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July 09, 2015

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Luis Enrique

I know these are not original observations but ... tax credits are out of Milton Frickin Friedman's playbook and the min wage out of Red Ed's.

Right wing newspapers should be tearing it to pieces.

http://www.dailymail.co.uk/news/article-3154139/Fearless-George-slays-dragons-Osborne-puts-Left-sword-9-living-wage-taking-9bn-axe-bloated-tax-credit-hammering-high-earners-pensions-super-rich-too.html

Oh.

Donald

Arguments for minimum wages which you don’t seem to have addressed here.

1. Lots of studies suggest negligible impact on employment. The OBR study, although specific to this particular minimum wage rise, is but one.

2. Even if it does increase unemployment a bit, most unemployment is temporary. People might prefer waiting a bit longer for a better paid job.

3. Higher minimum wages might improve productivity by setting the bar higher – staff and managers have to find things for staff to do that are worth the minimum wage. (Why aren’t they doing that anyway? Because they don’t have to. People are lazy. It’s analogous to making it more difficult to sack workers so managers have to focus more on improving their staff)

Ari Andricopoulos

Ignoring the fact that he took the money all back in tax credits, I am not sure that the study you quote of price elasticity of demand is reliable.

Meta studies should always be used for this type of analysis. This one here gives a good summary:
http://www.cepr.net/documents/publications/min-wage-2013-02.pdf

It suggests that increases in minimum wage are largely, as an economy, absorbed by decreases in profit margins and small rises in prices. As well as, presumably, the positive impact of extra demand caused by more money going to people who will spend it all rather than keep it in their pension funds.

If George Osborne really wants to raise wages, however, he should increase demand in the economy by more government spending. As I discuss here, http://www.notesonthenextbust.com/2015/06/the-uk-employment-miracle.html
more than 100% of the increase in employment during the Conservative government has been in jobs paid under the living wage. Pushing up the minimum wage should be supplemented by policies that increase demand and make it affordable to employers.

Jeremy Beckwith

Also no one talkinga bout the fact that local council semploy large numbers of people near the minimum wage (teaching assistants, care workers etc), but their budghets won't be adjusted to allow for these higher costs.

BCFG

((Why aren’t they doing that anyway? Because they don’t have to. People are lazy.)

Donald - you are an idiot. The problem is actually that people are not lazy enough. Laziness is a great incentive for progress and increases in productivity. Every great invention is the result of laziness. In the old days it would take almost the entire day to catch and prepare food, and then wash and clean. We then invented things that reduced the time it took to do these things. Laziness won out yet again.

But the problem is when a workforce is relentlessly hard working (which is a period we are in and reaping the negative results). These hard workers are so diligent, so focused and so subservient to the ruling class they set society back decades.

We should start a campaign against hard working people. And laud lazy people to the heavens.

On the Tories, what do we expect? Their policies are always designed to stick it to the most vulnerable and poorest in society. They do this because they are a evil, heartless and sadistic party supported by evil, heartless and sadistic people.

Felix


Shouldn't you call it the 'Living Wage' in quotes since it actually isn't high enough, or, Living Wage in capitals as a title rather than lower case?

Bob

"We cannot give ourselves pay rises merely by legislative fiat."
Can too. Alternative job offer at the living wage open to all paid for by the state, using their transferrable skills set. Done. Shite jobs eliminated. Unemployment eliminated forever. Workers drop onto this fixed buffer instead of NAIRU, retain skills.
Next question?

Bob

"But the problem is when a workforce is relentlessly hard working (which is a period we are in and reaping the negative results). These hard workers are so diligent, so focused and so subservient to the ruling class they set society back decades.

We should start a campaign against hard working people. And laud lazy people to the heavens."
What a load of complete victim blaming bullshit.
This is what is wrong with the left.
The vast majority of people WANT to be told what to do and work. That's why the military are never short of recruits.
This also shows "you are with us or against us." Well, I'm against you, as are most people.

Bob

"We saw the worst form of right-wingery in the attack upon low-paid workers."
Drop the emotional bullshit, Chris. Tax credits are literally the worst idea in the world - an idiotic Labour Party idea.
They are simply corporate welfare.
Would you prefer:
No minimum wage and a lot of tax credits.
High minimum wage and no tax credits.

Donald

BCFG - you're a numbskull!

We're talking about different kinds of laziness. I'm talking about management being able to make money by paying low wages. A higher minimum wage can force them to increase productivity to make money (and not by making people work harder doing exactly the same thing).

I agree it can be a race to the work life balance bottom. But that's a separate issue, I think

Mark

"The vast majority of people WANT to be told what to do and work."

Problem: political/managerial classes haven't created a compelling vision of where exactly our work is taking us. Please, yes! Somebody tell us what the hell we are actually doing! Where are we going?
Osborne promised to spend 2% of GDP on defense. Spend it on defense - not with any specific aims in mind, not details - just spend it.
That is the Osborne fallacy - work. Just do some work. It doesn't matter what you do, and there is no reason why - just do it. And... ?

I saw Grant Shapps on question time a while back rhapsodising about work. Hmmmm... If it is a choice between a hard working Shapps or a lazy person, I'll pick the lazy person - obviously best of all would be a system in which it was easier for people to work hard at something *worthwhile* - but for that, someone needs to stick their head above the parapet and present a vision for the future.

David

Most US studies show the impact of the min. wage is small on employment. I have not seen a study that tracks the impact an increase has on demand in a depressed economy. Seattle and LA enacted a 15 dollar minimum wage. See how that plays out.

BCFG

No Donald you said people were lazy and they are not. Quite the contrary actually.

You're an idiot.

Bob

"Please, yes! Somebody tell us what the hell we are actually doing! Where are we going? "
Yes now you are starting to get it. We need New Deal 2.0. Jobs funded nationally and created locally/nonprofits.
What jobs could there be - a start:
Social care and childcare.
Working with the elderly, meals on wheels, etc.
Environmental work - this is high labour low capital e.g. river valley erosion.
Allotment management.
Jobs helping integrate immigrants.
Use of higher skills if there - pro bono lawyers, builders building churches, etc.

Bob

I should note we can include other work e.g. open source software development, community musicians, etc but the electorate may want hard labour jobs. Ultimately the end of this is having job and income guarantees and then BIG when society becomes sufficiently sophisticated.

Donald

BCFG - okay then.

Gregory Stokes

Mark Littlewood is a lot of things, but honest isn't one of them.

John

"However, whereas Blair tried to combine the best features of left and right, yesterday's Budget combined the worst."

Typo? It always seemed to me that Blair combined the worst features of the right (crony capitalism: PFIs and financialisation) and the wacky right (neoconservative foreign policy).

If viewed through the prism of Minsky, the Blair years were economically quite close to a Ponzi scheme (an economy over reliant on artificially inflated asset prices providing an illusory wealth effect), while his foreign policy has proven to be not only dangerous but lunatic in the extreme.

Fortunately for him, Blair got out of town just before the whole show collapsed, leaving him able to boast, in that unhinged way of his, that he oversaw an economic miracle. As awful as he was, it is most unfortunate that he was dislodged, so not having to deal with the economic and financial crash that his illiterate economic policies wrought between 1997 and 2007.

If Blair had still been in the hot seat until 2010, he'd surely be considered the worst PM in history. The hostility that was showered on Gordon Brown should have been Blair's. All the John Rentouls in the world would have a hard time whitewashing a legacy of economic incompetence and foreign policy madness.

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