Timmy elsewhere

On the minimum wage:

Yes, of course the correct minimum wage is a rate of zero. But we’re unlikely to win that argument but at least we can argue for a rate that doesn’t do so much damn damage to the least favoured portions of our society. The minimum wage discriminates against those black, asian and minority ethnic youths. Indeed, such discrimination was a stated reason for the introduction of the minimum wage in the United States back in the times of Jim Crow. It’s actually a racist government policy. We should therefore end it.

74 thoughts on “Timmy elsewhere”

  1. One of the reasons given for the minimum wage was that it stopped the Gov subsidising low paying employers. Now that there are in work benefits to persons earning above the minimum wage isn’t that particular rational rather superseded to some extent.

  2. “least favoured” is an odd expression. Anyhoo “minority ethnic youths” in some parts of the country will now be white British, I suppose.

    I suppose that “unattractive as employees” is what you’re driving at.

  3. There was some 22 year old, just about to embark on a teacher training course and so presumably not having long finished UNi whining on about how difficult it was going to be to save for a deposit for a house. What does he want? A bursary of £50k for each person from HMG on their 21st birthday?

    The point about this and about the minimum wage is that when you are just staryting out, things probably will be tough. I’m a baby boomer but the starting salary of my first job wasn’t great and i didn’t get on the property ladder until the day after my 30th birthday. Fast forward 22 years and I’m doing OK but I’m buggered if I’m going to be made to feel guilty by a lot of snot nosed whiny cry babies who were bought up in the credit boom of the early 21st century and are now moaning that “no-one’s ever had it so tough”.

  4. you do not know whether the positive impact of higher wages for those who remain employed at the min wage outweigh the negative impact of lost jobs. You do not know this.

    If you want to claim that least favoured are more likely to be employed at min wage, that means they are more likely to a) benefit if they keep jobs b) lose jobs. But as you don’t know what the net cost/benefit is, how can you say the policy discriminates against them?

  5. Academic economists don’t seem so sure that NMW is A Bad Thing, or even about the unemployment trade-off.

  6. LE: It might be that society will be better off if your job was taken off you and you were prevented from getting another. We don’t know the net cost/benefit ration and those still in work might all be better off.

    Plus why should anyone give a monkeys about you–anymore than you care about unemployed youth.

  7. >Academic economists don’t seem so sure that NMW is A Bad Thing, or even about the unemployment trade-off.

    Even if that was true, it would only apply to the current lowish minimum wages that are currently around most Western countries. I don’t think any academic economist would deny that raising the minimum wage to, say £30 an hour would be a bad thing.

  8. >you do not know whether the positive impact of higher wages for those who remain employed at the min wage outweigh the negative impact of lost jobs. You do not know this.

    Which means the authors of minimum wage legislation don’t know either. So what justification do they have for this legislation? The onus is on them, after all.

  9. Dinero>

    However ‘whingey’ some particular complainer might be, there’s no doubt that housing in the SE has got considerably less affordable than in the past, at least on the face of things. It’s not quite as simple as just being down to the high cost of housing*, but ultimately it all stems from the lack of new supply to meet increasing demand.

    *Part of the problem is the income multiples borrowers are allowed. A loan of 5x annual income is seen as very large/risky, but on that multiple someone earning £25k a year can only borrow £125k at most. LTV ratios don’t come into it at that point, because you can’t buy much in London beyond a basement studio in the worst parts for £165k or whatever. I’m not being unrealistic about living in cheaper parts, either – there’s nothing at all in North/West London inside zone five, and that entire area did not used to be out of bounds.

    Realistically, our chap on £25k a year will need £60k to put down to buy a cheap 1-bed flat. £25k a year is (generously) £400 a week after tax. Assuming he’s renting a room somewhere cheap, that’s £100. Allow just another £100 for food, clothing and commuting expenses. Save every penny apart from that, so £200 a week. That’s £10k a year, or six years of living on beans and saving every penny before our example can afford to buy his own place.

  10. Which means the authors of minimum wage legislation don’t know either. So what justification do they have for this legislation? The onus is on them, after all.

    They’re politicians. I hate to be fair to them but their justification is that it is popular and politically expedient.

