Should We Have A Minimum Wage?

kraggy · 02-03-2011 12:44AM

minidazzler wrote: »

So you get offered 2 euro an hour to wait tables, and depend on Irish people for tips? There is no tipping culture here so it wouldn't work.

Though a system by where an employer pays a basic 3.50 an hour and then if the rest isn't made up to 7.65 an hour with tips the employer has to pay the balance might work in restaurants and such. I know that's how it's done in some US states, with other more civilised states (e.g. WA) having a flat minimum wage no matter what the job.

Who said anything about relying on tips?

The minimum wage is a new thing in this country. It only came in a few years ago. We managed ok without it before that.

The market always balanced itself. But it provides protection for employees by having one. However, it should be lower than it is. But should be lowered after unemployment assistance and benefit have been lowered.

We must provide an incentive for people to work.

FoxT · 02-03-2011 01:03AM

For me, this is a grey area.

No:
The vast majority of economists believe the minimum wage law costs the economy thousands of jobs.

Teenagers, workers in training, college students, interns, and part-time workers all have their options and opportunities limited by the minimum wage. [TRUE, IF THE MIN WAGE LEVEL IS TOO HIGH]
A low-paying job remains an entry point for those with few marketable skills. [ TRUE, AND THEY COULD BE TRAPPED IN IT. BETTER TO OFFER THESE PEOPLE OPPTYS TO INCREASE THEIR SKILLS THAN TO KEEP THEM LOCKED IN TO A 40 HOUR WEEK ON MIN WAGE]
Abolishing the minimum wage will allow businesses to achieve greater efficiency and lower prices i.e - lowering cost of living. [FOR MANY BUSINESSES, THIS WILL HAVE LITTLE EFFECT AS LABOUR COSTS ARE LOWER, THAN, SAY, RENT. THIS IS ESPECIALLY TRUE FOR SMALL RETAIL OUTLETS IN HIGH-RENT/UPWARD-ONLY RENT REVIEW SITUATIONS] ]
When you force Irish companies to pay a certain wage, you increase the likelihood that those companies will outsource jobs to foreign countries, where labour is much cheaper.[TRUE FOR SOME INDUSTRIES THAT ARE NOT LOCATION-DEPENDENT. NOT TRUE FOR AREAS LIKE RETAIL OR SERVICES]
Non-profit charitable organisations are hurt by the minimum wage. [NOT TRUE. PEOPLE CAN VOLUNTEER.]
The minimum wage can drive some small companies out of business. [TRUE, AND THEY WILL, IN DUE COURSE, BE REPLACED BY BUSINESSES THAT ADD MORE VALUE & ARE MORE PROFITABLE]
A minimum wage gives businesses an additional incentive to mechanise duties previously held by humans. [TRUE IN SOME CASES. IN THESE CASES, INCREASED AUTOMATION IS A GOOD THING BECAUSE IT INCREASES PRODUCTIVITY & HELPS IRELAND AS A WHOLE TO MAINTAIN COMPETITIVENESS]
The minimum wage creates a competitive advantage for foreign companies, providing yet another obstacle in the ability of Irish companies to compete globally. [ONLY IN SOME INDUSTRIES. DOES NOT APPLY TO LOCATION-DEPENDENT ONES, AS I MENTIONED ABOVE. ]

The minimum wage law is just another example of government condescendingly controlling our actions and destroying personal choice. Citizens do have the ability to say no to a lower wage.[ SOME DO, SOME DO NOT]

Yes:

Adults who currently work for minimum wage are likely to lose jobs to teenagers who will work for much less. [TRUE. BUT ENTICING TEENAGERS TO DROP OUT OF EDUCATION FOR A LOW WAGE IS ALSO WRONG. AND, ADULTS SHOULD HAVE MORE OPPTIES TO PURSUE FURTHER EDUCATION IF THEY CHOOSE]
Workers need a minimum amount of income from their work to survive and pay the bills. [TRUE. BUT INCREASING THE MIN WAGE MAY MAKE SOME OF THOSE BILLS HIGHER....]
Businesses have more power to abuse the labour market.[TRUE]
It forces businesses to share some of the vast wealth with the people that help produce it.[WHAT VAST WEALTH WOULD THAT BE, NOW?]

