New government in UK boosting minimum wages
One of the surprises W&D had in the UK was the strength of feeling by British industry about the new government's plan to considerably increase the minimum wage by 2020. The plan is to bring it more in line (as a percentage of the median wage) with, for example, Australia.
British industry in screaming (in a very British way, of course, "my dear fellow, can you not see how this will affect our profits...") about the cost, conveniently ignoring the offsetting cuts in company tax to 18% from the current 20%.
And the UK's company tax rate was slashed by the previous coalition government from 28% to 20% - making it the lowest in the G20 (Australia's company tax rate is 30%). W&D would suggest that British industry stop whingeing.
The move to boost minimum wages is part of a move to the political centre by the new UK government. Hmm.
Looking at the chart, it's all very well feeling happy about France. But its comfortable minimum wage is coupled with extraordinarily rigid work practices. This is one of the reasons that France is in a state of long-term economic decline. If you have a job in France you should be (economically) happy. Trouble is there are fewer and fewer jobs. And there will be even less in the future.
Contrast that with the US, where the minimum wage is a scandal (US$7.25 per hour). But work practices are generally very flexible. So the country is in long-term economic good health, it's just that the poorly paid are really poor. And having a job is not a guarantee of happiness. Hence the impoverished worker. Or 'working poor'.
What the UK government is trying to do is to provide a situation where if you have a job you should be (economically) happy. But there is flexibility in work practices so that industry can provide more and more jobs.