  11. I was 16 when I had my first paying job (no, helping out at my parents’ shop doesn’t pay a nickel) at a fast food restaurant. I never approach it as the last job I’ll ever have. Thanks to the current minimum wage crusaders, it’s currently occupied by people who seriously consider flipping burgers a career.

  12. I think its a reasonable notion that “zero hour contracts” are a response to the minimum wage. If its not legal to pay for the average productivity including downtime, then only the non downtime is paid for, hence zero hour contracts.

  13. Mr Ecks

    lots of policies help some , hurt others. Free trade, for example. Saying a policy is good on net does not imply not caring about those hurt.

    yes, maybe there is a policy out there which would make me lose my job to the greater benefit of others.

  14. >Is “justification” a typical part of the legislative process, then?

    Not normally, no, but we’re pretending for the sake of argument that it is.

  15. @ Luis Enrique
    Actually we DO know that society as whole is worse off if jobs disappear. If you cannot understand that A voluntarily employiong B to do a job adds benefit to both and that said benefit disappears if A chooses *not* to employ B if the work done is worth less than NMW, then please comment on the Grauniad website instead.

  16. If the NMW were increased to (say) £8.50, would the reduction in the amount paid in in-work benefits (in effect, a subsidy to certain employers) be offset by the increase in out-of-work benefits? How high can the NMW go before the public purse loses out?

  17. bloke (not) in spain

    “Actually we DO know that society as whole is worse off if jobs disappear.”
    Uh…
    Society as whole would be worse off if the value of the work done by A disappeared but if B could get the work done free ( by magic, tech, whatever) then it wouldn’t be.

    Or buggy whip manufacturers would still be necessary but it’d be impossible to find airline pilots, no?

  18. john 77 the question is about net gains. Here is a thought experiment. one person loses their job (say, me) everybody else in the country gets a £100k pay rise. Is society as a whole worse off because I lost my job? If you cannot understand this, please comment on the Gruaniad website instead.

  19. “john 77 the question is about net gains. Here is a thought experiment. one person loses their job (say, me) everybody else in the country gets a unicorn. Is society as a whole worse off because I lost my job? If you cannot understand this, please comment on the Gruaniad website instead.”

    There, fixed that for you. Makes much more sense and is a much more realistic Gedankenexperiment now.

  20. abacab, if you want realism why not go for some people lose their jobs and some people get a small pay rise?

  21. So what justification do they have for this legislation?
    Here‘s a 292-page report on the effects of the minimum wage.

    …some unknown number of workers who will lose their jobs
    Unknown, and quite possibly very close to zero. Could even be negative. There’s been a lot of statistical research which has failed to find any clear effect. You know, a bit like how statistical research fails to show that plain packaging discourages cigarette smoking.

    The report I linked to does include contributions from employers saying that the minimum wage reduces how many people they employ. For example

    During a Commission visit to Nottingham, a member of the Federation of Wholesale Distributors with a medium-sized firm told us how with 60 per cent of its staff on the NMW, every 10 pence increase in the NMW directly cost it £50,000-£60,000, but it also needed to increase the pay of those above that level to maintain differentials, so overall, £100,000 would be added to the wage bill. In reality the company said it had to employ fewer people in order to ‘keep a lid on wages’.

    So this wholesale distributor is employing fewer people because of the minimum wage. Does that mean that less wholesale distribution is being done? Hardly. It means that inefficient companies which rely on very low wages to survive will be out-competed by more efficient companies, who will see an increase in business and won’t complain about it. Since these companies are more efficient, perhaps they employ slightly fewer people per unit of goods distributed, but then, jobs are a cost not a benefit, right?

    Currently we pay a “jobseekers’ allowance” to protect the unemployed from extreme poverty while they look for work. And to discourage freeloading, we make it a condition of receiving the benefit that claimants accept a job if one’s offered to them. That makes the supply of unskilled labour highly inelastic to wages. So the minimum wage is necessary.

    In the future, we’ll have a unconditional citizen’s income. Then we can and should abolish the minimum wage.

  22. “In the future, we’ll have a unconditional citizen’s income. ”

    Not with open borders within the EU you won’t.