What are your thoughts? Yes or No?[/QUOTE]

I would like to see a better balance between social welfare & working for people who are on low wages - so they neither have a low-wage trap, nor a social welfare trap. Employers who offer low paid jobs should be prepared to offer benefits such as flexible working hours so that people in these jobs can balance the pay/social welfare deal & also have time to avail of further education opptys.
I am not at all involved in retailing or the service industry - but in my view that industry is being strangled , not by low wages, but by punitive rents & overheads, which are then passed on to the consumer in the form of higher prices.

UsernameInUse · 02-03-2011 01:51AM

FoxT wrote: »

Non-profit charitable organisations are hurt by the minimum wage. [NOT TRUE. PEOPLE CAN VOLUNTEER.]

Charitable organisations are among those most likely to benefit from the elimination of the minimum wage. Let's take an example - consider a homeless shelter. This type of shelter normally needs workers to clean, collect & organise donations, counsel & assist residents, monitor help-lines, provide legal assistance, and so on. Volunteers help relieve some of the duties, but it's often tough to find dedicated ongoing volunteers to do the job. After all, volunteers still have to earn a living, raise a family, etc.

However, if the charitable organisation were able to pay some amount, even a few euro an hour, it would better be able to build a more steady set of workers. A non-profit organisation may simply not be able to afford a €7.50 or whatever per hour pay rate. Thus, non-profits have only two solutions: dissolve their organisations or hire fewer people to provide the charitable service. The minimum wage kills private charity. Why is the VDP not so prominent as it once was, as some other poster said, before the introduction of the minimum wage?

RussellTuring · 02-03-2011 06:19AM

Very interesting thread. I'm as yet undecided as to whether or not it should be kept. On the one hand, keeping a minimum wage seems like a good way to ensure that those who are most vulnerable have a basic standard of living. On the other, I feel that this should really be the purpose of welfare. If we want to use it more dynamically, say to incentivise working in the first place or to encourage the growth of positions for potential workers to fill, it doesn't make sense to just set it at an arbitrary point for everyone over 18 with experience, irrespective of other factors such as the industry and the risk involved in the job.

Catch yourself on · 02-03-2011 06:26AM

pragmatic1 wrote: »

We shoud pay people in buttons instead.

Or bananas.

Nothingbetter2d · 02-03-2011 07:50AM

Pauleta wrote: »

I think we are losing jobs to eastern Europe due to too high a minimum wage, even with the recent reduction but i dont believe in abandoning it completely. I think maybe €1 max being cut would be acceptable. There's a lot of talk about creating a "smart economy" for graduates etc which is good short term but eventually even those jobs will go elsewhere and what about everyone else who hasnt gone to college.

Long term our country has no future with multinational companies because those jobs will go to low cost wage countries. We need to find something that Ireland can do better than most and i think that may be renewable resources like wind and tide power.

we actually lose jobs to eastern eu and asia more cos the high cost of energy in this country more so than wages as most factories are automated robots nowadays.

Crucifix · 02-03-2011 09:59AM

UsernameInUse wrote: »

Supporters argue that a minimum wage is an effective anti-poverty tool. If businesses must pay their low-wage employees more, then those workers should earn more and fewer of them should live in poverty. Common sense says a higher minimum wage should fight poverty. The facts, however, show otherwise. Economists have examined the evidence and come to the conclusion that the minimum wage does not reduce poverty.

Despite supporters' good intentions, their actions are untrue for three main reasons.
1. The only workers who benefit from a minimum wage are those who actually earn that higher wage. Raising the minimum wage reduces many workers' job opportunities and working hours.
2. Few minimum-wage earners actually come from poor households.
3. The majority of the poor do not work at all, for any wage, so having the minimum wage does not help them.

The late Milton Friedman could explain things better than I ever could.

https://www.youtube.com/watch?v=Rls8H6MktrA

https://www.youtube.com/watch?v=x6e8Pa6-IZU

So that's a no then?

Lockstep · 04-03-2011 11:41AM

UsernameInUse wrote: »

Despite supporters' good intentions, their actions are untrue for three main reasons.
1. The only workers who benefit from a minimum wage are those who actually earn that higher wage. Raising the minimum wage reduces many workers' job opportunities and working hours.
2. Few minimum-wage earners actually come from poor households.
3. The majority of the poor do not work at all, for any wage, so having the minimum wage does not help them.

