With prices being reduced in the sales,inflation dropping due to the recession, can businesses afford to keep paying the minimum wage?

 

The company's/shops etc that tend to pay it are at the bottom of the profitability scale, so are probably suffering more, so should the NMW be frozen at current levels, or even decreased till things pick up again?

 

Before the present crisis shops etc could just increase prices, but that's not an option at the moment, so they will probably cut costs which means reduce staff. Therefore to save jobs in these times are salary decreases going to become the norm, including the NMW.

No it should stay as it is

 

Someone on £50,000 a year can absorb a financial hit better than someone on a few quid a hour

 

 

Can they afford it? :mellow: It's bloody ridiculous as it is, definitely needs raising to the local living wage (so £7.45 in London etc., a lot cheaper in Scotland, probably roughly the same as it is now atch...) for each county. As Craig said, it should be those who can afford it absorbing this crisis rather than those who are already having a hard enough time of it on their pitiful salaries...

But a lot of the small businesses don't pay £50,000 per year to their staff, they only pay the minimum or just above. My question is, what should they do. They can't make anyone redundant who earns £50k if no-one is earning £50k can they. If they are really struggling, what should they do? I am not talking about WH Smith or Barclays Bank here, but the smal local garages,shops,cafes etc etc.

Demoralised, demotivated and underpaid staff are the worst thing imaginable Brian, you pay £3 an hour or whatever due to credit crunch you are going to get staff that are just going to go through the motions, not give a damn about the company and leave soon as the chance arises to work for a bigger company that offers a better salary then when they leave you are going to end up with Poles who can barely speak English working for you

 

I have run businesses mate and a happy and motivated workforce who are enthusiastic about the company is the most important thing

^ That's absolutely true. A friend of mine works for a company where mimimum wage is (just) paid and the staff rarely get their tips to keep - morale is at rock bottom, and people are excited to leave and go somewhere more motivational. If they paid, they'd attract highly skilled staff, who are competent and enjoy their work, which reflects well on the business. But cheap unprofessional labour is obviously more attractive to the employer, because they can't see past the accounts, no matter how it effects them in the long term.

Demoralised, demotivated and underpaid staff are the worst thing imaginable Brian, you pay £3 an hour or whatever due to credit crunch you are going to get staff that are just going to go through the motions, not give a damn about the company and leave soon as the chance arises to work for a bigger company that offers a better salary then when they leave you are going to end up with Poles who can barely speak English working for you

 

I have run businesses mate and a happy and motivated workforce who are enthusiastic about the company is the most important thing

 

I run a business too, and I can assure you everyone earns much more than the NMW. However you fail to address my point. I am not saying anything against the NMW per se. What I am laying out is an example whereby a small company/shop/garage/cafe who say have 20 employees who all earn the NMW(say), ie £5.73ph that equates to just under £14,000 pa when you add employers NI on top, times say 20 employees that is approx £280k. Now if the company was losing say £25k pa and all other costs like rent,rates,materials were fixed and you couldn't increase revenue,due to customers tightening their belts, then as a business person you would have to take a major decision.

 

1) borrow from bank- you could in the past, but today try it....not going to happen as Banks are not lending

 

2) Sack 2 employees and thus save £28k, don't envy this decision

 

3) reduce pay from £5.73 by 50p an hour and save amost £24k pa, and just about break even.

 

4) Carry on as if everything is rosy, and go bust, then everyone loses their jobs, at the same time as thousands of others, so they could be up $h!t creek

 

So what would you do Craig, blame it on the Poles.This is nothing about a demoralised workforce, this is about trying to save jobs.

I run a business too, and I can assure you everyone earns much more than the NMW. However you fail to address my point. I am not saying anything against the NMW per se. What I am laying out is an example whereby a small company/shop/garage/cafe who say have 20 employees who all earn the NMW(say), ie £5.73ph that equates to just under £14,000 pa when you add employers NI on top, times say 20 employees that is approx £280k. Now if the company was losing say £25k pa and all other costs like rent,rates,materials were fixed and you couldn't increase revenue,due to customers tightening their belts, then as a business person you would have to take a major decision.

 

1) borrow from bank- you could in the past, but today try it....not going to happen as Banks are not lending

 

2) Sack 2 employees and thus save £28k, don't envy this decision

 

3) reduce pay from £5.73 by 50p an hour and save amost £24k pa, and just about break even.

 

4) Carry on as if everything is rosy, and go bust, then everyone loses their jobs, at the same time as thousands of others, so they could be up $h!t creek

 

So what would you do Craig, blame it on the Poles.This is nothing about a demoralised workforce, this is about trying to save jobs.