  23. @ PaulB
    The poster child (actually 30-ish woman) for the NMW was an immigrant working in a so-called sweatshop (actually not at all sweaty) in Lecicester sewing. Over 90% of those working in the UK textile industry in 1997 have lost their jobs.
    I don’t know what sort of “statistical research” can fail to find that effect.
    M&S used to source at least 99% of clothing in the UK Itstopped because the price differential against Next became unsupportable. So now society is worse off to the extent that we buy clothes from the Far East instead of making them here. Money that would otherwise raise the standard of living of the families of the former textile workers and recycle into the UK economy ids now leached out to the Far East and global shipping companies.
    I think you can understand this even if Luis Enrique cannot.

  24. @Luis Enrique
    Where does that £100k come from? The magic money tree?
    Or are you a civil servant paid £6,000 billion for doing nothing?

  25. @ b(n)is
    If A could get the job done for free he/she would not be employing B in the first place.
    So, I should have said “… if jobs disappear due to NMW”. I thought that was obvious

  26. So Much for Subtlety

    PaulB – “Unknown, and quite possibly very close to zero. Could even be negative. There’s been a lot of statistical research which has failed to find any clear effect.”

    But that is because people pick a minimum wage for PR purposes. The left wants to feel it is doing something good, so they pick an unrealistic wage that makes it look like they are achieving something when in fact they are not. We can all agree that if the minimum wage was £120 an hour, it would have a definite impact. As it would at £100 an hour. Or even £50 an hour.

    “So this wholesale distributor is employing fewer people because of the minimum wage. Does that mean that less wholesale distribution is being done? Hardly.”

    Sure but we are not arguing about driving companies that rely heavily on unreplaceable-cheap-labour out of the market. We are talking about driving low-value-adding workers out of the market. Which we all seem to agree is what is happening.

    “That makes the supply of unskilled labour highly inelastic to wages. So the minimum wage is necessary.”

    I fail to see how that follows. Can you explain that a little further? We have too many unemployed youth. Therefore the clearing price for their labour has not been reached yet. They are too expensive. The solution is not to make them even more expensive.

    “In the future, we’ll have a unconditional citizen’s income. Then we can and should abolish the minimum wage.”

    In the future we will have pogroms but no welfare state.

  27. @ Theophrastus
    The public purse loses out if the increase in JSA plus the decrease in tax and NI paid by those losing their jobs plus the reduction in corporation tax paid by those firms absorbing the pay rise out of profits plus the various costs due to firms that cannot absorb the pay rises going bankrupt exceeds the reduction in tax cedits.
    OK so far?
    No-one actually *knows* the answer to your question but around £3-4 per hour seems to be a reasonable guess..

  28. All we can say about the minimum wage is that 0 is unacceptable for political reasons, whereas 19 trillion gazillion eurodollarpounds would bring the economy to a screeching halt in a femtosecond.

    So there has to be an optimum. Where is it?

    I suspect that the Swiss found the answer, factoring in the political reasons – that the optimum is in fact zero, as 77% of the population and all the cantons voted against a minimum wage on 18th May last year. Although the proposition was CHF22/hr, which on purchasing power parity is about GBP 10 – rather high……. And they do have unemployment under 3.5% (and a contributory unemployment system), which helps keep wages high even for unskilled jobs.

  29. @Dinero: “One of the reasons given for the minimum wage was that it stopped the Gov subsidising low paying employers. Now that there are in work benefits to persons earning above the minimum wage isn’t that particular rational rather superseded to some extent.”

    Or you might consider that if in-work benefits are necessary for people working 40 hours a week on minimum wage, then the general tax payer is subsiding low paying employers again. So increase the minimum wage and co-ordinate minimum wage with taking people out of the tax system. Consider also that some part-time workers will always be recipients of in-work benefits unless there is something like a citizen basic income.

    “I think its a reasonable notion that “zero hour contracts” are a response to the minimum wage. If its not legal to pay for the average productivity including downtime, then only the non downtime is paid for, hence zero hour contracts.”

    Perhaps. Or perhaps some employers use such contracts to control up and down employment costs, to the direct detriment of workers and the indirect cost of tax payers.

  30. @SMFS: “In the future we will have pogroms but no welfare state.”

    Do you understand the ethnic and religious connotations of “pogrom”?

  31. Paul B said:
    >>So what justification do they have for this legislation?
    >Here‘s a 292-page report on the effects of the minimum wage.