Have you *any* sources for these at all?
Your arguments seem to revolve around 'facts' and statements without any substantiation.

Now, if you were saying that having an overly high minimum wage=more unemployment you'd find few opponents. But your unsourced and dubious claims go a lot further than that.

wolfpawnat · 04-03-2011 11:46AM

I love how it is always those on salary's and business owners that say abolish minimum wage. Cop on, people need to have the security of it to try and get through this life. Why should a woman working the till in Tesco's do it for less than she is already!?!

endabob1 · 04-03-2011 12:56PM

When I was home in November I had no idea that the minimum wage was so high, I almost fell over when I heard; the cost to company must be over 10Euros an hour. (I relaise the budget was supposed to reduce it since then but I'm not 100% whether it got enforced or not?)
I work for a manufacturing company in South Africa our cost to company is between 3 & 4 Euros an hour and we are being told that we are not competitive with Asia. How in the world is Ireland meant to have any kind of industrial base?

However the cost of living is extremely high in Ireland which is why the Minimum wage is so high. The hard truth is that it's a bottom up solution, Social Welfare reform is required, minimum wage reduction is required to make it cheaper for employers to take on employees.
The govt needs to subsidise the creation of employment. One relatively quick & cost-effective way is that the cost of prsi should be removed for employers on lower income employees to make it cheaper for companies to create jobs.

I don't think it's feasible to go from a high minimum wage to none but it needs to be reduced to try and engineer growth in the economy.
The other issue is bringing inflation down to reduce the cost of living, of course the rampant profiteering that went on during the CT years and continues to go on needs to be curbed
http://www.irishtimes.com/newspaper/ireland/2010/1103/1224282560226.html

UsernameInUse · 04-03-2011 01:05PM

Lockstep wrote: »

Have you *any* sources for these at all?
Your arguments seem to revolve around 'facts' and statements without any substantiation.

Now, if you were saying that having an overly high minimum wage=more unemployment you'd find few opponents. But your unsourced and dubious claims go a lot further than that.

Lock, I'm not trying to persuade people that the minimum wage does harm - this is widely accepted already by economists. I've just got my head around the whole idea and it's a fascinating read.

UsernameInUse · 04-03-2011 01:07PM

wolfpawnat wrote: »

I love how it is always those on salary's and business owners that say abolish minimum wage. Cop on, people need to have the security of it to try and get through this life. Why should a woman working the till in Tesco's do it for less than she is already!?!

And what about the tens of thousands of people that can't find work because of the minimum wage - they're all over the country on dole queues. You should read how the system works - honestly, I'm on your side.

Dermighty · 04-03-2011 01:38PM

minidazzler wrote: »

So you get offered 2 euro an hour to wait tables, and depend on Irish people for tips? There is no tipping culture here so it wouldn't work.

I agree. Regards the tipping culture, this is my take on it:

High wages mean people are less likely to tip.

Low wages mean people are more likely to tip.

The "culture" of tipping is related to the wages of the staff. Ireland has high wages, we don't tip, Americans have low wages, they do tip. I don't think it's a coincidence. Obviously people do or do not tip based on their own personal preference too, but in general I think it's just wage related (ie: your perception of how much the waiter/waitress is being paid etc). I do not wan't to spark a conversation about why people tip.

Corruptedmorals · 04-03-2011 01:44PM

I understand the arguments in favour of lowering minimum wage, but not abolishing it, which would just encourage exploitation- not in retail per se, but definitely pubs and hotels and so on. But It's very easy for someone to say it should be without realising the reality of living off €300 a week or less- IF they get full hours, plenty don't at this time of year, even in companies that don't struggle, but because they're not taking in as much in slow periods, hours get slashed, regardless of the annual turnover. Until the cost of living comes down, lowering it further is nothing short of cruel. It SHOULD echo UK's minimum wage but until the cost of living here is comparable to there, it's not a fair option at all.

Several companies with minimum wage jobs inflict costs on themselves- if they treat their staff like crap, they will leave. Others only offer temp contracts, so that people will never get past probation and have rights. This results in HUGE staff turnovers, and massive amounts of training. Trying to close a shop if all but one member of staff are brand new results in lost money going on wages, as everyone would get out faster if most people were competent, instead of the minority. This was definitely the case where I worked for a few years- turnover sharply increased after the recession, and time spent past closing time greatly increased also. If they were more efficient and actually made staff permanent, costs would have gone down- this in a company which is the largest (and most notorious..) employer in Ireland- around 17,000.

