Private sector strike
Comments
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Stevo 666 wrote:
Erm - shareholders, these are the people who own and provide the capital for businesses and without which there would be no businesses to employ people.Rick Chasey wrote:It's not anti-capitalist. It's anti-shareholder.
A massive generalisation and IMO wrong for the majority of companies - think of all the privately owned and family run type businesses out there - do you honestly think they are only in it for short term gain? And do you really think that larger quoted companies are so short sighted that they cannot see that long term success is crucial to a company?Rick Chasey wrote:I'll point you to 'thing 2' in Ha-Joon Chang's 23 thing's they don't tell you about capitalism. In short, he says that shareholder capitalism has a detrimental effect on the long term benefit of a company to the wider economy because ultimately, shareholder run companies, due to their makeup of their incentives, are run for short term gain only.
Again, my experience in both privately owned and publically owned companies is not in line with your (borrowed) theory.
Maybe we're arguing over two different things. I'm speaking specifically of public companies, where any monkey can buy shares.
I don't consider family owned companies as part of that, no partnerships etc.0 -
Interestingly, in the T2 today, there's an article on women on boards in Norway.
Norway by most measures is one of the most productive nations in the world, high quality of living, competitive business etc, and they have a quota for 40% women on the board for any listed company.0 -
W1 wrote:
Remind me - what obligation does a company have to the wider economy?Rick Chasey wrote:Stevo 666 wrote:
WTF!?Rick Chasey wrote:The failure of multiple shareholder firms, banks, GM motors etc, is indicative that shareholders can't be trusted to run companies in a way that is most beneficial to the wider economy. As I explained above, they do not have the required incentives to do so. Therefore regulation must be put into place to compensate.
You said you were capitalist above but have just contradicted yourself big time. It's the old socialist 'we know whats best' school of thought - so we'll tell shareholders how to run their own businesses to get the result that we think is best. Bit patronising really, as well a massively sweeping generalisation...
It's not anti-capitalist. It's anti-shareholder.
There are many different types of corporate governance.
I'll point you to 'thing 2' in Ha-Joon Chang's 23 thing's they don't tell you about capitalism. In short, he says that shareholder capitalism has a detrimental effect on the long term benefit of a company to the wider economy because ultimately, shareholder run companies, due to their makeup of their incentives, are run for short term gain only.
Are they charities? Government organisations? Publically owned?
I know you're going to mention banks here, but as 99.9999% of companies are not banks, can we ignore them for a little while?
They have no obligation to the wider economy.
But, 99% of companies would rather run in a healthy economy than not. Ultimately, if companies and private individuals are engaging in belt tightening, it's difficult to be a successful company (unless you're a bailiff)
So if the prevailing business structure (the PLC) leads to actions which are to the detriment of the long term health of the economy, that isn't just a bad thing for the economy, but generally for the companies themselves...You live and learn. At any rate, you live0 -
Agreed - in which case it's difficult to understand how bringing in restrictive pay and undemocratic shareholder powers will assist these companies and the wider economy. In fact, it may discourage the best (and best remunerated) CEOs from wanting to be in charge of UK PLCs. Is this another "cut off our nose to spite our face" step for the UK?Jez mon wrote:W1 wrote:
Remind me - what obligation does a company have to the wider economy?Rick Chasey wrote:Stevo 666 wrote:
WTF!?Rick Chasey wrote:The failure of multiple shareholder firms, banks, GM motors etc, is indicative that shareholders can't be trusted to run companies in a way that is most beneficial to the wider economy. As I explained above, they do not have the required incentives to do so. Therefore regulation must be put into place to compensate.
You said you were capitalist above but have just contradicted yourself big time. It's the old socialist 'we know whats best' school of thought - so we'll tell shareholders how to run their own businesses to get the result that we think is best. Bit patronising really, as well a massively sweeping generalisation...
It's not anti-capitalist. It's anti-shareholder.
There are many different types of corporate governance.
