Minimum Wage

[Non-Believer]

Far and away too many of the Island's economic woes are being created by a Government living way beyond its means in both numbers and practices.

[SleepyJoe]

Absolutely

[Numbnuts]

3 hours ago, HeliX said:

Bet the boss isn't on minimum wage in any of the companies claiming they can't afford to pay if the minimum wage increases.

This in my experience is just not true. Yes bosses in many areas will I'm sure be earning well above mininum wage but in reality bosses/owners of small businesses with just a few employees are often compromised and for many reasons go without to make sure there loyal staff are looked after and also in the hopes that business will pick up . Yes the sensible thing is to close perhaps but many things can make that not a option. Maybe likes of lease on property or loans still to be paid cloud the judgement. And yes I have had my own business a few times and employed up to 15 at one time with all the headaches that brought and yes especially at Xmas struggled to pay what was due including giving my lads a bonus for the year gone by. They all took home alot more than I did ! .  A friend has recently sold his retirement home (he's 70 ) to put the money back into the business all to do with lack of income and footfall due to TT cancellation and of course Covid . My guess is lots of businesses are hanging on hoping ...... As others have said the general feeling is from many is having your own business is a license to print money. Well all I would say they have never tried it ! Incidentally my friend referenced above has always paid above minimum wage to full time staff and just over on part time seasonal staff/students etc.

Edited January 24, 2022 by Numbnuts

[HeliX]

3 minutes ago, Numbnuts said:

This in my experience is just not true. Yes bosses in many areas will I'm sure be earning well above mininum wage but in reality bosses/owners of small businesses with just a few employees are often compromised and for many reasons go without to make sure there loyal staff are looked after and also in the hopes that business will pick up . Yes the sensible thing is to close perhaps but many things can make that not a option. Maybe likes of lease on property or loans still to be paid cloud the judgement. A friend has recently sold his retirement home (he's 70 ) to put the money back into the business all to do with lack of income and footfall due to TT cancellation and of course Covid . My guess is lots of businesses are hanging on hoping ...... As others have said the general feeling is from many is having your own business is a license to print money. Well all I would say they have never tried it ! Incidentally my friend referenced above has always paid above minimum wage to full time staff and just over on part time seasonal staff/students etc.

I'm not trying to suggest all business owners have it easy, but a great many do. I've worked for several companies with fewer than half a dozen employees, I have family who have run small businesses (and didn't make a great deal of money doing so, but did enjoy other freedoms from doing so).

Nobody wants small businesses to go out of business either, but if a business can't afford a couple of grand a year extra per employee who's currently on minimum wage, it's likely to be wiped out by almost any unexpected cost rise.

[Will Halsall]

4 hours ago, Stu Peters said:

I suppose it's a matter of perspective. You make good points but I've had skin in the game: in 2013 a friend and I decided to open a coffee shop and we invested our own savings into doing it. Over a period of five years we never took a penny out of the business in dividends, repayments or salaries (we hadn't expected to for the first year, but every time subsequently that it looked as though we were turning the corner something came up that set the business back again). Over those 5 years we employed a number of people (many had been on benefits), paid our suppliers, rent and rates and taxes and offered a good service. We both had 'day' jobs to support ourselves so everybody (staff included) thought we were making good profits and if someone wanted a pay increase it was probably on that assumption. Now, you could say it wasn't a viable business - but hundreds of small IOM businesses run on tight margins. After 5 years we decided that either we weren't good enough, or the shop was in the wrong place, or the problems of getting good staff at a price we could afford were beyond our control, so we sold it as a going concern to people who wanted to be owner/operators at a knockdown price. I'm not looking for sympathy (certainly not on MF!) as I'd rather try hard and fail than wonder if I could make a success of something, so (reluctantly) wrote 5 years unpaid effort and most of my savings off to experience. So I don't buy the argument that the taxpayer is necessarily subsidising unviable businesses - in many cases those marginal businesses are subsidising the taxpayer. I appreciate it's a nuanced argument, but there are two sides to every story and this was mine.

👏👏👏  Stu, a lot of people will empathise with your well worded post, me included!

[doc.fixit]

3 hours ago, A fool and his money..... said:

The point is that starting or running your own business is a choice, it's something you choose to do, and if you choose to run a business that doesn't make enough to pay you the minimum wage (or anything in Stu's case) then that's up to you. The employment situation on the island means that nobody is forced to do it.

However, many people who are employed and work for the minimum wage have no choice but to do so. I take Declan's point that some minimum wage jobs are used as second jobs to complement other earnings - but is it right to allow people who may be doing the job as their primary source of income to be undercut by others in less need?

Continuing to allow sometimes multi-million pound companies to pay their staff less than what it costs to live here by our own definition is not something that should be allowed in a civilised and prosperous society.

The Island has and continues to sacrifice a lot in the name of economic prosperity. It's only right that we include people who are unfortunate enough to have to work for minimum wage to share in that prosperity, at least to the point they can afford to live here.

Totally agree but I think the same point should be made for those who only have a state pension. We have our own house and a little savings and always seem to be on the wrong side of claiming any other benefits so really have to think about budget yet see aquaintances who rent and have no savings with more available cash because of hand outs....so they say.

[Andy Onchan]

4 hours ago, HeliX said:

Also, it's not "a lot" of bosses, it's some bosses of small businesses. What proportion of businesses on the island are financial sector where the bosses are taking home 6-7figs?

But chances are their staff won't be on minimum or living wage either.

