The national living wage was introduced by the government as a new rate per hour voluntary set by employers, applicable to individuals aged 25 and older, which is calculated according to the basic cost of living in the UK and is updated annually. (Gov.uk, 2016) The minimum wage rate per hour in the UK is at 6.70 pounds p/h for those aged 21-24 while individuals over the age of 25 get paid around 7.20 pounds p/h, while the living wage is set at 8.25 pounds p/h across the UK with the rate in London being at 9.40 pounds p/h due to the higher cost of living. (National Living Wage, 2016) What is certain is that the introduction of the living wage is bound to affect the economy of the UK in one way other. It might as well have an impact on other …show more content…
When the residents of the UK are given the possibility to cope with the country’s high living standards and increase the amount of disposable income, then they are bound to live a more comfortable life and even be willing to invest into property. Therefore, buyers will be more than ever encouraged to purchase a new home, as the help to buy program is intended to make it even easier for them to afford their own property and as the program applies only to newly constructed houses, then there is bound to be an increase in the amount of houses being constructed as the demand for property is far higher than the supply available. (Bowcott, 2014) Yet, as mentioned above the introduction of the national living wage might have a very small or not impact at all, on the population’s income, if the corporations and businesses have to increase the prices for their good and services, in order to deal with the additional expenses caused from the higher wages. Besides the national living wage is set voluntarily by employers, so it’s not certain it will be implemented to such extent that it will actually make a noticeable difference to the economy as a whole, but rather increase by a certain percentage the annual income of some households. (Metcalf, 2008)Another possibility is the increase of savings, as the consumers might choose to save their extra income instead of spending it, which will therefore not have an effect on the housing market either. The help to buy policy is designed to assist buyers into investing into newly-constructed property regardless, but if the national living wage has the desired effects on the economy then the impact might even be negative, on the Help to buy: Equality loan scheme, as the buyers depending on their background might even be able to
Britain is currently undergoing the biggest overhaul of the welfare system since its introduction. The welfare system was first established with the assurance that people less fortunate would be able to have a standard of living that would ensure equality. But the recent amendments brought into place by the current government’s legislations may see the biggest divide between rich and poor since the days of the work houses. How will claimants be affected and who will be affected the most is an issue that will be examined more closely. The current government believes that Britain has become a welfare dependant state and according to BBC news (2013) 2.49 million are currently unemployed; those who are unemployed will also have entitlement to housing benefit and council tax benefit. All claimants will be affected by what will be known as Universal Credits. Universal credits will combine all existing benefits in to one payment; the amount a household can claim in welfare will be capped, this new system could have a catastrophic impact on people’s lives. Furthermore the government does not believe that a person should have full housing benefit if the home in which they reside has extra bedrooms, so introduction of the Bedroom Tax was implemented April 2013. The National Housing Federation website has given a detailed description of who will be affected and the implications it may have on tenants. But already only three months in to the bedroom tax and it has been reported “more than fifty thousand people have fallen behind on their rent and face eviction” Independent (2013). This report is going to concentrate on the affects the aptly named Bedroom Tax is having on people’s ...
Low-income households who cannot afford this large mark-up on rent can apply for housing benefit to make up the shortfall. Housing Benefit paid towards inflated rent prices to private landlords takes almost 95% of total UK housing spending, with only 5% of funds invested in house building (UN...
(Webster). The differences between the minimum wage and a living wage are that government regulates minimum wage and a living wage is the amount of money that a person needs to earn in order to have what
The living wage movement is an economic reform movement that has become one of the most important public policy issues that has come up within the last 10 years. Although there is no single definition, it is often defined as an hourly salary that allows working families of four to have an income that is above the federal poverty line. This means that the livable wage laws often stipulate that hourly wages should be two to three times above the federal Mininum wage. However, unlike the Mininum wage, the living wage has so far only been enacted on the county and city level. Cities and counties enforce the living wage for companies that have contracts with their respective cities and counties, receive subsidies from their cities or counties, other economic benefits cities and counties provide to companies, and in some cases a livable wage is required for the tourist areas of the particular city. For cities and local governments, the livable wage is perceived as a measure to increase the welfare of the poor. However, like everything in life the livable wage creates its on costs that along with its benefits of increased wage to some low income earners.
The housing affordability crisis has been slowly developing over decades. This implies that young households – in particular young families who want to get their feet on the owner-occupied housing ladder, are hardest hit by the crisis. (Housing Supply Working Group) It is clear, historically, that even with significant private sector rental development, there will always be a need for some government role in assisting low-income households with housing affordability and other income problems. The impact of lack in rental supply and the consequent upward the pressure on rents is pressuring on all levels of government for assistance to low income households so that they can afford suitable and adequate housing. And the household formation will be delayed as young people are unable to find affordable rental accommodation if the shortfall units of rental housings keep remaining. (Housing Supply Working
A federal minimum wage was first set in 1938. The first minimum wage was just 25 cents an hour in 1938. Can you imagine surviving off of 25 cents an hour? Now just over 70 years later the federal minimum wage is now 7.25. The question at hand is the federal minimum wage enough to meet the minimum requirement for a good, happy and healthy life? Some states and cities say no. While a select few states and cities have mirrored the federal minimum wage of 7.25, some states have placed their state or city/county minimum wage marginally higher than the federal minimum wage. So why would some states prefer to have a higher level than required by the federal minimum wage when some state have decided to match or even go below the federal minimum wage level. The answer to this question lies within each state city and county and how they perceive the cost of living in the presiding area. Minimum wage needs a makeover in America despite some of the negative effects that may come along with it. This paper will explore the reasons behind federal and state minimum wages and why some of them differ among states counties and cities across America.