I'll point you to 'thing 2' in Ha-Joon Chang's 23 thing's they don't tell you about capitalism. In short, he says that shareholder capitalism has a detrimental effect on the long term benefit of a company to the wider economy because ultimately, shareholder run companies, due to their makeup of their incentives, are run for short term gain only.
Are they charities? Government organisations? Publically owned?
I know you're going to mention banks here, but as 99.9999% of companies are not banks, can we ignore them for a little while?
They have no obligation to the wider economy.
But, 99% of companies would rather run in a healthy economy than not. Ultimately, if companies and private individuals are engaging in belt tightening, it's difficult to be a successful company (unless you're a bailiff)
So if the prevailing business structure (the PLC) leads to actions which are to the detriment of the long term health of the economy, that isn't just a bad thing for the economy, but generally for the companies themselves...
It will make some lefties happy, but that's not the same thing as benefiting the wider economy and the company itself in that context.0 -
UK CEOs are paid way more than their continental counterparts, and a little less than their US conterparts.
Yet their performance seems the same.
CEO performance hasn't got any better over the years, even though their pay has.0 -
Stevo 666 wrote:If you look at what's actually being proposed, they are closing the final salary pension scheme - the same sort as these 'gold-plated' ones that many public sector employees get and are widely regarded to be unsustainable. Shell recently closed its final salary scheme if you remember, as have many other companies. Seems the pensions the Unilever people will get will still be very competitive compared to the contributory schemes that are the norm in the private sector.
Pension liabilities build up over the long term and in the longer term this final salary scheme would probably have a material adverse impact on the company's profits - so it appears management are looking at the long term financial health of the company by doing this. If you look at the problems that hobbled the like of GM a few years ago, one of the major factors was long term post-retirement benefit costs for employees - but not that long ago GM was a very large and profitable company...who would have predicted then that they would almost go bankrupt?
Re: controls over remuneration, that's a matter for the shareholders. IMO the powers are already there, the problem seems to be that shareholders don't exercise them enough for some people's liking. The question for you should be how to get shareholders to be more active. Not sure how it could work in reality through other routes?
I understood that the final salary scheme had already been closed to new employees some years ago, but that a deal had been agreed with existing staff to keep it going for them - i.e. they had already addressed the problem to a greater or lesser extent. As for strike being blackmail, I can't see that it is any more blackmail than unilaterally altering an agreed contract of employment and saying take it or leave it.
I agree with you point about shareholders getting more involved in executive pay; the difficulty here is who the shareholders are. Some shareholders - pension funds for example - are more interested in this than others - hedge funds for example. It seems the balance of different types of shareholders is such that a few million here or there on executive pay is not considered a big deal.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
W1 wrote:Remind me - what obligation does a company have to the wider economy?
None, but they don't exist in a vacuum. Bit OT, but companies like Tesco can get away with paying their staff less than a living wage because ultimately the government will top it up with "tax credits". The situation for employees at the bottom of the pay scale can be pretty kafkaesque.
A friend sent me the below, I'll reference it properly when I find the source.(EDIT: It was from the comments section of the Zoe Williams article linked below)Most companies are in the business of making money, so they will do whatever they can to keep overheads low.
If they employ people for less than 16 hours a week, on minimum wage, they pay less or no NI contributions
If they they only give zero-hour contracts, they don't have to employ people on days when they might not need them.
If their staff don't have fixed-time permanent contracts, they don't have to provide pension schemes, holiday or sick pay.
The worker needs more than 16 hours because it pays just £97, and they have to work for 30 hours to get working tax credit.
So they need 2 jobs at more than 15 hours each, or they won't qualify for tax credits.
If they work any hours from 0 to 29, they won't get working tax credit.
If they work at all, they won't get out-of-work benefits or, if they are single parents they might get Income Support but they must look for full-time work when their children are 5, which is to be changed to 2 years old.
