"No jobs mantra suits the work-shy and welfare abuser"

[onq]

I'm talking about stores that are open Monday to Saturday.

That 25% figure comes from a Failte Ireland study which for some reason I can't reopen.

EDIT: [broken link removed]

It's actually 30%.

Thanks.

The reasons why I wanted to get behind the bare figures is quoted below.

From

[broken link removed]

P.2

Par 2.2.2.

"LABOUR COSTS 25.2% INCL VAT

"Labour costs account for a considerable portion of the overall cost
structure within a restaurant (30.4% of revenue ex VAT across all
restaurants, with a figure of 29.4% for hotel restaurants and 31.2% for
stand-alone sites). Labour is largely a fixed cost due to the minimum
staffing requirement to cook and serve a meal. The cost of labour is
governed by a large amount of legislation intended to protect the
rights of employees. In addition restaurants are regulated by JLC’s
who determine minimum remuneration and working conditions for
the sector. The JLC regulations have set rates of pay for the sector
above the national minimum wage."


People

"Labour is largely a fixed cost due to the minimum staffing requirement to cook and serve a meal."

You need many people to source, prepare, cook, serve and clean away a restaurant meal.
Many of them are skilled people and people in training, working in a high pressure industry in often stressful and challenging working conditions

During the Tiger I spoke with a client who was a hotel owner who simply couldn't keep good staff to satisfy the growing demand for eating out.
Many were from out of town and working day to day or week to week, the preferred extortionate method of employers. It backfired on the employers because of the demand and because the restaurant employees operated a grapevine.

Everyone wanted a piece of the restaurant action. As soon as an employer down the street was offering 50 per hour cents over the previous rate the employees left one establishment to seek the best pay elsewhere.
Market forces operated without let or hindrance and no one complained about the minimum rates because wages were well above them in many cases - how times change!


Rates of Pay

"The JLC regulations have set rates of pay for the sector above the national minimum wage"

The cost of labour in restaurants heretofore hasn't been set by the minimum rate of pay, but by Joint Labour Committee agreements and Employment Regulation Orders made by the Labour Court.
The Decision of the High Court of 7th July 2011 made such agreements unconstitutional but agreements in place prior to that date continue.

New legislation is currently being formulated to address both the underlying weakness in existing legislation and concerns of employers and businesses in the current challenging trading conditions.
A brief summary of the current situation can be found here.

http://www.citizensinformation.ie/e...and_trade_unions/joint_labour_committees.html


Overview

The JLC's and ERO's came into being as a response to employers exploitative work practices in the restaurant trade.
Long hours, sometimes off the books and for a flat rate were the hallmarks of the industry before the JLC reformed employers practices.

Restaurant owners made good money out of a booming economy and cheap foreign labour (despite the poaching of staff caused by the incremental hourly rate increases referred to above).
In the last two years or so serious concerns about viability have arisen due to the economic downturn and questions have been asked about what the government will do about the situation as summarized here -

[broken link removed]

You will notice that, despite the high staff figure, upward-only rent reviews are also mentioned in the article.


Reality Check

Part of what we are seeing is a shake out of the market where a lot of premises, some on marginal locations that catered for an overall increase in footfall simply aren't getting the business.
Location is a huge determinant of how well a food and drink related business will do in challenging trading conditions.
Thus, while restaurants and cafés have closed elsewhere, at least five new restaurants have opened in Dalkey, Co. Dublin this year.

The originally quoted article offered broad brush-stroke analyses based on percentages of costs.
I think we should be looking at what the owners of restaurants are taking out of the business per annum for what in some cases may be merely a watching brief.
In other words, some contribute little or nothing and want their days on easy street to continue.

I suspect the few remaining who think like that are in for a surprise
The recent High Court decision has undoubtedly shaken up the market
But people's expectations of a fair days work for a fair days pay won't go away.
You still have to pay well in an open market to attract good staff to a quality restaurant.

ONQ.

 

[Complainer]

More profits will result in new entrants entering the market which will create more jobs

This is back to the more jobs at lower pay issue - no net increase in GNP - just spreading the jam around a bit thinner, with all the implications of that as outlined above.

It's not a question of which export business are paying the minimum wage, rather that the minimim wage is a floor which wages are set above. Reducing the minimum wage will have downward presure on wages.

Right, so this is about getting everyone's wages down, as we enter the winter with gas prices skyrocketing. Let's hope we don't get another spell of extended freezing temperatures this year.

