[Closed] The minimum wage...

Hmmm, well there's a flawed logic to it (for the UK) in that you're taking money away from the people in society with the highest marginal propensity to consume, whilst helping to line the pockets of those who'll be able to save it... so is Gideon contemplating it? Almost certainly.

This'll be Gideon, heir to one of the baronetcy's of the Ascendancy? I think he has a reasonably direct interest....

Southern Yeti is spot on.

And of course this government isn't interested in "logic" as much as it is in keeping the neo-liberal dream alive.

Neo-liberal dream = high unemployment, low wages, high profit.

In a nutshell.

Who is Gideon?

There are arguments for and against. I thought the change in Ireland was a drop of one Euro stipulated by the European Union as a consequence of the bailout.

Gideon...

[img] [/img]

He's called George, I believe he's the Chancellor.

He's called George, I believe he's the Chancellor.

He calls himself George, but his name is Gideon

...or "Oik", if you prefer...

he changed his name when he was 12. he may be a **** but the name thing is hardly worth mentioning - i think there are other more important issues

he changed his name so is actually called George but people use it show he is a member of the aristocracy and different from you and me
I doubt it as they would pay less tax and we would pay more tax credit to top it up so I doubt it saves us any money.

Could potentially introduce more jobs. Some argue that it is better to have no or a low minimum wage and have the govenrment top up peoples income. This way unemployement is lower and while the government is paying out more to top up they will hopefully be paying less to people who are completely without work.

Personally I don't think it would work as many current employers would drop their wages and we'd have to make a substantial drop in the minimum wage to become competitive with other countries that are considered cheap for manufacturing.

Another famous name changer [url= http://en.wikipedia.org/wiki/Tony_Benn ]clicky[/url]

yes but he gave up his peerage as well fighting to get the law changed so he could do this. Agreed by the tories so Hulme could give his up to be PM iirc
A lot of the minimum wage is paid by comapnies who could afford more eg MC donalds so I think it would help big companies more than litlle companies. They are not going to hire more people they will maximise profits so I see no reall point.

yes but he gave up his peerage as well fighting to get the law changed so he could do this

And the double barrelled surname part ?

He killed his Mum.

What has our chancellor got to do with what is going on in Ireland?

Well their's (along with many things which is why they are in deep shit) is a lot higher than ours at EUR8.65 (ours is £5.93 = EUR6.92).

And minimum wage is about lifting the minimum a company can pay, without it they'd pay less... A bit like how women have been historically paid less than men, and its really only due to legislation that the gender rates have equalised (as seen with the many public sector cases).

you allready said he changed his name. My point was that his was due to principle [and embarassement??]. I have no idea why George changed his and have stopped caling him gideon as it seems childish

yes but .....

WTF are you talking about, Tony Benn hasn't changed his name 😕

To shorten Anthony to Tony is perfectly normal - it doesn't mean you've "changed" your name ffs.

And he is still Wedgewood Benn. OK he no longer bothers with the first part of his double barrel name....and ? so what ? His name hasn't "changed" ......the Wikipedia link proves that.

If I decided that I would no longer automatically give my middle name when asked what my name was, would that represent me "changing" my name ?

What has our chancellor got to do with what is going on in Ireland?

Quite a lot actually. Osborne sees Ireland as a shinning example of how an economy should be run. In 2006 he said,[i] "We should look and learn from across the Irish Sea"[/i], so impressed he was by their economic miracle.

More recently he has said that Britain should follow the example of Ireland with their commitment to reduce their deficit through massive spending cuts.

Although this week he bunged them a few £billions for their new fiscal stimulus. It is now a good idea for the Irish government to borrow more money ..... apparently they hadn't borrowed enough.

I think you will find he was impressed by their supply reforms which had proved very effective in promoting export led growth in the economy. The cause of Ireland's problems seem to be largely down (not exclusively) to joining the euro which lead to negative real interest rates so borrowing was invested in a property boom of pretty impressive proportions.

