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Fergal Quinn wants to scrap the min wage
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17-03-2013 11:42am#1
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Moderators, Category Moderators, Politics Moderators, Recreation & Hobbies Moderators, Society & Culture Moderators Posts: 81,309 CMod ✭✭✭✭
Join Date:Posts: 79125
Sure we didn't even have min wage here til 2000.But without a national minimum wage barrier, pay can reportedly go well below €1 per hour, especially in the former communist eastern states.
It's also already perfectly legal to work for less than min wage if you have less than two years' work experience or are under 18.
Studies have shown that having a min wage does actually have a negative impact on employment.
http://www.cato.org/publications/policy-analysis/negative-effects-minimum-wage-lawsWhile the aim is to help workers, decades of economic research show that minimum wages usually end up harming workers and the broader economy. Minimum wages particularly stifle job opportunities for low-skill workers, youth, and minorities, which are the groups that policymakers are often trying to help with these policies.
http://www.downsizinggovernment.org/labor/negative-effects-minimum-wage-laws
As for spending - well, cato has an article about that also
http://www.cato.org/blog/consumer-spending-mythJournalists talk endlessly these days about the need for more consumer spending to revive the economy, and for government programs to juice consumer spending.
Production, not consumption, is the source of wealth. If we want a healthy economy, we need to create the conditions under which producers can get on with the process of creating wealth for others to consume, and under which households and firms can engage in thesaving necessary to finance that production….
Whatever about scrapping it altogether, I think all 3 bands of it could at least do with being lowered.
I just found an interesting report from when they were considering introducing min wage in Ireland, actually...
http://www.djei.ie/publications/employment/1999/nationalminimumwagereport/appenb.htm
It looks like an introduction of the min wage was expected to cause a decline in employment particularly in industrial/building/construction, which would tie in with the USA- based reports above.To put it in context, the most recent medium-term forecasts of employment growth with the ESRI's macromodel, in the absence of the minimum wage, include a growth in employment of 18.9% between 2000 and 2010. The introduction of the minimum wage is expected to reduce the growth in employment over the period 2000-2010 from 18.9% to 18%. (The projected fall in employment lies within the range 9,500 to 17,400 when different assumptions on spillover are used).
This decline is driven in equal measure by two separate effects:
a decline in the demand for low-wage labour due to the direct impact of the introduction of the minimum wage. Almost all of this decline occurs in industrial sectors.
a decline in the demand for higher-wage labour due to the indirect impact of the minimum wage on inflation, increasing wage demands and reducing competitiveness. The cumulative long-run impact on average wages is 2.85% and on consumer prices is 1.4%. This implies an increase in the real wage of approximately 1.4% which represents a significant deterioration in competitiveness. This decline impacts on the demand for labour in both industrial and services sectors.
Overall approximately 84% of the projected total fall in employment occurs in the industrial sectors, including building and construction.
Unemployment is projected to increase by 8,860,0 -
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A study backed by Koch-founded/run Cato, among others from Cato-backed/funded institutes, has as much credibility as the Koch brothers themselves; that's like bringing out a study from the tobacco industry, to support the argument that smoking is good for you.Studies have shown that having a min wage does actually have a negative impact on employment.
http://www.cato.org/publications/policy-analysis/negative-effects-minimum-wage-laws
http://www.downsizinggovernment.org/labor/negative-effects-minimum-wage-laws
As for spending - well, cato has an article about that also
http://www.cato.org/blog/consumer-spending-myth
Here is a good summary of the current state of study regarding the effects of the minimum wage:
https://en.wikipedia.org/wiki/Minimum_wage#Empirical_studies
Still highly contested, with studies showing no effect on employment, and studies showing a clear publication bias in favour of reports critical of minimum wage.
Your using a report from 1999, about expectations, instead of showing what actually happened?Whatever about scrapping it altogether, I think all 3 bands of it could at least do with being lowered.
I just found an interesting report from when they were considering introducing min wage in Ireland, actually...
http://www.djei.ie/publications/employment/1999/nationalminimumwagereport/appenb.htm
It looks like an introduction of the min wage was expected to cause a decline in employment particularly in industrial/building/construction, which would tie in with the USA- based reports above.
After minimum wage, we had the lowest unemployment rate in decades:
One notable thing about arguments on the minimum wage, is that the people that argue against it try to use arguments based on times of economic recession, as a face for the ideological reasons for supporting its abolishment; what are their arguments, for good economic times, when unemployment is not so high?