Lockstep · 04-03-2011 01:47PM

UsernameInUse wrote: »

Lock, I'm not trying to persuade people that the minimum wage does harm - this is widely accepted already by economists. I've just got my head around the whole idea and it's a fascinating read.

The minimum wage *can* cause harm if it's too high but to assume that the minimum wage causes harm is a very blinkered position. Economists like Card, Krueger, Krugman and Stiglitz see the benefits to it. Clinton raised the minimum wage when he was president as economists began to consider that a reasonable minimum wage had benefits that outweighed the deadweight (Labour economist George Borjas is a very good example)
To say that 'the minimum wage does harm' is a very oversimplified viewpoint. To say that this view is 'widely accepted already by economists' is even more silly.

Once again, I'd ask for your sources for the following statement

1. The only workers who benefit from a minimum wage are those who actually earn that higher wage. Raising the minimum wage reduces many workers' job opportunities and working hours.
2. Few minimum-wage earners actually come from poor households.
3. The majority of the poor do not work at all, for any wage, so having the minimum wage does not help them.

Lockstep · 04-03-2011 01:51PM

UsernameInUse wrote: »

And what about the tens of thousands of people that can't find work because of the minimum wage - they're all over the country on dole queues. You should read how the system works - honestly, I'm on your side.

They can't find work because of years of financial mismanagement, reckless lending, light tough regulation and the stupidity of the banks, government and the financial regulator.
Blaming this largely or even significantly on the minimum wage is extremely silly.

Right now, only 3% of the workforce are on the minimum wage. Even during the boom years this was only 5%. Do you genuinely think that abolishing it would cause large scale employment (ignoring the side effects of lower purchasing power for those on lowest wages and the effects this would have on the local economy)

Nodin · 04-03-2011 01:57PM

I remember working for less than the scratcher when said scratcher was 60 pound a week......so no, I don't think abolishing the minimum wage is a good idea.

UsernameInUse · 04-03-2011 02:42PM

Lockstep wrote: »

The minimum wage *can* cause harm if it's too high but to assume that the minimum wage causes harm is a very blinkered position. Economists like Card, Krueger, Krugman and Stiglitz see the benefits to it. Clinton raised the minimum wage when he was president as economists began to consider that a reasonable minimum wage had benefits that outweighed the deadweight (Labour economist George Borjas is a very good example)
To say that 'the minimum wage does harm' is a very oversimplified viewpoint. To say that this view is 'widely accepted already by economists' is even more silly.

Well, it's common sense that those who come from poor backgrounds don't benefit from the minimum wage if their low-marketable skills don't justify employers hire them for the set minimum wage. Now, you have a whole class of people without opportunities because of this law.

A major reason why the minimum wage is such an ineffective anti-poverty tool is that minimum- wage hikes cause businesses to reduce the number of workers they hire and the hours they ask their employees to work. So they're put into the welfare system which is paid for by others who are not wealthy. Many people consider the welfare tax as tax on business, you can't tax business, you can only tax people. And the people who are being taxed in business are not employers, they are employees.

As for the cost of living, it is directly related to the minimum wage and is a cause of inflating prices. The lower the minimum wage, the lower the cost of living. I'm not speaking about slave labour - people have the choice to say no but anyone who sees the minimum wage as a default is missing the point. Why are we protecting one group of individuals at the expense of another more disadvantaged group? By creating an artificial price-tag for work, you are not allowing the market to balance itself out.

As for not finding work because of mis-management - there would be no fiscal problems if Government didn't run businesses distorting the markets. It is one cycle, every little decision affects the next. The Government reduce education funds and then discriminate against those products of their crappy system by enforcing minimum wage laws.

And you have it the opposite way around - abolishing the minimum wage laws will increase the purchasing power of the Irish consumer.

I'm not saying the minimum wage doesn't benefit you personally - people are selfish and want more money, of course, its a basic human instinct - but what we're doing is killing off another class of people. It's immoral and that was the principle I was getting at.

wolfpawnat · 04-03-2011 02:43PM

UsernameInUse wrote: »

And what about the tens of thousands of people that can't find work because of the minimum wage - they're all over the country on dole queues. You should read how the system works - honestly, I'm on your side.