Finally....back to the original topic...a simple question:

Do you think that our minimim (sic) wage level and social welfare rates are deterring people from seeking employment?

In the vast, vast majority of cases, no, I don't believe that minimum wages and SW rates are a deterrent. I believe the absence of any meaningful jobs, and the presence of 450k on the live register are the real deterrent.

Reducing the minimum wage will not create manufacturing jobs. It just won't.

Scary when we agree, isn't it.

See this is the thing about economics and the future, nobody knows.

Even scarier when we agree, well nearly.

It doesn't matter what jobs will be created, the important thing is to balance supply and demand of work.

I'd imagine that the important thing to the 450k people on the dole is to give them the opportunity to have a meaningful job, paid at a level that allows them to have a meaningful life here in Ireland.

Please don't compare the comments that oppose your views to the PDs. Under the PDs government grew hugely, minimum wage went up massively, welfare entitlements went up, regulations increased across the board. All these things are the exact opposite of free market and classical liberal economics.

OK then, I'm sure it is entirely coincidental that the author of the original opinion piece was head honcho of the PDs for years, and that the piece is textbook PD policy. Pure coincidence.

Here's another lesson in basic economics for you. Increased profits means increased capital available for reinvestment, which results in increased employment.

Here's a lesson in basic life for you - Increased profits means increased capital available for reinvestment does not mean that increased profits actually get reinvested. Some if it may get reinvested, and some of it will certainly go elsewhere.

Maybe they could start their own business? Maybe they could hire people at a rate that makes sense to expand their own business? But why bother when the social welfare rates are so high compared to the minimum wage?

Kinda difficult to start their own business and hire people when deflationary policies like those proposed here are repeatedly taking money out of the economy and reducing the little discretionary spending power left in the country.

I'm off for a while now, so I won't be able to respond. Have fun.

 

[onq]

"Scary when we agree, isn't it."

- Complainer, AAM Post in the "No jobs mantra suits the work-shy and welfare abuser" thread made 9th August 2011 @ 12:14 PM.

And I agree with you as well.

Taking money out of a stagnant economy whether through reducing dole payments or cutting the minimum wage will not create more economic activity or employment.

Banks that can lend, a freeze on utilities prices and tax rises and a private sector free of upward only rent reviews are what is required to help re-float the L.E. Ireland.

Of course if America goes under because of its policy of aggressive war we're all sunk and China will be picking up the pieces.

ONQ.

 

[Gekko]

A cut in the minimum wage would lead to cheaper meals. It would have to. Yes the chef is skilled and should be rewarded accordingly but the rest of the labour is unskilled and should be remunerated accordingly.

And saving money by cutting the dole is an end in itself...it's not necessary for such a move to do anything else but help the State finances.

People spoof about us "taking the pain" but the reality is that nobody has taken any pain relative to what needs to done. When the s..t hit the fan the gap between national income and expenditure was €20 billion. It's still €20 billion give or take a couple of billion. Somebody needs to grasp the nettle bigtime and do the following for starters:

- Cut the salaries of ALL public sector workers by 20%.
- Cut all welfare payment by 20%.
- Cut the number of TDs to 100.
- Abolish the Seanad.
- Rationalise RTE, move it to a small greenfield site on the outskirts of Dublin and sell off Montrose to the highest bidder.
- Cut consultants' annual salaries from €250,000 to €100,000. They'll still do the work because they need the access to private patients and resources (consultants in France are paid €85,000 per annum for this reason).
- Introduce a gigantic compulsory redundancy programme in the public sector. For example, get rid of the thousands of HR people working in the HSE. Pay no more than statutory redundancy. Slash and burn to rid the public sector of the tens of thousands of people who have no work to do.

What's happening right now is a joke. We're navel gazing about a property tax of €100 which will raise €75 million per annum and all the while we're staring into a €20 billion per annum abyss.

 

[Firefly]

This is back to the more jobs at lower pay issue - no net increase in GNP - just spreading the jam around a bit thinner, with all the implications of that as outlined above.

More jobs = less people on the dole = less state borrowings..can't make it much simplier

Right, so this is about getting everyone's wages down, as we enter the winter with gas prices skyrocketing. Let's hope we don't get another spell of extended freezing temperatures this year.

Provided by a semi-state I might add.

In the vast, vast majority of cases, no, I don't believe that minimum wages and SW rates are a deterrent. I believe the absence of any meaningful jobs, and the presence of 450k on the live register are the real deterrent.

