If the NMW is set at a level above the output of a potential employee, the employee never gets the job to begin with.

                  You don’t seem to grasp that for a young person, a low-payed job should be a stepping stone to furthering your skills for better employment. It is almost never a permanent job. If you make it too expensive to hire them, they never get on the ladder.

                • Des Demona

                  Again I would say that £150 for a 40 hour week as a starting wage is a low paid job. Just how low do you want the bottom rung to be? And how many of those migrants and older Brits are on minimum wage? And what skills do you think a young person is going to learn from a job paying £1 an hour? Why would they even bother turning up for it if they feel so undervalued and exploited?
                  And in reality you have provided no evidence that the current rates do make it too expensive to hire them. It seems to be supposition and opinion rather than evidenced based. The Low Pay Commission would disagree with you.
                  I recall the Tories fighting tooth and nail against the introduction of the NMW – now they seem to realise that was based on ideological dogma rather than economic sense and seem to embrace the concept now.

                • Count Dooku

                  To be honest I want the less well off to be higher paid. The issue with a statuatory NATIONAL minimum wage is that it doesn’t take into account local conditions and is extremely inflexible when there is a downturn.

                  In a boom, firms are not as fussed about the NMW as they can just raise the prices charged to customers. This is not the case in a demandrecession and leads to people being laid off rather than them keeping their jobs for lower pay. It hits the people that need it the most.

                  I aknowledge that the LPC does try to take into account unemployment, but the rates only go up, never down. They also aren’t set regionally, so have devastating effencts in the North and South West.

                  My point is that a national minimum is arbitrary. It helps people who are in work and skilled but hurts the young. This is a great summary of my position with relevant citations : http://www.iea.org.uk/blog/unemployment-and-the-minimum-wage

                • Des Demona

                  As I noted above, in the USA States and even individual cities have the ability to increase the Federal minimum wage level. So it is certainly more flexible there and something perhaps we should look at before next uprating. Although that does have its difficulties in a country this size because of exacerbating potential jobseeker flight from the North to the South.
                  However I note from your link that the researchers could find no adverse effects of the NMW on employment until recently when it perhaps led to a cut of 2 or 3 hours a week. But when you think about it, a good number of skilled workers took pay cuts, shorter hours etc during the recession. So I don’t think people on NMW would be any different.
                  Also in this country the well of unskilled jobs is drying up a little compared to former years. So the long term solution has to be in training and education.

                • Count Dooku

                  You can’t take a pay-cut below a statuatory minimum. And the UK research was limited by the relatively short time the NMW has been imposed.

                • Des Demona

                  No, but you can decrease hours, which is what your link seems to indicate Bear in mind something like 1.4 million workers are on zero hour contracts, the majority of whom I’d assume are on NMW or close.
                  The LPC paper I linked to was 2012 so what, 13 years after introduction?

                • the viceroy’s gin

                  …are you sure you didn’t catch the low end of the recession in 2000, skewing the numbers? I notice you didn’t bother catching anything after calendar year 2007, and foreshortened your study period to 7 years. Why is that, I wonder? Hmmmmmmmm… lemme think.

                • Des Demona

                  Hmmmmmmmmmm because it would be pointless including figures for a global recession where UK GDP dropped by 11% virtually overnight when trying to show that the NMW and immigration had a negligible if not beneficial effect on years of continued growth in GDP per capita?

                • the viceroy’s gin

                  So, in other words, you cherry-picked the data bookends, to suit your argument, and then dressed out your handiwork by calling any disciplined analysis “pointless”?

                  Gotcha.

                • Des Demona

                  Seriously???

                • the viceroy’s gin

                  …was that reply to me supposed to communicate something, lad?

                • Des Demona

                  I’m intimating that you haven’t read the thread or understood the argument sonny boy. The count and I were having a reasoned argument on the salient points before you stuck your neb in.

                • the viceroy’s gin

                  I’ve read the thread and understood your “argument”, lad. You’re just continuing the smoke blowing you started out with, now.

        • Mynydd

          Quite right, many were working as slaves, that’s why the last Labour government introduced the two age related National Minimum Wage

          • Count Dooku

            Evidence please. You are begging the question.

      • DWWolds

        But the Germans has had a situation where some firms in some circumstances do not have to pay the minimum wage. So do they use slave labour?

        • Mynydd

          I don’t know the details in Germany, so please tell me, when a minimum wage is not paid, do the government add to it a state benefit or not. If not then it’s state sponsored slave labour.

      • lojolondon

        It is not slave labour. It is market-related wage. Liebour opened the doors to millions of unemployed and unemployable and introduced minimum wage at the same time. It was better left to the market, where people are paid based on the salary that would attract them. It worked.

  • RavenRandom

    Yes let’s reduce the flexibility of the labour market so all these people could be out of work. That’s be better wouldn’t it? Then they’d have their dignity.
    Or we could force companies to up pay and tenure… but then they probably couldn’t afford to employ as many people… so they’d be out of work again. Still they’d have their dignity wouldn’t they?

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