I am on the Dole Queue, and I would never blame the 3% of the work force on minimum wage. I would blame those on 125,000 a year salaries off the HSE before I would blame them! Also most of those on the dole queue these days are not from low paid jobs, they are mostly law graduates, construction workers, etc!

I'd say it is near impossible to live on €346 a week and getting the motivation to get out the door to work, now it is down 40 already, how will they live at all if the reduce it further?

UsernameInUse · 04-03-2011 02:48PM

wolfpawnat wrote: »

I am on the Dole Queue, and I would never blame the 3% of the work force on minimum wage. I would blame those on 125,000 a year salaries off the HSE before I would blame them! Also most of those on the dole queue these days are not from low paid jobs, they are mostly law graduates, construction workers, etc!

I'd say it is near impossible to live on €346 a week and getting the motivation to get out the door to work, now it is down 40 already, how will they live at all if the reduce it further?

Oh, I agree with you 100%. I don't think the HSE has any business being a government run circus.

Secondly, I'm not blaming anyone or group. It is us, as a society who has done this. And it is difficult to live on that but what you're forgetting is that everything would be reduced if the minimum wage fell. The market balances itself out.

wolfpawnat · 04-03-2011 02:58PM

UsernameInUse wrote: »

Oh, I agree with you 100%. I don't think the HSE has any business being a government run circus.

Secondly, I'm not blaming anyone or group. It is us, as a society who has done this. And it is difficult to live on that but what you're forgetting is that everything would be reduced if the minimum wage fell. The market balances itself out.

But the SW was reduced, min wages reduced, USC was introduced and took more money off people. So everyone took a cut in income, but Tesco increased the cost of essentials, Eircom have increased their charges, Tax and Insurance went up, so no, there is no balance.

These companies should be forced to reduce their prices at the same time as cuts are brought in to ensure that people are not left in debt.

Suryavarman · 04-03-2011 03:18PM

wolfpawnat wrote: »

But the SW was reduced, min wages reduced, USC was introduced and took more money off people. So everyone took a cut in income, but Tesco increased the cost of essentials, Eircom have increased their charges, Tax and Insurance went up, so no, there is no balance.

These companies should be forced to reduce their prices at the same time as cuts are brought in to ensure that people are not left in debt.

Social Welfare was reduced at the start of January and the minimum wage was reduced at the start of February. It will take much longer than one month for prices to go down as a result of these decisions. Forcing these companies to reduce these prices would do more harm than good in the long term as they would have to increase prices in the future to make up for the losses they have to make now.

snugglebear · 04-03-2011 03:20PM

the cost of living would have to drop dramactically before people could afford to live on less than the minimum wage

Mister men · 04-03-2011 03:26PM

What we need is to stop the silly situation where average Joe or Jane gets paid 40-50k a year for sitting at a desk doing next to nothing and the guy down the factory breaking his boll**x gets paid 7.65 and hour. Is that even 20k a year ffs. Minimum wage at that rate is slavery whilst the cost of living is increasing week on week.

UsernameInUse · 04-03-2011 03:29PM

snugglebear wrote: »

the cost of living would have to drop dramactically before people could afford to live on less than the minimum wage

Cost of living will not come down until the minimum wage does first.

Lockstep · 04-03-2011 03:34PM

UsernameInUse wrote: »

Well, it's common sense that those who come from poor backgrounds don't benefit from the minimum wage if their low-marketable skills don't justify employers hire them for the set minimum wage. Now, you have a whole class of people without opportunities because of this law.

Coming from a poor background ≠ having low-marketable skills. People are fully capable of moving up the social ladder, regardless of their background. It's harsh but it exists.
Likewise, provided it is sensible and not overinflated, the minimum wage has direct benefits to the least well off, ensuring they have a minimal amount of money to survive on. Again, if this amount is sensible, then they are fully capable of ploughing money back into the local economy (at less than €270 a week, you're not going to be able to save much of it so will need to spend it which kickstarts the circular flow of cash/multiplier effect. And that's assuming that you're working a full 35 hour week)

UsernameInUse wrote: »

A major reason why the minimum wage is such an ineffective anti-poverty tool is that minimum- wage hikes cause businesses to reduce the number of workers they hire and the hours they ask their employees to work. So they're put into the welfare system which is paid for by others who are not wealthy. Many people consider the welfare tax as tax on business, you can't tax business, you can only tax people. And the people who are being taxed in business are not employers, they are employees.

