Politics Thread!

[Darkflame]

Another random idea; Couldn't we tax in relation to wages? That is, paying staff a better wage gives you a tax reduction?
So "cheap labour" loses some of its advantage and (hopefully) more money getting into workers hands means they help the economy more.

Probably hard to make loop hole proof.

[pogo]

Another random idea; Couldn't we tax in relation to wages? That is, paying staff a better wage gives you a tax reduction?
So "cheap labour" loses some of its advantage and (hopefully) more money getting into workers hands means they help the economy more.

So all the banks in the city paying staff hundreds of thousands and millions pay the least tax? Can't see that winning many votes for any party.

You might think you could do it by comparing e.g. wages in similar industries, but that's remarkably hard to do. Wages naturally vary for all sorts of reasons. E.g. they're higher in London, but it would be a bad idea to design a tax scheme so those in London pay least – not only is it unfair but as London accounts for a lot of the tax the govt. collects it could be very expensive, unless you raise tax everywhere else. A tax change that takes money from the rest of the country and benefits London? Again not likely to go down well with voters.

[pogo]

I should add that there's a much easier way for the government to tackle low wages. Raise the minimum wage. E.g. to quiet all the calls to pay a living wage they could just set it equal to that.

The reason they don't is it costs jobs. The higher the minimum wage, or the further it is from what firms would naturally pay, and the more jobs it will cost. It's not a simple linear cutoff - many if not most firms will pay the higher wage. But some won't, as they can't justify it, or can find cheaper ways to do the same thing, or just can't afford it. Other firms won't expand, or even start up, because it's now too expensive. Repeated across the economy and the effect is significant.

We don't really know what the ideal level of the minimum wage is. Probably there isn't one, and it's always going to be a political decision, balancing the effect on employment and so unemployment with the support for low wage earners. But once you've made that decision I think it's a bit perverse to introduce other laws, such as special tax breaks, which suggest the minimum wage is not enough. If you really think businesses should pay more then raise the minimum wage. If you think it's not enough but can't raise it because of the effect on jobs then use in-work benefits such as tax credits to boost the incomes of low paid.

[Darkflame]

Another random idea; Couldn't we tax in relation to wages? That is, paying staff a better wage gives you a tax reduction?
So "cheap labour" loses some of its advantage and (hopefully) more money getting into workers hands means they help the economy more.

So all the banks in the city paying staff hundreds of thousands and millions pay the least tax?

Do they pay ALL there staff that?
I'm not talking about the people at the top paying the people just under the top, I'm talking about the lowest wages a company gives out.

I should add that there's a much easier way for the government to tackle low wages. Raise the minimum wage. E.g. to quiet all the calls to pay a living wage they could just set it equal to that.
The reason they don't is it costs jobs.

So, back to my idea then.

If we want to refine it more, have it kick-in only if you employ over a certain number of people. Paying your thousand or ten thousand lowest level workers more gives you a advantage.

No company is forced to pay more so none of this "wahhhh...but we cant employ them at all then" stuff, it merely provides an advantage if you do.

--

Variation; Minimum wage depends on how much the firm makes. Effectively what you pay your staff is at least a (tiny) fraction of your total revenue.

All big company's would hate the hell out of it, of course, but would barely touch the little guys. Actually, probably make smaller firms more competitive.


The goal is, essentially, to spread the money out more. Its not just to raise the lowest point (which, as you point out, will make it harder for the smallest company's).

Generally speaking, company's are more efficient then ever - producing more product - but less and less is trickling down. Having the money more spread out makes the whole economy a bit more healthy.

[Darkflame]

Anyway, this is a bit of shitter that snuck up on us;

https://www.change.org/p/pierre-moscovi ... ssion=true

Seems to effect any small business. Digital sales now, general in future.

Also we are now expected to keep records of customer sales for 10 years, as well as the various privacy bureaucracy that goes with that :-/

[pogo]

The law closes a loophole that certain companies (e.g. Amazon) have been exploiting by setting up in Luxembourg, Channel Islands etc. The law won't effect small companies especially who mostly have much smaller geographical reach; of course they'd like to opt out so they can undercut Amazon but that's not a good reason for it. In fact it's a bad reason; tax that applies only to certain people just opens up loopholes. You can imagine Amazon reorganising itself so suddenly many of its sales were made by small companies (not that ridiculous as it sells for many small merchants, but right now all sales go through Amazon).

Minimum wage depends on how much the firm makes

That's even less workable though as 'how much a firm makes' is really up to the firm, so it would be very arbitrary and unfair and vary wildly. E.g. Amazon (again) structures itself so it makes almost nothing in profit. Should it be exempted from any minimum wage improvements?

Again if you think the minimum wage is justified then it should be uniform, the same for everyone, so the benefits and costs are felt across the economy. Otherwise it's not only arbitrary and unfair but the effects are masked, and the implementation becomes very political as decisions are made about how to measure firms' profitability and what exemptions there are. And should public sector workers, who make no profit, not benefit?

[Dio]

Affects anyone doing digital sales. E.g. we can't sell the TxK soundtrack any more without being VAT registered, which is a bit daft.

[merman]

£8.4 million spent on "special advisers", despite the Coalition Agreement saying they would reduce spending on SPADs.

And now Gideon Osborne's cuts include millions from police authority budgets, forcing councils to cut spending further and even axing the emergency funds available over Christmas for the homeless, those in refuges escaping domestic abuse and those whose benefit payments have been delayed.

