Support the living wage

[MK Shrimper]

Just a quick question Paul, what do the shareholders do when you stop offering them a profit that's comparable with other investments they might consider?

I imagine they switch their money. If they want to keep the returns to their shareholders perhaps they could look at cutting costs elsewhere rather than the labour force, which without, there would be no business anyway especially if they are skilled staff.

 

[South Bank Hank]

I imagine they switch their money. If they want to keep the returns to their shareholders perhaps they could look at cutting costs elsewhere rather than the labour force, which without, there would be no business anyway especially if they are skilled staff.

Indeed - and the business closes and more people are unemployed. Do you honestly not think that shareholders looking at cutting costs in the labour force to an effective minimum will not also have considered cutting costs to an effective minimum elsewhere? Why wouldn't they?

 

[MK Shrimper]

Indeed - and the business closes and more people are unemployed. Do you honestly not think that shareholders looking at cutting costs in the labour force to an effective minimum will not also have considered cutting costs to an effective minimum elsewhere? Why wouldn't they?

It seems that the first port of call is always the labour market. Replacing skilled workers with minimum wage, zero hour contracted staff with no claim to sick pay/holiday pay etc. I know for a fact this has happened in my wife's school (not the teaching staff) DESPITE the fact that;

a) This is a school to educate children and not ICI.
b) They make a meagre profit (still a profit however).

 

[South Bank Hank]

It seems that the first port of call is always the labour market. Replacing skilled workers with minimum wage, zero hour contracted staff with no claim to sick pay/holiday pay etc. I know for a fact this has happened in my wife's school (not the teaching staff) DESPITE the fact that;

a) This is a school to educate children and not ICI.
b) They make a meagre profit (still a profit however).

I wouldn't dispute that cost cutting in the labour market is happening but I would strongly question whether the replacement of skilled labour is where stakeholders will primarily focus their energies. Again, why would they? I do think it's happening now but as one of the final pieces of the puzzle to be looked at after all other areas have been exhausted. Counter-productive and short-sighted for some firms but a means for survival for others.

Which is where it again comes back to choices for the shareholder, employer and employee.

 

[Napster]

It seems that the first port of call is always the labour market. Replacing skilled workers with minimum wage, zero hour contracted staff with no claim to sick pay/holiday pay etc. I know for a fact this has happened in my wife's school (not the teaching staff) DESPITE the fact that;

a) This is a school to educate children and not ICI.
b) They make a meagre profit (still a profit however).

One anecdote does not a fact make.

 

[MK Shrimper]

One anecdote does not a fact make.

But as I said this is a fact as my wife's school is going through a re-org.

 

[londonblue]

I imagine they switch their money. If they want to keep the returns to their shareholders perhaps they could look at cutting costs elsewhere rather than the labour force, which without, there would be no business anyway especially if they are skilled staff.

They may well do, but since these shares are already in existence, and assuming this is a PLC, these shares will be traded on a secondary market somewhere. No money will be directed to or from the company itself. All it will do is reduce the value of the shares to a point where someone else will be willing to buy them. If the shares fall far enough someone might try a buy out which could be interesting.

However, none of the above is relevant since up until now (it seems to me) we've been talking about small companies (which are probably limited companies rather than PLCs). Given that, nothing will happen since the owners will most probably be the only shareholders, and they're unlikely to sell.

 

[South Bank Hank]

They may well do, but since these shares are already in existence, and assuming this is a PLC, these shares will be traded on a secondary market somewhere. No money will be directed to or from the company itself. All it will do is reduce the value of the shares to a point where someone else will be willing to buy them. If the shares fall far enough someone might try a buy out which could be interesting.

However, none of the above is relevant since up until now (it seems to me) we've been talking about small companies (which are probably limited companies rather than PLCs). Given that, nothing will happen since the owners will most probably be the only shareholders, and they're unlikely to sell.

On the first point, what makes you think people would buy shares in a business struggling for profit - unless of course they thought it could be turned around? Share-prices would fall and, in order to increase the value of their investment, shareholders would demand action to turn the struggling business around. Which would mean focusing on both increasing incomes and reducing costs. So we're back to square one.

On the second point, you're absolutely correct. But that's the very point. Shareholders of such businesses WOULD be unlikely to sell (they'd never find a buyer anyway). What they'd most likely do then is WITHDRAW THEIR MONEY and close the company as they weren't receiving a return on their investment. ****ed off shareholders. ****ed over employees. Entirely negative cycle negating anything of value to everyone.

 

[londonblue]

On the first point, what makes you think people would buy shares in a business struggling for profit - unless of course they thought it could be turned around? Share-prices would fall and, in order to increase the value of their investment, shareholders would demand action to turn the struggling business around. Which would mean focusing on both increasing incomes and reducing costs. So we're back to square one.

You answered your own question. But as I said, this is irrelevant to the thread...

On the second point, you're absolutely correct. But that's the very point. Shareholders of such businesses WOULD be unlikely to sell (they'd never find a buyer anyway). What they'd most likely do then is WITHDRAW THEIR MONEY and close the company as they weren't receiving a return on their investment. ****ed off shareholders. ****ed over employees. Entirely negative cycle negating anything of value to everyone.

