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The Minimum Wage & Zero Hour Contracts

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OneFootInTheGrave

OneFootInTheGrave Report 22 Sep 2013 10:31

The Minimum Wage & Zero Hour Contracts are regularly in the news these days and this has prompted me to post this thread.

From 01 October 2013 the amounts below are the amounts those on the minimum wage will receive per hour. I have added, if I have done my sums right, the % increase on last years rates, the weekly and annual amounts, before deductions, based on someone lucky enough to work at least 37 hours per week.

All the rates below have risen less than inflation, the most recent figure showed that inflation had dropped to 2.7% and the main reason for this was attributed to petrol prices, air fares and clothing prices, rising slower than they did last year, however the cost of items like food, gas, electricity, rent, and many other daily essentials continue to rise and it is these items that hit the pockets of the less well off hardest.

What this tells me, I may be wrong, is that those on the minimum wage will, in real terms, have less disposable income to spend than they did last year.

New Minimum Wage Rates:-

21 and over £6.31 = £233.47 = £12,140.40 increase 1.938%
18 to 20 £5.03 = £186.11 = £ 9,677.22 increase 1.004%
Under 18 £3.72 = £137.64 = £ 7,157.28 increase 1.075%
Apprentice** £2.68 = £ 99.16 = £ 5,156.32 increase 1.132%

**This rate is for apprentices under 19 or those in their first year. If you’re 19 or over and past your first year you get the rate that applies to your age.

Note: This thread is only about the minimum wage & the abuse of zero hour contracts - It is not about anything else.

My questions are:-

Do you think that the minimum wage is a fair wage, bearing in mind that many people who want to work full time, do not get the opportunity to work full time, due to the abuse of zero hour contracts, and if you do not think it is a fair wage, what do you think a fair minimum wage should be?

Do you think that zero hour contracts are being abused and if so should the use of them be restricted/regulated?

JustJohn

JustJohn Report 22 Sep 2013 10:49

OFITG £12,140 is very very close to the figure of just under £12,000 used by the Rowntree Trust to calculate household poverty.

Have no real idea about working tax credit and how it works, but (without working tax credit being in place), it has crossed my mind that a household working less than 37 hours on minimum wage is below poverty threshold.

And if we take the measure of fuel poverty as being more than 10% of your net income being spent on gas and electricity, we may have an awful lot of families round me in the Valleys of South Wales that will be in fuel poverty and absolute poverty this winter. My guess would be that 80% are in fuel poverty - and more likely to be a bit more than a bit less :-( :-( :-(

+++DetEcTive+++

+++DetEcTive+++ Report 22 Sep 2013 11:07

Minimum wage is far less than a Living wage

The living wage is now set at £8.55 an hour in London and £7.45 an hour in the rest of the UK.
http://www.bbc.co.uk/news/business-20204594

Although Kent CC have said that they pay their employees more than the minimum wage, if they paid the living wage, it would cost an extra £41.4 mil. In the meantime, the Governement and tax payers are picking up the slack

Zero hours contracts can work out fine for employees who are flexible and aren't relying on their earnings to support themselves. As there is usually a lag in receiving benefits, it must be a nightmare for the employees who have their hours changed from week to week.

DazedConfused

DazedConfused Report 22 Sep 2013 11:32

Zero contract hours are awful.

The empoyee is contracted to one employer and will never know from one week to the next if they will be working and if working how many hours.

How on earth can anyone budget to those criteria.

It is a legal scam, that our government is using to fix the unemployment figures and adjust any benefits accordingly, without knowing someones exact income this is a nightmare.

ZERO HOUR contracts should be abolished, they are suitable to no one except the employer....

OneFootInTheGrave

OneFootInTheGrave Report 24 Sep 2013 10:54

I have been doing a bit more research on zero hours contracts as I was trying to fathom out why the government has not moved to restrict the use of these.

According to one legal source a zero hours contract is designed to create, an on call arrangement, between employer and employee, and is most commonly used by employment businesses who provide temporary work and short term assignments within different organisations. The most important thing about a zero hours contract is that it does not oblige the employer to find work for the employee.

In my opinion these contracts should only be used for those who want some flexibility in their working hours, as they are definitely not suited for people who want to work full time. People who want to work full time want to know the rate of pay and the number of hours they will work so that they can budget their finances.

What I have discovered from various reports is that many unemployed people are being directed to employment agencies by Job Centres, this is a government agency which comes under the jurisdiction of the Department for Work and Pensions. Many major stores, factories, and well known organisation such as the NHS use employment agencies.

When the individual is directed to an employment agency by a Job Centre, they make contact with the employment agency and are often asked to sign a contract which makes them what is known as an agency worker, more often than not this is a zero hour contract, and the individual who was unemployed is now on the agency's payroll and deemed to be employed.

They are sent to an employer that has asked the agency to provide them with staff. The individual may well find out after working only one day that the employer the agency sent them to advises them that they wont need them tomorrow and also that the hours they work are varied and few.

If the individual decides they have had enough of this insecure work pattern and jacks it in, they may find that when they attempt to sign on as unemployed again the Job Centre will tell them that they could lose their job seekers allowance for up to 13 weeks as they left their job voluntarily without good reason, longer if this was not the first time they had did this.

