"Harney refuses to rule out cuts in minimum wage"

Liam Byrne

techdiver wrote: »

Terrible idea! We want to get away from the idea of defined payment regardless of skill.

Hold on a sec! It's the MINIMUM wage that does precisely that. A maximum wage would be the complete opposite.

techdiver wrote: »

Bonuses might be dealt with differently and should not be awarded for excessive risk in the banking sector as they were in the past. I think the main point is to differentiate between restricting salary and rewarding recklessness.

Fair point, but the fact is that even going back 10 years, the pension company that my then employer used was clapping themselves on the back for being "the best", when they managed to lose about 40% of the combined contributions of myself and the company.

What I'm saying is that wages should be set at a realistic level; one which reflects the cost of living in this country; yes, factor in the qualifications and experience and track record, but it's beyond me how one person could be worth €400,000 as a director who goes out golfing, doing SFA, while someone else is "worth" the minimum wage in the same company.

Having the core wages at a realistic level would ensure that prices for lots of things were kept realistic too, since there would be no guarantee that any additional cash would be available.

Then, bonuses should be paid on the back of EXTRAORDINARILY GOOD PERFORMANCE, not on a whim of a director, and not for stuff that should be an integral part of why they were hired.

And if someone's fired, then there's no severance pay if the reason is that they were crap.

Case in point : the financial regulator, the bank directors, the current Taoiseach, Tanaiste & Minister for Finance, etc.

Show me ONE of them that's even worth a nominal €50,000 a year, let alone the massive amounts they paid themselves.

Shan75

Liam Byrne wrote: »

What I'm saying is that wages should be set at a realistic level; one which reflects the cost of living in this country; yes, factor in the qualifications and experience and track record, but it's beyond me how one person could be worth €400,000 as a director who goes out golfing, doing SFA, while someone else is "worth" the minimum wage in the same company.

The thing is though a private company will and must be able to decide for themselves what they think people should be paid.Some company directors would be worth hundreds of thousands per year because of their organisational skills and leadership,decision making,innovation etc.A company should be allowed to try and get the best person for the job and this will mean paying the price.If there was a maximum level of payment there wouldn't be the financial incentive to be the best you can for the company.Any private company whose directors do sweet FA except play golf won't last too long.

Liam Byrne wrote: »

Case in point : the financial regulator, the bank directors, the current Taoiseach, Tanaiste & Minister for Finance, etc.

Show me ONE of them that's even worth a nominal €50,000 a year, let alone the massive amounts they paid themselves.

None of them are worth more than 204 euro a week.The difference is they don't answer to shareholders, CEO's etc.The are supposed to be answerable to the electorate but seeing as how we kept voting them in it doesn't say much for our ability to see they weren't up to the job.Only when we hit the rocks do we realise something is wrong, and some people still are not fully aware why we are sinking.

techdiver

Liam Byrne wrote: »

Hold on a sec! It's the MINIMUM wage that does precisely that. A maximum wage would be the complete opposite.

A maximum wage discourages people from bettering themselves by capping an achievement level at a defined level. It will not help in any way to imrove things and in fact it will lead to apathy amongst the best and most talented people we have.

Liam Byrne

Listen, I know it's not an ideal proposal, but it's damn better than the one that we've had for the last 10 years, where people commuted and worked crazy hours to get extra pay in order to pay for overpriced houses - houses whose price was related to the fact that potential buyers were people who commuted and worked crazy hours, etc....

All I'm saying is that prices soared beyond the reach of many because we were far too flush; and many of the people who were far too flush were indeed people who were crap; yes, there were the ones I mentioned above, but likewise there were the directors of banks and builders and speculators who got paid to make disastrous decisions!

And I'm sorry, Shan75 - those people WERE answerable to shareholders, and the REASON for pushing much, much too far was because those shareholders were interested in nothing BUT extra money.

Yes, if someone takes a "risk" then they should be rewarded, but society has been crippled by people out to make nothing but money, and driving up costs for everyone else in the process, as well as - now, through FF - having to pick up NONE of the tab.

