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Ehis Odijie

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Should we abolish national minimum wage?

I posed the question to a professor and she screamed “No, we should increase it to help poor people”. So let’s increase minimum wage to, say 100 Pounds per hour. How do you suppose businesses will respond to that? If you work with Tescos supermarket for a wage of 7 pounds an hour you’d lose your job. Why? – is it because Tescos cannot afford to pay 100 pounds? Not at all – it is due to the fact that your productivity level is not up to 100 pounds so it will be an act of charity to keep you employed (Employers don’t pay on the bases of what they can afford – they pay you from what you produce. Just like you don’t buy an item on the bases of what you can afford but the value).

A friend of mine earns about 150 Pounds an hour; she wouldn’t lose her job in a system of 100 pounds minimum wage because she produces more than the MW.

If you understand minimum wage this way then, surely, a MW of 4 pounds could be properly defined as ‘if you cannot produce 4 pounds an hour you don’t deserve a job.’ There is no other way to describe it – if you deny this then you should be in favour of increasing the national minimum wage to 500 pounds -why not?

It is not the doctor or the engineer that is affected by minimum wage. It is the unskilled and poor worker with low productivity - the very group the minimum wage is created to protect.

On the other hand, some giant corporations would not have existed if there was a minimum wage system when they came into existence – so the policy also prevent potential entrepreneurs with low financial capacity from setting up.

If you study minimum wage from any angle you’d realise that it is only the poor that is affected. The poor skilled man, the poor entrepreneur and the poor consumer (YES it affect consumer but that is not my focus).

Off-licenses in the UK (your regular corner shop) cannot take up staffs in a system of minimum wage because it means no profit for them - same for local food stores. In a society of mass unemployed teenagers

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  • Aug 15 2012: I work in the performing arts, it really isn't about productivity. In our industry its about employers who simply don't want to pay and aren't even aware that the NMW applies.
    The same is true of fashion, journalism and politics. Employers are deliberately misinterpreting the law, plain and simple.
    http://actorsminimumwage.wordpress.com/

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