Minimum Wage

[cissolt]

1 hour ago, John Wright said:

The UK, and by extension the IoM, has the largest pay differentials in Europe. Time for those at the top to take the strain, for there to be a cap on differentials, or much higher tax rates for top earners.

Great post John.  I have friends who were claiming EPA and rejected a payrise as the rise would impact their EPA.  Seems to be a broken system.

I would happily pay more tax if the money was spent properly.  The families relying on foodbanks before the pandemic was shocking, the figures now must be truly staggering.

[2112]

11 minutes ago, cissolt said:

Great post John.  I have friends who were claiming EPA and rejected a payrise as the rise would impact their EPA.  Seems to be a broken system.

I would happily pay more tax if the money was spent properly.  The families relying on foodbanks before the pandemic was shocking, the figures now must be truly staggering.

You would happily pay more, I would happily more tax. However, if the tax receipts weren’t being squandered on IOMG largesse, vanity projects and aping the current trend of extravagant spending (stupid, and wasteful), maybe there would be spare funding to address some of the concerns Foodbank etc). 
 

There are some within Tynpotwald who do view employers as evil and money grabbers and whilst on the whole, most could afford the increase, some genuinely can’t. Some will absorb the extra costs, some will increase their costs accordingly, and some will either get rid of staff or reduce their hours. Adapt to survive. A reduction in hours will probably mean a claim for EPA. Another unintended consequences could be a pay rise for other employees who want a distance between their rate of pay and £9.50. To some employers either way, somethings got to give.

[2112]

27 minutes ago, offshoremanxman said:

After the Liverpool Port fiasco I’m not happy to pay more for anything. It will all just get pissed away. None of it will get to the poor or vulnerable either. 

it’s not just the Liverpool Port fiasco, the list is endless, MNH Peggy, TT scoreboard, TT Museum, New TT Grandstand, New TT Medical Centre, the list is endless. How much on these have been squandered?

I would rather those resources are focused on the GENUINE deserving poor and vulnerable rather than the poor who are able to survive, and sadly make dubious lifestyle choices. 
 

Ashy has made a song and dance performance of his Treasury review of the benefits system. Maybe it would have been better to get that review commissioned independently from a large organisation within the UK? 

Edited January 24, 2022 by 2112

[Declan]

8 hours ago, Stu Peters said:

Very good point. Government doesn't increase the minimum wage, they force employers to do so. And it willl have a trickle up effect on other low earners wanting to maintain their pay differential. I'm not against it but worry about the effect on small businesses who are already struggling.

This is something that worries me a bit. But if a business doesn't generate enough money to pay staff a living wage - is that  really  a business? No other expenses - stock, premises, equipment - expect the suppliers to operate at less cost. 

If you're paying someone full time, it should be enough for them to make ends meet. I worry though a blanket living wage may price out after school jobs or second jobs to raise a bit extra or jobs taken by retirees for extra "pin money". 

[Non-Believer]

In the late nineties and early noughties Govt used public sector pay and conditions to drag pay and terms up across the Island, I can remember "The Don" proudly declaring that "We've got the pay situation sorted out".

Compare then to now with the proliferation of low pay and ZHC jobs, many in Govt and its own statutory bodies.

Edited January 24, 2022 by Non-Believer
typo

[HeliX]

1 hour ago, Declan said:

This is something that worries me a bit. But if a business doesn't generate enough money to pay staff a living wage - is that  really  a business? No other expenses - stock, premises, equipment - expect the suppliers to operate at less cost. 

If you're paying someone full time, it should be enough for them to make ends meet. I worry though a blanket living wage may price out after school jobs or second jobs to raise a bit extra or jobs taken by retirees for extra "pin money". 

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.

[Max Power]

10 hours ago, Stu Peters said:

Very good point. Government doesn't increase the minimum wage, they force employers to do so. And it willl have a trickle up effect on other low earners wanting to maintain their pay differential. I'm not against it but worry about the effect on small businesses who are already struggling.

Yes, we are in a strange period, but as @John Wrighthas mentioned, it ends up that the rest of us are subsidising businesses through benefits to low earners. It has to be said that if a business depends on its staff, then they should pay a living wage to them. Otherwise, the whole viability of that business should be looked at, should the business exist at all? This does put it back in the hands of the taxpayer to fund the unemployed, or indeed find employment for them, but masking the problem by allowing the current dubious employment practices is a wicked short sighted fix. It leads to the underclass and the social problems we are enduring now! 

[doc.fixit]

I agree but would have said some of the problems.

[Stu Peters]

40 minutes ago, Max Power said:

Yes, we are in a strange period, but as @John Wrighthas mentioned, it ends up that the rest of us are subsidising businesses through benefits to low earners. It has to be said that if a business depends on its staff, then they should pay a living wage to them. Otherwise, the whole viability of that business should be looked at, should the business exist at all? This does put it back in the hands of the taxpayer to fund the unemployed, or indeed find employment for them, but masking the problem by allowing the current dubious employment practices is a wicked short sighted fix. It leads to the underclass and the social problems we are enduring now! 

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.

[Passing Time]

1 hour 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.

A lot of bosses are on less than the minimum wage

[Passing Time]

1 minute 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.

Excellent post Stu. There is this misconception that because you own a business, you are literally raking it in. We also took the decision to open a business back in 2020 but were hit shortly after with back to back lockdowns. We made sure the staff we had continued to be paid a wage which resulted in my wife and I pouring what savings we had into the business to keep it going. Like you we are not looking for sympathy as it is something we wanted to do for our son. Hopefully we have turned a corner and look towards a brighter future

[HeliX]

12 minutes ago, Passing Time said:

A lot of bosses are on less than the minimum wage

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?

[A fool and his money.....]

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.

[A fool and his money.....]

30 minutes ago, Passing Time said:

Excellent post Stu. There is this misconception that because you own a business, you are literally raking it in. We also took the decision to open a business back in 2020 but were hit shortly after with back to back lockdowns. We made sure the staff we had continued to be paid a wage which resulted in my wife and I pouring what savings we had into the business to keep it going. Like you we are not looking for sympathy as it is something we wanted to do for our son. Hopefully we have turned a corner and look towards a brighter future

Fair play to you for looking after your staff during the lockdowns. It sounds like you started your business with honourable intentions and have suffered the mother of all bad luck with the timing.

I really hope things do improve and your business and wish you all the best for the future.

[Max Power]

31 minutes 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.

I understand completely, been there myself. The island is a difficult place to go into business and very few will make enough money to justify the heartache, stress and sacrifice. Being your own boss isn't all it's cracked up to be sometimes but some will cherish that independence.

If government are going to hand out salary support, perhaps it would be better paid directly to the employer in the form of a small business grant, assuming good employment practices are observed and the living wage is paid? Larger organisations, such as McDonald's, Dealz, Costa, although some are franchises, should be expected to comply without a grant?