We need a society where everyone earns "enough" to get by, and has scope for small bonuses, but also where money and "reward" isn't the be-all and end-all. Reward someone who performs OVER AND ABOVE expectations with extra holidays, or whatever, but the crap of bonuses and big cars and whatever just for making a few million extra profit just incentivises crazy risk-taking as well as gazumping and promotion of 100% mortgages and a host of other ills - because it was down to bonuses and commission.

If that sorts itself out, well and good. But in the meantime we need a better society.

Shan75

Liam Byrne wrote: »

Listen, I know it's not an ideal proposal, but it's damn better than the one that we've had for the last 10 years, where people commuted and worked crazy hours to get extra pay in order to pay for overpriced houses - houses whose price was related to the fact that potential buyers were people who commuted and worked crazy hours, etc....

All I'm saying is that prices soared beyond the reach of many because we were far too flush; and many of the people who were far too flush were indeed people who were crap; yes, there were the ones I mentioned above, but likewise there were the directors of banks and builders and speculators who got paid to make disastrous decisions!

And I'm sorry, Shan75 - those people WERE answerable to shareholders, and the REASON for pushing much, much too far was because those shareholders were interested in nothing BUT extra money.

Yes, if someone takes a "risk" then they should be rewarded, but society has been crippled by people out to make nothing but money, and driving up costs for everyone else in the process, as well as - now, through FF - having to pick up NONE of the tab.

We need a society where everyone earns "enough" to get by, and has scope for small bonuses, but also where money and "reward" isn't the be-all and end-all. Reward someone who performs OVER AND ABOVE expectations with extra holidays, or whatever, but the crap of bonuses and big cars and whatever just for making a few million extra profit just incentivises crazy risk-taking as well as gazumping and promotion of 100% mortgages and a host of other ills - because it was down to bonuses and commission.

If that sorts itself out, well and good. But in the meantime we need a better society.

I agree with you it was a crazy situation we were in.People allowed themselves to get sucked in to the bubble because just like the developers and bank executives many ordinary people became greedy for the half a million + house and fancy car.It was keeping up with and staying ahead of the Jones's on a ridiculous scale and all on crazy credit facilitated by greedy politicians who took no measures to stop the spiral and indeed encouraged it.The Government are mainly to blame, along with their developer pals and bank execs but the people must realise their place in this too.Many people moved house when the house they were in was more than adequate.I know people who moved less than a kilometre just so they could have the illusion of being considered successful.Even at the time I couldn't understand forking out an extra 100k or more to move across the road into a similar but newer house in a similar area.Others I realise were just plain screwed by greedy developers,speculators and, lest we forget them, auctioneers.

Sorry Liam I was really talking about directors of private non-banking companies.People who actually still had to work for the companies rather than those in the banks who sat back and let the dollars roll in.I agree with about bank directors.

In terms of large companies there is a need to attract the best people to run them so they are run efficiently and cost effectively.Because we are competing globally to retain companies here and attract others it is imperative we get the best business leaders possible to run them.This can only be done through financial incentive.At director level the human capital is much more mobile and we cannot afford to lose good people to other regions.I know for a fact that one particular company were contemplating pulling out of Ireland in 1999 but then in came a new general manager and saved it through many cost cutting and process improvement measures.He would have been paid a fortune but was responsible for saving thousands of jobs.We cannot afford to lose people like this because of a maximum wage being implemented.

Tech3

Taxipete29 wrote: »

The minimum wage hasnt increased in 2 years and is highly unlikely to increase again in the near future.

What is wrong with wanting a decent standard of living for all workers. Those who work minimum wage work hard in most cases and deserve to do more than just exist which is about all you can do on it at the moment if you dont live at home. € 350 a week is hardly high living now is it

No its not high living. But if wages are reduced then the cost of living will reduce and Ireland will start to be somewhat competitive again.

I see many posters have declared that a reduction on the minimum wage and VAT to 15% should be implemented. I mentioned this months ago with huge cuts also in public spending.

One concern I would have in the reduction of wage, costs of energy, cost of living is that there will be alot less money in the economy leaving an impossible task for the government to get back to levels of under 3% of GDP.

djpbarry

Taxipete29 wrote: »

If we cut the minimum wage tomorrow by 10%, it goes from €8.65 to €7.79. Will that really make the difference between a job being created or not??