[pogo]

£8.4 million spent on "special advisers", despite the Coalition Agreement saying they would reduce spending on SPADs.

£8.4 million? So what!? The government has been abolishing quangos (that the last government was so fond of):

http://www.theguardian.com/politics/201 ... ed-bonfire

They hope to save £2.6bn annually from this. £8.4m in comparison is nothing, not even a rounding error.

[merman]

And the operative words are "hope to save". They made huge announcements about cutting red tape over the first three years of the Coalition, but the reality is they have not achieved it.

Instead they put the burden of cuts onto local councils (and disproportionately on Northern Labour-run councils at that) and dodge the blame.

[pogo]

I wrote "hope to save" as the £2.6bn is for the whole of the parliament, but they've not been idle, they have been making cuts. Worth £1.4bn when that article was written in 2012.

It may look like it's hitting councils hardest as they've been kicking up a fuss for political reasons. But cuts have been made across departments, not just local government. It's not been that newsworthy as although public sector employment is down by almost a million unemployment's fallen over the same period, so even more private sector jobs have been created and employment is at record levels. For similar reasons the quango cuts haven't been that newsworthy, and I didn't find a more recent article when looking.

[pogo]

This is the sort of thing you’d expect from Labour not the Tories.
Firms should boost wages after oil price fall, says PM
Except it’s a very bad idea for various reasons.

People and politicians already complain loudly and rightly when prices rise quickly as oil prices rise but fall slowly when they fall. So firms should pass on these savings. The PM is in effect saying to firms keep the money and reward staff instead, but he can’t have it both ways.

At the same time firms could do with cutting prices to grow exports and sales, to boost economic growth. That will feed into wages and jobs, but it will do so after firms and the economy have grown to support them, not before.

And perhaps most importantly the main problem with raising wages when oil is cheap is it might be hard to cut them again when oil prices rise, as everyone expects (a lot of producers find this price too low to cover their costs so are cutting back production which will push prices up). Firms might be stuck with a permanent wage bill increase after a very temporary windfall from oil prices. If there’s a case for putting up wages anyway then do so, but not in response to a probably temporary oil price fall.

Finally some of our biggest firms actually lose money when oil prices fall; Shell and BP for example, two of the top three firms on the stock market, who are having to cut back production while the price is low. Most other firms see little benefit; we don’t have a large manufacturing or chemical sector making things from oil anymore.

[merman]

Typical. You ignore the points Labour raised.

In response to Mr Cameron's comments in the US, a Labour Party spokesman told the BBC the coalition was the first government since the 1920s to leave people worse off at the end a parliament than at the beginning.

The party has argued that most people are yet to benefit from the recovery in the UK economy as there has been below-inflation wage rises and a squeeze on living standards under the coalition.

So why are so few firms being prosecuted for NOT paying the minimum wage?

And you ignore Gideon Osborne's latest wheeze - offering "pensioner bonds" with above-market returns. How is he going to pay the £400 million in interest if the bond issue sells out?

[pogo]

In response to Mr Cameron's comments in the US, a Labour Party spokesman told the BBC the coalition was the first government since the 1920s to leave people worse off at the end a parliament than at the beginning.

Leaving aside that this parliament isn’t over, so it’s a little premature to make judgments about the whole of it, the main objection to that is the current government had nothing to do with the recession. It had already started when they were elected. They were left with sorting out the recession they inherited from Labour, the worst since the Great Depression.

If Labour are going to try and deflect blame from themselves onto the coalition for the recession it won’t work. How much blame Labour has for the recession is debatable, but it started on their watch. Labour’s problem is people are not that stupid or forgetful, and will punish them at the election if they keep trying to rewrite history and pretend everything was OK before the 2010 election.

So why are so few firms being prosecuted for NOT paying the minimum wage?

Minimum wage: 37 firms named for failing to pay rate

Retail giant H&M and service station operator Welcome Break are among 37 firms to be "named and shamed" for failing to pay the minimum wage.

It is the single biggest list of companies exposed by the Department for Business, Innovation and Skills.

The 37 firms will be fined a total of £51,000 and must also pay affected staff the £177,000 they were underpaid.

So if this is “so few” it must have been even fewer under Labour.

[pogo]

Surprised no-one posted about the unemployment. It’s all good news but it’s worth highlighting a couple of features.

http://www.ons.gov.uk/ons/dcp171778_393554.pdf

First the % of people in work, the employment rate, is at an all time high; it's not a new record but it just matched the previous record (set in 2005). This is in some ways a more meaningful statistic than the unemployment rate which can be affected by the number looking for work; the employment rate though is just jobs ÷ workers (the number of people working has been a record for a while, but that’s partly down to the growing population. this just confirms it was not just due to demographics).

Second wage growth is has taken a definite turn upwards. This is while inflation is falling, due to falling oil and food prices. Maybe two or three years ago low inflation would have let employers freeze pay or offer only rises in line with inflation. Not any more with the labour market tighter and tighter.

This contradicts some of the gloom and doom predictions on the left, that cuts (and there have been real cuts and job losses) would massively boost unemployment and harm the economy, and on the right that mass immigration would take jobs from natives also boosting unemployment. Neither has happened; instead the economy has been steadily improving since the recession. Things are improving so fast I’d not be surprised to see interest rates rise this year, though that probably depends where the unemployment rate stops as it can’t keep falling forever.