National Minimum Wage and other things

Mark Wadsworth has a guestposter, Lola, who has up a vid:

It goes into exploitation of workers and what the NMW means for the lower rungs, i.e. the sack. Not in dispute in a full time sense but it also means that those already on the minimum wage would have to add cleaning to their job specs, maybe on a roster basis, which then comes into conflict with Elfansafetee and the unions’ demarcation.

Or else the boss employs someone on, say, 10 hours a week [formerly 35 hours] and insists the cleaning is done within that time, in some sort of superhuman way. Eventually, some places will be cleaned some of the time, some all of the time.

Not many see the problem for the boss. If he’s medium or small, he has a different outlook to the GSs and JPMs. He wants to be fair because a happy worker will give good service but he also demands they show some of the application to the task which he shows, being the boss and wanting his business to prosper.

The worker doesn’t understand that the cost of fabric maintenance, ongoing utilities, compliance, the tax regime, the greedy local council, the uncertain economic times – all of it – mean he has to factor in labour in some way. If he makes the slightest error in choosing someone, he has litigation on his hands as well as the daily load and for the small businessman, this doesn’t involve sitting in clubs smoking cigars – it means hands-on. Then there are things like maternity leave.

So, whilst I can see the dire situation for the lower rungs [now including me] and those just above them, the employees, I can also see the direness for the small businesses and even the medium – they’re going out of business the whole time now.

Nor is the solution to socialize industry because then you get the dire social consequences as in the USSR. This is why socialists are so fanatical – they see no solution to the conundrum, nor do they have any sense of history, therefore they see some national pie to be equally carved up and every person has a job – fair, isn’t it?

Except there’s no national pie. It’s more likely to be a foreign national pie now anyway. There was a time when it worked in fits and starts, e.g. the 60s in Australia, when 4% unemployment was the achievable aim, when the wage did cover the domestic costs and homes were still affordable for most. It did work until government began interfering, tinkering with this, tinkering with that.

I believe that it was meant to become unwieldy, that the global push was on and it needed to bring down wicked “capitalism”, to show that Marx had been right all along and that there was a new, socialized way some time around the turn of the next century, now delayed till about 2015-20.

The best solution is and always has been the freeing up of the markets and the workplace because it then creates incentives to set up businesses and that creates jobs without government interference. There’s a place for unions in this, within limits. It’s always going to be a compromise and arbitration hearings onsite are a solution here, dismantling the costly judicial bureaucracy – sort of like having travelling judges.

If there is no ultimate solution, then perhaps this is the best compromise – it at least allows the thing to work.

9 comments for “National Minimum Wage and other things

  1. April 30, 2012 at 7:36 am

    Yet the freeing up of the markets has led, as Alex Brummer’s new book (part-serialized in the Mail) to the UK losing control over its economy, to a far higher degree than in the rest of Europe; and when the bigger crunch comes, I suppose the unemployment will be dumped here as foreign interests defend their own – like Rome recalling its legions from the outposts. There’s how the economy works in economists’ theories and models, and then there’s how it really works.

    • Single Acts of Tyranny
      April 30, 2012 at 9:52 am

      I think unemployment has already been “dumped” in Spain, Greece and Italy, odd that their laws did not protect them?

      And as for freeing up… er the minimum wage, maximum working week, business rates, endless tribunals, employers national insurance contributions, employment protection legislation. I am not aware of this flexible dynamic economy you talk about.

      As to ‘foreign interests defending their own’ do you imagine BMW or coke or Microsoft give two hoots about where they notionally started? They sell in the most profitable market and manufacture in the most convenient location, nothing more.

      As for the “bigger crunch” stuff and the belief that more laws will help, try passing a law against gravity and see how you get on.

      • April 30, 2012 at 12:41 pm

        The recent rise in unemployment in Spain and Greece is for other reasons, as you know.

        The point I’m making is to do with the fact that “Britain is unique in having such a supine attitude to selling off its crown jewels” – says Alex Brummer here:

        • Single Acts of Tyranny
          April 30, 2012 at 1:50 pm

          So why didn’t the Labour laws ‘protect’ the now unemployed?

          • sackerson
            April 30, 2012 at 2:28 pm

            Jimmy Goldsmith (no Socialist) predicted it all in 1993, around the time of GATT. The “free” market is freedom of capital, which cut the ground away from labour. The UK’s governments ran with it, far more than other, more patriotic regimes; and imported low-paid workers to keep wage rates down, which increased the burdens on public expenditure. We have been comprehensively betrayed.

  2. April 30, 2012 at 7:53 am

    How does EU control of every aspect of the economy beyond City speculation equate to “freeing up”? Is that like “freeing up” a criminal into prison?

    • Andrew
      May 1, 2012 at 4:10 pm

      Mises summed it up with:

      “As a rule, capitalism is blamed for the undesired effects of a policy directed at its elimination.”

  3. Greg Tingey
    May 3, 2012 at 3:09 pm

    If your business maodel cannot cope with the national minimum wage, then your model is broken – quote from my wife, a Chartered Tax Adviser ….

    Seriously, do you REALLY think paying peole LESS will really work?
    It never has in the past, in the long run, and provided, of course that the Employer’s cartel don’t use semi-military force on the workers ….

    • Andrew
      May 3, 2012 at 10:38 pm

      “Seriously, do you REALLY think paying peole LESS will really work?”

      Seriously, do you REALLY think RAISING the barrier to employment will really work?

      Do you REALLY support the state using its monopoly of VIOLENCE to prevent the less skilled/qualified/experienced finding work?

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