Timmy elsewhereNovember 5, 2013 Tim WorstallTimmy Elsewhere11 CommentsAt the ASI. The new living wage and minimum wage numbers. Yes, it’s still tax poverty. previousTimmy elsewherenextThe Miliboy really is an ignorant tosser 11 thoughts on “Timmy elsewhere” Surreptitious Evil November 5, 2013 at 9:58 am Yes. But you’re talking to the already-converted. Both here and at the ASI. With the possible exception of Arnald. And whoever it is (can’t remember, sorry) who insists that paying taxes is necessary to feel democratically engaged. Dinero November 5, 2013 at 9:58 am employers NI tax incidence If you take it that the minimum wage legislation is actually required -ie that employers need regulating because they pay low -Then I don’t think you can conclude that if employers payed less NI to the tax man they would give that money to the employee instead. Surreptitious Evil November 5, 2013 at 10:04 am But wages are set by a combination of job competition and (for the private sector) revenue generated by that role. Yes, employers will try to get away with paying people as little as possible. Just as employees will try to get as much as possible. But there is a point below which you won’t get people with the appropriate skills. And there is a point above which you are costing the organisation money (in net terms.) So you’ll be paid somewhere in that range. And employers’ NI helps to set the upper boundary. On an anecdote note, I’ve rarely found actual employers to be difficult to negotiate pay with. HR departments, yes, but the people who actually need you to do the work are usually okay. Very similar applies with customers. Dinero November 5, 2013 at 10:08 am Well that analysis based on negotiation is not appropriate when are dealing with a non-negotiated wage set by legislation. At that point a different analysis is required. Surreptitious Evil November 5, 2013 at 10:21 am If your non-negotiated wage is set by legislation, then the analysis is that your wage is set by the legislation, therefore … Dinero November 5, 2013 at 10:26 am is that a question if it is then the answer is – therefore – lowering employers NI will not effect the wage as the wage is set by legislation Surreptitious Evil November 5, 2013 at 10:49 am Dinero, If the wage is set by legislation, then the wage is set by legislation and nothing other than changing that legislation will affect the wage. Or by moving to operating illegally. However, the minimum wage legislation does not set peoples’ wages. It sets a floor to them. You can negotiate for pay above the minimum wage. Therefore lowering employers’ NI will increase the amount of money available to pay the employees. Dinero November 5, 2013 at 11:33 am So in the case of the minimum wage the employers NI does not effect the wages . The article refered to the wage senario where the minimum wage legislation applies. Surreptitious Evil November 5, 2013 at 11:53 am So in the case of the minimum wage the employers NI does not effect the wage Let us assume I employ a person and they are currently on the minimum wage. They are a very good employee and I want to keep them, therefore would like to pay them more but, because of my business sector, the recession etc, I don’t have very much money. If the government cuts employers’ NI then, not exactly magically, there is more money in the business – even in the “paying people” column of the budget if you run that sort of business – and I can pay them more. Emil November 5, 2013 at 12:25 pm I think in Dinero’s world a business with not a lot of money in it is something that simply doesn’t exist … Dinero November 5, 2013 at 12:29 pm yes in that precise scenario you can say that the employers NI does effect the new income of someone who in a state of transition from going from the minimum wage to a higher wage Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment.