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Living wage plans are 'not realistic'

By South Wales Evening Post  |  Posted: June 18, 2012

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BUSINESS leaders have warned the Welsh Government not to press for private sector pay rises as ministers investigate public sector wage levels.

Welsh Labour has a manifesto commitment to find ways of making sure all Welsh workers are paid a "living wage".

Academics at Loughborough University have estimated a living wage is at least £7.20 an hour. The current statutory minimum wage is £6.08 an hour for workers aged 21 and over.

Welsh NHS workers and Welsh Government civil servants are already paid at least the living wage. Some big private firms are also signed up to paying it.

Robert Lloyd Griffiths, of the Institute of Directors, said he was concerned the living wage would effectively become the new minimum wage.

"Businesses would like to take on more staff and lots of companies that I talk to would love to be in a position to be able to take on more employees," he said. "I'm afraid it (living wage) just isn't realistic in the environment we live in."

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  • hacker_jack  |  June 19 2012, 8:58AM

    I never said Amazon was a skilled job. It was a response to the comments of people complaining about them, not to you. And regarding Google, it doesn't matter how many they employ, the workforce they end up with would still be lesser skill set in Swansea than near London and will remain that way for a number of years at least. Even if they trained everyone up to top level, the locally available skill-set outside the employed group would be far lower, thus making replacements less efficient. Eventually over time that would improve yes, but you are talking about a major disadvantage however you look at it. To think that it is irrelevant to the decision of where to base your company is at best very naive. Regarding MS in Dublin, yes they chose Ireland over the UK for the tax breaks, but notice they then chose to go to the area with the highest density of skilled labour in Ireland, which is exactly the same as choosing to base around London once you've decided to pick the UK. They would not have based themselves in Cork for an extra 0.5% tax break.

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  • Philosoraptor  |  June 19 2012, 8:33AM

    hacker_jack Evidently they do, because Google employ closer 80,000 than the 8,000 I gave as a hypothesis and the company expanded massively within just two years and tens of thousands upped sticks and went there. So what is all that you were saying again? PS. Since when was Amazon a skilled job?

  • hacker_jack  |  June 19 2012, 8:09AM

    Skills follow vacancies, not the other way around. -------------- BS. The skills/jobs relationship is a long term one with massive momentum behind it. If Google were to open up 8000 jobs in Swansea as you suggest then they would have a much much lower quality choice than opening up in London because people will not just up sticks and move at the drop of a that like that in great numbers. It would take a number of years before any kind of technical legacy is impacted on the area outside of the initial imported skills from people who did move. Add to that that without a concentration of such companies the skill level n the local area outside of it's employ will remain much lower and you can see ongoing recruitment quality problems. That is why you always get industries of a like ending up grouping around in clusters. As for Amazon, sure they pay close to minimum wage but you have to remember that the majority of the staff they are paying that are basically shelf-stackers/retrievers, it's hardly a job you need huge skills for. They make very little money in relation to the number of employees and it's this model that has worked for them, without that model there would be no Amazon depot in Swansea at all.

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  • siarad2  |  June 18 2012, 11:35PM

    Of course this will increase the median wage & therefore increase poverty, surely a bad thing

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  • Philosoraptor  |  June 18 2012, 9:07PM

    Gentlemen, let's just hypothesise for a moment. If a company like Google suddenly decided to debase to Swansea for whatever reason then there would be 8,000 more skilled jobs in Swansea. Skills follow vacancies, not the other way around. And these companies do not pay minimum wages, they go over that already however in London it ridiculously high. As for contacts... Companies like Microsoft never let that get in the way. They stayed true to their base and forced people to move to them if they wanted a job and still kept a great line of contacts through two systems that make the city location irrelevant, telephone and email. The only reason some companies go to London is the perceived prestige, there is no real business advantage as shown by mega corporations rising in the last twenty years who purposely built far away from large metropolitan cities as it kept costs down. There are many companies who would save money by leaving London and people will follow because the major priority of a worker is to secure work even if it meant moving away. Swansea Council would do well introducing a tax break for companies because little money is better than no money. Example: Canada and the Gaming Industry, massive tax break meant companies set up base there and although the tax is low they Anglesey have cash coming in now. Swansea Council should be making it cheaper for companies to operate here as they stand a far better chance to attract them to our city and county. Mcrosoft as it was, created their European Headquarters in Dublin because of local authority tax breaks. It is doing there economy a favour by employing loads of people and paying them good money despite the problems in some of it's other industries. Just imagine Swansea council undercut Dublin by half a percent, our wages are comparable so that is one enormous boat missed there. Microsoft was never, ever interested in London because it knows that place is money waster and that people from all over Europe will move to work for them. A lot of stubborn companies will inefficient CEO's need to take a leaf out of their book and our leaders need to take a leaf out of Dublin's.

  • odinhouse  |  June 18 2012, 6:05PM

    the problem with= '' press for private sector pay rises '' will mean that the Private sector will go abroad where the Labour is cheaper, produce over there and import there good's into Wales and the UK. and in Wales they are also telling the Private Sector to abide by the Welsh Language act, if they do not follow the act they will get a Large fine .so how can they survive wages and the Act..? it was Labour that brought in a minim wage because of a cheap workforce in the past. you can only pay what you can afford in the Private sector.it will be make or brake.. apart from the Big Banker's .

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  • immigrant1  |  June 18 2012, 4:24PM

    Philosoraptor - many companies set up in London because that's where the skilled staff they need are based. Swansea is one one of the places in the UK with the least skilled workers, so that's why you get mostly minimum wage jobs. If people want to earn more they need to get educated. Also, people need to stop relying on other people and set up their own businesses. It's all very well complaining about businesses paying a low wage, but why not start your own business and pay higher wages. You lot have no idea of how to run a business and just don't understand the costs involved. For example, Amazon only makes 1-2% profit on turnover, so it is very close to making a loss. If they paid every worker GBP1 more per hour then they would be making a loss. The margins at Amazon are incredibly small. For the amount of turnover it makes an incredibly small amount of money. Millions profit sounds like a lot, but it's nothing when spread out among all the shareholders. Try buying some shares and you'll be very disappointed at the return you get. i.e. nothing.

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  • hacker_jack  |  June 18 2012, 3:52PM

    you'd have thought a company would set up in Swansea because the labour is cheaper -------------- Except because of minimum wage it really isn't. And being in London has a massive advantage when it comes to contacts, trade links etc. It also has the fact that a large percentage of the most skilled workers wish to go there, not Swansea.

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  • Philosoraptor  |  June 18 2012, 2:13PM

    Companies claim they want to employ more staff, but cannot afford it. Not suprising when they set up base in expensive cities like London and Birmingham, you'd have thought a company would set up in Swansea because the labour is cheaper and thus they could deliver on their so called 'desire' to employ more people. The truth is, they have no interest in employing more people. They are interested in the prestige of being based in a vogue urban area. It's a pathetic way to run a business to be honest, and virtually every multinational company runs itself in this overly expensive way.

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  • Petert53  |  June 18 2012, 1:53PM

    conn8d Who is Mr Robert Lloyd Griffiths?