They will most likely qualify for Housing Benefit, but if they have a private landlord, it's unlikely to cover all the rent.
So the taxpayer is now paying the tax credits etc. and the employer is not providing anything other than a few hours of work for a lot of poor people.
Employers who sign up to the Work Programme are paid to take benefit claimants who work for 30 hours to "earn" their benefit.
They don't need to employ more than a core of regular staff, with part-time zero-hour workers and, now, the "free" ones.
The Work Programme "providers" are basically agencies who place DWP claimants in the not-jobs, and they get paid as well.
The work gets done with no cost to the employer - and there's no cost in wages, NI conts, pensions, holiday and sick pay. In fact HE gets paid.
The employer gets his free staff from the DWP via a "Work Programme Provider" who places the claimant in the not-a-job - and gets paid as well.
The claimant gets to go round and round in the system because the employer won't take them on permanently or they'd have to pay them.
Every time the claimant goes to another employer the Provider gets paid again.
The part-timers are beginning to look a bit expensive - even though they were ridiculously cheap before the Work Programme came in.
So those already on zero-hour contracts won't get work; they'll have to claim out of work benefits, and go to the...Work Programme where they'll......
This, of course, will save lots of money on the benefit bill according to our leaders.
The problem with unregulated capitalism and letting the market drive everything is that this is a pretty imperfect way of running things. Ultimately the government will pick up the tab when corporations run the risk of driving people into poverty because we as a society don't like to see destitute bare-footed children begging on the streets.
Meanwhile, CEO's are being paid millions, and the shareholders are getting their dividends. Zoe Williams has written a very interesting article about this: http://www.guardian.co.uk/commentisfree ... ages-we-do0 -
Jeez Rick, you're like a dog on a postie's trouser leg. Actually since you have so much time to post rather than work, shouldn't your company be cutting your pay and benefits ;-)
So your solution is to have an employee sitting in on remuneration committees? What powers would this person have? Would they just be an observer, or would they have a vote or some power of veto? Would they refer back to the wider group of employees and then tell the board what they should do?
The principle that management mange is quite a well established one, as is the one that shareholders own the business and can change things if they don't like it."I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Stevo 666 wrote:Jeez Rick, you're like a dog on a postie's trouser leg. Actually since you have so much time to post rather than work, shouldn't your company be cutting your pay and benefits ;-)
So your solution is to have an employee sitting in on remuneration committees? What powers would this person have? Would they just be an observer, or would they have a vote or some power of veto? Would they refer back to the wider group of employees and then tell the board what they should do?
The principle that management mange is quite a well established one, as is the one that shareholders own the business and can change things if they don't like it.
Take a look at our market and you'll see why we're not busy
I'd say the person has a vote. No veto. They would take their cues from the wider group of employees, be elected by them, and represent them on the board, and their presence on remuneration committees would be compulsory.
That way, say there is unhappiness like uni-lever. The board would get a better idea sooner.0 -
I don't know the past history as i didn't see anything on that. but have no reason to disbelieve it. But it's very likely the case that the costs of this fund are escalating materially as lifespans increase etcrjsterry wrote:I understood that the final salary scheme had already been closed to new employees some years ago, but that a deal had been agreed with existing staff to keep it going for them - i.e. they had already addressed the problem to a greater or lesser extent. As for strike being blackmail, I can't see that it is any more blackmail than unilaterally altering an agreed contract of employment and saying take it or leave it.
