Threat to minimum wage in Northern Ireland

Belfast Tue Jul 24, 2007 at 10:41:46 PM GMT Print-friendly version Facebook

I do hope this is silly season journalism, but this evening the BBC Northern Ireland website reports:


 'Prime Minister Gordon Brown is considering plans which could see the minimum wage reduced in Northern Ireland, it is believed.




The minimum wage is set at £5.35 across the UK, however, if the plans go ahead it will be reduced in NI, Scotland, Wales and the north east of England.

Employment Minister Sir Reg Empey said he was disappointed with the idea.

"We have difficulty in getting people to leave benefit and go to work, this would make matters worse," he said.

"I think for that reason we have got to remember that the people who are receiving the minimum wage tend to be those people who are doing very basic jobs and I honestly don't think penalising them will improve our economic prosperity."

A government spokesperson would not comment on the issue.'.


At a time when the cost of living in Northern Ireland is at a peak this seems crazy. Like the proposal to implement highly unpopular local water rates, if this is another ploy by a willy (former) Chancellor to make local greedy politicians get real about economics then I welcome the backlash, but perhaps its a sweetner to stop local business leaders from complaining too loudly if they do not get thier much campaigned for reduction in corporation tax to match Southern Ireland levels. Either way it feels like a major threat to  many people here 'living' at minimum wage levels and if its true a proposal that must be resisted through out the UK.


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Threat to minimum wage in Northern Ireland | 23 comments (23 topical)

Re: Threat to minimum wage in Northern Ireland (#1)

by SocialistAC on Tue Jul 24, 2007 at 10:53:54 PM GMT

We MUST not let this happen. It will be the beginning of the end of the minimum wage.


Re: Threat to minimum wage in Northern Ireland (#2)

by NorthernMonkey on Wed Jul 25, 2007 at 02:00:08 AM GMT

Under no circumstances must this happen. I cannot believe that Brown is even considering such a move. What on earth has happened to him lately?


Re: Threat to minimum wage in Northern Ireland (#3)

by MM on Wed Jul 25, 2007 at 02:04:19 AM GMT

I'm sure I was reading somewhere that Brown was planning to introduce changes to the minimum wage so that it was variable across the regions, i.e those in the south would get a higher rate than in the north because of the higher living costs.  Perhaps this is the 1st stage in the process?  There is no doubt that the Government wants to introduce much more flexible pay deals for public sector workers depending on where they live.


Re: Threat to minimum wage in Northern Ireland (#4)

by rwendland on Wed Jul 25, 2007 at 10:25:33 AM GMT

If the minimum wage becomes variable across regions, the logical next step is for Tax Credits to become variable, as the two have a lot of linkage. If the wage of someone on Tax Credits (and perhaps housing benefits) drops, about 70% to 90% of that drop would be made up by a Tax Credit/housing benefits increase. So dropping the minimum wage without adjusting Tax Credit rules increases benefit costs (and the converse is also true).

I'd be amazed if we went down this route. The logical end of the road is for London to have higher minimum wage and benefit rates than the rest of the UK, to reflect higher costs in London; which is a dumb politcal move if nothing else.

I suppose there is reason to special case Northern Ireland though, because of its long land border with the Republic of Ireland which seems to have a lower min-wage of €8.65 (£4.37) per hour. I guess benefit rates are also lower in Eire. If we are preparing the ground for a merger I suppose we have to bring these rates into line. Tricky; easiest if the value of the pound against the euro dropped a bit.


[ Parent ]

Re: Threat to minimum wage in Northern Ireland (#12)

by NorthernMonkey on Wed Jul 25, 2007 at 03:15:27 PM GMT

Preparing the ground for a merger? I think we all know that's not going to happen.


[ Parent ]

Re: Threat to minimum wage in Northern Ireland (#5)

by grimupnorth on Wed Jul 25, 2007 at 10:39:17 AM GMT

Disgraceful. Inexcusable. One of the achievements endlessly  cited  by New Labour. If  it's true  I hope the trade unions wake up and smell coffee as  at moment their silence is deafening.


Re: Threat to minimum wage in Northern Ireland (#6)

by swatantra on Wed Jul 25, 2007 at 11:11:21 AM GMT

I've never been in favour of 'universal' benefits at the same rate and that I suppose that goes for the min wage as well; it really all depends on what each persons or family circumstances are and the general cost of living in a particular area. The natural conclusion I suppose is a proper, realistic assessment of needs in particular areas.


[ Parent ]

Re: Threat to minimum wage in Northern Ireland (#7)

by listelcs on Wed Jul 25, 2007 at 11:22:30 AM GMT

If the minimum wage is to change then maybe the basic rate should be what it is at now and  then add on weightings for various areas. Here in Brighton we do not get any weightings even though we are one of the msot expensive places to live, you can buy property cheaper in some places in London.


[ Parent ]

Re: Threat to minimum wage in Northern Ireland (#8)

by swatantra on Wed Jul 25, 2007 at 11:28:29 AM GMT

area cost adjustment? an excellent idea!


[ Parent ]

Re: Threat to minimum wage in Northern Ireland (#10)

by rwendland on Wed Jul 25, 2007 at 02:08:37 PM GMT

It could be a political disaster, which will go down very badly ioutside the south-east.