As far as cutting expenditure is concerned Ireland failed to stave off a reduction in their credit rating, something Osborne to date has achieved so it is not a comparison of like with like. Now that a bailout is happening, Ireland's public spending is likely to be cut more vigorously.

It is not a fiscal stimulus, the money is being used to repay market debt because it is too expensive.

The cause of Ireland's problems seem to be largely down to joining the euro

So wouldn't a better suggestion from Osborne have been : "[i]We shouldn't look across the Irish Sea, they've gone and joined the Euro"[/i] ?

[i]something Osborne, [b]following on from Gordon Brown[/b], to date has achieved[/i]

And anyways, I thought it was construction led growth rather than export led growth.

[img] [/img]

I think everyone knows that he has or indeed had no intention of joining the euro, so why mention it? He admired the supply side reforms and praised that aspect - no need to upset people is there?

Until about 2000, the growth
had been on a secure export-led basis, underpinned by wage restraint.

[url= http://www.tcd.ie/Economics/staff/phonohan/What%20went%20wrong.pdf ]World Bank report[/url]

I've just seen an Irish fireman on the news saying that his most repetitive task these days is pulling people out of the Liffy who've tried to commit suicide by jumping into it.

Seriously...

crikey - I think you will find his predecessor in post was Alastair Darling.

Disgusts me should be no less than £ 10 per hr

[IMG] [/IMG]

Liffey!

And I assure you, joining the euro was not the cause of Ireland's problems.

From the report I linked above

Among the triggers for the property bubble was the sharp fall in interest rates following euro membership: within the eurozone also the disciplines of the market which had traditionally served as warning
signs of excess were muted.

By the way, the author is now in charge of the Irish Central bank.

Whenever I think about the minimum wage I think of a guy I met while I was camping, I wrote a blog at the time and this was part of my blog entry for the day...

He explained that when he reached his teenage years he found out that the woman he had always thought of as his sister was actually his mum and his mother was actually his gran. Dyslexia had made school unbearable at the hands of unsympathetic and spiteful teachers so, feeling betrayed and lied to, he left school early and hit the streets. He spent the next 20 years living in shop doorways and hostels, eeking out a living where he could doing odd jobs, fruit picking, labouring on building sites and rummaging amongst bins. When the minimum wage came along he could no longer find work that was not illegal so he became a beggar.

This is exactly as he described it.

I no longer believe that the minimum wage is a good thing for the poorest people in our society, it does in fact draw a line between those included in our society and those who are firmly outside.

Until about 2000, the growth
had been on a secure export-led basis, underpinned by wage restraint.

World Bank report

mefty - did you really think I wouldn't bother reading your link ? 😀

The very next sentence after that was : "[b][i]However, from about 2000 the character of the growth changed: a property price and construction bubble took hold.[/i][/b]"

Osborne made his comment in 2006, at that time the Irish economy was being driven the construction/property industry bubble - a fatal mistake which made them particularly vulnerable to the toxic nature of the global credit crunch. And it is precisely because property prices in Ireland have collapsed (iirc) by 40% that it is today up shitcreek without a paddle.

Of course Ireland's property speculation/credit driven boom was to much for Thatcherite neo-liberals with their deep hatred of manufacturing and their enduring love for fictitious capital, and poor old Osborne couldn't help wetting his pants......hence his comment in 2006 :

[i]"[b]We should look and learn from across the Irish Sea. What has caused this Irish miracle and how can we in Britain emulate it?[/b]"[/i]

If it becomes too expensive to employ people then people start to look to automation.

I've done a couple of jobs at minimum wage and the majority could have been done by a machine if it became cost effective.

Of course I didn't but he never praised the construction boom, he praised education, R&D and low corporate taxes - that is what initially led the boom, which was sustainable. Unfortunately it was then pissed away on a property boom.

Extract from article George Osborne wrote from which your quote is derived, I believe.