Minimum wages are a trade off between guaraneeting a minimal level of income and the wages that can be paid. Yes, if the minimum wage is set to high, then you will see unemployment. However, it's a balancing act.
For example, Nobel Economist Paul Krugman advocates the minimum wage as the main way to target market inequality; he also supports Card and Krueger's 1994 study which found that minimum wage raises in New Jersey had no discernible effects on unemployment.
To quote Krugman directly; "All the empirical evidence suggests that minimum wage increases in the range that is likely to take place do not lead to significant job losses. True, an increase in the minimum wage to say, 15 dollars an hour would probably cause job losses, because it would dramatically raise the cost of employment in some industries. But that's not what's on-or even near- the table."

Also, once again, you're relying on weasel words and platitudes such 'Many people'. I suppose next you'll be talking about the 'silent majority'.

UsernameInUse wrote: »

As for the cost of living, it is directly related to the minimum wage and is a cause of inflating prices. The lower the minimum wage, the lower the cost of living. I'm not speaking about slave labour - people have the choice to say no but anyone who sees the minimum wage as a default is missing the point. Why are we protecting one group of individuals at the expense of another more disadvantaged group? By creating an artificial price-tag for work, you are not allowing the market to balance itself out.

Given that only 3% of the population live on the minimum wage, it is not 'directly related' to inflating prices. It was only 5% during the boom years so your point is even more irrelevent.
There are a myriad of factors affecting the cost of living, are you *honestly* trying to say that paying burger flippers €1 extra an hour has a direct, distinct and noticeable correlation with price rises across the board?
Once again, blinkered, oversimplified viewpoints.

UsernameInUse wrote: »

As for not finding work because of mis-management - there would be no fiscal problems if Government didn't run businesses distorting the markets. It is one cycle, every little decision affects the next. The Government reduce education funds and then discriminate against those products of their crappy system by enforcing minimum wage laws.

How on earth did the government run businesses distorting the markets?
Once again, evidence please.

Are you really saying that private entities like Anglo-Irish, Bank of Ireland and so on didn't have a large role to play, especially when the government regulators didn't do their job?

UsernameInUse wrote: »

And you have it the opposite way around - abolishing the minimum wage laws will increase the purchasing power of the Irish consumer.

Once again, the fact that only 3% of Irish people are on the minimum wage means that the changes will be neglible.
Do you have *any* sources for your above claim? Or is it more 'wide acceptance'?

UsernameInUse wrote: »

I'm not saying the minimum wage doesn't benefit you personally - people are selfish and want more money, of course, its a basic human instinct - but what we're doing is killing off another class of people. It's immoral and that was the principle I was getting at.

What class of people is this? The 3% who are on the minimum wage?

Right, so I take that you have no sources. Zilch. Zip. Nada. Instead you try to dress it up as the 'common sense' argument (Ie; avoiding empirical evidence and trying to pass your own opinions off as widely accepted facts)

Despite my numerous requests for evidence of your bizarre claims, you havn't providied a single one.

The Volt · 11-03-2011 07:48PM

- Only 3% of the workforce is actually on the minimum wage and this is mostly made up of students and women in part-time jobs.
- It achieves nothing for the economy and entices people into staying on the dole, the IMF even stated that it would not be necessary.

Essentially, €40 per week is taken from the pockets of the working poor and goes straight into the pockets of the worst employers in Irish society.

It is interesting to note that despite the assurances of Brian Lenihan at the time, that employers are already forcing workers to sign new contracts to negate their originally contracts with carried the old minimum wage.

Where most of the people on the minimum wage are employed are the likes of bars, supermarkets, restaurants and hairdressers. In the main, they only compete with each other and they don’t trade internationally so the notion that they somehow increases our competitiveness is nonsense.

The last act of the worst Taoiseach in the history of the state was to sign the order to reduce the minimum wage as he walked out of Dail Eireann with €140,000 a year of a pension and him still in his 50’s.

Should We Have A Minimum Wage?

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