The Big Issue

I recently wrote a post regards Obama, Romney and the state of politics in the US, UK and Mexico. But I’m going to expand on it just a little. Here’s the big issue in the UK, and I’ll bet it’s the same in Mexico and the US. We have a great education system that churns out a great mass of smart young people ready to get going in the work place. But when they get there, they find that there’s no jobs open to them. There are jobs. More importantly, there are jobs in their chosen professions.  Just no jobs for them.

You end up with degree toting twenty somethings hoping to find work at the local Poundland. Or Dollarstore. Or Pesotienda. Is there a Pesotienda? There should be. The moment a recession kicks in, factories and offices close down. People lose their jobs. And the job market becomes flooded with experienced, qualified personnel ready to step into new roles. There plenty of support out there on how to handle redundancy. I imagine being made redundant is pretty tough. I wouldn’t wish it on anyone. But there is a way back. There’s substantially less out there for new members of the workforce on how to get on the employment ladder.

Which brings on the second problem. The National Minimum Wage. I get as aggravated as anyone when people take advantage of our benefits system. There are plenty of people who abuse the system because, quite frankly, they’re better off on benefits than on a wage. That does aggravate me. But perhaps not as aggravated as when a holier-than-thou right-wing politician (who is soaking up tax payers money at a higher rate than any unemployed person) whines that benefits should be cut back so that there’s an incentive to go get a job.

The amount we pay in benefits is not the biggest problem. No one gets rich or live the life of Riley on benefits. You can point out stories which contradict that assertion, if you want. And I’ll point you to a person who is defrauding the system. It’ll be the same person. So how about, instead of increasing poverty and homelessness through benefit cut backs, we have a minimum wage that can be reasonably lived upon. A minimum wage that’ll pay the rent and bills on a small but functional one bed flat. That will pay the food bills. Pay the bus or train tickets to work. And that will leave something, say 20%, left over. This isn’t an insignificant section of the population we’re talking about. The NMWers make up nearly 10% of the workforce. There’s another huge chunk who are at a pittance above the NMW. And then there’s those who claim benefits instead of working.

I did a quiz that is doing the rounds on Facebook. I’m pleased with the result. Not because I ‘side with Obama’. But because the figures attributed to my results aren’t extreme. Nothing in the 90%’s or 20%’s. It’s never good to end up on the extreme. It’ll usually mean, with a high degree of certainty, that you’re wrong. You’ve missed the point. And if Romney is high on up there, then you’ve probably lost touch with the real world.  No one likes government interfering in their lives. But…well, the ‘inventor’ of the blog puts it better than I can. But both the problems above will never be addressed by free markets. They are the sole responsibility of government. His site is well worth reading on a regular basis, for anyone interested in politics or tech.

10 thoughts on “The Big Issue

  1. I wouldn’t mind taking that test, it looks interesting.

    The debates about the minimum wage often pale for me because it is R1,600 in South Africa which is about £150. Since we’ve left, food had come to match UK prices R for £ so it is no surprise that masses of the population live in informal settlements. Taxi fare alone, anywhere in SA, would be R1,200 which means people often depend on co-workers’ generosity to eat. And mini-bus taxis are often the only form of transport to informal settlements.

    But… Back to the UK. Have you read Fran Adams Below the Breadline? It had a level of Liz Jones offensive ignorance to it but it did highlight the near impossibility of living on the minimum wage.

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    1. It’s real difficult to compare developed countries to developing ones, such as Mexico or South Africa. Comparing the US and UK is a lot easier. One of the plus points for me is that Mexican prices are pretty low for the basics. They have to be, just to enable the huge number of people in poverty to scrape by and survive. I would, I sincerely hope, earn substatially more than Mexican minimum wage. No one likes the ‘1%’ but it sure is nice to be one of them! Or at least one of the 10%. Heck being one of the 20% is still pretty good.

      I haven’t read that book, but I’m gonna go ‘Amazon’ it in a minute…

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  2. We have a National Minimum wage here in the states. When I was in high school back in the 70s, I earned it, $2.25 was the amount. Gas was $0.38. Today gas is $3-4 and the hamburg flipping wage is $7. The Minimum has not kept up. And to those that say the minimum wage kills jobs-poppycock-if you need someone else to do your work then you should be willing to pay them enough to eat, the work still needs to be done. People put on more people than they need??? Low wages just dump the responsibility of people getting enough to eat onto those of us who make enough to pay taxes. Not everyone has or will ever have a shiny skill set.