I think it might, yes; a 10% reduction in the cost of hiring an employee is not insignificant.

How about this question; how high would the minimum wage need to be before those opposed to a reduction might reconsider? €10 per hour? €15? €20?

Taxipete29 wrote: »

We will never compete with countries in Eastern Europe and India etc. The future here is high tech value added jobs.

That’s all fine and dandy (although I wouldn’t lump “Eastern Europe” in with India), but the overwhelming majority of people in this country are not qualified to work in “high-tech value added jobs”. So what are they going to do?

Taxipete29 wrote: »

Thats where we need to be competing and we can only do this by lowering commercial rates, ESB, Gas etc.

I’m no expert on the subject, but I’m guessing that payroll has to be one of the biggest factors in the high cost of doing business in this country.

Taxipete29 wrote: »

€ 350 a week is hardly high living now is it

That’s probably why it’s called the minimum wage.

But seeing as you brought it up, let’s do a little cost analysis. For a standard 37.5 hour week, €8.65 per hour comes to about €1,400 per month before tax (which won’t be much). If we allow a generous €500 per month for rent and bills that leaves about €200 per week (before tax) for food and whatever else you want to spend it on. That’s a pretty decent minimum standard of living (for a single person).

Permabear

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Taxipete29

djpbarry wrote: »

I think it might, yes; a 10% reduction in the cost of hiring an employee is not insignificant.

How about this question; how high would the minimum wage need to be before those opposed to a reduction might reconsider? €10 per hour? €15? €20?
That’s all fine and dandy (although I wouldn’t lump “Eastern Europe” in with India), but the overwhelming majority of people in this country are not qualified to work in “high-tech value added jobs”. So what are they going to do?
I’m no expert on the subject, but I’m guessing that payroll has to be one of the biggest factors in the high cost of doing business in this country.
That’s probably why it’s called the minimum wage.

But seeing as you brought it up, let’s do a little cost analysis. For a standard 37.5 hour week, €8.65 per hour comes to about €1,400 per month before tax (which won’t be much). If we allow a generous €500 per month for rent and bills that leaves about €200 per week (before tax) for food and whatever else you want to spend it on. That’s a pretty decent minimum standard of living (for a single person).

Your first question doesnt make sense. Its not 10 or 15 euro. Its 8.65.

Eastern Europe is very relevant as companies relocating there are doing so as they wish to operate within the EU.
Payroll is a factor of course, but its not the only one. Their are other factors which need to be dealt with before you approach the minimum wage. Hence my original point that this debate is premature.

€200 a week. Lets say that person has to go to the hospital?? Thats 100 gone straight away before any perscriptions. Even a visit to a dcotor will eat up 50+.

Food and transport to work could eat up half of that 200. That leaves 100 for incidentals. Thats a very small margin.

I think the minimum wage is fine as it is. I would not advocate it being increased anytime soon, but to decrease it after a very short period of deflation would be wrong. With the revelations from TSB this morning that deflation is quite likely to stop. Would you still advocate a cut in the minimum wage if that was the case??

djpbarry

Taxipete29 wrote: »

Your first question doesnt make sense. Its not 10 or 15 euro. Its 8.65.

I know it’s €8.65, but suppose it was higher. Would it be ok to lower the minimum wage if it was, say, €10 per hour?

Taxipete29 wrote: »

Payroll is a factor of course, but its not the only one.

I’d say it’s a pretty damn big one. I’ve worked in small businesses were payroll accounted for about 40% of total expenditure.

Taxipete29 wrote: »

€200 a week. Lets say that person has to go to the hospital?? Thats 100 gone straight away before any perscriptions. Even a visit to a dcotor will eat up 50+.

Indeed it will; fortunately the average minimum wage worker (like most people) will not be attending the doctor on a weekly basis. Besides, there's always health insurance (not to mention PRSI contributions).

Taxipete29 wrote: »

Food and transport to work could eat up half of that 200. That leaves 100 for incidentals. Thats a very small margin.

I’m sorry, what? €100 per week (that’s over €5k per annum) is a small margin?!? What sort of “incidentals” are we talking about here? The occasional new car?!?

newname

that leaves about €200 per week (before tax) for food and whatever else you want to spend it on. That’s a pretty decent minimum standard of living (for a single person).

