Friday, February 18, 2011

Youth unemployment

Youth unemployment has, apparently, reached a record high.
The latest official statistics showed that youth unemployment rose by 66,000 to 965,000 in the three months to the end of December, the highest level since comparable records began in 1992.

The youth unemployment rate was 20.5%, compared with a general unemployment rate of 7.9%.

Well, as both Timmy and the ASI point out, it is not as though we didn't warn you—the National Minimum Wage prices low value workers out of jobs.
And for the reasons that I have outlined above, the National Minimum Wage "achievement" should be thrown as Gordon—along with the rotten fruits and turds—when he is finally driven out of Downing Street.

And the unemployed should be on the front line because, of course, the NMW has had another effect: someone whose labour is worth less than £5.80 per hour will now never, ever get a job. And that means that they cannot get either the experience or finance to better themselves—and that means that they are condemned to a life rotting away on benefits, a seam of potential destroyed.

Of course, the above was written a little time ago: the NMW now stands at £4.92 per hour for 18 to 20-year-olds and £5.93 for those 21 and above. Which means that, of course, anyone who's labour is worth less than those figures—plus, of course, 12.8% Employers' NICs—will never get a job.

This applies particularly, of course, in more depressed areas of Britain—which also have the highest levels of general unemployment—because £4.92 (or £5.93) per hour is much higher relative to other wages in the area. Just as with the National Pay Deal, the National Minimum Wage takes no account of the differences in living costs in the various parts of Britain.

And, naturally, the situation is only going to get worse when the 2% rise in National Insurance kicks in—it is, after all, a direct tax on job-creation at a time when the economy is struggling. Brilliant.

Of course, young people could work for free—and, luckily, on W4MP (a recruitment site for MPs' bag-carriers and political party wonks) you can see many, many opportunities for young people to do precisely that.

It appears that MPs and political parties view researchers as being utterly valueless.

Or is it simply that MPs and political parties want to be able to pay the going rate for these jobs, i.e. nothing, whilst preventing businesses from doing the same...? Yes, I think it is.

Anyway, Timmy sums up the solution to this problem very neatly...
Us bastard capitalist neoliberal pig dogs said that the effect of a minimum wage would be to push the lowest skilled people out of the employed, into the unemployed, part of the labour force.

We now have that minimum wage and in our first proper recession since we have had, we’ve got 20% unemployment among the least skilled, the young, as opposed to 8% more generally.

We said this would happen and lo and behold, it has come to pass.

The solution is therefore obvious: abolish the minimum wage.

Quite.

22 comments:

Michael Fowke said...

Who can even survive on minimum wage? You want them to work for less?

Richard Allan said...

The threshold for absolute poverty is about £1.33 a day. Multiply by 7 days and divide by a 40 hour week gives you the princely sum of 24p/hour as the minimum survivable wage. And these people could easily work for more than 40 hours per week, which pushes it even lower. Also, you can assume some level of universal benefits to cover the most basic living costs; might as well make it 1.33/per day. That way the minimum survivable wage is zero.

Also MF, you obviously didn't read the post because the point is that people don't get the minimum wage because it throws them out of work.

Furor Teutonicus said...

XX That way the minimum survivable wage is zero.XX

And, just convieniently, (for us) that is what the Benfit agency have decided to pay you.

You are a coward, sir!

Go for a zero benefit system. Nothing, zilch, FUCK ALL!

That will sort out the "can't be arsed" crowd.

Michael Fowke said...

"people don't get the minimum wage because it throws them out of work"

@Richard - are you saying that there is not one person in the entire country who gets the minimum wage?

Anonymous said...

Governments don't do the bl**ding obvious. They do not listen to people who actually know how the worlds works.

Derek

I Hate Lefties said...

@Michael Fowke

Fuck's sake. Talk about wilfully missing the point.

Of course some people get the minimum wage (my fiancee, for one).

The point, typed extra slow for clarity, is that the minimum wage ensures that fewer jobs are available in the first place. Why? Because some labour simply isn't worth the minimum wage, and private companies generally don't have magic money trees that they can use to pay their wage bills.

Michael Fowke said...

I'd be spitting blood if my fiancee was being exploited on the minimum wage, but I guess I'm the caring type.

Francis Urquhart said...

My government has taken steps to address this shocking issue as you will see on the iGov site at http://f-urquhart.blogspot.com/2011/02/employment-rights-bill.html

I Hate Lefties said...

@MF: Thanks for the insult, classy guy. As it happens, I'm infuriated with the situation. My fiancee is talented, intelligent and hard-working and is way too good for the job she's in. She tries and tries but can't seem to land anything better. She cries on my shoulder at night sometimes. This makes me want to machine gun every useless fucker sat clock-watching in a good job.

So, yes, I care. But guess what? I can still recognise a shit policy when I see one.

P.S. Despite the crapness of her job she always gives 100%, because she has pride. That's one of those old-fashioned things that you can't buy.

xelent said...

Yes, the distinction is that the minimum wage excludes people from the job market, because the jobs are simply not created in the first place. This is the sad fact to reflect on. Those young people that would like a job, for which they will learn better skills are now regrettably excluded and relegated to silly Job Centre schemes, which have no idea what the economy needs. As an entrepreneur myself, if I take the risk and pay a never worked before 18 yr old £100 pw (£2.50 ph) at which point I am probably taking a small loss compared to their productivity. I see it as an investment of course, in nurturing productive staff for the future. In which case I do think I'm best placed to know what my business will need in future. So that once this youngster is fully trained up and being productive, I can then start paying them a far higher wage. Not only that, but they now have skills they can take elsewhere within the jobs market. This now has sadly all but disappeared since the minimum wage unfortunately.