This bit you may have hit the nail on the head - for big companies usually isn't. People 'on the street' see this and their natural reaction is 'it's so unfair/we have to stop this' and so on. But is it really the one off the crucial issues in business today given the very small number of individuals who are involved in the senior echelons of some large Plc's? The owners of the business tend to think not, and literally it is their business! Although there have been examples where they have taken action where they think execs are taking the p1ss.rjsterry wrote:I agree with you point about shareholders getting more involved in executive pay; the difficulty here is who the shareholders are. Some shareholders - pension funds for example - are more interested in this than others - hedge funds for example. It seems the balance of different types of shareholders is such that a few million here or there on executive pay is not considered a big deal."I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Stevo 666 wrote:
I don't know the past history as i didn't see anything on that. but have no reason to disbelieve it. But it's very likely the case that the costs of this fund are escalating materially as lifespans increase etcrjsterry wrote:I understood that the final salary scheme had already been closed to new employees some years ago, but that a deal had been agreed with existing staff to keep it going for them - i.e. they had already addressed the problem to a greater or lesser extent. As for strike being blackmail, I can't see that it is any more blackmail than unilaterally altering an agreed contract of employment and saying take it or leave it.
This bit you may have hit the nail on the head - for big companies usually isn't. People 'on the street' see this and their natural reaction is 'it's so unfair/we have to stop this' and so on. But is it really the one off the crucial issues in business today given the very small number of individuals who are involved in the senior echelons of some large Plc's? The owners of the business tend to think not, and literally it is their business! Although there have been examples where they have taken action where they think execs are taking the p1ss.rjsterry wrote:I agree with you point about shareholders getting more involved in executive pay; the difficulty here is who the shareholders are. Some shareholders - pension funds for example - are more interested in this than others - hedge funds for example. It seems the balance of different types of shareholders is such that a few million here or there on executive pay is not considered a big deal.
I think the idea that a few million in bonuses isn't a big deal when compared to a few hundred million or even a few billion in profit - which btw is the same argument used to justify footballers' and TV 'talent' salaries - partly stems from the involvement of private equity. They are not just buying a few shares here and there as part of a pension fund, but buying up majority shares in companies in some cases. To people able to invest sums that large, a few million really is pocket money.
Fundamentally, I think the general backlash against high pay for senior execs is about two things: 1. the increasing gap between the bottom and the top of the pile; and 2. the apparent disconnect between performance (however that might be measured) and reward.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
rjsterry wrote:Fundamentally, I think the general backlash against high pay for senior execs is about two things: 1. the increasing gap between the bottom and the top of the pile; and 2. the apparent disconnect between performance (however that might be measured) and reward.
Whilst that's true, I don't think "general backlash" (in the light of the general scapegoating against "the City" that the previous government used to hide their own failings) justifies the government getting their sticky paws on how private companies are run.
Don't forget, 50% of these paypackets go to HMRC - a point easily forgotten by envious socialist types. It would be cutting your nose to spite your face to deliberately reduce that tax-take - unless the same socialists are prepared to pay a bit more tax to take up the shortfall?0 -
W1 wrote:rjsterry wrote:Fundamentally, I think the general backlash against high pay for senior execs is about two things: 1. the increasing gap between the bottom and the top of the pile; and 2. the apparent disconnect between performance (however that might be measured) and reward.
Whilst that's true, I don't think "general backlash" (in the light of the general scapegoating against "the City" that the previous government used to hide their own failings) justifies the government getting their sticky paws on how private companies are run.
Don't forget, 50% of these paypackets go to HMRC - a point easily forgotten by envious socialist types. It would be cutting your nose to spite your face to deliberately reduce that tax-take - unless the same socialists are prepared to pay a bit more tax to take up the shortfall?
Maybe if the pay was better balanced, the state wouldn't need to carry out as much wealth re-distribution in the form of taxes and benefits?You live and learn. At any rate, you live0 -
Maybe - and maybe, if the state didn't carry out so much wealth distribution via taxes and benefits, we'd have more people working in the first place?Jez mon wrote:W1 wrote:rjsterry wrote:Fundamentally, I think the general backlash against high pay for senior execs is about two things: 1. the increasing gap between the bottom and the top of the pile; and 2. the apparent disconnect between performance (however that might be measured) and reward.
Whilst that's true, I don't think "general backlash" (in the light of the general scapegoating against "the City" that the previous government used to hide their own failings) justifies the government getting their sticky paws on how private companies are run.