So if the dole was halved tomorrow would you think these 450K people would stay at home or seek work / start working for themselves? I'm not interesting in the social aspects of this by the way for this debate, just the economic aspects which require us to borrow 18bn a year plus interest (which is compounding each year we have to borrow).

Kinda difficult to start their own business and hire people when deflationary policies like those proposed here are repeatedly taking money out of the economy and reducing the little discretionary spending power left in the country.

You're right....this will take money out of the economy, but only in the short term. As the price of labour falls it will be a lot easier to start a business. Our costs vis a vis our European competitors will fall. This means we'll have lower export costs..this leads to an increase in demand for our products which will result in profits. This will attract new entrants into the market creating more employment.

 

[Firefly]

"Labour is largely a fixed cost due to the minimum staffing requirement to cook and serve a meal."

So reducing wages would lead to even bigger savings as there are so many staff.

Everyone wanted a piece of the restaurant action. As soon as an employer down the street was offering 50 per hour cents over the previous rate the employees left one establishment to seek the best pay elsewhere.
Market forces operated without let or hindrance and no one complained about the minimum rates because wages were well above them in many cases - how times change!

I've absolutely no problems with that. Why then though when these market conditions changed do employees expect to hide and still base their pay on minimum wage rates? Do you think if the minimum wage was abolished that there would be as many restaurants closing?

You still have to pay well in an open market to attract good staff to a quality restaurant.
ONQ.

Agree 100%. Any employer should pay what the market commands. With the exception of top-end restaurants, the waiting position is non-skilled. There are 450k people on the dole who could do this job if the social welfare was cut and it wasn't beneath them. I know I would do any job if I was out of work to try and put food on my table.

 

[Purple]

ONQ, JLC agreements pre-date the minimum wage. If you want protection then have one or the other but not both.

 

[Purple]

To those who oppose pay cuts in general; do you think that we have a competitiveness problem and if so how do we fix it (will pay cuts be part of the solution)?

 

[Sunny]

To those who oppose pay cuts in general; do you think that we have a competitiveness problem and if so how do we fix it (will pay cuts be part of the solution)?

There will be a decline in wage levels as the market adjusts to the new supply and demand dynamics in the market. We are already seeing that where I work. We are hiring people on 20-30% less than they would have got a couple of years ago. You don't need to cut the minimum wage to achieve that. Very few people in this Country are on the minimum wage so not sure why people are fixated on it. I agree that we need to very careful that social welfare doesn't become a lifestyle choice but I don't agree that this necessarily means choping unemployment benefit for everyone just because they are looking for a certain amount time to try and get back into their chosen career.

Competitiveness is about more than labour costs. It is to do with energy costs, transport costs, local authority rates, regulatory costs etc etc.

 

[Firefly]

Competitiveness is about more than labour costs. It is to do with energy costs, transport costs, local authority rates, regulatory costs etc etc.

I agree. Alas, most of these are provided by the government with little or no competition for the public to chose from.

 

[Sunny]

Not sure if this was already linked but it might be interesting for people

http://www.competitiveness.ie/media/NCC110623-cost_of_doing_business_2011.pdf

 

[onq]

A cut in the minimum wage would lead to cheaper meals. It would have to. Yes the chef is skilled and should be rewarded accordingly but the rest of the labour is unskilled and should be remunerated accordingly.

And saving money by cutting the dole is an end in itself...it's not necessary for such a move to do anything else but help the State finances.

People spoof about us "taking the pain" but the reality is that nobody has taken any pain relative to what needs to done. When the s..t hit the fan the gap between national income and expenditure was €20 billion. It's still €20 billion give or take a couple of billion. Somebody needs to grasp the nettle bigtime and do the following for starters:

- Cut the salaries of ALL public sector workers by 20%.
- Cut all welfare payment by 20%.
- Cut the number of TDs to 100.
- Abolish the Seanad.
- Rationalise RTE, move it to a small greenfield site on the outskirts of Dublin and sell off Montrose to the highest bidder.
- Cut consultants' annual salaries from €250,000 to €100,000. They'll still do the work because they need the access to private patients and resources (consultants in France are paid €85,000 per annum for this reason).
- Introduce a gigantic compulsory redundancy programme in the public sector. For example, get rid of the thousands of HR people working in the HSE. Pay no more than statutory redundancy. Slash and burn to rid the public sector of the tens of thousands of people who have no work to do.