The coalition government has been shouting from the roof tops that they have created over one million new jobs since they came to power and that unemployment is falling.

I wonder if the reason the coalition government has not moved to restrict the use of zero hour contracts is that they allow the government to not only spin and manipulate the job figures to say what they want them to say, but also to say they have reduced the amount paid to the unemployed - very crafty and divisive ;-)

RolloTheRed

RolloTheRed Report 24 Sep 2013 12:05

One predictable effect of the Minimum Wage has been that it has become a maximum wage. There is nothing to stop employers paying more e.g. "Living Wage" but few do. Enforcement of the M.W. is in any case next to none existent.

The government underwrites the whole miserable mess thought the tax credit system which is effectively a subsidy to employers not to people at work.

If people were paid properly then a big part of the business model for Wonga and similar companies would collapse. It is perhaps of no coincidence that these companies ultimate owners contribute significantly towards Tory part funds raising.

Even in the 1930s employers accepted that a skilled working man would be paid enough to raise a family respectably with the assumption that his wife would not be working. Today that is very far from the case.

The inevitable effect of driving the economy towards low wages low profits and debt is that the economy will shrink and nearly everybody will be losers. The notable exception is the rentier class who oddly enough dominate the Cabinet.

It is disappointing that Ed Balls has still not grasped that tax credits are not in the interests of the working class. It does though seem to have dawned on him that the endless import of cheap semi skilled and "skilled" labour is hardly helping to push earnings upwards.

A lot of employment today can of course be off shored without thought of visa regulations. That especially applies to garment manufacturing and I.T.

It is disappointing to see most UK banks, the DVLC and the NHS planning to offshore much of their "back end" to India. It is even more disappointing to see high street chains getting stuff made in Asia when they can get the work done for the same money in the East Midlands.

The zero hours contracts can be very useful for the purpose intended. It should not be legal for such contracts to tie anybody exclusively to one employer - the scope for abuse by both employer and the DWP are obvious. The DWP should not be able to force people into such contracts or even part time when people are looking for full time work.

The payment function of the JSA should be split from the job hunting function. The latter is so woeful that it should be removed altogether from the DWP and given to private sector job agencies sector by sector.

Labour are in large part responsible for the current mess by failing to fix an educational system which was not delivering and then propping it up with tax credits, unfettered immigration and ATOS.

They will most likely win the next election thanks to Tory voters preferring UKIP and LibDems shifting to Labour.

They will need to think very very hard as just how to restore wages so that people can indeed meet the cost of living. A starting point would be admit that the whole Brown/Blair policy of appeasement to big business and the financial sector was unworkable given an objective of low unemployment and wages adequate to live on.

Ed Balls has however grasped - as Osbourne has not - that getting unemployment down below 7% and back to around 5% will automatically fix the structural deficit problem so it is well worth trying especially as it accords with new thinking at the Bank of England.

As a bonus higher real employment would push up interest rates and help those reliant on private pensions no end.

State sector employees should accept that (a) their pensions are set in a way that most private sector employees can only dream about and (b) to expect wage increases above what most people in the private sector achieve is unrealistic and unfair. The typical private sector increase in the last 5 years ( other than minimum wage ) is zero.





OneFootInTheGrave

OneFootInTheGrave Report 24 Sep 2013 12:57

RolloTheRed - I am on the same wavelength as you on many things, and agree with most of what you say, in particular the need to grasp the fact that something needs to be done to restore wages to a level at which people can at least meet the cost of living and raising a family.

On unemployment I found this article quite revealing:-

http://www.telegraph.co.uk/news/worldnews/europe/eu/10205511/UK-jobs-being-advertised-across-the-EU-at-taxpayers-expense-it-emerges.html

UK jobs being advertised across the EU at taxpayers' expense, it emerges
More than 800,000 UK jobs are being offered to workers across the European Union, it has been disclosed.

Under an EU scheme partly funded by British taxpayers, all positions advertised in UK jobcentres also have to be offered to workers in European member states.

UK firms are given as much as £1,000 as a bonus for taking on the foreign workers.

The disclosure undermined comments made by Matthew Hancock, the business and skills minister, who called on UK bosses to stop taking the “easy option” of filling jobs with foreigners when they could train local workers instead.

Just hours after Mr Hancock's intervention it emerged that that a website called EURES, which was set up by the European Commission, is advertising 808,659 UK jobs to people on the continent.

The EU scheme offers foreigners hundreds of pounds of funding to pay for interviews in the UK, relocation costs and even English lessons.

RolloTheRed

RolloTheRed Report 24 Sep 2013 13:27

Dear OFITG

This is what the French equivalent of the DWP/JSA do about offering jobs in France to non-French residents.

"

"

that is to say nothing at all.

All government business in France is done in French including job applications, benefits and so and on. No French, no work, no benefits. Virtually all benefits in France are based on contributions. The sole exception is the RMI - minimum income - of about £ 350 / month. Even that requires a fixed residential address.

So now you know why having got to a Channel Port it is not the end of the journey. Starting from Bucharest though all that is needed is the bus fare of about £ 75.


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