Have you forgot the dole is €204 per week - who is going to do a full weeks work and have less spending power than someone on the dole.

Taxipete29

djpbarry wrote: »

I know it’s €8.65, but suppose it was higher. Would it be ok to lower the minimum wage if it was, say, €10 per hour?
I’d say it’s a pretty damn big one. I’ve worked in small businesses were payroll accounted for about 40% of total expenditure.
Indeed it will; fortunately the average minimum wage worker (like most people) will not be attending the doctor on a weekly basis. Besides, there's always health insurance (not to mention PRSI contributions).
I’m sorry, what? €100 per week (that’s over €5k per annum) is a small margin?!? What sort of “incidentals” are we talking about here? The occasional new car?!?

The question makes no sense. If it was €10 per hour I would suggest there would be a reason such as higher prices than we have seen in recent years. The figure is meaningless in isolation, it must be seen in conjunction with prices of food, rent etc.

Again figures in isolation. What percentage of turnover was the wage bill??

Yes becasue anyone on minimum wage can afford Health insurance:rolleyes:

Incidentals such as illness, clothing, what about the ability to do a course part-time to better themselves or should they just run up massive debts to afford a better lifestyle, no wait, thats whats happened already in this country.

The fact that those who earn minimum wage are more likely to spend their entire income within the economy means it doesnt make sense to reduce their spending power in a time we need consumers to spend their money.

joseph brand

The_Minister wrote: »

Firstly, no minister will rule anything out until the government has made its plan public, so I wouldn't read into this too much.


The minimum wage reduces the number of jobs in the economy and raises prices.
This isn't really disputed by anyone with economic knowledge (as in professionals).

The trick is to balance those two concerns with the need for people to have a certain standard of living.
In the boom times, when there were more jobs than people to fill them, it didn't really matter if we had a high minimum wage - we didn't need more jobs.
In the recession, when we need more people working, we need more jobs.
Lowering the minimum wage is one way to create more jobs and preserve existing ones.


She is one of the most senior ministers in the country, and one of the longest serving deputies.
She is not a political nobody.

What utter bilgewater. When there are people on 40K, 50K, 60K and upwards per /yr, the way to save jobs is to take it from the people at the bottom??
You're probably a fan of Trickle-Down Economics and the Laffer Curve?

What do workers on minimum wage earn per/yr? It cant be much more than the dole, especially when travel and lunch and other work related expenses are taken into account.
You Sir are having a laugh, and it's not remotely funny.

Just look at the Consultants getting a nice little bonus of 25,000 per/yr. Dr John Barton refused his pay hike in these recession times. Not much support from Harney :P
http://www.politics.ie/economy/87497-consultant-my-25-000-pay-hike-absurd.html

(cant find article on net, but in paper today it said that Harney claimed Barton was only a Political activist and he could give it back. Fair enough, but it still doesn't justify the increase, now does it Mary, . . .DOES IT?? :mad:


PS: Mary Harney looks more and more like Eric Cartman every week. She seems to have his mannerisms too. And his chins.

djpbarry

Taxipete29 wrote: »

The question makes no sense. If it was €10 per hour I would suggest there would be a reason such as higher prices than we have seen in recent years.

Ok, so the current minimum wage was deemed acceptable this time last year, right? The cost of living is now lower than it was this time last year, so surely a reduction in the minimum wage should at least be considered?

Taxipete29 wrote: »

Again figures in isolation. What percentage of turnover was the wage bill??

I honestly don’t remember, but if you have some stats on the subject, do share.

Taxipete29 wrote: »

Yes becasue anyone on minimum wage can afford Health insurance:rolleyes:

I don’t see why not – it shouldn’t be more than €10 – 15 per week for a healthy individual.

Taxipete29 wrote: »

Incidentals such as illness, clothing, what about the ability to do a course part-time to better themselves…

All of which should come to substantially less than €5k.

Taxipete29 wrote: »

The fact that those who earn minimum wage are more likely to spend their entire income within the economy...

I think it’s pretty unlikely that those on the minimum wage will spend their entire income in Ireland.

