Is it time for wage increases?

[TheBigShort]

Then he has to stick with it.

Obviously, but I sense we are far removed now from the notion that a mechanic must be rubbish at their job just because of a €14ph rate?
In fact, if we are to accept that he is good at his job (same as you), but that €14ph is low income for a mechanic, then perhaps it is time for a rise in his wages.

 

[TheBigShort]

I agree that there has been a general move from a return on labour to a return on capital. It’s happened since the 80’s and early 90’s, mainly since the opening up of South East Asia and a huge increase on capital due to their very low wage costs. On a global level, as per your original post, this has resulted in massive wage increases, just not in the part of the globe where wages were already high.


So, in answer to your first post yes; it is time for wages to increase and there have been increasing well ahead of inflation for the vast majority of those in the labour force (or “workers” as you like to call them) in the world. Just not for those who are already very highly paid. Everyone in Ireland, even those who have no job, are very highly paid in the global context

I agree that incomes have risen globally, which is a good thing, but relative to capital gains, it has been diminutive.
I read a stat recently that if you earn $28,000 pa or equivalent, that you are in the top 1% of income earners globally. I don't know how accurate that stat is, but I would hazard a guess it is not too far off the mark.
The problem arising, which is the thrust of this topic, is the cost of living in the top 1% of wealthiest economies - $28,000 or equivalent does not cut it. That does not mean people cannot feed themselves, but it may mean, hard-working people, like mechanics in Athlone, may not be able to afford a home of their own, or sustain a future for their families based on normal expectations of living in a wealthy economy. This will bring resentment, fatigue, disillusionment, political unrest etc. All of this is clearly evident, to me anyway, in developed economies of US and Europe.
The best way, in my opinion, to quell unrest is make living affordable again for such workers. Not by cutting taxes, but increasing wages.
Increasing incomes will also bring thousands of workers into the tax net, contributing their share, and reducing the (perceived) % burden of tax on high income earners, as has been propagated on this site.

 

[Purple]

In fact, if we are to accept that he is good at his job (same as you), but that €14ph is low income for a mechanic, then perhaps it is time for a rise in his wages.

If that's the market rate then that's what it's worth.

 

[Firefly]

As his employer wasn't paying him, I assume his absence from work is not calculated as a sick days? Unlike public service, where pay is afforded by the employer and as such, sick days in the public service will always be calculated as a higher amount.

Fair enough. But the point im making is that as public servants receive pay while out sick (genuine or not) and as such total sick days per employee will be far greater than private sector where employers may not pay for such absences (genuine or not).

You seem to take issue when people compare the private sector to the public sector, but you seem happy to do so yourself when it suits. Nobody is comparing levels of sick-leave between the sectors, so why bring it up? In fact nobody is even discussing levels of sick leave at all. The topic of "pulling a sickie" was raised by me. "To take a day off from work feigning illhealth" https://en.wiktionary.org/wiki/pull_a_sickie#English

In any case, any of the companies I have worked for had pretty much the same policy..sick leave is paid for upto a point (usually 6 months upon medical certification). If someone is out for more than 2 days they are required to produce a medical cert. If it becomes a regular occurence they may be asked to be assessed by the company doctor and if it's deemed they are taking the proverbial, HR may get involved.

'Sickies' are a disgrace in the public sector, but nudge-nudge, wink-wink, in the private sector.

Sickies are a disgrace regardless of the sector. Anywhere I've worked it's never been treated as wink-wink, certainly not by management.

As his employer wasn't paying him, I assume his absence from work is not calculated as a sick days?

I am self-employed. If I am out of work for any reason I'm not paid. However if I pull a sickie, it's still a sickie. It's unplanned and could be letting someone or a project down.

 

[Purple]

I read a stat recently that if you earn $28,000 pa or equivalent, that you are in the top 1% of income earners globally. I don't know how accurate that stat is, but I would hazard a guess it is not too far off the mark.
The problem arising, which is the thrust of this topic, is the cost of living in the top 1% of wealthiest economies - $28,000 or equivalent does not cut it. That does not mean people cannot feed themselves, but it may mean, hard-working people, like mechanics in Athlone, may not be able to afford a home of their own, or sustain a future for their families based on normal expectations of living in a wealthy economy. This will bring resentment, fatigue, disillusionment, political unrest etc. All of this is clearly evident, to me anyway, in developed economies of US and Europe.