What has caused this Irish miracle, and how can we in Britain emulate it? Three lessons stand out. First, Ireland’s education system is world-class. On various different rankings it is placed either third or fourth in the world. By contrast, Britain is ranked 33rd and our poor education performance is repeatedly identified by organisations such as the OECD as our greatest weakness. It is not difficult to see why. Staying ahead in a global economy will mean staying at the cutting edge of technological innovation, and using that to boost our productivity. To do that you need the best-educated workforce possible. It is telling that even limited education reform is proving such a struggle for the Prime Minister.

Secondly, the Irish understand that staying ahead in innovation requires world class research and development. Using the best R&D, businesses can grow and make the most of the huge opportunities that exist in the world. That is why it is shocking that the level of R&D spending actually fell in Britain last year. Ireland’s intellectual property laws give incentives for companies to innovate, and the tax system gives huge incentives to turn R&D into the finished article. No tax is paid on revenue from intellectual property where the underlying R&D work was carried out in Ireland. While the Treasury here fiddles with its complex R&D tax credit system, I want to examine whether we could not adopt elements of Ireland's simple and effective approach.

Thirdly, in a world where cheap, rapid communication means that investment decisions are made on a global basis, capital will go wherever investment is most attractive. Ireland’s business tax rates are only 12.5 per cent, while Britain's are becoming among the highest in the developed world.

even the shining light of Capitalism, USA, has a minimum wage so there must be some substance to having one if they do (even though its pretty low and the service industry relies on staff to supplement wages through their tips)

he never praised the construction boom

Well of course he didn't ! What sort of daft muppet would argue that house price inflation and easy credit was a great basis for economic stability ? 😀

But in 2006, whatever his claims, the Irish economy was being driven by a property bubble. Even your World Bank link recognises that.

Well of course he didn't ! What sort of daft muppet would argue that house price inflation and easy credit was a great basis for economic stability ?

Someone who abolished boom and bust? I think we will agree not to differ on this point.

However reverting to your initial post, I don't think it is unreasonably to draw the conclusion that you were implying that Osborne supported their then economic policy in its entirety, which there appears to be no support for.

I don't think it is unreasonably to draw the conclusion that you were implying.....

I am not implying anything - I am telling you straight, : Osborne was wrong.
Let me repeat that : [u]Osborne was wrong.[/u]

There was no "Irish miracle". And the "three lessons" were not about Education, R&D, and low corporation tax. Because despite everything Osborne said, Ireland was not better placed economically than Britain and other countries. In fact, the complete opposite has been shown to be true - Ireland is much worst placed than other countries, including Britain.

So what Osborne was saying in 2006 about Ireland was clearly complete bollox, ie, [i]despite[/i] Education, R&D, and low corporation tax, your economy can still go tits up.......big time.

Let me remind you just how precise his words were :

[i]"Ireland stands as a shining example of the art of the possible in long-term economic policymaking"[/i] George Osborne 2006

And he has been wrong about the Irish economy since then too ..... as he has heaped praise on their strict austerity programme - the same strict austerity programme which has helped them to dig themselves into an even deeper hole, cumulating in this week's crises.

And of course time will eventually show that he was completely wrong about Britain too. Still, he won't worry too much about that, as he will have achieved what he always intended to.

Well said ernie

it doesn't matter what he said in 2006 - this crisis was unforseeable then. the banks hadn't collapsed yet and america was still dishing out sub-primes like sweets to children on halloween!

besides, surely he will still get his peerage regardless of his mis-placed praise of a fundamentally flawed economic policy!?

this crisis was unforseeable then

I think many would beg to differ. Greed, incompetence, and previous property bubbles which have been known to burst, all suggests that the crises was both foreseeable and avoidable.

And unless of course, you had bought into theory that Capitalism had finally rid itself of the shackles of "boom and bust". Didn't think Osborne had though.