    You’re not following the logic of the discussion. I was responding to LE’s claim that “you do not know whether the positive impact of higher wages for those who remain employed at the min wage outweigh the negative impact of lost jobs. You do not know this.” The point is that if what LE says is true and we don’t know, then that applies equally to the legislators, and in that case they would have no justification for introducing the legislation.

    (But of course both sides do think they do know, and of course the government always puts out a long report justifying the legislation. But government-commissioned reports are usually mediocre research, and produced by people who have been carefully selected to say what the government wants.)

  32. Incidentally, from April 2015 there’ll be no employers’ NI for under-21s. This more than offsets the rise in the NMW for this age group.

  33. So Much for Subtlety

    Luis Enrique – “lots of policies help some , hurt others. Free trade, for example. Saying a policy is good on net does not imply not caring about those hurt.”

    Free trade only hurts some people in the short term. In the long run we may all be dead, but we can afford a much better funeral.

    So. I am not sure I quite understand where you are coming from or what your argument is. You are taking the standard leftist view that it does not matter if a bunch of restaurants are driven out of business as long as everyone else is forced to raise wages? That it does not matter if some BME youths cannot get their first step on the wage ladder because most young people will be better off?

    I tend to think that people who harden their hearts have pretty hard hearts, myself. So, yes, people who knowingly destroy businesses and hence jobs, don’t care. They may say they do. Doesn’t mean they actually do.

  34. @ Luis Enrique
    I learned Reductio ad Absurdum at school – we were required to use it for some mathematical prooofs.
    However you have not used reductio ad absurdum, which from a proposition and proves it has a logical consequence that is absurd – you have started with absurdity and applied no logic.
    What you would needto do, but cannot, is to start with argument that A will stop employing B if B’s wage exceeds the value to A of employing him and demonstrate that this will increase GDP.

  35. SMFS: “You are taking the standard leftist view…”

    The “standard leftist view”. What is that — Stalinism, Trotskyism, Maoism, Eurocommunism, Social Democracy, Liberal Democracy? Or are you just making up the concept of a standard leftist view?

  36. @SMFS: “Free trade only hurts some people in the short term.”

    It’s lovely to see you back, SMFS. Perhaps you missed my earlier comment:

    Do you understand the ethnic and religious connotations of “pogrom”?

  37. @SMFS: “…we can afford a much better funeral.”

    When I or you are deceased, we can’t afford anything on this earth.

  38. @ PaulB
    I just looked at the membership of the Low Pay Commission: of the 9, three are officers of the TUC or Trades unions, one of the “employer representatives” is a donor to the Labour Party, one “independent” academic attended Ruskin, the Trades Union College in Oxford before going to the University, one got a degree from Wolverhampoton Polytechnic and wrote not one, not two but *five* so-called academic papers jointly with Richard Murphy. The other three members may be non-political but they are outnumbered two to one by trade unionists and committed lefties.
    So my confidence in the report is negligible.

  39. Bloke in Costa Rica

    Minimum wages are good for raising productivity per worker, which makes for nice headlines. There’s a healthy dollop of What is Seen and What is Unseen, of course. You can plot minimum wages against unemployment (and labour force participation) and get a correlation. Is unemployment bad per se? If it is, then we’re in a lot of trouble, because the category of tasks that can be carried out by machines more cheaply and more satisfactorily than low-productivity humans—at any wage—is growing. Right now the wage level at which a business owner is indifferent between hiring a person or buying a robot is not a great deal higher than the minimum wage prevailing in a lot of modern economies. And once the decision is made to automate, those jobs are gone. We’d better hope the coming Age of Abundance kicks in before the unemployable start burning things.

  40. @John77
    “Actually we DO know that society as whole is worse off if jobs disappear. If you cannot understand that A voluntarily employiong B to do a job adds benefit to both ”

    Actually you can include A’s customer C as benefitting too, because if A could not ‘sell’ to C the cost of hiring B, B would not be hired.