    I spent 30 plus years in a steelmill, we had people on the rolls who had a hard time sweeping the floors right but as a union “boss” I fought to keep the less than bright ones on the rolls because at least in the mill, they were not on the welfare rolls. Someone had to sweep the floors and clean the can. They made much less than those of us who made the steel, about a quarter of what I made but they made enough to eat. Now if one of those people bid on a job where they could screw up our steel, a heart-to-heart talk was in order because the steel had to be right. I can live with bad sweeping. A few idiots on the rolls were never a danger to the steelmill’s future, now one or two at the top…

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    1. I hear what you’re saying Norm. That the National Minimum Wage hasn’t kept up with the costs of life is an issue. Sure, there are plenty of people in society who are only as good as NMW, but they’re still part of our society. They have to get by, and it’s up to us in society how they do it. A decent liveable wage seems the best solution to me.

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  3. The salario minimo has been losing its value here in Mexico. not that people have been able to live on it in reality ever. Heck, I have a hard time getting by on my income (which in terms of U.S. dollars has fallen about a third in the last year… food prices have gone up, thankfully housing hasn’t). We are also facing a crisis of not enough slots at the public universities (none opened during the Calderón administration) let alone decent paying jobs for graduates. Of course, we DO have a revolutionary history here, and there is widespread opposition to the same old-same old.

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    1. I would say there’s only a crisis of not having enough openings at public universities if there are jobs unfilled because there aren’t enough graduates. And that isn’t the case.

      As far as I’m concerned, the state should fund education full stop. Simply because I personally believe that every person born in the UK should be given the same opportunity to make the most of themselves in life and be as productive and fulfilled as possible.

      That’s not to say that everyone should automatically be given access to state funded universities though. We should be ensuring that those who have shown the aptitude, dedication and results get a shot at uni places which produce skills which are needed.

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  4. I notice you scored high on the Ron Paul board — undoubtedly, on the social issues. As do I. But my instincts are libertarian on economics, as well. And that always puts me in a quandary for elections. Both American parties are advocates of crony capitalism — the only question being which party is more inclined in that direction. This year, the president’s party seems to be leading the band for corporatism. And that will probably be the tipping point for me.

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    1. There’s plenty about me that is libertarian. Especially socially. If someone isn’t doing anyone else any unreasonable harm, then let them be.

      Economically, I’m not a libertarian. It’s too close to laissez-faire for my liking. Which is too close to genocide for my liking.

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  5. The problem with minimum wages is that there’s no such thing as minimum productivity or skill. Imagine if minimum prices were set for goods. If you as a consumer didn’t like the price, you’d end up consuming a lot less. Well, this too works in the labor market. If you raise the minimum wage too high, then you end up with more unemployment as employers don’t feel that they are getting value for that minimum-skill employee.

    Also, if you set a minimum wage at a level that allows someone to live alone, and save 20% of their pay, then you effectively say that there’s no room in the labor force for teenagers, mostly stay-at-home moms, or others who want only a part time job, and who don’t have high wage demands.

    A better policy which would achieve some of the same goals would be to have more free, skills-based education. That way people could acquire skills and then earn what they are worth. And those who didn’t want to invest in their skills could still get crappy jobs at low wages.

    Saludos,

    Kim G
    Boston, MA

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    1. I do appreciate that there is a limit as to how high the NMW can be set. But I’d argue it still isn’t currently high enough. I’m not looking for equality for all, or a world of clones. I just feel that countries such as the UK and US have some really screwed up priorities and govts have forgotten what they should be doing and who they represent.

      The issue I have with allowing market forces dictate pay levels is that the market doesn’t really give a crap about value or long term effects of low pay. It simply works out what is the cheapest it can employ someone for, right now. With goods, it’s about how high they can set the price and who they can sell it to right now. People do seem to whine about having government in their lives, but without anything to restrain it, ‘market forces’ cause catastrophes. You have a lot of Irish in the US….more than there are in Ireland. And there’s a reason for it.

      A cheap one bed place in Bournemouth is £500 minimum. This will be real cheap and nasty and in an area commonly habited by druggies and thieves. Unless you’ve got a dodgy landlord, they’ll want to see the combined income of the occupants is more than four times the rent. NMW after tax for two people is about £1750. So a NMW couple, right from the off, are excluded from the ethical rental market. A single has no hope whatsoever.

      There are other ways to make life more liveable and bring teens and mums into the workforce, including setting the tax free allowance at the NMW, lower NMW for teens and tax breaks for employers taking on certain sections of society.

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