Wagamama, among others like the Marriott chain, has just been fined for paying under the minimum wage. This is proof that we must abolish the minimum wage.

No, not because this is obviously some impertinence where government prevents the capitalists from exploiting the workers. But because this is proof that the workers would prefer there not to be a minimum wage.

Wagamama and Marriott Hotels have been named and shamed by the Government for underpaying minimum wage workers, as it identified 179 employers that had to repay £1.1m to thousands of workers and fined them £1.3m.

The British Japanese food chain was the worst offender, after it failed to pay £133,212 to 2,630 minimum wage workers. Marriott Hotels came in second, failing to pay £71,722.93 to 279 workers, while TGI Friday’s did not pay £59,347.64 to 2,302 workers.

Whether these are the correct details or some desperate smoke blowing I know not:

Thomas Heier, people director at Wagamama, said: “As an employer we have always paid minimum wage and make sure that our staff receive 100pc of their tips. This was an inadvertent misunderstanding of how the minimum wage regulations apply to uniforms and as soon as we were made aware of this in 2016 we acted immediately to correct the position.”

This is about uniform and shoe allowances, not quite that plutocratic greed. Getting the rules wrong – OK, they say – rather than anything else.

But then this does prove that we shouldn’t have a minimum wage anyway. This rather relies upon us all accepting standard economics of course. You want to start prating about how a minimum wage raises aggregate demand and all that then off you go and we’ll pay no attention. It doesn’t. So, standard stuff, a minimum wage means some people aren’t going to get a job. The very point of a minimum wage being that it is set above the market clearing rate.

And what do we have here? Evidence that people still turn up to work at less than minimum wage. So, therefore, these people prefer, by their actions, to have a job at less than minimum wage rather than no job. So, why do we deny people what they want, that job, by insisting they cannot sell their labour at the price they wish?

It’s not that people pay less than the minimum wage which proves we must abolish it, it’s that people work at less than the minimum wage which shows we must abolish the minimum wage.

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bloke in spain
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bloke in spain

Not sure about this one. The economics is, of course, impeccable. But if you’re importing an infinite amount of third world labour who’ll happily work for peanuts, what’s to stop the entire tier of low pay jobs being taken by them because the entitlement for state benefits for the domestic labour pool is also infinite?
It’s part of the argument that you can’t have both a welfare state & an open door immigration policy.

Quentin Vole
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Quentin Vole

The market is also distorted by ‘in work’ benefits. Get rid of those and no-one is going to work for less than they can afford to live on.

Rhoda Klapp
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Rhoda Klapp

All the noodles you can eat. Does that count for nowt?

Hallowed Be
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Hallowed Be

Bis = yes there’s a contradiction which is usually glossed over. One of the more common justifications for the min wage rises is that “we’re building a high wage economy” So the point that some people are priced out of jobs is not refuted but sidestepped. The implication is there is a cost worth paying (or in polspeak investing) for some point in the future. But you still can’t claim to be building a high wage economy unless your immigration policy is geared towards high wage earners.

bloke in spain
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bloke in spain

@Hallowed Be
Why would you want a high wage economy? A high productivity economy, yes. But there’s no obvious connection between the two. High productivity implies reducing labour costs, not increasing them

Gamecock
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Gamecock

‘So, why do we deny people what they want, that job, by insisting they cannot sell their labour at the price they wish?’

It’s not about people, it’s about punishing the rich.

jgh
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jgh

I giggle whenever I see a Wagamama store as it’s Japanese for (near enough) “spoiled brat”.

Spike
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“Building a high-wage economy” means constraining individual choices for the sake of prettier aggregate statistics – here, by declaring an increasing set of jobs illegal to offer. Same as Trump’s tendency to treat as an act of war any current-account trade balance that doesn’t total out at $0, or Obama’s push for “universal coverage” in a system of “affordable” health care. If foreigners, even illegally resident, will work for less, that communicates something, just like the true price of any product including borrowing money. Conceal the true price and everyone makes wrong decisions. So either lower your own wage demands… Read more »

Twatting on Timmy
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The minimum wage was one of the great successes of the Labour governments between 1997 and 2010. It was universally condemned when proposed, with claims being made that it would create mass unemployment and harm business, but neither happened. The real wages of many were increased as a result of that legislation, but it remains the case that a minimum wage of only just over £6 an hour is far too little to ensure most people, even people living by themselves, can sustain themselves without risk of being in relative, and sometimes absolute, poverty. As a consequence those employers paying… Read more »

James in NZ
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James in NZ

The minimum wage has directly led to my mentally handicapped sister no longer having a job as the cost of employing her is now too great. As a result taxpayers are paying more and, more importantly, she has lost out on the opportunity and benefits of being a useful part of society.

You and your ilk can go fuck yourselves backwards on a merry-go-round.

Gamecock
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Gamecock

You are one cold mutha, Twatting. Why not make the minimum wage £60 an hour so that the workers can live well?

Diogenes
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Diogenes

So the average underpayment was about £50 per person. So the rules are too hard to understand and apply as interpreted by HMRC. The workers have not been massively underpaid.

On the other hand, does it make sense for the government to spend £25m in order to recover £9m of miniscule underpayments?

BniC
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BniC

Relative poverty, yes as you can keep defining that as you like, but absolute poverty, no way, unless of course your using some other definition that’s really relative poverty

bloke in spain
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bloke in spain

Sure macro, Tim. Which a lot of us regard as Einstein rather than Newton. But closer to Ron L Hubbard. “All production equals all consumption and also all incomes, by definition.” In a closed economy, sure. But in this case, if your low paid are immigrants you can count on them remitting a lot of their earnings back where they came from. That’s what they do. So the consumption of production doesn’t happen in the UK & your sums don’t balance. “we can indeed say that high productivity equals high wages.” And if the increase in productivity comes from automation… Read more »