Don't forget, 50% of these paypackets go to HMRC - a point easily forgotten by envious socialist types. It would be cutting your nose to spite your face to deliberately reduce that tax-take - unless the same socialists are prepared to pay a bit more tax to take up the shortfall?
Maybe if the pay was better balanced, the state wouldn't need to carry out as much wealth re-distribution in the form of taxes and benefits?0 -
W1 wrote:
Maybe - and maybe, if the state didn't carry out so much wealth distribution via taxes and benefits, we'd have more people working in the first place?Jez mon wrote:W1 wrote:rjsterry wrote:Fundamentally, I think the general backlash against high pay for senior execs is about two things: 1. the increasing gap between the bottom and the top of the pile; and 2. the apparent disconnect between performance (however that might be measured) and reward.
Whilst that's true, I don't think "general backlash" (in the light of the general scapegoating against "the City" that the previous government used to hide their own failings) justifies the government getting their sticky paws on how private companies are run.
Don't forget, 50% of these paypackets go to HMRC - a point easily forgotten by envious socialist types. It would be cutting your nose to spite your face to deliberately reduce that tax-take - unless the same socialists are prepared to pay a bit more tax to take up the shortfall?
Maybe if the pay was better balanced, the state wouldn't need to carry out as much wealth re-distribution in the form of taxes and benefits?
Norway does pretty well re employment and they do a lot of redistribution. 3.3% unemployment.
Beats the UK's 8 and a bit.0 -
W1 wrote:Maybe - and maybe, if the state didn't carry out so much wealth distribution via taxes and benefits, we'd have more people working in the first place?
Maybe, just maybe - raise the tax threshold and cut out tax credits etc all together.
Too easy?None of the above should be taken seriously, and certainly not personally.0 -
daviesee wrote:W1 wrote:Maybe - and maybe, if the state didn't carry out so much wealth distribution via taxes and benefits, we'd have more people working in the first place?
Maybe, just maybe - raise the tax threshold and cut out tax credits etc all together.
Too easy?
Of course it's too easy - we're talking about politicians here!
I think a stripping down of the ridiculously burdensome tax and benefits system is required, - greater simplicity = lower costs = increased revenue - but it won't happen.0 -
W1 wrote:Maybe - and maybe, if the state didn't carry out so much wealth distribution via taxes and benefits, we'd have more people working in the first place?
To be fair, there are a group of business leaders in this country who are wealthy partly because the government picks up the bill for them not paying their staff a living wage. Wealth distribution seems to be uneven and going in the opposite way to which you think it is.0 -
W1 has no sympathy for people living in relative poverty clearly.
Real wage growth for the bottom 20% of earners has been roughly 0% since the late '70s.
I.e. the rich get plenty richer, and the poorer get an increasingly smaller slice of the growing pie.0 -
Rick Chasey wrote:W1 has no sympathy for people living in relative poverty clearly.
Real wage growth for the bottom 20% of earners has been roughly 0% since the late '70s.
I.e. the rich get plenty richer, and the poorer get an increasingly smaller slice of the growing pie.
Well its the common view isn't it, the rich deserve to be rich, and the poor deserve to be poor. If you're rich you clearly have merit, otherwise how would you have become rich? And people are poor because they're lazy and can't lift themselves out of their situation.0 -
notsoblue wrote:Rick Chasey wrote:W1 has no sympathy for people living in relative poverty clearly.
Real wage growth for the bottom 20% of earners has been roughly 0% since the late '70s.
I.e. the rich get plenty richer, and the poorer get an increasingly smaller slice of the growing pie.
Well its the common view isn't it, the rich deserve to be rich, and the poor deserve to be poor. If you're rich you clearly have merit, otherwise how would you have become rich? And people are poor because they're lazy and can't lift themselves out of their situation.
Mmm..
Does put a sword to the trickle down theory.0 -
Rick Chasey wrote:notsoblue wrote:Rick Chasey wrote:W1 has no sympathy for people living in relative poverty clearly.