[Boris Johnson]

4 hours ago, Numbnuts said:

This in my experience is just not true. Yes bosses in many areas will I'm sure be earning well above mininum wage but in reality bosses/owners of small businesses with just a few employees are often compromised and for many reasons go without to make sure there loyal staff are looked after and also in the hopes that business will pick up . Yes the sensible thing is to close perhaps but many things can make that not a option. Maybe likes of lease on property or loans still to be paid cloud the judgement. And yes I have had my own business a few times and employed up to 15 at one time with all the headaches that brought and yes especially at Xmas struggled to pay what was due including giving my lads a bonus for the year gone by. They all took home alot more than I did ! .  A friend has recently sold his retirement home (he's 70 ) to put the money back into the business all to do with lack of income and footfall due to TT cancellation and of course Covid . My guess is lots of businesses are hanging on hoping ...... As others have said the general feeling is from many is having your own business is a license to print money. Well all I would say they have never tried it ! Incidentally my friend referenced above has always paid above minimum wage to full time staff and just over on part time seasonal staff/students etc.

One of the best posts on here for summing up IOM small business.

There is a good wage to be earned here in SME for the owners but no one is becoming a millionaire on the back of 80K residents. Not unless you have a business that sells water or air... 🙂 

The global type enterprises here (Egambling/ banking/ offshore tax type stuff etc) are a different matter, and fair play to them, we all make our choices in life. 

I have friends who earn 6 or 7 figure salaries  working for these types of business. They are very high up the food chain involved but they are still just employees at the end of the day and don't have full control of their futures because of that.

I have setup SMEs in the UK too and the main difference, apart from lack of mobile labour here, is the crabby attitude to anyone who has the "audacity" to set up and employ others on a smaller scale.

The government departments too seem to want to tie you up in "Red Tape" which is a common factor with my old UK business'ss but on the island the "Red Tape" is very vague, no proper written down rules and regs, you end up arguing with a CS bod on their personal interpretation of the "Rules" which in most cases have no basis in IOM law and are bastardized interpretation of UK guidance / Code of Practice regarding the industry involved.

 

 

 

Edited January 24, 2022 by Boris Johnson

[Passing Time]

6 hours ago, HeliX said:

Then they are getting some other sort of benefit, be it dividends, an expectation of selling the business down the line, fewer hours than working as an employee, or a level of enjoyment (and prior financial comfort) that makes it worthwhile. Otherwise they simply wouldn't be doing it.

 

Also, it's not "a lot" of bosses, it's some bosses of small businesses. What proportion of businesses on the island are financial sector where the bosses are taking home 6-7figs?

No point having this conversation with somebody with your mindset, but I'll give it a go.

People start a business for several reasons. Mine wasn't about getting rich more about putting what savings we had to benefit our son. He's very talented but fed up of getting lied to by previous bosses. Money in the bank earns the neck end of nothing interest wise so it was a simple choice for us. The expectation was and still is that it will provide an income for my son and also an income for my wife and I when we finally retire. Covid has put a brake on this temporarily.

As for working fewer hours - spoken like a true government employee. Business owners tend to work harder and longer hours in the hope that it will be worthwhile.

If you want to be a millionaire then you would not be in our business. The best that we can hope for (and knew this when we started) was that we would be comfortable in our old age

 

[HeliX]

46 minutes ago, Passing Time said:

No point having this conversation with somebody with your mindset, but I'll give it a go.

People start a business for several reasons. Mine wasn't about getting rich more about putting what savings we had to benefit our son. He's very talented but fed up of getting lied to by previous bosses. Money in the bank earns the neck end of nothing interest wise so it was a simple choice for us. The expectation was and still is that it will provide an income for my son and also an income for my wife and I when we finally retire. Covid has put a brake on this temporarily.

As for working fewer hours - spoken like a true government employee. Business owners tend to work harder and longer hours in the hope that it will be worthwhile.

If you want to be a millionaire then you would not be in our business. The best that we can hope for (and knew this when we started) was that we would be comfortable in our old age

 

I've said multiple times that I'm not referring to all business owners, and certainly not all small business owners.

The payout for you appears to be a better income in retirement than you would have otherwise.

I'm not a Government employee, and I said working fewer hours is one of the possible other benefits of being a business owner - and it is. I know several business owners who work fewer hours than a regular salaried employee - particularly those in the wind-down towards retirement.

[BriT]

So they can’t even get the basics right

https://www.iomtoday.co.im/news/politics/we-got-our-sums-wrong-on-the-living-wage-559179

Now we’ve had to have Loughborough University check our figures and 5 years later they’re wrong. 

[SleepyJoe]

The biggest sums they got wrong was awarding retiring civil servants pensions with an inflationary annual increase directly related to UK RPI

[BriT]

1 hour ago, SleepyJoe said:

The biggest sums they got wrong was awarding retiring civil servants pensions with an inflationary annual increase directly related to UK RPI

Maybe we should have an independent checker over the IOMG Pension increases? I’d hate to think we’ve been overpaying them for years too. 

[Will Halsall]

3 hours ago, BriT said:

So they can’t even get the basics right

https://www.iomtoday.co.im/news/politics/we-got-our-sums-wrong-on-the-living-wage-559179

Now we’ve had to have Loughborough University check our figures and 5 years later they’re wrong. 

Or maybe it’s a ruse to justify their own reliance on low paid workers and Zero hours contracts etc? 🤔

[0bserver]

3 hours ago, BriT said:

So they can’t even get the basics right

https://www.iomtoday.co.im/news/politics/we-got-our-sums-wrong-on-the-living-wage-559179

Now we’ve had to have Loughborough University check our figures and 5 years later they’re wrong. 

1+1 is in fact 5.