Consider mobile workers like cleaners or van drivers. I bet many such companies move HQ out of town to a lower min-wage area if possible, but with workers still servicing city-centre companies.

Yes, we could introduce complex rules to try to defeat this (like wage depends where you spend most time - but of course this might vary week-to-week). But why should a van driver from Swindon sent to deliver in London be paid more that another driver sent to Slough?

This might work well for Northern Ireland because of geography, but it will be painful elsewhere.


[ Parent ]

Re: Threat to minimum wage in Northern Ireland (#13)

by SocialistAC on Wed Jul 25, 2007 at 06:51:25 PM GMT

"Consider mobile workers like cleaners or van drivers. I bet many such companies move HQ out of town to a lower min-wage area if possible, but with workers still servicing city-centre companies." Exactly! Bosses WILL do that short of bastardry if variable minimum wages are introduced. Then it'll be a case of 'race to the bottom' in terms of lowering the minimum wages to "stay competitive".


[ Parent ]

Re: Threat to minimum wage in Northern Ireland (#9)

by jkitleft on Wed Jul 25, 2007 at 12:48:48 PM GMT

if there are area pay adjustments, pay more in London, South etc. rather than less in North, Scotland etc.


Re: Threat to minimum wage in Northern Ireland (#23)

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[ Parent ]

Re: Threat to minimum wage in Northern Ireland (#11)

by NorthernMonkey on Wed Jul 25, 2007 at 03:13:33 PM GMT

People in the North, Scotland, Wales etc. will not stomach Southerners having a higher minimum wage than they get.


If you're looking for a way to well and truly cement the North-South divide then follow this policy.


Re: Threat to minimum wage in Northern Ireland (#14)

by JM on Wed Jul 25, 2007 at 06:59:03 PM GMT

I don't believe there's any plan to do this.


Re: Threat to minimum wage in Northern Ireland (#15)

by JM on Wed Jul 25, 2007 at 07:08:30 PM GMT

Wait, spoke to soon!

A bit of looking turned up this Telegraph article.

I wonder if there's anywhere we can look at the academic study mentioned in the article.


[ Parent ]

Re: Threat to minimum wage in Northern Ireland (#16)

by NorthernMonkey on Wed Jul 25, 2007 at 07:45:34 PM GMT

Hmm...this is pretty worrying.

It seems Gordon's got his mind set on this and as we know, once Gordon sets his mind on something, there's no going back.

The thing is, why are the media not reporting this more? Surely this is a major policy development and one that would create a great deal of controversy?


[ Parent ]

Re: Threat to minimum wage in Northern Ireland (#17)

by fluffymike on Wed Jul 25, 2007 at 08:06:37 PM GMT

How can people be even contemplating an acceptance that the minimum wage should be variable? It's a MINIMUM wage for crying out loud, and should only be the wage in a limited number of instances.


If we are to start attempting to redistribute wealth, then that means bringing poorer areas up to scratch with more affluent areas - not artificially holding them back.


Yes - this is all part of the attack on public sector workers - and the govt is already trying to railroad regional pay through in many areas.


As Grim said - time to wake up and smell the coffee TUs and other false xxxxxxx followers!


Re: Threat to minimum wage in Northern Ireland (#18)

by JM on Wed Jul 25, 2007 at 09:36:27 PM GMT

I don't think you can fault Brown on that. The new proposals for development agencies to take over powers from the regional assemblies with a view to bringing the poorer regions towards the national wealth average is testiment to that.


[ Parent ]

Re: Threat to minimum wage in Northern Ireland (#19)

by grayee on Wed Jul 25, 2007 at 11:28:22 PM GMT

Hang on folks - I would not believe the spin that the Torygraph would give on any Labour Party story (nor Grims for that matter).  We have had a number of past posts on the need for a "living wage" for more expensive parts of UK (London etc).  It would also be a success if Councils could set minimum wage levels for any contracts they set. 


Re: Threat to minimum wage in Northern Ireland (#20)

by jkitleft on Thu Jul 26, 2007 at 11:47:14 AM GMT

I don't think we should have the sort of sytem the US has though.


Re: Threat to minimum wage in Northern Ireland (#21)

by jkitleft on Thu Jul 26, 2007 at 11:47:25 AM GMT

'system'


[ Parent ]

Re: Threat to minimum wage in Northern Ireland (#22)

by bigpapi on Thu Jul 26, 2007 at 12:44:46 PM GMT

There may be a kind of convoluted logic to this in that if the Minimum Wage is higher in Northern Ireland than in the Republic, and given the EU's free movement of labour regulations, there could be signs of an influx of workers from the Republic taking the higher paid minimum wage jobs from Northern Irish citizens.  Thus reducing the level of the minimum wage in the North acts as a disincentive to workers from the South, and frees up jobs in the North, thus reducing unemployment rates in both Northern Ireland and the UK figure as a whole.


I'm not arguing it's the right thing to do, just trying to introduce what may be the reasoning behind it - assuming it's accurate.


Threat to minimum wage in Northern Ireland | 23 comments (23 topical)