Real wage growth for the bottom 20% of earners has been roughly 0% since the late '70s.
I.e. the rich get plenty richer, and the poorer get an increasingly smaller slice of the growing pie.
Well its the common view isn't it, the rich deserve to be rich, and the poor deserve to be poor. If you're rich you clearly have merit, otherwise how would you have become rich? And people are poor because they're lazy and can't lift themselves out of their situation.
Mmm..
Does put a sword to the trickle down theory.
I always thought trickle down rhetoric was used to just keep people in their place. i.e. Don't get ideas above your station, let the rich get richer and eventually you'll get yours.0 -
Well that's not universally false, is it?notsoblue wrote:Rick Chasey wrote:W1 has no sympathy for people living in relative poverty clearly.
Real wage growth for the bottom 20% of earners has been roughly 0% since the late '70s.
I.e. the rich get plenty richer, and the poorer get an increasingly smaller slice of the growing pie.
Well its the common view isn't it, the rich deserve to be rich, and the poor deserve to be poor. If you're rich you clearly have merit, otherwise how would you have become rich? And people are poor because they're lazy and can't lift themselves out of their situation.
I don't have any sympathy for anyone who is "poor" because they leach off the state and don't want to work because they can live in relative comfort on the hard work of others and never contribute anything.
I have significant sympathy for those who work incredibly hard and stand on their own two feet, contribute to their community and make the most of the help that they are given.
I would never begrude helping the latter; I detest the former.0 -
notsoblue wrote:Rick Chasey wrote:notsoblue wrote:Rick Chasey wrote:W1 has no sympathy for people living in relative poverty clearly.
Real wage growth for the bottom 20% of earners has been roughly 0% since the late '70s.
I.e. the rich get plenty richer, and the poorer get an increasingly smaller slice of the growing pie.
Well its the common view isn't it, the rich deserve to be rich, and the poor deserve to be poor. If you're rich you clearly have merit, otherwise how would you have become rich? And people are poor because they're lazy and can't lift themselves out of their situation.
Mmm..
Does put a sword to the trickle down theory.
I always thought trickle down rhetoric was used to just keep people in their place. i.e. Don't get ideas above your station, let the rich get richer and eventually you'll get yours.
i think it's more "We may get more of the pie, but we're making the pie bigger, so you'll get more pie in absolute terms".0 -
notsoblue wrote:W1 wrote:Maybe - and maybe, if the state didn't carry out so much wealth distribution via taxes and benefits, we'd have more people working in the first place?
To be fair, there are a group of business leaders in this country who are wealthy partly because the government picks up the bill for them not paying their staff a living wage. Wealth distribution seems to be uneven and going in the opposite way to which you think it is.
I find this concept of a "living wage" a bit like the concept of people "being entitled" to benefits.
What counts as "living"?
Relatively speaking, we are all well off.
We have a minimum wage to help protect the lowest paid who, if the market was left unregulated, would be paid a lot less.
We have benefits and tax credits to help them further, funded by others - disproportionately by the "wealthy" people you mention above.
Would your ultimate aim be that we all have exactly the same? If not, where would you draw the line, and why? Would you want it to be global - in which case the "UK poor" would be required to redistribute their relative wealth. Would you rather no-one had any more than anyone else, and if so what is the incentive to work or save at all?0 -
W1 wrote:notsoblue wrote:W1 wrote:Maybe - and maybe, if the state didn't carry out so much wealth distribution via taxes and benefits, we'd have more people working in the first place?
To be fair, there are a group of business leaders in this country who are wealthy partly because the government picks up the bill for them not paying their staff a living wage. Wealth distribution seems to be uneven and going in the opposite way to which you think it is.
I find this concept of a "living wage" a bit like the concept of people "being entitled" to benefits.
What counts as "living"?
Relatively speaking, we are all well off.