  41. PaulB

    As abacab points out – an unconditional citizen’s income begs the question ‘what about people who aren’t citizens?’ Indeed Murphy and one of the ‘gang of four’ most idiotic contributors, Howard Reed have an idea for a minimum household income of around 10K. When I asked the question of them to whom this applied (i.e was it everyone in the country regardless of nationality) Murphy accused me of being racist and a troll whilst Reed at least acknowledged the validity of the question – his answer being some vague platitude about reciprocal arrangements being made by the UK with other countries. I pointed out this was unlikely to work with most Eastern European countries (can one imagine the number of Albanians that would set up shop here as single person households if such a policy was in force?) and from the gallery came there no response.

    Can you provide any backing for your assertion this is the future of welfare provision?

  42. As to the article itself, the cat is out of the bag I am afraid – As is argued, abolition simply isn’t possible (at least not without substantial reform on immigration and welfare) – to mitigate the effects I would progressively freeze it for a period of five years, then increase it below headline inflation rate for five years – giving businesses at least the freedom to plan ahead.

    The concern is that increasingly the likes of Murphy and his various parasitic acolytes have bought the concept of a ‘living wage’ to the fore – In the event of a Labour/Green coalition we could expect to see that policy piloted in London in the next five years, with concurrent impacts on industries with low and medium pay rates – basic economics and these people never interact unfortunately….

  43. @Van_P

    Paul will have a ‘report’ somewhere that ‘proves’ it, never fear.

    I love these reports. Here’s one from the Prison Reform Trust saying prison is a terrible place and makes recidivists out of essentially decent people, based on interviews with, er, prisoners.

    Here’s one saying zero hours contracts are terrible, produced by people employed by Trades Unions and reported in glowing terms in the Guardian where they have been employing journalists as casuals on zero hours contracts for decades.

    I could go on.

    I can understand why Ed Balls and the top people at Unite push this bullshit, because their six figure salaries depend on it. Len McCluskey would be an unemployed docker instead of a talking head on Question Time with a company Jag and a pension to dream of.

    I can’t understand what PaulB and Luis E get out of it. I’d like a full declaration of interests.

    Meanwhile, in the real world, where business owners haven’t read these reports and so don’t know that high wages are good for them, automation will gather pace.

  44. Interested

    Absolutely – Frances Coppola (who now spends much of her time offering her insights on Forbes and Seeking Alpha and getting deservedly remunerated for it) makes the point re: automation quite well.

    Meanwhile we get shrills like Murphy saying ‘we have reached the limit of technological innovation’ and being given money usually extorted from taxpayers directly or through ‘third sector organizations’ like charities and quangoes to spout this rubbish – as you say I would be intrigued to know what the critical commenters on this blog have in terms of interests….

  45. Over 90% of those working in the UK textile industry in 1997 have lost their jobs.
    72% in textile manufacturing according to the ONS. Output has fallen by about 40%. Are you saying that without a minimum wage, none of this would have happened? Have there been no changes globally?

    …if the minimum wage was £120 an hour, it would have a definite impact.
    So it would. And unicorns.

    “That makes the supply of unskilled labour highly inelastic to wages. So the minimum wage is necessary.”

    I fail to see how that follows. Can you explain that a little further? We have too many unemployed youth. Therefore the clearing price for their labour has not been reached yet. They are too expensive. The solution is not to make them even more expensive.

    If unskilled jobseekers have to accept a job on pain of destitution, which is roughly what our benefits system demands, and if there’s an oversupply of such labour, which there is, then the clearing price is zero. Is that where you want the market to go?

    …government-commissioned reports are usually mediocre research…
    …I just looked at the membership of the Low Pay Commission….
    No need to look at the actual data then, let’s just assume what’s published is wrong and reality matches our prejudices.

    an unconditional citizen’s income begs the question ‘what about people who aren’t citizens?
    They don’t get it. (But possibly an eventual scheme will apply across the EU.)

    Can you provide any backing for your assertion this is the future of welfare provision?
    No, it’s wishful thinking. But automation will progress.

    I can’t understand what PaulB and Luis E get out of it. I’d like a full declaration of interests.
    My income is not, and never has been, directly affected by the minimum wage. I am interested in the well-being of humanity, and in the promotion of fact-based policy. You?

  46. As abacab points out – an unconditional citizen’s income begs the question ‘what about people who aren’t citizens?’

    Non-citizens won’t be recipients of a citizen’s basic income – yes, I am a citizen-ist. If that’s prohibited in terms of today’s EU arrangements, we’ll have to change the arrangements (istr a loophole here). Or ignore them.

