I've been having a debate with a mate who is on minimum wage.

I don't think the minimum wage should be increased, he does. This is my argument:

You increase minimum wage, the wage of the shop and warehouse workers and the masses and this is recovered by shops and warehouses* through price increases. Thus equilibrium is gained and all we have is the deflation of the pound.
Instead, a greater tax allowance should be given to everyone, say 15k, thus minimum wage is tax free. But when you arrive at the 41k required to pay higher tax this 15k is reduced to, say 10k (as we are now). This increases spending power without costing employers anymore. Yes it costs the government, but I'm sure that with no wage increases more people would be employed or not made redundant.

On second thoughts, the decrease would need to be incremental otherwise there would be a grey area where being on less than 42k would mean you earned more in your hand than at say 40k.

His argument was that on more money he can get a bigger mortgage and higher value loans. < this upset me, I expressed just how wrong that sounds, arguments ensued and then we moved on to Alex Jones' chest!

Anyone care to shoot down my argument? I'm happy to hear what my plans might have missed!

I'm not convinced by arguments about Alex Jones' chest; surely her legs are her convincing argument?

And a great set of gnashers.

Both good points tbh!

Big Muzzie, if we follow your argument, your mate will have a higher disposal income which should allow him to get a bigger mortgage as he will be able to service that debt with the money he would have paid in tax.

Should you mate get an increase in wages, he will only have the additional money (less tax) to service a higher loan.

He will need to do the sums a see which would be better.

Slightly off track, It's actually £31866 where you start to pay in the 40% tax bracket. I don't mind paying more tax but incremental rises rather than two single staged increases.

£31,866 *over* the tax-free allowance of £10,500 surely?

Yep.

Gov

Ah stand corrected, still same applies though. 20% straight to 40% and £150k plus earners only upto 45%.

Demotivates when pushing to earn more really.

You've missed off the reduction in NIC rate and also the personal allowance vanishes by 50p in the pound for every pound over £100k earned.

He's not the brightest light and he doesn't get that he'd be better off.

I just don't understand why people think increases in the minimum wage is a good thing - all it does it earn the government more tax and put pressure on retailers who are on the edge. Incentivise people to work, incentivise mass employers to employ.

The big issue to me is not the minimum wage per se - but that the government has schemes in place to supply benefits for people who are working at the minimum wage, or indeed at any income level.

Effectively, the government is sponsoring companies not to pay a living wage; they are saying, yep, pay six quid an hour and we'll double that in benefits[1].

So the company owners says, thanks, that's nice, all the more for me! And then he introduces zero hour working, and clocking off if the shop is empty, and other ways to pay even less...

What the government *should* be doing is encouraging employers to pay sufficient that benefits are *not required*. No, I have no idea how this might work; if a worker is not providing sufficient value in his work for the employer to make a profit from him, he's not going to stay employed very long. But if the employer can only make a profit at such a low salary, he needs to think about his rational for employing someone.

Benefits should not be required for anyone in full-time work.

[1] I exaggerate for effect; the numbers are irrelevant, just the concept.

What about parents? If you have one parent earning 15k and one working part time earning 7k. They have an annual child care bill of app. 6k and a modest mortgage of say 60k so 4.5k a year. That would leave them 10k a year to eat, clothe and keep warm.

I don't believe I've exaggerated the situation many people face above.

Unless I've taken it out of context and you mean the earnings should cover basics in which case I agree.
But the issue isn't pay, it's modern life, the need to accumulate "stuff"

You make my point: a salary should be able to cover things you *need*; a child or two should be supportable with just one person working.

On the other hand, 50" TV, beer, fags, and foreign holidays are not necessities.

Indeed - one could argue that one should not have a child unless one can afford to pay for it (why should I pay for your kids, or you pay for mine?) - though of course there are obvious changes in circumstance.

10k a year - say, £1200 for heat and light; about the same for council tax, that's still leaving £625 a month for food and clothes. Given that you can *easily* eat for fifty quid a month per person, how many socks do you need?

To be clear here: I'm not criticising any person or group except the government. If a benefit is available you would be a fool not to take it - but it doesn't help people ever being able to get a better standard of living.

The issue *is* the drive to possess. Even the poorest of us is significantly better off than our parents and grandparents, and immeasurably far away from subsistence farming... but we feel poor if we don't have the big telly or the always on internet or the mobile phone or the latest trainers.

