Don't forget the growth in unemployment too!

I'd be interested to see where the growth fits exactly, in terms of relative wealth. Is is evenly distributed, concentrated in the higher echelons, or more focused at lower wage earners.

Ideally it would be the first or third of those options.

My impression is that there's a hell of a lot more of the employed at minimum wage (or so close as makes no difference) on a zero or tiny hours contract compared to five years ago.

The whole zero hours contract thing was debunked as grossly exaggerated (to the point of out and out lying) at the last GE, but the minimum wage thing may well be a different matter. Still, even if true, working in minimum wage employment > unemployment.

working in minimum wage employment > unemployment.

Though with the removal of working tax credits, the government are making minimum wage jobs less attractive!

I was so relieved to get back to work even when it was minimum wage after 5 months on the dole. I think it was perhaps one of the most miserable periods of my life.

Agreed, and personally I think that sucks. I'd cut all manner of other things first, before cutting 'make work pay' in-work benefits, personally.
That said, to be fair, the tax credits budget was spiraling out of control and the whole thing was stupidly complex (as befitting of Gordon Brown). It's got to be right that we, the taxpayers, are not expected to subsidise the likes of Tesco to pay people sub-living wages in dead end jobs. It's one thing paying young apprentices in genuine training employment, with college, low wages (but with the promise of a good education and Trade in return), but shelf-stackers? Nah.

The problem with having simple tax systems is that then someone inevitably points out a way in which it unfair, which leads to an exemption, which leads to loopholes that unscrupulous people APoD exploits.

FTFY

Agreed, and personally I think that sucks. I'd cut all manner of other things first, before cutting 'make work pay' in-work benefits, personally.
That said, to be fair, the tax credits budget was spiraling out of control and the whole thing was stupidly complex (as befitting of Gordon Brown). It's got to be right that we, the taxpayers, are not expected to subsidise the likes of Tesco to pay people sub-living wages in dead end jobs. It's one thing paying young apprentices in genuine training employment, with college, low wages (but with the promise of a good education and Trade in return), but shelf-stackers? Nah.

"ISIS don't queue and steal my shoes".

But what good does lowering tax credits do? Tesco are still going to pay people sub-living wages in dead end jobs. People will still do them, because they're desperate and have no other way to earn.

It's all well and good them saying they'll implement a living wage to compensate, but a) it's nowhere near to a living wage and b) that's not going to be on the scene til what.. 2020 I think was originally said? The two things need to happen side by side or not at all. In the mean time, the government make money out of people who can least afford to sacrifice it.

I'll really take some convincing that Cameron et al find any of this difficult or unpleasant. But regardless of that it's short-sighted and idiotic, even from a capitalist perspective Just more young people raised in circumstances which mean they are less likely to grow up to become efficient little economic units.

Could anyone explain this tax credit stuff to me?

Surely you must concede that our unemployment rates, including youth unemployment rates, compare (incredibly) favourably to most of the rest of Europe, most notably the so-called 'social democratic' left of centre ones that chaps like you, Mark, are presumably admirers of? Seriously, how can 50-60% youth unemployment ever be even remotely sustainable; you can make the minimum wage as high as you like and have all the fancy employment laws, protections and unions one could ever desire - it's still unsustainable, immoral shite?

I refer you to Mali's earlier post about being unemployed; I, too, was made redundant in the 80s and was out of a job for 6 weeks which, OK, isn't a massively long time but at a period where we had 3 million+ unemployment, I was prepared to sweep the bloody streets towards the end. Not nice.

The basic point I'm making, which could hardly be denied given we have more people working now than we ever have had in our history (and vastly more than 2008-10 btw), is that at least people have a decent chance of employment now. OK it might not be the employment they want but it's a heck of a lot better, and less soul-destroying, than having no chance of ANY employment, no matter how hard you study at school or whatever. Most people I know (not having come from a particularly collegiate background ), myself included, all started working life with a shit, menial, incredibly low-paid job, but it was our first rung on the ladder.

Poor people are going to have to pay more tax.

How does that work?

I do not understand how tax credits work.

But I'm not blaming anyone for anything Mark. I just want to give people - ALL people - as much of a chance as possible of making a go at their lives. Yes, you can scoff at me for thinking it's all about being 'an economic unit' but to simple souls like me, having a good job, having forged a half-decent career and keeping a basic roof over you and your family's heads is something to be proud of and a worthy, realistic objective.

