The minimum wage in the UK at the moment appears to be
£5.52 an hour and in the U.S.A., the federal minimum wage
is
$5.85 per hour, effective July 24, 2007.
Proponents
say that the net effect of a minimum wage policy guarantees a base living standard for all workers, does not significantly effect unemployment, increases work ethic, stimulates the economy through consumer buying, decreases social welfare payouts and helps business.
Opponents say that the net effect is to hurt small business by excluding low cost competitors, reduces hours worked by workers,raises prices of goods and creates inflationary pressure, causes outsourcing and hurts the really disadvantaged in the lowest positions, making some employable people now unemployable. This then adds them to the welfare system.
They say that the policy should be one of maximizing work opportunities by encouraging small businesses, topping up wge packets with earned income tax credits and indirect money saving across the board, e.g. reduction in hidden taxes.
Anyone in my current position needs to have enough to cover, flat rental, gas and electricity, transport to and from work and a minimum for food. The flat rental cost needs to be below that and in this part of the world can be around £90 a week if you're lucky, with up front costs to get started.
Against that is unemployment benefit of £56.20 on current information [which I'm not eligible for] and housing benefit of around £50 [which is possible]. For someone who has lived here for years, that then leaves, in round terms, about £15 for all utilities, clothing, transport and food. For me it doesn't. For many
graduates, tricky little clauses in the eligibility for the dole effectively exclude them.
In realistic terms, once employed, these benefits disappear anyway and one is reliant on the weekly wage which, if you work a 35 hour statutory week, comes out to £193.20 per week. The advantage, if one works a rotational shift, is that one can find other work as well. Such work is available and living, though very tight, precluding any frills and subject to landlords bumping up the rental in line with inflation, is a possibility. Just.
From an employer's point of view, using my friend's analogy, if you have, say, a flower delivery service, you need to have people to deliver flowers. Assuming you run a good business, then you'll be paying above minimum wage, plus rebate on usage of the employees' cars. Otherwise you won't be attracting employees who have a certain amount they're paying out to survive.
The higher the minimum wage goes, the less people you can employ and the harder they must work to compensate. Thus the higher the turnover of staff and the more you need to retrain, before even looking at taxation and the like. With no minimum wage, you can employ far more people at a lower rate, this stimulates the economy in a small way but you are just one of many and the economy overall benefits.
It seems a sort of catch 22 to me. Maybe you could look over this post and tell me where the fallacies are and what it missed. I don't claim to have any authority in this matter.