The drive to consume ! I'm reading "A Brave New World" at the moment, so it it quite appropriate to this thread.

From personal experience, I find I am happier when I consume less "stuff" (not including food here). Stuff just clutters your house and doesn't get used much, apart from a nice 50" TV of course.

Having too many vehicles for my needs does get me down - and now I've put myself in a position of not knowing which to get rid of ! Entirely my own fault of course.

Agree that people should consider their finances before having kids. I am a bit tired of people moaning about having no money when they have chosen to have 3 or more kids... it is a choice not a disease after all. You'd think after the first sprog or 2 you'd say, "that'll do for now."

Is there a class / culture thing going on too? Some of the well-to-do middle class choose not to have a TV at all ! And the gentry drive round in battered old Landrovers and old Tweed.

Hmmm

That's the Vimes theory:

Good point, in years gone by a single mum was quite happy working up to 16 hours a week and no more, as her weekly wage would be topped up to a 150 pounds. This way she would also get her council tax and rent paid free of charge and had child benefit thrown in on top too. So for working 16 hours a week, she would have 700 quid a month to cover any bills. They are probably even better off these days, i dont know, have checked the benefit rates lately.I would like 700 quid left over every month to cover food , electric and phone ! [ and only work 16 hours a week ].A wry smile used to cross my face when at work i asked single mums how many hours they were working . I had already typed in 16 before i got an answer

"Buy cheap, buy [at least] twice"

Or, as I prefer it:

"Buy previously expensive high quality stuff second hand !"
Doesn't have the same ring to it I'll grant you.

Maybe thats wrong nowadays. Even the expensive stuff is crap!

The above is incorrect, especially if it involves one parent and just one child.

A single parent had to work at least 16 hours a week or more, in order to obtain the top up (Family Tax Credit). Council tax and rent was NOT paid for at all and the child benefit 'thrown in on top' was available to every parent in the country regardless of any income.

The 16 hour rule is there to get people into work, keep them active so that when they are able to return full time they have a good chance rather than having x years out of work and being pretty much useless as they are massively out of touch. You couldn't fairly expect a single parent to work full time and pay childcare - my childcare bill in the summer holidays is £450 a week for 6 weeks - thankfully I can afford to pay it and I also don't get any tax credits or whatever they have become to subsidise. There again I also don't get tax credits either anymore - anyway a mother of 1 in a month could have to pay £150+ per week in childcare to work full time. That's £650 a month or, £11,400 gross pay a year. How many single parents can get anywhere near having that kind of money to spend on childcare. The incentive is there to help.

Milk and nappies must be £15 a week these days for a baby.

Due to consumerism it's not as easy as it once was. Internet, mobile phone and the price of public (private transport made available to the public) transport must cripple anyone trying to make ends meet.

It's very easy to say "in my day we did without x" but I don't believe anyone under the age of 30 has been brought up like that and knows what it was like in the early 20th centaury when it really was living hand to mouth.

I still believe the Government puts the minimum wage up to benefit itself, not the people.

so just assuming a single parent earns 5,500 a year, family tax credit will pay them another 8,771 a year if they have 3 children [ just checked lol ]. Does this mean they have to pay full rent and full council tax [ minus the reduction for single occupancy ] , as i would have thought they would get some relief for CT and rent ? Just interested .

I'm not sure how that part works, I can do some of the costs from experience and some of it because it's part of my job but housing benefits isn't an area I know about.

I would assume if you are in a council property or housing association scheme that you would get some relief / free rent etc. but as I said don't quote me as, thankfully, I've not yet had any experience of it!

You don't have to live in council housing to get 'free rent'.

People living in council houses have to pay full rent like any one else living in rented accomodation.

Anyone who lives in private rented accomodation is also able to claim 'free rent' if they qualify for it.

Private rented is often a bit dearer than council house rent though, so the claimant may have to put money towards it, whether they live on other benefits or not.

So , on the figures i quoted above, would they get their rent paid for them or partly paid or not at all ?

This is probably the appropriate information

You won't get all paid for if you are paying for a house with a higher 'normal to area' rent.

Plus the claimant (probably claimant and partner - or 'household' savings) needs to have savings (as money, shares, land etc) of a value less than £16,000 first as well ! (I think the value is still 16k anyway)

i just need 3 young children then i can give up full time work...can you still adopt children from romanian orphanages ?

I have 3, but trust me, they won't get you out of full time work.