What's happening right now is a joke. We're navel gazing about a property tax of €100 which will raise €75 million per annum and all the while we're staring into a €20 billion per annum abyss.

Its like the last year of debates on AAM hasn't happened reading this post.

This appears to be just a listing of first-year-accountancy Progressive Democrat principles - a monetarist agenda with no appreciation of the overall deflationary economic effects and social hardship it will cause.

Here is a clue.

Borrowing to fund the state is a given - live with it.

Reducing the need to borrow to fund the sovereign debt or reduce taxes is a good aspiration, but should never be an end in itself.

However -

Reducing the total amount of money entering an economy is a deflationary measure.

Swiping 20% of the social welfare allowance is an "I'm all right jack" attitude that needs to be binned.

Its as much navel-gazing as ignoring the fact that we have petty criminals making money in fraudulent welfare claims and working on the black market.

This hits the exchequer in two ways - reduced tax take and increased social welfare payments and is a nettle that needs to be grasped firmly and rooted out.

But targeting dole scroungers while letter white collar fraudsters and criminals get away with ruining our economy? No, that's an unbalanced, unfair approach to our woes.

But by targeting those who fraudulently claim welfare and work on the black market you improve the position in two ways, fairly.

ONQ.

 

[onq]

Cutting overall spending by the government in a difficult economic situation will lead to deflation unless the private sector can invest or borrow to invest - and that's just to replace the money taken out by the cuts.
With the banks not lending and reducing demand world-wide because of the continuance of America's sucking its tax dollars out of the system and into the pockets of military contractors, the world economy continues to suffer.
Stopping America continuing to ruin its economy and waste scarce fossil fuels in a vain attempt to prop up dictators and created "influence" world wide would be a first step towards recovery.

Cutting costs to give people what they need will never reflate the economy because there is a limited demand for utilities above subsistence level.
Investing in research and innovation to give people things they don't even realize they want - yet - that's the trick to making profits in a global economy - just ask the guy who invented the iPhone or Facebook.
We need to get out of the "cut, cut, cut" mentality and get on the positivity and creativity diet.

ONQ.

 

[Firefly]

Borrowing to fund the state is a given - live with it.
ONQ.

For investment purposes like building roads,schools this can be true. A cost-benefit analysis can be performed etc. However, we're borrowing 4,500 euro per year for every man, woman and child living in this country. This will have to be repaid (with interest). Does this not alarm you?

 

[onq]

To those who oppose pay cuts in general; do you think that we have a competitiveness problem and if so how do we fix it (will pay cuts be part of the solution)?

Defining products in terms of price instead of supply and demand misses the point.
Looked at solely in terms of price, reducing money going into the local economy through pay cuts is a barren agenda unless it increases productivity and reduces cost of the product - BELOW THE COMPETITOR'S PRICE!

• Is Ireland able to compete on a global scale with India or China on Labour costs? No.

• Is it possible to sell similar products for a higher price than a competitor? Yes.

• Is it possible to clean up the market with a game-changing new product? Absolutely!

So lets stop concentrating exclusively on the price - reducing the cost base needs a broad approach anyway - and start concentrating on leading innovation and change, using our money better as opposed to spending less of it.

• Spending less money will deflate the economy.

• Using this money better will help the economy to recover.

And remember -

• You will earn a living selling people what they need.

• You will make your fortune selling people what they want.

ONQ.

 

[onq]

For investment purposes like building roads,schools this can be true. A cost-benefit analysis can be performed etc. However, we're borrowing 4,500 euro per year for every man, woman and child living in this country. This will have to be repaid (with interest). Does this not alarm you?

No, I'm not alarmed Firefly.

I've lived here through the seventies and eighties and seen us bounce back from corrupt governments and economic Armageddon before.
I can still remember Haughey on the T.V. telling us that "we are all living way beyond our means" - a confession by him at the time if only we had known.

Its why I disagree with austerity measures imposed by government and international financiers beyond a certain point, which I believe has been reached - beyond that point lies Anarchy, something quite deeper and less capricious than the opportunistic looting we've seen in the UK recently.

Its why I have such a huge distrust of people in gainful employment or in the professions finance or accounting targeting the unemployed in their rhetoric about "what we should do".

Its why people who think they can cut their way out of a recession need to be countered in all forums.