    Can you provide any backing for your assertion this is the future of welfare provision?

    I don’t know whether it is the future but:
    Mainstream economics says it’s A Bad Thing to have 100% of people in work, we want 3-12% (depending on the economist) to be out of work. We have an economy that from time to time puts people out of work through no fault of their own. Automation and offshoring puts people out of work too – all very well saying jobs are created as others are destroyed but it’s not necessarily the case that a particular person can walk from a destroyed job into another job, particularly during recessions when jobs are relatively scarce. There’s some doubt as to whether modern or future economies are or will be capable of providing sufficient work to humans. So how do we make sure the non-working-through-no-fault-of-their-own are adequately fed, clothed and sheltered (assuming we don’t want them to keel over)? What’s the optimal or least worse way of doing it?

    The UK has a mess of means-tested tax credits and benefits that discentivise work because of high withdrawal rates, creating welfare traps, if you work varying working hours it’s difficult to plan ahead and more opportunity for error and there is no incentive for the housing benefit recipient to spend less housing benefit, which provides a floor to rents. Workfare – making benefit recipients work in return for their benefits – puts state-funded ‘volunteers’ in competition with employer-paid workers – hmm, wonder which the employer will prefer.

    Absolutely – Frances Coppola (who now spends much of her time offering her insights on Forbes and Seeking Alpha and getting deservedly remunerated for it) makes the point re: automation quite well.

    She supports basic income in part because of automation.

  47. As for textiles:

    … The introduction of the National Minimum Wage – may have had some negative consequences for the international competitiveness of the sector. But it is important to realise that many of the remaining larger textile businesses in the UK pay average wages well above the NMW rate. The problems created by the high exchange rate and the downturn in Asian and US economies have been more influential than the national minimum wage
    The industry has also suffered from a number of supply-side problems that have created inefficiencies in production. These include an inefficient supply chain (poor communication, lack of trust etc.), under investment in new capital machinery. Inadequate research and development in new products. The industry has also found it hard to overcome a lack of skills, particularly in marketing, exporting and use of technology. …
    …employment fell sharply during the 1990-92 recession. Employment in the industry stabilised during the mid 1990s helped by the encouragement of a much lower exchange rate and a sharp rebound in UK manufacturing exports overseas. Employment started to decline once more in 1998 as the effects of the Asian economic crisis and the high pound kicked in.

    http://www.tutor2u.net/economics/content/topics/manufacturing/textiles.htm

    Incidentally the USA, EU and China throw money at domestic cotton producers (the USA also subsidies Brazilian cotton to circumvent the WTO) and impose tariffs and quotas on imports, making cotton more expensive for cotton and making it more difficult for developing world cotton producers to compete. We also pay money to landowners to not grow cotton or other crops. That kind of welfare is fine, though…

  48. @ PaulB
    It would take too long to find my original source (I think from Nottingham University but I cannot be sure) on my old computer even assuming that it still works, so I’ll use yours.
    The textile industry includes, and was primarily, manufacture of wearing apparel. So you have to look at two columns, not just one in the ONS statistics. Secondly I said “lost their jobs” – you are talking net reduction in employment (which is bound to be an understatement as it nets off growth in high-fashion from loss in basic clothing) over a period which includes a modest recovery in the last three-and-a-bit years while the NMW has declined in real terms. If you look at the detail you will see that the *net* decline in employment in manufacture of wearing apparel from June 1997 (my baseline) to June 2009 plus the *net* declines following the two subsequents bounces is 168k more than 90% of the starting 183k. Part of manufacture of leather goods is clothing industry part isn’t – job losses from June 1997 to Dec 2010 total over 90% of original 37k workers. On manufacture of textiles (which had fewer employees and far fewer low-paid employees because it included massive chemical plants extruding artificial fibre) the *net* decline is, as you say, only 72% but that is not enough to cause me to assume my orignal source which showed gross job losses for the whole industry of 90% was wrong.
    ” Are you saying that without a minimum wage, none of this would have happened? Have there been no changes globally?”
    I am saying that without a minimum wage *most of it* would not have happened. Firstly, M&S would have continued sourcing its textiles from UK manufacturers, Nottingham Manufacturing and several other M&S suppliers would not have gone bust. Dozens of small firms that paid piece rates to part-time workers have been forced out of business because they could no longer compete. Change in global situation with the rise in transport costs and Chinese wages should have eased the pressure in the absence of NMW. Actually I do know a little of what I am talking about because I had to research some small textile companies in the 1990s and they were able to sell on decent quality and quick response to demand (imports could take weeks to arrive) despite modestly higher delivered prices. After NMW, the chain stores wouldn’t pay prices high enough to cover costs.
    “I am interested in the well-being of humanity, and in the promotion of fact-based policy.” I think it is fairly obvious that so am I.

