Oh Aye?

Former Bank of England MPC member David \’Danny\’ Blanchflower tells Robert Miller that the Government must cut National Insurance contributions for two years to help all young people under the age of 25 to find jobs.

And why would anyone want to do that?

Because, obviously, Blanchflower thinks that young people are too expensive to employ. The money they must be paid, including that NI, is too much considering what they are able top produce.

Or, in other words, the youth minimum wage is too high.

It would be simpler to cut that youth minimum wage really: despite that being politically difficult.

But this proposal is proof absolute that my long averred contention is correct. Youth unemployment is high because we have a minimum wage that prices youth out of jobs. That\’s why Blanchflower is recommending that we lower the cost of employing youths.

7 thoughts on “Oh Aye?”

  1. I think the NI issue is beside minimum wage, not caused by it.

    Assuming 40 hour work week 52 weeks a year: The Employers NI cost would work out to be £769 p.a. for over-21s; £453 p.a. for 18-20; £80 p.a. for 16-17; and £0 for apprentices.

    Employers NI is not that prohibitive for minimum wage jobs. It starts looking prohibitive when you start giving pay rises, though; but then, it comes back to my point from a comment a while back, employers should also compete for good workers, just as workers should compete for good jobs. Whether NMW is right or wrong, £12,646 is not a lot to live off of, particularly for southerners.

  2. But many young people will be living with parents and therefore don’t need to “live off” the minimum wage as such. It will just be beer and clothes money for them.

  3. Curmudgeon,
    I agree that about many young people, but most minimum wage jobs would probably pay more if there was not a surplus of people willing to come in and work for just that or below from elsewhere. A rational employer would pay half of the minimum wage if they could get away with it. And foreign low-cost workers would (and most likely do) work for less than minimum. If there wasn’t a surplus of grown adults from elsewhere willing to work crap jobs then many of those crap jobs would be available to younger people.

    When our local Tesco Express puts an ad up to hire they get over 1000 applicants, but for some reason they only end up hiring foreign workers. Could it be because a more transient worker is willing to take less and will not be bothered to ask for pay rises after a certain amount of time?

    If low-paid Brits want to compete, they need to be willing to doss with 20 other people to attain lower living costs, and figure out a way not to pay employees’ NI (which can get refunded to many foreign workers whose stay does not exceed 52 weeks.)

    It doesn’t just happen at minimum wage: the IT contracting market was severely depressed in 1998-1999 because a lot of South Africans came over and were willing to take less than the going rate for lower-level contracting jobs; many rates were cut – by as much as a third – at the height of the dot com boom. For the South Africans, who were only going to stay temporarily anyway, this was a mint and would be enough to go back home and buy a house outright. Most of those of my acquaintance would share a house with up to 20 other people. Those of us with real bills and living on our own or taking care of families had to learn to adjust to the new reality of lower rates for what we were doing. Not that I blame anyone for taking advantage of the opportunity.

  4. Yes, but the point is that the oft-heard calls from the Left that the minimum wage needs to be a “living wage” are misplaced, as there are many people, such as young people living with parents, people doing second jobs, and people in receipt of a pension, for whom accepting a job at less than the minimum wage may well be genuinely worthwhile by a rational calculation, and not in any sense exploitative.

    And if Tesco have 1,000 genuine applications, and end up taking Poles and Lithuanians, is it not because they know from experience that those groups are likely to prove more reliable and conscientious workers?

  5. “is it not because they know from experience that those groups are likely to prove more reliable and conscientious workers?”

    I’m beginning to think that the idea of unreliable and unconscientious Brits might actually be a bit of propaganda to soften the acceptance of open borders. The entire young population of Great Britain cannot be nearly as inept as the press paints them out to be. They may be deluded in thinking that degrees in any field ending in “Studies” would guarantee them jobs, but that’s just naivete borne out of trusting what so-called leaders tell them rather than seeing university as what it is: a substitute for the dole.

    To work at entry level in, say, retail, one only needs to be able to learn how to use a cash register and speak with people (and many non-Anglophones fulfil only half of this requirement.)

    Are Britons, as a people, really that inept?

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