Over the past decade, politicians have sought to reform the national poverty levels by lobbying for what is frequently referred to as a living wage. Living wages, on the most elementary level, are the absolute minimum a person must make per year or per hour to stay above the federal poverty level. While the number of people that receive living wages is still small, Wood (2002) suggests that this is a trend that is gaining momentum across the United States because it may help reduce employee turnover and increase worker productivity.
Minimum wage was established state wide in 1938 by Franklin Delano Roosevelt; at that time it was only 25 cents which is equivalent to 4 dollars in today’s world. It was established as part of the Fair Labor Standards Act which covered youth, government and overtime pay. Massachusetts was actually the first state before Franklin’s statewide acknowledgement, and it only covered woman and children without overtime. There are lot of issues with minimum wage now such as setting a statewide minimum wage to $10.10, which does not benefit places were living is expensive such as in New York. It leads to an imbalance in different states’ economies, and the government setting price controls in wage has some issues.
House prices have been affected by the number of people who buy houses to rent out and this has had an impact on younger people wanting to buy homes. Thus, the term ‘generation rent’ has come to the forefront in recent years. In A Century of Home-ownership and Renting (The Open University, 2016) census data presented supports the claim for the use of this term. In the video, they mention levels of home-ownership dropped for the first time since records began. From 69% to 64% in the space of 10 years and the percentage of households privately renting has been on the rise. 11% in 1981 compared to 18% in 2011. In addition, house prices have risen faster than previous years and banks have also restricted lending. These factors have all lead to more people not being able to afford a home of their own, especially at a younger age. So, as house prices rise this benefits the home-owners and allows them to gain more wealth and capital. The distribution of wealth has been affected by changes in these markets. There is evidence to support this claim. Table 3.5 (Investigating the social world 1, chapter 3, p. 96) shows wealth distribution in Great Britain from 2000 and 2005. The table shows results for housing wealth distribution amongst other things. It’s important to look at the look at the lowest and highest percentiles to look at any
Minimum wage has been around for ages. Minimum wage employment was a temporary condition for people earning little payment until they moved on to a better paying job. These jobs helped build résumés, experiences, and skills for a better career. It has become the easiest way for people to receive easy pay. As years went on that idea began to demolish into a job that many families can get to survive and pay for their expenses. There have been many arguments going on, "Should minimum wage be raised or should it be lowered or eliminated altogether?" This action has its pros and cons. It can benefit many families as living cost has gone up, price for education is rising, and college students are in huge debts. It may increase poverty, but those
However the effects of it could have impacts on others, for instance a waitress could become a tip only type job. There would also be many changes to laws, for example a minimum wage would not be necessary because most positions would be filled with skilled workers who are able to barter for their wages. Organizations would have to evaluate how they pay their employees and decide if they want skilled workers or unskilled and then how much they would be willing to pay for those employees. The rate of pay could potentially keep employees from accepting positions, so that would be a factor as well. I think that despite there not being a minimum wage or a living wage requirement an employer or employee would be able to work out a satisfactory wage that they can both benefit from and in the end both being happy about
A while ago I was told by my parents that I got a call from (my now boss), Donald Makepeace, asking if I was still interested in a job. We played phone tag for the longest tag, but finally I was hired at the local Dairy Queen. My parents originally said that I was supposed to contribute some money to help pay for insurance, gas ,and ect. After, seeing how much money I brought back week after week, they ignored that request. The truth of the matter is, it’s hard to live on a minimum wage job. In fact, many individuals must have at least two jobs to keep the bills meet. So, President Obama is trying to get Congress to pass an increase in the minimum wage. However, Congress refuses to raise the minimum wage. I agree with Congress, that we should not raise the minimum wage because these jobs are mainly for high school students and more people wouldn’t be able to hire people.
On the 1st of April 1999, the National Minimum Wage (NMW) was introduced in the UK at a rate of £3.60 per hour for workers aged 21 and older, and at a rate of £3.00 for workers aged 18-21. Since then, it has grown steadily to reach a rate of £6.31 per hour today. The NMW is “the minimum pay per hour that almost all workers are entitled to by law” (www.gov.uk). In 1999, 1.9 million people were paid less than £3.60, sometimes even below the Living Wage due to the dismantling of unions by the Thatcher government. The idea of a minimum wage then came up, supported by the Labour Party, in order to reduce the increasing poverty and to prevent low wages workers from being exploited by their employers. The Conservative Party, supported by employers, was strongly opposed to this project, arguing that a minimum wage will damage the economy and create poverty due to higher unemployment levels. So, how does the NMW really affect poverty and employment in the UK?
An option for individuals look are looking to buy property have the option to purchase a house. The advantages are: “pride in ownership, privacy, own land, tax benefits, fixed rate, security, and can renovate to their desire. The disadvantages are: less flexibility, mortgage has interest, more stress about money, requires down payments, closing costs, and moving costs, need to have a fixed income/stable income, and bank may take over house if payments are not made” (Zillow, May 12th 2012 ). Pride of ownership is advantage because it gives those individuals accomplishment feeling and shows their hard work paid off and do not have to deal with landlords anymore” (Free Advise Staff, unknown date). Privacy is another advantage because it gives the homeowners the freedom to do whatever they wish and not worrying that they will break the rules. Owning land is an advantage because “every time you pay off your mortgage individuals are gaining equity and increasing your assets” (Chapman’s lecture, unknown date). Another advantage is individuals will get a “tax benefit which will help pay off the interest of the mortgage and increases income” (Kirlew, Unknown date). Security is an advantage because in the “long run if some individuals want to have kids those individuals do not have to worry about moving each year, but instead helps their children grow up in a ...
National income is a measure of the value of the output of the good and