We have a minimum wage to help protect the lowest paid who, if the market was left unregulated, would be paid a lot less.
We have benefits and tax credits to help them further, funded by others - disproportionately by the "wealthy" people you mention above.
Would your ultimate aim be that we all have exactly the same? If not, where would you draw the line, and why? Would you want it to be global - in which case the "UK poor" would be required to redistribute their relative wealth. Would you rather no-one had any more than anyone else, and if so what is the incentive to work or save at all?
Use Scandanavia as a blueprint. Take Norway.
They have strong social security, strong(er) market regulation, and they're more productive than the UK!0 -
Rick Chasey wrote:W1 has no sympathy for people living in relative poverty clearly.
Real wage growth for the bottom 20% of earners has been roughly 0% since the late '70s.
I.e. the rich get plenty richer, and the poorer get an increasingly smaller slice of the growing pie.
But can still get more with that slice of the pie..
http://www.economist.com/blogs/dailycha ... rice_index
+ can get a 32" t.v. for next to nothing now, whereas in 1970s it'd be something more like
http://www.rewindmuseum.com/vintagetv.htm#1971rgd
Similar with many other (but not all) things..FCN 9 || FCN 50 -
W1 wrote:notsoblue wrote:W1 wrote:Maybe - and maybe, if the state didn't carry out so much wealth distribution via taxes and benefits, we'd have more people working in the first place?
To be fair, there are a group of business leaders in this country who are wealthy partly because the government picks up the bill for them not paying their staff a living wage. Wealth distribution seems to be uneven and going in the opposite way to which you think it is.
I find this concept of a "living wage" a bit like the concept of people "being entitled" to benefits.
What counts as "living"?
Relatively speaking, we are all well off.
We have a minimum wage to help protect the lowest paid who, if the market was left unregulated, would be paid a lot less.
We have benefits and tax credits to help them further, funded by others - disproportionately by the "wealthy" people you mention above.
Would your ultimate aim be that we all have exactly the same? If not, where would you draw the line, and why? Would you want it to be global - in which case the "UK poor" would be required to redistribute their relative wealth. Would you rather no-one had any more than anyone else, and if so what is the incentive to work or save at all?
There are ways round paying people a minimum wage though. Employers like Tesco's take people on as part time (~16 hours), with only a skeleton crew of full time employees. They put them on zero hour contracts, so they don't need to employ them on days when they don't need them. And if the employee isn't on a fixed time permanent contract they don't need to provide pension schemes, holiday or sick pay. A part time employee working 16 hours a week on minimum wage will not earn enough to survive, they have to work at least 30 hours a week to get working tax credit, and because they're working at all they won't get out of work benefit. So they need to get a second part time job to just put them in a position where the government can top up their wages.
If their employer had just paid them a "living wage" in the first place then a) there would be less dependence on the state and b) they would have much higher quality of life.
The system as it stands now basically amounts to the government picking up the tab for people on low wages so that employers can increase their profits, share value and executive pay. Its the average tax payer funding the wealthy. Things get even more bizarre when you consider new efforts by the governments to get people working for companies at no cost to them so claimants can "earn" their benefits.
It could be a lot worse, of course. But my point is that the view that people on low wages are already getting too much in the way of support from the government, that there are too many restrictions on big business, and that taxes get in the way of growth is a pretty simplistic view that simply doesn't reflect reality.
Since you ask, my aim would be to encourage an environment where it isn't more profitable for employers to pay their staff a sh1tty wage and let the government pick up the tab so that they can further increase profits. I don't really care about wealth redistribution. But the current situation encourages people to stay dependant on the state rather than get paid a a fair "living" wage. You seem to be suggesting that people at around this income level don't deserve it.0 -
jds_1981 wrote:Rick Chasey wrote:W1 has no sympathy for people living in relative poverty clearly.
Real wage growth for the bottom 20% of earners has been roughly 0% since the late '70s.