Ian R Thorpe said...

We can go all the way back to the Speenhamland poor relief system (circa one million years BC) and see that every time a minimum wage has been introduced it has made the poor worse off and saddled the taxpayer with a bigger burden.

When will they learn?

Now of course those people whose work is only worth minimum wage or less face increased cometition from machines which are not stroppy and don't take sick days.

Mark M said...

Well.. I don't know about abolishing the minimum wage because the argument for it are actually quite good, especially with the massively foreheaded one taking unemployment benefit away from someone refusing a job.

But, having said that, it does irritate me when politicians say "we need to do something about youth unemployment" when the minimum wage is staring them in the face.

We all said it, we all know it, the price of a minimum wage law is higher unemployment in the lower skilled sections of society. How is it that the politicians just don't get this point? Minimum wages protect some, at the cost of making many more unemployed. That's just a fact, and borne out by our experience of NMW.

Furor Teutonicus said...

Then why bother paying any one to do anything?

No dole, no pay, nothing.

But of course, all the work will get done because of those that are all "too proud" not to work, right?

IF the job is worth doing, it is worth paying for it to be done. That includes paying the person doing that job the value of the work done.

Firms going bust should not be subsidised. A person working for lower wages is nothing other than a subsidy for that firm.

Pogo said...

FT, you're wide of the mark...

IF the job is worth doing, it is worth paying for it to be done. That includes paying the person doing that job the value of the work done.

But if the job is only worth three quid an hour and you're forced to pay five, it isn't going to get done and the person who could have done it isn't going to get the opportunity as the job will never materialise.

Only local and central governments can "provide jobs" at greater than perceived value - because they can enforce the subsidy with the tax laws.

Dr Dan Holdsworth said...

I still don't get why any minimum wage law has ever been thought to be a good idea. Abolish the minimum wage altogether, and you remove a whole tranche of regulation and save the state a large amount of money, and save the various companies using low-waged workers a lot of money too.

If a worker ends up on a wage too low to live on, then going somewhere else is the best solution; let the bloody market sort out wages rather than some shiny-arsed penpusher socialist!

Furor Teutonicus said...

XX Dr Dan Holdsworth said...

If a worker ends up on a wage too low to live on, then going somewhere else is the best solution; let the bloody market sort out wages rather than some shiny-arsed penpusher socialist!XX

There IS nowhere else "to go".

The "market sorted out agency work GOOD and proper, so ending the "go somewhere else" theory.

NO agency will pay more than a few pence more per hour than any other agency.

Hotels, Restaraunts, bin wagon washing firms, have all done the same. IF they have not TOTALY gone over to employing only agency workers any way.

I suggest you TRY to find work as a "starter" these days, that will pay your mortgage, to send your bastards to school, to pay the petrol for your Jag, etc.

And FURTHER from a socialist as me you could not get, so DON'T try THAT one. In fact I would end ALL "social payments", No dole, no sick pay, no bastards allowance, no polltax payment for low earners, no rent subsidies,no free health care, schooling, librarys, NOTHING.

But realistically, you NEED to give people a MINIMUM wage on which they can live. Or are YOU suggesting that having half your employees living under a motorway bridge is just fine and dandy?

Devil's Kitchen said...

Furor,

As I have explained before on here, if we—as a society—believe that there is a certain level of income below which someone cannot live, then that is fine.

However, we should not force one particular section of society, e.g. company shareholders, to pay for our conscience.

As such, if there is to be a minimum wage, it should be paid by the whole of society, e.g. through top-ups to the workers' wages through taxation (such a system does, in fact, exist now), rather than putting the burden onto others.

This makes us no better than the government, i.e. "I think that the NMW should be this, but I don't have to pay for it. So there!" It's very easy to be generous with other people's cash...

DK

Devil's Kitchen said...

P.S. I am, as it happens, a shareholder in a small company. We don't pay people the NMW—we pay way above it because we cannot get the staff that we want for that price.

DK

gnasher said...

It does'nt matter what the unemployed are paid, within 2 years, "The Moneychangers" will be again creaming the profits as the've done for the past 200 odd years . The war against the Muslims will be in full flow, industry will be on a war footing and conscription will once again be making mincemeat out of our babies. Of course the fucking bankers get another advantage, they do away with Sharia Banking (That really does fucking scare em).

Stephen said...

As such, if there is to be a minimum wage, it should be paid by the whole of society, e.g. through top-ups to the workers' wages through taxation (such a system does, in fact, exist now), rather than putting the burden onto others

So we should subsidise crap employers. What a wonderful scheme.

Furor Teutonicus said...

XX Blogger Devil's Kitchen said...

However, we should not force one particular section of society, e.g. company shareholders, to pay for our conscience. XX

Then they need to re-learn the lesson that if you want quality, you have to pay for it.

That goes for employees just as much as for a pair of hand made Italian shoes.

xelent said...

The whole point of the market is understanding your value, when I was 16 and left school in 1985 I was only worth £35 per week.. An average bedsit cost the same to live in at the time as I recall.. I mean I would hope parents were there to support their child through this early stage of employment of course, as a means to raising their income levels as their skills progress.. But what really annoys me about this debate is that in the past it was the employer that invested in the youth with their own money. Sure they had a profit motive, but heck since when has a job centre scheme given a toss whether a kid was successful or not? They get a shed load of tax payer money to just sit on their ass.. If it were their own cash, they would make damn sure that kid was successful.. This really is a no brainer frankly.. and I guess an old story by the kitchens standards by now too.. :)