  49. @ ukliberty
    Your reference is only someone’s opinion and is over a dozen years out of date – it makes a *forecast* for 2001.. What quality research house would fail to update? It is also specious in the extreme by attributing the decline in UK textile manufacture and employment to a reduction in competitiveness and saying government-mandated increase in wages was not a major cause. To suggest that a drop in our exports of textiles to the Far East, due to a recession in some countries there, when we had a large trade deficit in textiles was a major cause of job losses is pathetic.
    “many of the remaining larger textile businesses in the UK pay average wages well above the NMW rate”
    The key word there is “remaining”. The firms which paid all (or virtually all) employees above NMW were completely (or virtually) unaffected by NMW. Initially at least: British Nylon Spinners, ICI Fibres and Courtaulds were part of the chemicals industry which paid high wages, so they only started to suffer when they ran out of customers.
    So it is not surprising that they were remaining in 2001. Most of them are not in 2015 – in “manufacturing of textiles” jobs have worse than halved since 2001; in “manufacture of wearing apparel” employment has fallen by two-thirds since 2001 (at the bottom it had fallen by three-quarters since 2001, over 90% of those employed in 1997 have lost their jobs.
    Showing a graph of decline which has a nadir *four times as high* as the actual nadir is, at best, incompetently misleading.
    “We also pay money to landowners to not grow cotton” LOL No-one grows cotton in Britain because itwon’t grow in this climate. Not even the government is stupid enough to pay British landowners not to grow cotton..

  50. john77,

    “I do know a little of what I am talking about because I had to research some small textile companies in the 1990s and they were able to sell on decent quality and quick response to demand (imports could take weeks to arrive) despite modestly higher delivered prices. After NMW, the chain stores wouldn’t pay prices high enough to cover costs.”

    That’s the really annoying part about the thing of jobs going to the far east – we have an advantage.

    I don’t know how anyone can think it’s a good thing that we have 2 million unemployed, while also importing from the far east. If we had a basic (as in, living on lentils, living in Hull) citizen’s income for all, and allowed people to then earn more to top up their wages and scraped NMW, we’d have a load of those unemployed taking a job.

  51. “We also pay money to landowners to not grow cotton [or other crops]” LOL No-one grows cotton in Britain because itwon’t grow in this climate. Not even the government is stupid enough to pay British landowners not to grow cotton..

    The economies I mentioned were the USA, the EU and China. I didn’t mention Britain. The EU subsidises Greek and Spanish cotton. The EU also says farmers mustn’t use all their productive land.

  52. @ ukliberty
    Are you now saying that the EU is paying a British Landowner not to grow cotton? Which one? Where? I should like to buy an acre or two from him/her.

  53. @ ukliberty
    The subject under discussion was the British textile industry* (which mostly means manufacturing clothing) into which *you* introduced the topic of growing cotton. I fail to see how how growing cotton in Spain or other crops (except flax )in Britain has any relevance whatsoever, There are no subsidies to get people to stop growing flax or wool in Britain.
    *And, in case you had forgotten, your selection of a highly misleading quote from 2001 to attempt to rebut my description of jobs lost between 1997 and 2010.

  54. john77,
    I didn’t mention growing cotton in Britain. Apparently you became pissy just because you think I tried to “rebut” something you said (god forbid) and as a result you became confused and boring. Instead of asking me to clarify you tried to score internet points. And you’re still carrying on.