I disagree - the growth achieved by Ireland was pretty spectacular - 6% to 11% each year for nearly a decade, much of which was export led, we dream of such numbers. They caught up with us and then overtook us. Clearly, mistakes were made but to suggest that no lessons can be learned from what they did achieve is frankly ridiculous. If they were not within the Euro they would have more weapons to confront their present position. Unfortunately, they don't and therefore many of the gains made could well be lost. However, they still likely to be well ahead of where they would have been without that growth before the construction boom.

I disagree - the growth achieved by Ireland was pretty spectacular

Who are you disagreeing with ?

Ireland's growth was indeed spectacular............as was it's collapse.

BTW it really is hard to overstate just how serious the situation concerning the Irish economy is.
And it isn't just serious on paper, it is serious in real life, affecting real people, and causing real misery.

Furthermore mefty, it is pointless you banging on [i]"6% to 11% each year for nearly a decade, much of which was export led"[/i] when the link you yourself provide (and therefore presumably trust) from the World Bank, very clearly states :

[i][b]"from about 2000 the character of the growth changed: a property price and construction bubble took hold"[/b][/i]

So for the majority of the decade, ie 2000-2007, growth was fuelled by a property bubble.

And this is precisely the same period in which George Osborne described the Irish economy as a "shining example" which we should "emulate".

.

Clearly, mistakes were made but to suggest that no lessons can be learned from what they did achieve is frankly ridiculous.

Who is suggesting that no lessons can be learnt ?

There are a whole multitude of extremely valuable lessons to be learnt. Amongst them are, that achieving the lowest corporation tax rates in the EU does not guarantee you long term economic stability (note that the present UK government is committed to slashing corporation tax) That achieving high levels of growth based on meaningless fictitious capital and property bubbles, also does not guarantee you long term economic stability - better to rely on tangible assets with real value. Neither does achieving impressive levels of education guarantee you economic stability - note the historically high levels (for many years) of those in further education in the UK, despite it not translating into high and sustained levels of growth. As I have said before on here ...... someone somewhere has to produce [i]something[/i], for wealth to be created.

We can also learn from Ireland that when faced with a downturn, opting for extremely severe austerity measures, rather than a sensibly planned fiscal stimulus, simply makes a very bad situation even worst.

But perhaps the most important lesson we can learn, is not to trust George Osborne's judgement on matters concerning long term economic stability. Not that Osborne's definition of a sound economy is the same as most people mind. I have no doubt at all that Osborne would be absolutely thrilled if Britain had a low-wage high unemployment economy which was churning out high profits.

But you choose to ignore what he said he should emulate, other than low corporation tax - your views are often are interesting, I disagree with many of them - but cherry picking quotes out of context is pure spin that you so often denigrate.

We are going to disagree on corporation tax rates, I believe low rates attract outside investment which generates jobs which generates tax revenue. You will no doubt argue that it only panders to the global multinationals etc etc.

Education is important and it will prove to be a worthwhile investment, if done well, whether an all time high of people in higher education is the right measure to its effectiveness, I would question, I think you might as well.

But, as far as Ireland having a fiscal stimulus when they started cutting expenditure, where were they going to get the money from? Who was going to pay for it?

So in short, Osborne seems to have drawn sensible lessons, in my view, from the good that Ireland achieved. He was also probably right about Irish spending cuts because there was very little alternative - who was going to lend?

you choose to ignore what he said he should emulate

No I didn't. Look up there ^^ (second post from the top) I mention the 3 things which he said we should emulate.

I simply don't agree that it provides, as he suggested, with a, quote : [i]"Irish miracle"[/i] and a [i]"shining example of the art of the possible in long-term economic policymaking"[/i]

Events have shown that he was wrong.

OK, apologies you did, if you believe that construction boom and the building of tangible assets was responsible for Ireland's downfall as I do - events have not proved him wrong.

Regarding, the fiscal stimulus, where was the money going to come from?