$28,000 sounds about right to me. Should that income be increased before the income of people on $500 a year?

The best way, in my opinion, to quell unrest is make living affordable again for such workers. Not by cutting taxes, but increasing wages.

What if increasing wages just increases the cost of living? The only way to increase real wealth is to increase productivity. Even if we find a way of reversing the trend from capital retaining value to labour retaining value (badly phrased but I hope you know what I mean) we still face the prospect of increases in income being eaten up by increases in living costs.
I want to see everyone better off. I just don't think increasing pay levels for everyone as the solution. That's particularly the case for those of us at the top of the global income graph.

 

[PGF2016]

$28,000 or equivalent does not cut it. That does not mean people cannot feed themselves, but it may mean, hard-working people, like mechanics in Athlone, may not be able to afford a home of their own

28k and can't afford a home? Add in a partner earning 20k and the couple could borrow ~150k. There are plenty of houses around Athlone for less than that. Please tell me how a person on those wages can't afford a home.

or sustain a future for their families based on normal expectations of living in a wealthy economy

Expectations of living in a wealthy economy? Expect nothing. Work hard and earn enough to sustain the standard of living you desire.

 

[Firefly]

Expectations of living in a wealthy economy? Expect nothing. Work hard and earn enough to sustain the standard of living you desire.

There are enough of us here who think like that, so bugger off and start your own thread

 

[Leo]

Something as dangerous as mountain biking is a bit much. Where is the line drawn? I don't know.

Mountain biking isn't all that dangerous. Injuries that affect ability to work even temporarily are very rare.

 

[TheBigShort]

28k and can't afford a home? Add in a partner earning 20k and the couple could borrow ~150k. There are plenty of houses around Athlone for less than that. Please tell me how a person on those wages can't afford a home.

I think she earns roughly the same as him.
For sure there are plenty of properties for sale for which they could afford. But there is the consideration of their income being used up in rent and childcare. I believe there are moves afoot so that a history of rental payments will now be considered for approval for mortgages, a good thing I think, do you?
There is also the consideration of finding a suitable property, or desired property. Its not a snooty thing, I think it is reasonable to find a home that is worth the asking price dont you? Its not like buying a bottle of milk. Most people will only carry out this transaction once or twice in a lifetime, so best to make sure you will be happy there long-term.
The way you put it is that there is a 2 bed apt for €99,000, buy that! Any consideration allowed for a bigger family one day? The condition of the property relative to the price? The location, local amenities, neighbours, taste, management fees, property tax, refurbishing and repairs?

 

[PGF2016]

I think she earns roughly the same as him.
For sure there are plenty of properties for sale for which they could afford. But there is the consideration of their income being used up in rent and childcare. I believe there are moves afoot so that a history of rental payments will now be considered for approval for mortgages, a good thing I think, do you?
There is also the consideration of finding a suitable property, or desired property. Its not a snooty thing, I think it is reasonable to find a home that is worth the asking price dont you? Its not like buying a bottle of milk. Most people will only carry out this transaction once or twice in a lifetime, so best to make sure you will be happy there long-term.
The way you put it is that there is a 2 bed apt for €99,000, buy that! Any consideration allowed for a bigger family one day? The condition of the property relative to the price? The location, local amenities, neighbours, taste, management fees, property tax, refurbishing and repairs?

Yes, the history of rental payments being considered is good. Stupid that it wasn't previously.

You've moved the goalposts from not being able to afford a home to not finding a property to match their desires.

The way you put it is that there is a 2 bed apt for €99,000, buy that!

I didn't say that.

Any consideration allowed for a bigger family one day? The condition of the property relative to the price? The location, local amenities, neighbours, taste, management fees, property tax, refurbishing and repairs?

I'd like 5 kids. I'll need a 6 bed house. I desire a detached house with good neighbours and a nice playground close by. I'd love a raise in wages to cover this. Is it time for wages increases? Yes, definitely.

Sarcasm aside... if you want bigger and better you should then create a situation that allows you to afford bigger and better. There should be no expectation or entitlement to what you want by default.

 

[TheBigShort]

$28,000 sounds about right to me. Should that income be increased before the income of people on $500 a year?

