FG and the Minimum Wage

goosebump

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I had intended to vote for FG at the next election but after hearing Richard Bruton on Morning Ireland this morning I think I've changed my mind.

I can't believe that FG, who are apparently the party who are the least 'wholly' when it comes to shifting the economy up a gear, would advocate reversing the cut in the Minimum Wage. Richard Bruton's justification for this policy was ridiculous.

His main point was that only 2% of the workforce are on the the MW, so that there was no point in cutting it.

Is he for real?

The reason why there are so few people on the Minimum Wage is because there are so many people who are unemployed. The fact that there are only 2% of people on the Minimum Wage proves that the Minimum Wage is too high!

By lowering it, we can shift a large number of the 13.5% of the workforce who are unemployed into the 2% bracket of people who are on the Minimum Wage.

Furthermore, Bruton completely ignored the push/drag effect of the Minimum Wage, in that the Minimum Wage progressively influences all other strata of income.

ie

if you increase it, it pushes up higher wages rates, and it you decrease it, it drags down other wage rates.

Right now, wage deflation is the only economic tool we have to regain economic competitiveness, and nothing should be allowed to impede rapid and widespread wage deflation.

4 faults Fine Gael.
 


Limestone

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I had intended to vote for FG at the next election but after hearing Richard Bruton on Morning Ireland this morning I think I've changed my mind.

I can't believe that FG, who are apparently the party who are the least 'wholly' when it comes to shifting the economy up a gear, would advocate reversing the cut in the Minimum Wage. Richard Bruton's justification for this policy was ridiculous.

His main point was that only 2% of the workforce are on the the MW, so that there was no point in cutting it.

Is he for real?

The reason why there are so few people on the Minimum Wage is because there are so many people who are unemployed. The fact that there are only 2% of people on the Minimum Wage proves that the Minimum Wage is too high!

By lowering it, we can shift a large number of the 13.5% of the workforce who are unemployed into the 2% bracket of people who are on the Minimum Wage.

Furthermore, Bruton completely ignored the push/drag effect of the Minimum Wage, in that the Minimum Wage progressively influences all other strata of income.

ie

if you increase, it pushes up higher wages rates, and it you decrease it, it drags down other wage rates.

Right now, wage deflation is the only economic tool we have to regain economic competitiveness, and nothing should be allowed to impede rapid and widespread wage deflation.

4 faults Fine Gael.
I couldn't agree more. I'll still be voting FG at the election as there is no credible alternative but their Defence of the current minimum wage is very foolish. I agree with your comments above and in fact the FG policy makes no sense on any level because very few of the 2% on it will vote FG in any event. All this does is give the impression that FG aren't very serious about reform. Bruton's performance this morning and on Monday's frontline also demonstrate why Enda is still leader of FG.
 

LiberalFG

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Minimum wage decreases won't affect the cost of consultants, lawyers, accountants, dentists, pharmacists, doctors etc. They're the real cause of our uncompetitiveness, these protected sectors. All those professional bodies restrict the amount of people in those professions thereby restricting supply and keeping up the wages or their members.
 
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Tony Soprano

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Richard Bruton is dead right!!! What Bruton said is that "you dont START by cutting the minimum wage"! You start at the top and work down. He's dead right!! Employers/Business owners are paying through the nose in water charges/rates in order to prop up the bloated public sector!!
Thats where the cuts should be and not for the poor hard-pressed workers who are washing dishes in hotels/restaurants!!
 

An Gilladaker

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I had intended to vote for FG at the next election but after hearing Richard Bruton on Morning Ireland this morning I think I've changed my mind.

I can't believe that FG, who are apparently the party who are the least 'wholly' when it comes to shifting the economy up a gear, would advocate reversing the cut in the Minimum Wage. Richard Bruton's justification for this policy was ridiculous.

His main point was that only 2% of the workforce are on the the MW, so that there was no point in cutting it.

Is he for real?

The reason why there are so few people on the Minimum Wage is because there are so many people who are unemployed. The fact that there are only 2% of people on the Minimum Wage proves that the Minimum Wage is too high!

By lowering it, we can shift a large number of the 13.5% of the workforce who are unemployed into the 2% bracket of people who are on the Minimum Wage.

Furthermore, Bruton completely ignored the push/drag effect of the Minimum Wage, in that the Minimum Wage progressively influences all other strata of income.

ie

if you increase it, it pushes up higher wages rates, and it you decrease it, it drags down other wage rates.

Right now, wage deflation is the only economic tool we have to regain economic competitiveness, and nothing should be allowed to impede rapid and widespread wage deflation.

4 faults Fine Gael.
You support taking 2080 euro pa from the lowest paid
 

collina

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The reason why there are so few people on the Minimum Wage is because there are so many people who are unemployed. The fact that there are only 2% of people on the Minimum Wage proves that the Minimum Wage is too high!

By lowering it, we can shift a large number of the 13.5% of the workforce who are unemployed into the 2% bracket of people who are on the Minimum Wage.
I'm not quite sure what you mean by a "large number" and how would that "shift" work exactly?
 

meriwether

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The reason why there are so few people on the Minimum Wage is because there are so many people who are unemployed. The fact that there are only 2% of people on the Minimum Wage proves that the Minimum Wage is too high!