Employers and retailers never stop finding ways of lining their pockets.
Especially in recessions - a prime time to exploit workers and consumers.
Now they're upset because people won't play at the prices they are offering.

They want to threaten people who've worked all their lives and paid tax with dole reductions.
At the very time such hard-working people are down on their luck they want to bury them financially.

All this is being done in the name of "increasing competitiveness" and tarring them as dole scroungers when they are anything but.
I don't think these pseudo intellectuals can even guess what's coming down the road if matters get out of hand.
The Times they are a-changin'... let's see what they bring.

ONQ.

 

[Firefly]

• Is Ireland able to compete on a global scale with India or China on Labour costs? No.

I totally agree. We should however be as cheap or cheaper than our European competitors

Is it possible to sell similar products for a higher price than a competitor? Yes.

I agree, but not on a large scale.

• Is it possible to clean up the market with a game-changing new product? Absolutely!

Again I agree. The only thing is that we would need an aweful lot of them in a hurry.

So lets stop concentrating exclusively on the price - reducing the cost base needs a broad approach anyway - and start concentrating on leading innovation and change, using our money better as opposed to spending less of it.

This should be part of our medium term planning. In the short term we need to reduce our borrowing so that we don't have that difficult conversation with our children down the line.

Using this money better will help the economy to recover.

How? Can you provide examples of this whereby our annual borrowing requirement is not increased further?

 

[Firefly]

No, I'm not alarmed Firefly.
ONQ.

Hi ONQ,

The 80s were bad definately and we did pull through. There were a number of factors that led to this and they would make interesting reading. As bad as things were though we didn't have the level of public debt we now have. The following graphs helps to illustrate this:

[broken link removed]

This is only to the end of last year so the actual figure is a lot higher. Any future increase in economic activity will be reduced by this burden. It's hard to see without HUGE changes and partial default how we can get out of this.

 

[onq]

So reducing wages would lead to even bigger savings as there are so many staff.

Personally I don't think it will - I think the logic that suggests this is trite, faulty. And if saving occur, they won't be passed on to the consumer. The employer will pocket them.

I've absolutely no problems with that. Why then though when these market conditions changed do employees expect to hide and still base their pay on minimum wage rates? Do you think if the minimum wage was abolished that there would be as many restaurants closing?

Hide? They expect to live! Unless costs fall cross the board in all sectors that won't happen. It won't happen. Those at the bottom will suffer most. As usual.
Yes, the minimum wage thing is employers whinging about having to pay employees instead of pocketing it themselves. Just look at the outrageous prices still being charge in shops for goods like sweets and compare the prices of exactly the same product in Britain. 65 cent for a packet of crisps here that costs 45 cent there.

Agree 100%. Any employer should pay what the market commands. With the exception of top-end restaurants, the waiting position is non-skilled. There are 450k people on the dole who could do this job if the social welfare was cut and it wasn't beneath them. I know I would do any job if I was out of work to try and put food on my table.

Employers pay what they say they can afford. Nothing more. Until no-one wants to work for them at that price, then they start attacking the dole queues and social welfare payments.

As for people working in restaurants, they are not simply paid for their time. Waiters for example are front of house staff dealing with customers. Kitchen staff have a plethora of health and safety and food safety regulations to satisfy. They are skilled people, not unskilled. Not valuing anyone below the boardroom is the rock on which badly run businesses founder. Pay peanuts if you want monkeys.

Irish businesses may have recently learnt to respect their customers. Now they need to learn to respect the dignity of their employees. And contributors to AAM need ot learn to respect the dignity of those who through no fault of their own have no work.

=================================

As for your comment - "I know I would do any job if I was out of work to try and put food on my table" - here is a clue.

You wouldn't. You would hold out for the best job you could do with your skillset. You'd be stupid not to.

And if you applied for jobs below your skill level or qualification you'd be rejected as over-qualified.

I've done my research on this.

ONQ.

 

[onq]

Hi ONQ,

The 80s were bad definately and we did pull through. There were a number of factors that led to this and they would make interesting reading. As bad as things were though we didn't have the level of public debt we now have. The following graphs helps to illustrate this:

[broken link removed]

This is only to the end of last year so the actual figure is a lot higher. Any future increase in economic activity will be reduced by this burden. It's hard to see without HUGE changes and partial default how we can get out of this.

Maybe it'll take huge changes and default.

The banking world needs to change.

I'm still not alarmed.

We'll survive.

ONQ.