    FYI:

    The UK is an EU member state.
    The UK is a net contributor to the EU’s money pot.
    The EU spends some of the money on agricultural subsidies.
    Some of the agricultural subsidy is payment to landowners per hectare of land they own.
    A requirement of the subsidy is the landowner mustn’t use some of their land to grow crops.
    Regardless of the fact that cotton is unlikely to grow in the UK it is one of many crops grown in the EU (including tobacco, another crop not grown in the UK) and subsidised by the EU (I can’t be arsed to look up whether direct subsidies for cotton still exist).
    Wool isn’t a crop (it doesn’t come from plants). IIRC sheep are allowed to graze on some land that isn’t allowed to be used for crops – I don’t know whether there are subsidies for wool or sheep.

    The “relevance” was I riffed from your textiles thing to corporate and agricultural welfare because it interests me that the Daily Mailograph rarely rants about those tens of billions but spends a very large number of column inches on citizen welfare.

    A trade-off of spending on corporate and agricultural welfare is its opportunity cost. A further trade-off of subsidising cotton is that it makes it more expensive for us plebs whether hardworking taxpayer or benefit scrounger. In the USA the public purse in effect spends multiples of the median wage keeping people employed in the cotton industry (I can’t remember what the figure is for the EU) and the US citizen has to pay more dollars for his t-shirt than he would if there were no subsidies, tariffs or quotas. And what would otherwise be an important and solid rung on the economic ladder for developing countries is kicked away by the richer economies for which cotton is in the scheme of things a triviality. Similarly for some other goods.

    HTH.

  55. EU cotton subsidies (mainly to Greece) are now very modest. Furthermore, farm set-aside payments were abolished years ago.

    US cotton subsidies are however a scandal.

    I forgot what this has got to do with the minimum wage.

  56. @ ukliberty
    Grow up
    I am *always* boring but rarely confused unless someone like you fails to understand what he/she is saying.
    I didn’t notice that I was becoming pissy – just wait until I do!
    I poked fun at your claim that we paid money to get landowners not to grow cotton in Britain where it cannot grow. “We also pay money to landowners to not grow cotton or other crops.”: if you do not realise that you are claiming that we pay landowners not to grow cotton, your English teachers needs to be sent back to do some CPD. If I was pissy I should ask for her to be sacked.
    Growing cotton anywhere else is *not* part of the UK textile industry. If the EU pays Italians not to grow cotton that is utterly irrelevant to the debate about the impact of the NMW on employment in the UK.
    I am not responsible for the Daily Mail and the only tme that I can remember buying it was on behalf of my mother-in-law who likes the Femail section (surprise:I am more physically active than my mother-in-law!) and it is totally irrelevant to this thread.
    You seem not to know that wool is a textile and sheep graze totally on agicultural land since any land on which sheep graze is defined as agricultural.
    I was wondering whether your previous posts were based on ignorance or were lefty propaganda: it seems that ignorance is the answer
    The US cotton-growing industry is totally irrelevant to the UK garment manufacturing industry and an only marginal competitor to the UK artificial fibre manufacturing industry.
    Hundreds of thousands of people in the UK textile industry alone have lost their jobs as a direct result of the NMW.

  57. @ PaulB
    As far as I know, you are quite right.
    It is a relief to have you as someone honest to debate politics and economics from a different viewpoint

  58. Furthermore, farm set-aside payments were abolished years ago.

    I didn’t mention “set-aside”, which was indeed abolished but now we have “greening” and if you don’t do “greening” you lose some or all of the payment. Which some have argued is quite similar to set-aside in terms of the “don’t use some of your land to grow crops” aspect of it.

  59. You’re not always boring john77.

    I poked fun at your claim that we paid money to get landowners not to grow cotton in Britain where it cannot grow.

    A claim I didn’t make. A claim you bizarrely inferred.

    “We also pay money to landowners to not grow cotton or other crops.”: if you do not realise that you are claiming that we pay landowners not to grow cotton

    OR OTHER CROPS, john.

    You seem not to know that wool is a textile

    Another bizarre inference.
    u ok hun?

  60. So paying someone to put agricultural land to fallow has an impact on garment manufacturing?
    I am sure that someone on this blog has offered you a bridge for sale

  61. So paying someone to put agricultural land to fallow has an impact on garment manufacturing?

    A claim I didn’t make. I said subsidies, tariffs and quotas make cotton more expensive.

Leave a Reply

Your email address will not be published. Required fields are marked *