 

It is not as simple as that, you cut the salary by 50p an hour then you are going to LOSE those staff to other employers who pay more as soon as they can sniff an opening in another company then when your staff leave because you have cut their salaries you have to advertise for new staff, you have to spend time doing interviews and reading through CV's that would be better spent selling, once you have gone through the whole long winded and expensive in terms of man hours and money recruitment procedure you have to spend time training them which again takes up a lot of time while your remaing employees go through the motions waiting for the chance to jump ship because the pay is too $h!t

 

 

...i dont think that legally you can reduce wages , so really the question is a non starter... i agree with craig.

...i dont think that legally you can reduce wages , so really the question is a non starter... i agree with craig.

 

What a silly thing to say, of course you can legally reduce wages. That has happened before and happens all the time especially in recessions. No one has a god given right to a wage increase, it has just become an acceptable part of work life. Pay increases are funded by price increases to you and I, or better profitability by organisations. But if an employer cannot afford it he is under no legal obligation to pay one. I have worked in Companies where one year you don't get a rise and others you do. You don't have that problem if you work for yourself Rob, you pay yourself what you like.

 

Yes, the consequences are his employees might leave, but they might not if there are no jobs available for their skills locally.But if people leave there are always unemployed or other workers earning less for someone else who will fill these vacancies.

 

If you are meaning, can the NMW be reduced legally, I don't know, that would have to be done by the Government.

 

My original post was to see if it was feasible to consider it in a climate whereby wages accross the board go down due to the recession, should the NMW be immune from decreasing. I have never said anywhere that it should be reduced.

 

I have always been in favour of the NMW, but at the end of the day, you can only pay what you can afford to pay, or go out of business.

 

Working for the Government/council/civil service in some way, you are pretty much immune from this because they just put up tax,council tax etc to cover pay increases. We have to pay that, because we have no options. But private companies/shops etc cannot increase prices in a recession, it would be financial suicide.

I really can't see many people going for a job paying less than the minumum wage as it is now. It would just act as a further incentive to those who believe they'd be better off on benefits than they would working.

 

ESPECIALLY not if the price of food and other goods continues to rise and rise.

Edited January 4, 200916 yr by Shoat

What a silly thing to say, of course you can legally reduce wages. That has happened before and happens all the time especially in recessions. No one has a god given right to a wage increase, it has just become an acceptable part of work life. Pay increases are funded by price increases to you and I, or better profitability by organisations. But if an employer cannot afford it he is under no legal obligation to pay one. I have worked in Companies where one year you don't get a rise and others you do. You don't have that problem if you work for yourself Rob, you pay yourself what you like.

 

i didnt say that employees were entitled to a yearly raise, i said that i didnt think that legally an employer can reduce a wage, assuming theres no change in the job discription, and only with the agreement with any union to prevent job losses. besides you are talking about the minimum wage...

Just get rid of the national minimum wage. With the recession, just having a job is nice enough. And most companies don't even pay that low anyway.

Just get rid of the national minimum wage. With the recession, just having a job is nice enough. And most companies don't even pay that low anyway.

Awful idea :mellow: If people think there's a problem with managers undercutting wages by hiring from Poland, Slovakia etc., then the problem would only intensify if the actual barriers to preventing people from getting ripped off were taken away - it would lead to more people going on the dole, as jobs would reduce wages in order to get by; leading to strain upon the already massive national debt. Taking away the NMW would just lead to economic catastrophe...

Just get rid of the national minimum wage. With the recession, just having a job is nice enough. And most companies don't even pay that low anyway.

 

Are you Crazy Chris under an alias ? I can't think of anyone else that would come up with such ridiculous garbage

 

Nothing I can add to what Tyron said

 

 

the NMW should stay at what it is if not increase.

 

It's hard enough to live on the current NMW never mind take a pay cut

the NMW should stay at what it is if not increase.

 

It's hard enough to live on the current NMW never mind take a pay cut

 

agreed

 

if a business cant stand the crunch then maybe its time it gave up. harsh? in the short term but new businesses start up everyday and new jobs will be created, especially when the economy picks up as it inevitably will.

Are you Crazy Chris under an alias ? I can't think of anyone else that would come up with such ridiculous garbage

 

Nothing I can add to what Tyron said

 

 

I can assure you that he/she is not Crazy Chris. There is only one and I am him. Do agree with scrapping the minimum wage though. If people want to work for peanuts then more fool them. I never work for less than £20 an hour after tax/NI.

You never work and never have.

I can assure you that he/she is not Crazy Chris. There is only one and I am him. Do agree with scrapping the minimum wage though. If people want to work for peanuts then more fool them. I never work for less than £20 an hour after tax/NI.

 

so youre a scrounger? or if you work i hope you never lose your job...lol