We don’t have a well functioning economy though. A living wage is part of trying to create a well functioning economy.
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And yet practically every company does this exact thing. CEOs on £1.5m salary with shares and pension and who knows what on top, whilst they employ thousands of people on the minimum wage.
Your issue is that you believe the people on the low wage are able to find a better-paid job elsewhere. This is a fallacy and in real life™ it’s not that easy at all. I have a number of friends who are on minimum wage crappy jobs (sometimes on more than one to supplement their meagre earnings), and if they could find a well paid 9-5 job they certainly would.
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These are market salaries for the jobs. They’re not set arbitrarily. If you have to pay £1.5M to attract and retain a good CEO, then you have to pay £1.5M.
If people will accept low-skill / low-responsibility work for the min wage, then that’s great.
If your company didn’t exist, both the CEO and the thousands of min wage staff would be worse off as they would have less choice of jobs on the market.
We improve the situation for all staff by making it easier for companies to create job opportunities.
We must not make it harder by arbitrarily intervening in the wages that companies can pay their staff
Oh puh-lease.
*puts on Socialist hat*
There is no justification for paying £1.5M salary. Nobody needs that kind of money. I have many skills in the area of “having meetings and schmoozing investors” (which frankly is what most CEOs do) and would happily take the job of CEO for a small portion of that.
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Translation: You should be grateful you are being effectively exploited and have a minimum wage job! It could be worse!
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Nope, that’s not a fair translation at all.
Firstly, it’s insulting to claim “exploitation” exists in a country where education is free, and people are free to choose and to leave jobs. Broaden your perspective and consider countries where people’s labour is genuinely exploited. Dubai, for example, where passports are confiscated and workers work in unsafe conditions for less than the wage they were promised.
My argument was this - if there is more choice of jobs available, it’s better for employees. Please don’t misrepresent my argument.
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Unless you want to go to University, which is generally essential if you want to get anywhere in the job market, in which case you should expect to start any working life saddled with many thousands of debt.
Oh, I’m sorry. I didn’t realise exploitation is only relevant when it’s in Dubai. Clearly there is a level at which point it becomes exploitation – perhaps the level of harm to the person, or chance of dying – but prior to that it’s all good clean commercial fun.
I don’t disagree with this. I just think your understanding of the level of choice out there is flawed.
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Just curious how you feel about those on low paying jobs due their sector? e.g. Childcare workers who arguably do an extremely important job (caring for, teaching and protecting our future generations) but their sector pays very little as it’s undervalued. Would you tell them to leave and find other sectors to work in rather than raise the minimum wage?
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The only thing I disagree with about the minimum age is the age brackets. Yes, a lower minimum wage for 18-21 should theoretically make them more employable but if they are doing the exact same work as someone aged 25 and over they should be paid the exact same wage. When I worked for Tesco (aged 17-20) I was paid the same as everyone else doing the same job regardless of my age
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I think most CEOs would feel the same about your opinions of the salary they’re allowed to have.
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Yes of course those who feel they are underpaid should leave the sector.
This is how the market naturally forces a sector to pay higher wages.
The fact is, there are many people around who will accept low salaries to care for children. That’s why salaries are low. Supply and demand.
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A great theoretical discussion. Sadly, as stated, in the real world other factors intervene. Capitalist idealism is lovely but it doesn’t pay anyone’s bills. Instead we all have to survive in the system as it is and not in the one that it ‘ought to be’.
I agree that, as a result, people intervene and try and normalise the situation which, in turn, knocks the ideal even further out of whack. That isn’t an arguement against intervening, it’s an arguement for re-examining the ideal.
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All of this discussion is theoretical, as there is currently not enough data in economic journals to determine the effects of minimum wage policies. Until there is more of a consensus by economists on minimum wage, we’re all just throwing our favourite ideologies here.
Capitalism is exactly the mechanism by which we earn money for our work, pay the bills and fund the building of the technology that allows us to have this conversation.
Socialist idealism, on the other hand, has wrecked and impoverished societies every time it has been tried
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Exhibit B always failing is not a credible arguement in favour of exhibit A always working.
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That wasn’t the argument I made.
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Oh no, not the CEOs! Not them! How will I cope?
*anguished wail*
I REPENT! I REPENT! PAY THEM MORE! A YACHT EACH MONTH!
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This is a really important and interesting subject but I find the lack of nuance, and adherence to theoretical economic dogma somewhat undermines the credibility of your argument. This is further compounded by the fag packet pubonomics [dreadful pun intended]…
Revenue for FY18 at JD Wetherspoon was £1.69bn against £1.56bn cost of sales, of which £501m was spent on wages and salaries (excluding NICs). Profit after tax for the period was £83m so forgive me but I simply don’t understand your numbers. Source for the above figures here.
Also, that you criticise government directed minimum levels of income for distorting markets, yet fail to acknowledge the effects of massive QE and the fast and loose monetary policy over the last decade, and subsequently fail to connect the dots is also a little bit disappointing. If we want to discuss market distortion, let’s start at QE and work from there? But I think this somewhat misses the point. We are where we are, and something needs to be done…
Capitalism also has profound flaws, and to conveniently skirt over this does the debate no favours. Even Adam Smith, one of the founding fathers of free market economics, believes that some intervention and regulation are absolutely necessary to protect the public from business’ rampant desire to maximise profit at all costs. And I support this as a firm believer in capitalism as a system for human progress and prosperity.
A lot of debate around wages and minimum income is intrinsically linked to the ever growing issue of socio-economic inequality. I highly recommend this piece on the LSE British Poltics and Policy blog by Deborah Boucoyannis for an interesting Smithian reading of these matters. There’s link through to her main article from the blog post below.
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Your numbers are different, and thank you for the extra information. This does not, however, refute my argument.
As for your mention of QE and market distortion, yes - I’m sure this is also distorting, but this is whataboutery and does not refute the point I made regarding the min wage.
Regarding your mention of capitalism having flaws, I never argued otherwise.
Please do not misrepresent my arguments. Thanks! 
Accept? Really?