I.e. the rich get plenty richer, and the poorer get an increasingly smaller slice of the growing pie.
But can still get more with that slice of the pie..
http://www.economist.com/blogs/dailycha ... rice_index
+ can get a 32" t.v. for next to nothing now, whereas in 1970s it'd be something more like
http://www.rewindmuseum.com/vintagetv.htm#1971rgd
Similar with many other (but not all) things..
Its not as simple as that. Cheap food isn't good food. Just because you can buy a Junior Spesh for £1.50 doesn't mean things have gotten better.0 -
Rick Chasey wrote:Use Scandanavia as a blueprint. Take Norway.
They have strong social security, strong(er) market regulation, and they're more productive than the UK!
You always do this - why not give your own opinions, rather than deferring to the Scandis all the time? It's too easy a get out for you :P
Please take the below with a pinch of salt, because much of the above is from hazy memory of when I visited Norway, and some from google, and some is unsubstantiable opinion.
I like Norway very much indeed. But it's not comparable to the UK.
Yes, they pay higher taxes - but they get much better services for their taxes i.e. value for money.
It is also much smaller than the UK, economically different, and with a very different attitude. It is relatively protectionist of it's economy (it's not in the EU) and borders (limits on immigration). It also has quite tightly controlled benefits (I found this link but haven't read it - but it sounds much more sensibly restrictive than the UK's benefits system http://www.regjeringen.no/upload/AD/pub ... k_2011.pdf). For example, you need to have earnt a certain level of income in the preceeding year to be entitled to unemployment benefit. That presumably stops long-term claimants.
Bearing in mind that this is a difficult comparison, I think the question is not what do Norway get right, but what does the UK get wrong?
Well, plenty of things:
- inefficiency in government spending; leads to
- poor value (or at least, perceived value) for taxpayers; leading to
- resentment against paying tax; and
- resentment that some tax goes to people who scrounge off the state and will never contribute.
If you introduce taxes like the wealth tax here, do you think people would accept it? Or would they leave? What sort of limitation on Norway's economic growth has been the disincentive to do business there, or live or invest there? Who knows.
I mean can you name more than 5 successful, global Norwegian companies (without google)? These sorts of taxes limit the serious growth on which much of the UK's wealth is based on (and within that I mean significant numbers of employees, pension funds etc etc). The UK was, and stil is, a global economy - Norway isn't.
Norway also has very low unemployment - so the generous government funding for state-provided services is split over a much larger percentage of the country. It's no surprise, if 97% of the country is working, that the tax receipts allow decent public services. That's not the same here.
I think one key question is why do the Norwegians work when actually their lives would be very comfortable if they didn't? Maybe it is because they have a work ethic which I think is severely lacking here. If we offered the same benefits, but maintained our high levels of state-reliant non-workers, the tax rate would need to be much, much higher than Norways. In fact, swap places with Norway and I doubt they could afford their public services on our unemployment figures. We can argue all day about what causes unemployment, but (for some) it is because they would rather live off the state than work - in other words, no interest in contributing, and a sense of entitlement that breeds laziness.
What you're advocating is to increase "wealth distribution" so that the less well off are closer to the wealthy. That works if everyone is prepared to work - it's impossible if the number of people who are not working is as high as it is here. It is made worse as there is no incentive to work, either because it's too easy not to, or the tax rate is so penal if you do. We have one of the higest rates of non-working households in Europe - why is that? We also have a very high proportion of people who are deemed incapable of work - again, why is that? Are we really a sickly nation, or are we just "on the sick"?
It's far too easy to just say "look at Norway, they're so happy" to justify massive increases in taxes. In my view, it works in Norway because of the cultural attitude and work ethic of the Norwegians, together with sensible benefits and immigration policies and not (just) because of the taxes. And there are undoubtedly macro-economic impacts of such a policy (whether you think that matters or not).
I await you blowing the above apart with interest but if you mention the Daily Mail I shall ignore you :P0
