the maoster:
Rjan:
Without the NMW, wages would have fallen even further.
Wrong, wrong, wrong. The NMW has provided a benchmark figure for crap employers to aim down to!
But why would anyone accept it, if they weren’t willing to accept it before? (Unless, of course, workers are also systematically benchmarking their pay demands downwards to NMW).
It’s an interesting theory but without an explanation of how this benchmarking actually overrides market forces, I’m inclined to look at other factors which explain why wages have fallen.
Personally, what I’d be inclined to think is that some employers had previously been paying more than the required market rate (perhaps because they weren’t under pressure to pay less, and perhaps in the past had been under pressure from unions or market conditions to pay more and had not immediately dropped wages once this pressure fell away).
So on this analysis, the NMW has not affected underlying market forces, it has just encouraged employers to look at what the market rate actually is. This I gather is part of what firms like De Poel do - they exchange wage data and equalise unnecessarily high wages (which employers can afford, but aren’t required by workers to pay) down to the market rate.
Without the NMW maybe them employers would be offering say £5 p/h but there would be no takers so they would have to increase the offer until it met a local average. With the NMW they can offer that and the type of people who work for that sort of wage perceive that they are getting a good deal and therefore offer their services.
I’d be interested to understand this better. If there are no takers at £5, then wages must go up. If there are no takers at £NMW, then wages must go up. The fact that there are takers, suggests that this is the market rate.
I don’t understand why workers who required £9 before, would when NMW comes in at £7, lower their demands. Nor do I understand why employers who couldn’t get workers to take at less than £9 before, will suddenly get them to take at £7 when NMW comes in.
As I say, what was really happening before NMW was that some employers were offering above the market rate (for whatever reason). Perhaps the introduction of NMW prompted a review of payroll costs, and somebody took a chance attacking the drivers to try and keep costs down (a chance of disruption they wouldn’t normally risk taking without the overall pressure to find savings) - and when there was no ructions, and no shortage generated, word got around to other local firms that drivers could be paid less and that the true market rate was lower than appeared.
It’s no accident that many employers have a two tier wage system wherein workers who have worked for the Co since before the introduction of the NMW get £X p/h as that was the going rate THEN. However new starters are paid NMW as the employer has been provided a handy figure to aim down to.
But why do they have takers? Perhaps the old rate was set by a union (or a large union presence in the general market) which has since disintegrated. Hence, newly employed drivers will accept less (as perhaps the old drivers would have as isolated individuals facing either low wages or unemployment), but they got a premium baked into their contracts because they were taken on when a solid union forced the wages up at that firm (or forced up the wages at a competitor with which they could have sought work instead, and so increased the market rate by forcing employers to compete with the unionised firm to retain good workers).
That’s just speculation of course, but I’m inclined to think the NMW was introduced at the same time as adverse market changes, not that the NMW caused adverse market changes.
I say this because whilst it acts maybe as a psychological target for employers trying to force down wages, or might trigger a pay review all at once amongst several employers (because they need to decide whether customers or higher-paid workers will pay for the increase for low-paid workers), there’s no reason why it should act as a psychological target for workers who were demanding more beforehand. If anything, in skilled jobs workers psychological target should go up, as they demand to be paid more than NMW and maintain differentials in pay (and now have better paid alternative careers thanks to NMW).
No offence Rjan but I’m bowing out now as I’m not Carryfast and have neither the time, patience nor bandwidth to discuss this for the next 74 pages! 
Shame. You make points but don’t want to subject them to any analysis. It’s even more of a shame because it strikes me as wrongheaded and could disadvantage workers if your view were believed but was not correct.
) I don’t think anything will happen suddenly, because that would take some organising.
IE it’s not all about wages it’s also the quality of the work on offer.To the point where it can be better to accept a lower wage for better work.The problem being that a shortage of decent work and opportunities applies in all cases whether indigenous or the immigrant workforce.The type of work on offer arguably being as much if not more of an issue than wages in the UK case. 