Its not about increasing average incomes, which include the incomes of the wealthiest and poorest in our societies. You are starting to miss the point again by not factoring in the cost of living.
Somebody who earns $5,000 in an economy that costs on average $500 a year to live in will probably be relatively happy. Ditto someone on $280,000 in an economy that costs $28,000 to live in.
Take a look at Brendans revenue chart showing the income bands and the level of income earners below incomes of €30,000. Many of whom rely on welfare benefits to supplement their incomes.
The richest economies in the world are seeing increasing numbers of population struggling to cope. This is causing political tensions. Political tensions are a recipe for conflict. Conflict destroys societies. And if the wealthiest societies destroy themselves, the poorest will (unlikely) fare much better.

What if increasing wages just increases the cost of living?

Mute point, relative to the subject matter. Im talking about increasing the standard of living of the population at large, rather than the current winner takes all (or disproportionately more) approach.
The best way, in my opinion, is through wage increases. Yes, we are talking about an inflationary effect here, the cost living will go up, but the cost of (old) debt will decrease. I am talking about an environment where people will save capital (for future investment, for real productivity growth) rather than borrow it into existence through new debt.

 

[Purple]

Ok, so you are really talking about flattening our income distribution, not wage increases. Is that the case?
You see wage increases as the best way of achieving this but they are not the end goal, equal or more equal income distribution is the ultimate aim. Yes?

 

[TheBigShort]

You've moved the goalposts from not being able to afford a home to not finding a property to match their desires.

My bad, when I said that they couldn't afford a home I was of course talking about the banks refusing to approve a mortgage. Admittedly, this is about events early in the year, things may have changed since then, I haven't heard.

if you want bigger and better you should then create a situation that allows you to afford bigger and better. There should be no expectation or entitlement to what you want by default

But who said anything about entitlement? They are working to create a situation that allows them to afford what they want im sure? Who said they werent?
Its not easy, as im sure you are aware, but they do work hard, and are smart people. Im sure they will get there in the end.
They are only 27, whats the average age of owning your first home these days, 45?

 

[PGF2016]

The richest economies in the world are seeing increasing numbers of population struggling to cope.

Why are they struggling to cope though? You believe it's because wages aren't high enough. I believe it's because they consume more than they can afford to. The earnings can't cover their expectations.

Your mechanic friend from Athlone is struggling financially, right? He can't afford a house of his own. A person from a less rich economy would love to have his lifestyle. Decent job and enough time off to play hurling, football and go mountain biking. In the far East they'll work 7 days a week without having a living standard near the mechanics.

 

[TheBigShort]

You see wage increases as the best way of achieving this but they are not the end goal, equal or more equal income distribution is the ultimate aim. Yes?

Yes, my bad about the topic title, somewhat misleading.

 

[PGF2016]

They are only 27, whats the average age of owning your first home these days, 45?

The average age is higher than previous generations due to behaviour. My parents generation didn't go on foreign holidays, eat out, have 2 cars etc. If the current generation saved like previous generations there's nothing stopping them getting houses earlier.

 

[Firefly]

I believe there are moves afoot so that a history of rental payments will now be considered for approval for mortgages, a good thing I think, do you?

I think it's a good idea. It shows a capacity to pay and just as important that the person has paid.

Most people will only carry out this transaction once or twice in a lifetime, so best to make sure you will be happy there long-term.
The way you put it is that there is a 2 bed apt for €99,000, buy that! Any consideration allowed for a bigger family one day? The condition of the property relative to the price? The location, local amenities, neighbours, taste, management fees, property tax, refurbishing and repairs?

I wish more people did this, myself included! I would bet that many people spend more time scanning supermarket shelves comparing the prices of tins of beans than than the time when choosing a new car.

 

[Firefly]

Yes, my bad about the topic title, somewhat misleading.

I've just nearly soaked myself with a nice cup of tea I am enjoying! 22 pages and 438 posts later!

 

[Purple]

The average age is higher than previous generations due to behaviour. My parents generation didn't go on foreign holidays, eat out, have 2 cars etc. If the current generation saved like previous generations there's nothing stopping them getting houses earlier.

People are living longer so wealth is not being transferred as early and housing stock is not being released as early as previously. Obviously there's not much we can do about that but it's a major cause.

 

[Purple]

Yes, my bad about the topic title, somewhat misleading.

Right, let's start again.