By lowering it, we can shift a large number of the 13.5% of the workforce who are unemployed into the 2% bracket of people who are on the Minimum Wage.
This has thrown me. What exactly are you saying here?

Furthermore, Bruton completely ignored the push/drag effect of the Minimum Wage, in that the Minimum Wage progressively influences all other strata of income.

ie

if you increase it, it pushes up higher wages rates, and it you decrease it, it drags down other wage rates..
Please explain to me therefore how wages in the private sector have fallen in the last two years despite the minimum wage remaining constant.

Your relationship between minimum wage and other wages in the economy is majorly tenuous.
Unless of course you have data demonstrating a relationship between decreasing the minimum wage and decreasing wages in general.
 

civilserpant

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Can't possibly agree with the OP.
The minimum wage should have been left alone or the concept abolished, reducing it by €1 is a direct invitation to companies to cut staff salaries, and despite what the ISME spokesperson said, thats exactly what will happen.

The line about international investment is bogus. Companies moving here, bar the lowest grade call centres, aren't hiring on the minimum wage. Those companies where the min wage is the key 'where-to-locate' issue locate in Poland, eastern europe, India - which will always be cheaper no matter what the min wage is.

Moving the min wage down to €7.65 a hour - €298 for a 39 hour week or €15,500 a year isn't a good idea. The dole is currently €198 a week. Even if thats cut by €20 (10%) in the budget, you're basically working a 39 hour week for €120 more thna you'd get for doing nothing. Wheres the incentive to work there - esp when you include travel costs, work clothes, childcare etc.

Even beyond that, it doesn't make economic sense - in about the one bit of leftist economic thinking I fully agree with. Wages earned by the lowest workers in society, including the dole, goes right back out the door in expenditure. They don't have the facility to save on such margins. The 12% cut will result in significantly less spending in the shops, and smaller revenue streams. Its cyclical. Maybe the min eage has gone too high, but it doesnt mean reversing it is a good idea. Leave it as is.

It seems FG get slaughtered if they fight for the less well off for not being 'responsible' and slaughtered if they don't for being 'callous'. What a joke! Where's the thread on Labours position?
 

TheDystopian

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I agree with Bruton on this one. A cut in the minimum wage can only be justified if there are cuts at the top too. Start cutting from those who can afford it! The minimum wage reflects the cost of living, and there are plenty of overpaid personnel in the upper echelons of public service. Let them be cut first!
 

RahenyFG

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Richard Bruton is dead right!!! What Bruton said is that "you dont START by cutting the minimum wage"! You start at the top and work down. He's dead right!! Employers/Business owners are paying through the nose in water charges/rates in order to prop up the bloated public sector!!
Thats where the cuts should be and not for the poor hard-pressed workers who are washing dishes in hotels/restaurants!!
+1
 

HarshBuzz

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culmore

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when they cut the top pay by a large amount, there might be an arguement to cut a small bit at the bottom no reduction at the bottom till them
 

goosebump

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Minimum wage decreases won't affect the cost of consultants, lawyers, accountants, dentists, pharmacists, doctors etc. They're the real cause of our uncompetitiveness, these protected sectors.
I never said it would.

However, arguing that you should postpone 1 necessary economic measure because another isn't in place yet isn't credible.
 

powderfinger

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FG are saying that the 4yp can be 'renegotiated'.There is an implication that the creditor (Ireland) will have a degree of leverage with it's IMF led lenders of last resort.
I would suggest that any initiated 'renegotiations' will be a tool available at the IMF/EU /ECB's disposal to ramp up further austerity measures, and impose extra conditionalities when required.
Plan can be renegotiated - Noonan - The Irish Times - Wed, Nov 24, 2010
 

meriwether

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I never said it would.

However, arguing that you should postpone 1 necessary economic measure because another isn't in place yet isn't credible.
No, we need to see the economic necessity of cutting the minimum wage.
Then we can judge.

I fail to see the economic necessity of it myself. Im my mind, its the Govt acting tought to be seen to be acting tough, with no actual benefit, on a group that won't be fighting back. Its much easier do that that rip up the Croke Park deal.

Please educate me.
 

Aindriu

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Richard Bruton is dead right!!! What Bruton said is that "you dont START by cutting the minimum wage"! You start at the top and work down. He's dead right!! Employers/Business owners are paying through the nose in water charges/rates in order to prop up the bloated public sector!!
Thats where the cuts should be and not for the poor hard-pressed workers who are washing dishes in hotels/restaurants!!
Dead right! It is professional fees and charges that are too high in Ireland, NOT the minimum wage!
 

goosebump

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I'm not quite sure what you mean by a "large number" and how would that "shift" work exactly?
It currently costs €346 per week to employ someone on the MW. After the cut, it will cost €306.

If you employ 10 people on the MW, you save €400, which means you can afford to employ an extra person.

Alternatively, you don't employ an extra person, and instead pass on the saving to your customers, who are then enabled to spend more money on wages, and employ more people.

If you extrapolate that up through the wage strata, you make a significant dent in the unemployment problem, which in turns reduces the State's costs and allows the State to reduce its burden on business, which also lends to the creation of employment.
 

goosebump

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No, we need to see the economic necessity of cutting the minimum wage.
Then we can judge.

Please educate me.
The basic law of economics is that the more something costs, the less demand there is for it.
 


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