Trying to answer that, usually exposes the core ideological roots/reasoning, behind wanting to end the minimum wage.0 -
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Moderators, Category Moderators, Politics Moderators, Recreation & Hobbies Moderators, Society & Culture Moderators Posts: 81,309 CMod ✭✭✭✭ Join Date:Posts: 79125
I'm using a report that indicated that even Irish groups did not think the introduction of a min wage would be a good thing, for the same reasons.KyussBishop wrote: »Your using a report from 1999, about expectations, instead of showing what actually happened?
My report dealt with unemployment as directly affected by min wage. You're looking at unemployment overall, with a number of factors (like a property bubble?). You need to pick out what part of those levels were affected by min wage, positively or negatively; otherwise the two are not comparable. Did unemployment drop despite the min wage? Because of it? No effect?After minimum wage, we had the lowest unemployment rate in decades:
You might also notice that the report said the rate of unemployment dropping would be slowed after introducing it - not that it would stop altogether. Showing that it didn't stop altogether... has no bearing on it.One notable thing about arguments on the minimum wage, is that the people that argue against it try to use arguments based on times of economic recession, as a face for the ideological reasons for supporting its abolishment; what are their arguments, for good economic times, when unemployment is not so high?
It seems quite obvious that when we have an unemployment problem, we should look at the causes and solutions
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Unemployment leveled out at what economists generally would mark as a pretty good/low level of unemployment, between 4-5%; you don't get a whole lot better than that, unless you set up something like a Job Guarantee.My report dealt with unemployment as directly affected by min wage. You're looking at unemployment overall, with a number of factors (like a property bubble?). You need to pick out what part of those levels were affected by min wage, positively or negatively; otherwise the two are not comparable. Did unemployment drop despite the min wage? Because of it? No effect?
The fall in unemployment rate wouldn't be correlated with minimum wage at all really, in my view; the rate it was at, is pretty much within the bounds of standard international rates for 'structural unemployment'.
Agreed, but abolishing minimum wage is a permanent policy that lasts into good economic times as well; otherwise, why not argue for linking minimum wage to the unemployment rate, rather than abolishing it outright?It seems quite obvious that when we have an unemployment problem, we should look at the causes and solutions
The causes of high unemployment right now, are pretty clearly to do with reduced consumer demand, due to reduced dispensable income, caused by debt-deflation (excessive private debts being deleveraged), and reduced public spending plus taxes.0 -
Barracuda1 wrote: »
If you were on the dole and wanted out of Ireland you would live on a paultry menu for a few months to get the money together.
Years ago I worked in Superquinn on minimum wage. At that time I had a particulalry nasty supervisor who enjoyed terrorizing people below him. Once Fergal appeared on the shop floor, caught him in the act, and asked me was I going to stand for this.
Well I had to stand for this as otherwise I didn't have a job Fergal (that's what I wanted to say but it didn't happen.... That or tell the supervisor to get f himself in front of the boss
).
Not sure of my point her beyond that Fergal Quinn is not a black and white character, not quite your typical CEO and if he says something he believes in it, even if his delivery or logic may have holes in it.
I don't agree with scrapping minimum wage, as it is very important for ensuring a minimum income standard for the working class, students, part-timers, people starting out and the money goes back into the local economy anyway, but there is a case for adjusting the wage if it is counterproductive to hiring people.
And yes social welfare rates would need to be adjusted in tandem to make it work.0 -
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Years ago I worked in Superquinn on minimum wage. At that time I had a particulalry nasty supervisor who enjoyed terrorizing people below him. Once Fergal appeared on the shop floor, caught him in the act, and asked me was I going to stand for this.
Well I had to stand for this as otherwise I didn't have a job Fergal (that's what I wanted to say but it didn't happen.... That or tell the supervisor to get f himself in front of the boss).
Not sure of my point her beyond that Fergal Quinn is not a black and white character, not quite your typical CEO and if he says something he believes in it, even if his delivery or logic may have holes in it.
I don't agree with scrapping minimum wage, as it is very important for ensuring a minimum income standard for the working class, students, part-timers, people starting out and the money goes back into the local economy anyway, but there is a case for adjusting the wage if it is counterproductive to hiring people.
And yes social welfare rates would need to be adjusted in tandem to make it work.
Good to hear from someone who has met Fergal. The problem we face here is that the tax to employ someone in ireland is high. The employers PRSI per employee is 10.75% This is higher than the UK. To pay min wage to a person is almost double the cost to the employer but the employee should not be the loser. A win win for everyong would be reducing the employers PRSI by 1% for companies with <50 employees. The bulk of employment in ireland are given by small companies employing <50 employees0 -
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