Multiple minimum wage articles and an opinion piece in one week, what a lucky lot you are!
Last month, I gave my view on the governments plans to increase the minimum wage by nearly 10%.
Since then I have spoken to the Treasury Minister, a former Treasury minister, several businesses, and off-record a fair few employees (however, they’ve been happy for me to write without going into details).
Minimum Wage
The substantial increase in minimum wage is something that I (not speaking on behalf of Manx.News) am very much against.
Instead, I would like the treasury to rethink this and consider purely increasing personal income tax thresholds by a substantial amount rather than a token £250.
It seems I wasn’t alone in my thinking, and I’m delighted to see that many agreed, although many have challenged this and some have called businesses out for being “tight” and “greedy”, whilst others just purely say the wage should be increased.
One thing I’d like to make crystal clear is that I am NOT against fair pay and wage increases. I am against government trying to rubbish claims that this will result in inflation, job losses and redundancies.
I believe this to be very short sighted and it will have a detrimental effect on those it’s trying to help.
I’d also like to answer questions that no doubt will appear in the comments section. Questions such as: “Who is this reporter? Why should we listen to her? What does she know?”
Firstly, you don’t have to listen to me, read what I write, or even agree – but you can respectfully disagree, not read it, or swipe past the next video. I don’t mind.
Who is SHE?
Who am I? I am no economist, nor hold a doctorate, hell I don’t even have a bachelors – but what I do have is real life experience.
I am a farmers daughter, someone who set out having to work their ass off from 12 and haven’t had anything simply handed to me on a plate.
I have been well aware of the struggles that the self employed and many businesses face all before I entered into the working world myself.
Growing up, and even now, I’m not able to rely on a monthly pay cheque and a guaranteed income, and I have very quickly learnt how to duck and dive and make a living.
My upbringing and my own life choices thereafter have enabled me to have real empathy and understanding when businesses say they cannot afford a minimum wage increase, and being real, neither can most of you.
However, I also understand employees that are screaming out that they need more money in their bank accounts (not necessarily how much they’re “paid” but what they have in their bank accounts on payday – they are two very different things).
Buckle up, lads. You’re in for quite the read, it’s at this point I’d recommend getting a brew or pouring a VERY large glass of wine.
Fair Pay
First off, for those who are buying government’s spiel about this minimum wage being about bringing fairness and equality to people in low income jobs, it isn’t.
Although the Treasury Minister says it isn’t a government money making exercise, I find this increasingly hard to believe.
How fair is it to the employee to put their jobs at risk, and reduce their hours? Which is exactly what this increase will do.
For those saying they can’t afford to live on the current minimum wage, would you rather have the increase and fewer hours, and risk your job? Because, this is exactly what these businesses are going to be forced to do to survive.
The industries and sectors this will affect are already depressed, already struggling with increasing costs, and although some of you may find this hard to believe they do give a serious damn about their employees.
Fight For Survival
For those who think this is about businesses being greedy, this is about businesses fight for survival.
To people who say this increase won’t make a massive difference if it is a “good viable business”, you’re very much mistaken.
Those who have no experience in running a business, or managing finances will see this as simply a 9.9% increase to the minimum wage. It is so much more than that.
A simple calculation shows that with five people on minimum wage this will account for a business having to find an additional £14,000 per year to cover this with the NI impacts and possible other contributions added.
To those saying if it doesn’t increase people on minimum wage won’t be able to afford anything, for this exact reason some of us are trying our best to see a substantial increase to thresholds. This would secure jobs, give low earners more money in their pockets, the only downside? The government, whose own payroll costs nearly £2million a day, would suffer.
Businesses are not objecting to the idea of a higher wage, they’re objecting to a methodology that puts 100% of the cost onto business and gives 40% of the benefit to government by way of additional tax.
Keep People Employed
To a certain councillor who said “can’t imagine the absolute disrespect to be an employee at one of these businesses and see your boss campaign to say that you don’t deserve a living wage. All workers deserve a living wage, a business model cannot rely on workers living in poverty and benefits payments taking up the slack”.
There is no disrespect from a business trying to fight for survival, take a look at your own embarrassingly empty high street, those in glass houses shouldn’t throw stones.
These businesses are campaigning to stay open and keep people employed. But, if you’d rather people be more dependable on benefits, look to the food bank for more meals, and live in further poverty – yes increase the minimum wage.
People deserve a living wage. But we have to be realistic, and if you genuinely think that increasing minimum wage alone will cure this you are laudable, but also shortsighted.
Inflation
Costs will get passed on, costing people more in the long run, and people will be taxed more. The cold, hard, fact is no one will be better off.
Pretty much all services and goods will increase in cost with this increase. It doesn’t take a rocket scientist to work this out – costs get passed on to the consumer because many of these businesses cannot stomach the additional increase.
So whilst you may think it’s brilliant to have an extra £130 a month, you won’t see it after tax and increase in cost of living. All this is doing is driving up the cost of living and income to government.
Look for yourself at the pragmatix report, granted this increase was to £13.73 instead of £13.46, however this report was dismissed by our Treasury Minister, yet it’s in black and white to see who the winner is:
The only solution that would be fair and viable, is to increase thresholds and increase wages by inflation.
I have had countless employees approach me over the past few weeks from a variety of sectors, all saying they don’t want the increase and would rather an increase in thresholds so they could see more money in their bank accounts at the end of the month.
They don’t want to lose their jobs, they don’t want reduced hours, but they do need help. However, so do their employers.
Without these businesses, our economy is on a one way trajectory, and it isn’t up.
All of us
I promise you that this will have an effect on each and every one of us in a roundabout way.
Being against a minimum wage increase is NOT about being against fair pay, it’s about being realistic and finding a solution that doesn’t cripple the businesses we all use, love and often rely on; as well as securing jobs and a sustainable future.
There are more sustainable ways to increase earnings – solely increasing minimum wage and a token threshold increase isn’t the answer.
The minimum wage committee advised against this, many businesses are against this, some employees are against this – anyone with basic economic understanding is against this.
Yet government members, with very little private sector experience or experience in running a business, think they know better.
Reap What You Sow
I’d like to end this with a message to those in power that will have to vote on this proposal next week.
If you feel like this proposal isn’t the right thing to do, but you’re thinking of voting yes to it purely because there isn’t another option on the table, don’t.
This will undoubtably have a negative effect on workers, businesses and the community as a whole; and once it’s been approved there is no going back.
If you vote yes, you can take the blame for redundancies and a cut in hours as a result, and you will also have played your part in creating a climate that will result in businesses closing.
Do not sit there in eight months time wondering how we ended up in the position where more businesses are closing, and giving a lip service notion that you care.
Because if this goes through it’s clear to see you didn’t care, and as you see multiple business closures being announced, it’ll be clear to see who is to blame.
There is no sense in increasing minimum wage if you’re going to see less job opportunities, and more poverty.
WATCH: PAYCHECK POLITICS: Who Really Profits?
The latest in Manx.News Special Report Series, this episode explores the controversial minimum wage proposals.