Taxipete29

djpbarry wrote: »

Ok, so the current minimum wage was deemed acceptable this time last year, right? The cost of living is now lower than it was this time last year, so surely a reduction in the minimum wage should at least be considered?
I honestly don’t remember, but if you have some stats on the subject, do share.
I don’t see why not – it shouldn’t be more than €10 – 15 per week for a healthy individual.
All of which should come to substantially less than €5k.
I think it’s pretty unlikely that those on the minimum wage will spend their entire income in Ireland.

It could be considered if that cost of living was to remain low for a sustained period but that is extremely unlikely in my opinion. Therefore any consideration is very premature.

I dont have any stats on this. Maybe someone who has their own business could give us an idea of what this % should be.

Thats quite a large % of discretionary income. If we go with €200 and then take off €70 for food and €20 for transport( conservative estimates). Thats leaves you with 110. €15 a week is 13.6% of your discretionary income.

I am not saying its not sufficent for a basic standard of living, its probably just about manageable. The point is if you get sick or some unforeseen expense comes up( everyone has these, you can never predict them) you are in trouble, you have no room to manouvre.

Why do you think they dont spend all their money here. I will agree some immigrants may be sending what little surplus they have home, but aside from that I dont see where else they would be spending it??

deadhead13

The US has increased its minimum wage by $1 as of today.

Taxipete29

deadhead13 wrote: »

The US has increased its minimum wage by $1 as of today.

It was actually 70cent. It was the third and final installment of three 70cent increases approved by Congress in 2007. This is of course the federal minimum wage. Some states already had minimum wages which were above the federal minimum.

deadhead13

Taxipete29 wrote: »

It was actually 70cent.

Your right, I misread it - it went from $6.55 to $7.25

ronbyrne2005

Taxipete29 wrote: »

It was actually 70cent. It was the third and final installment of three 70cent increases approved by Congress in 2007. This is of course the federal minimum wage. Some states already had minimum wages which were above the federal minimum.

Mexicans work illegally for a lot less.

Permabear

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Taxipete29

donegalfella wrote: »

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The minimum wage protects workers from being exploited by employers. If we reduce or remove the minimum wage all we do is allow employers to drive down wages to a point where it wont be worth it for people to work and social welfare will look like a more attractive option.

The people who work minimum wage jobs work hard and many do jobs that alot of people in this country think are beneath them. This would be further compounded by reducing or removing the minimum wage. It sends a signal to those people that your not worth what your earning now and we really dont give a s*** about you because most of you dont vote or are ineligable to do so.

This all based on the idea that we are in a deflationary period and this will continue for the forseable future, which is probably not the case as seen by TSBs little PR excercise today.

Permabear

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Raiser

How is anyone on a reduced minimum wage expected to actually live in this miserable Country where the price of goods, services, accommodation and every other thing is sky high and acknowledged as begin a complete cynical rip-off?

- Fix this before you condemn people to starvation FFS.

P. Breathnach

donegalfella wrote: »

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Source? [Please don't cite the Indo.]

Permabear

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Taxipete29

donegalfella wrote: »

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The minimum wage is not keeping people on the dole. When it was introduced and any subsequent increase were as a result of higher proces and the need for a certain standard of living to be acheived. I as I have said repeatedly, one short period of deflation is not enough to warrant a decrease.

They werent in most cases as we have a strong union prescence in this country.However pre-2000 we had little immigration. There is a case to be made that immigrant workers would work for less than Irish workers hence the need to protect a minimum standard.

There will always be people who would prefer to live off the state rather than work. I believe however that these people are in the minority and Irish people for the most part have a more self worth than to rely on hand outs and prefer to work for a living.

P. Breathnach

donegalfella wrote: »

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Thank you. It seems to include the presumption that employed people do not get child benefits which, as you know, is not a correct representation of how things actually are.

[It's because of that selective counting that I had hoped your source was not the Indo, because they recently published similar erroneous claims, and I had thought that it was all their own work.]

Permabear

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P. Breathnach

donegalfella wrote: »

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That's good enough for me. In Ireland, even in our recently-straitened circumstances, nobody should be paid as little as €5 per hour.

Permabear

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