You really are painting a doom and gloom scenario. It's not necessarily as black and white as that. Paying a bit more could work completely the other way. It would entice better quality staff and gain a better reputation, thus improving profits. At least that's how it's worked with my wife's business...

 

[South Bank Hank]

You answered your own question. But as I said, this is irrelevant to the thread...

Hmm, well yes. It was rhetorical and intended to carry its own answer.

:thump:

You really are painting a doom and gloom scenario. It's not necessarily as black and white as that. Paying a bit more could work completely the other way. It would entice better quality staff and gain a better reputation, thus improving profits. At least that's how it's worked with my wife's business...

As above. I rather feel you've stepped into a discussion that's already half way through and raised a point that's already been answered. We were discussing the doom and gloom scenario of a business where the shareholders were no longer able to turn a profit due to spiralling costs (be they labour or otherwise). I've spoken throughout about an effective level of wages which balances the positives from paying more against the need to manage costs. I say again that it's at its most effective when the business owner, like your wife, is able to determine what THEY see as being the correct wage to attract the required talent.

Rather wish you'd read all the posts in the thread rather than pick up one comment.

For the record, I personally don't think you achieve anything by telling people to do something and paying them a minimal amount. I believe that all wages should be incentives-driven where the right behaviours emerge because employees are motivated to achieve certain outcomes. In such ways, you link success of the employee with success of the company.

 

[steveo]

Cant you blokes stop this high level debate so we can get back to Barna Bashing?

 

[londonblue]

Hmm, well yes. It was rhetorical and intended to carry its own answer.

:thump:



As above. I rather feel you've stepped into a discussion that's already half way through and raised a point that's already been answered. We were discussing the doom and gloom scenario of a business where the shareholders were no longer able to turn a profit due to spiralling costs (be they labour or otherwise). I've spoken throughout about an effective level of wages which balances the positives from paying more against the need to manage costs. I say again that it's at its most effective when the business owner, like your wife, is able to determine what THEY see as being the correct wage to attract the required talent.

Rather wish you'd read all the posts in the thread rather than pick up one comment.

For the record, I personally don't think you achieve anything by telling people to do something and paying them a minimal amount. I believe that all wages should be incentives-driven where the right behaviours emerge because employees are motivated to achieve certain outcomes. In such ways, you link success of the employee with success of the company.

Stop being so patronising. I read every post. The point I was making which I'll make again so you can understand (see we can all do it) was that if you're the one that pledges to adhere to a living wage and your competitors don't then you will be able to attract better quality staff. It doesn't matter what the level of wages is, if you pay a bit more than your competitors you'll attract better staff than your competitors.

Why do you think the best investment banks pay the most? (Or at least did when I was in banking.)

 

[South Bank Hank]

Stop being so patronising. I read every post. The point I was making which I'll make again so you can understand (see we can all do it) was that if you're the one that pledges to adhere to a living wage and your competitors don't then you will be able to attract better quality staff. It doesn't matter what the level of wages is, if you pay a bit more than your competitors you'll attract better staff than your competitors.

Why do you think the best investment banks pay the most? (Or at least did when I was in banking.)

What I'm struggling with most is that I completely agree but you don't seem to realise that? The only distinction I've made is the point around choice by the firm (to pay less than the competitors/a living wage/more than the competitors) rather than choice enforced by the government.

 

[Mad Cyril]

I would set the living wage at around £1000 per hour assuming most people get through essentials such as jewellery, white fur coats and pimp sticks at the same rate I do.

 

[Tangled up in Blue]

Cant you blokes stop this high level debate so we can get back to Barna Bashing?

Love you too,Stevo.:winking:

 

[Yorkshire Blue]

Theoretically, but it doesn't work like that. Those at the top see their wages rise, the shareholders get a nice return whilst those at the bottom see their incomes shrink.

Same as it ever was.

Just worth giving a nudge in the light of the Welby-Wonga story: I hope you noticed that it was a pension fund who owned Wonga.

When shareholders get a nice return people with pensions are the ones to benefit.

 

[MK Shrimper]

Just worth giving a nudge in the light of the Welby-Wonga story: I hope you noticed that it was a pension fund who owned Wonga.

When shareholders get a nice return people with pensions are the ones to benefit.

On this note, a few years back I wrote to the RPS people (Railway Pensions) to ask where MY money was being invested as I would feel distinctly uncomfortable if it with industries & products which I feel are unethical. They wouldn't reveal it, which I'm not even sure is legal?

 

[Yorkshire Blue]

Almost certainly 50% will be invested in propping up Hornby and the rest will be unethically invested.

 

[Napster]

A quick google search

http://citywire.co.uk/global/how-uk-rail-pension-became-an-investment-powerhouse/a500143

 

[MK Shrimper]

Almost certainly 50% will be invested in propping up Hornby and the rest will be unethically invested.

Probably in bad and ovepriced cheese sandwiches!