The thought which upsets me more than anything else is that of some kid who's done their reasonable best at school, got reasonable GCSEs and never even gets to work in any job, ever, because there are none. That thought breaks my heart more than most.

If you don't earn very much, then the government returns some of the tax that you pay

I wasn't saying that you were blaming anyone but when you keep on saying how you started with a low-paid job and now you're a millionaire then there is some implicit notion that this is what others can do as well. And for sure some can and should be encouraged to do so but this model does not provide for the masses who find themselves on the shitty end of this latest stick.

I left school and started with a rubbish job too, but looking around I regard myself as fortunate that I started when I did rather than better than those who are struggling now. Even more so when it comes to things like having a house which we actually own. Things seem to be getting shitter by the day for the worse off and these tax changes are only going to exacerbate that. I think this is bad both from a moral and a hard-headed economic long-term perspective which was where my "economic units" comment came in, it had nothing to do with you.

Isn't it the case that some (many?) people actually get much more "back" than any tax they've paid in the first place, even including any tax/NI their employers have paid?

If so, then, it isn't a case of giving people back some of their tax, but actually all of it, plus a bunch of other people's taxes as well? Which, I thought, was kind of the problem, spiralling out of control?

You can earn 223 quid a week to hit the person allowance, which is 32 hours at £7.

So where does it kick in?

Isn't it the case that some (many?) people actually get much more "back" than any tax they've paid in the first place, even including any tax/NI their employers have paid?

If so, then, it isn't a case of giving people back some of their tax, but actually all of it, plus a bunch of other people's taxes as well? Which, I thought, was kind of the problem, spiralling out of control?

Take a single parent with three children, working 16 hours on minimum wage of £6.50 an hour. Their wage would be about £5,400 per year.
Child tax credit would be £8,885 a year. The basic working tax credit would be £3,970, including an allowance for being a single parent. But then add in the childcare element. At the maximum this is worth £11,000 a year. A total of £23,855 per year

BBC says



So, not working for 19 hours a week is worth c £18k? That is £21 an hour for not working?

Is that cash, put into to their account?

11k for a year and 3 kids works out as £39 a day per kid. Which seems about right at a fiver an hour.

((11k/(47×2))/3

In fairness, MrsA and I don't see the £600 a month we pay nursery.

In fairness, MrsA and I don't see the £600 a month we pay nursery.

That's can't be right. Is that right?!

If it is... I'm fucking quitting.

11k for a year and 3 kids works out as £39 a day per kid. Which seems about right at a fiver an hour.

((11k/(47×2))/3

I'm still reeling at those numbers that BBC piece quotes - 19 hours a week in a totally unskilled, in all likelihood zero stress, minimum wage job gives £5400 income per annum, which would be entirely untaxed. You then have fully £24000 tax credits (excluding child benefit, housing benefit and any other benefits due) on top of that, which gives £30000 per annum income IN HAND.

To earn £30k pa in hand, you need to actually earn £50k pa or thereabouts. But don't forget this is for only 19 hours per week (totally unskilled, unstressed work), so you could say that, pro-rata for a 38 hour week, it's the same as earning £100k pa. For totally zero stress, unskilled work.

It's estimated the taxpayer will spend £30bn on them in the year from April 2015 to April 2016. That's 14% of the welfare budget (£220bn).

I wouldn't equate low paid=low stress work.

You don't keep the childcare costs, even in the BBC's hyopthetical best/worst case scenario. You're actually trying to clothe and feed three kids plus yourself, with no partner around, on £18k a year. That doesn't sound like a zero stress scenario to me.

So which alternative do you support: (a) cutting these benefits and making it uneconomical for people to work, forcing them into unemployment; (b) letting kids live in poverty, which has been proven in endless studies to be a blocker for their achievements for the rest of their life; or (c) sterilising poor people? This is hyperbolic, but I don't see any other choices. Do you have any?

I also note:
State pensions are circa £75bn. Why aren't we cutting those? They've been completely untouched by austerity.

While you certainly can get stressful low paid jobs, you can certainly get low stress ones too.

It works better other way around, really, low stress generally equals low wage.