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Brixton Ritzy staff in pay dispute for London Living Wage with Picturehouse Cinemas

editor said:
Great piece by Dexter Deadwood on B Buzz!

living-wage-ritzy-pay-dispute.jpg


Opinion: Why Picturehouse Cinemas should pay the Brixton Ritzy staff a living wage
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great article Dexter - I teach people who work in childcare which is another low paid workforce and your persuasive facts about economic benefits to all are very useful when we're talking about why wages need to be realistic
 
Mark Thomas was saying last night that he helped the Curzon staff get union recognition by staging a few stunts before the films started. Like the Ritzy they're an art house cinema with lots of nice, liberal customers. Not sure if they're paying the London Living Wage though.
 
Ms T said:
Low wages mean that people are claiming benefits at the same time as working, ie the taxpayer is subsidising the profits of businesses.
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I agree that businesses should be paying enough that people on a full time wage should not need benefits. I don't see why they should be publicly subsidised other than if there is strong evidence that it will stimulate job creation - or if it contributes to essential skills and experience.

I just used the (somewhat confusing, I thought) benefits calculator to look at the impact on income for a healthy 29yr old, no dependants, sharing a rented house (150pw), <6k savings, averaging 35hrs/wk @ £7.70/hr who gets a pay raise to £8.80 (LLW). The example apparently did not qualify for benefits other than housing. The net increase after tax and reductions in Housing Benefit is £0.26/hr.

35hr/wk @ £8.80/hr
£13,878 After tax income
£905 Housing Benefit
£14,784 Total

@ 7.70
£12,514 After tax income
£1,790 Housing Benefit
£14,304 Total

If the aim of the LLW is to shift responsibility for full costs onto the business - then the example above would seem to go a long way to achieving that - but that 21% increase in hourly rate only appears to deliver about 3% increase increase in net income. Can that be right?
 
Onket said:
Oh right. Seems a bit of an odd cut off point. Having no savings at all is the same as having £5999.
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It's the cut off point for some benefits I think- you can have £6k and still get JSA, more they expect you to spend it first before relying on the state. Puddy_Tat will know
 
Re. JSA (income based) and savings - you lose £1 a week for every £250 over £6k. Over 16k - you get nothing. Initially it is possible to get contribution-based JSA for a while (6 months?) where this doesn't apply.
 
There will be a variety of economic circumstances amongst the Ritzy staff. Some will be entirely reliant on the income. I know one who is relatively well off - owns their house locally, small mortgage - runs a business with a modest income which is supplemented with shifts at the Ritzy. I doubt they receive benefits. The increase to LLW will benefit them and any other modestly better off employees far more than the worse off ones. I'm not concerned with them earning more - that's fine. But whilst he better off will get the full 21% pay rise as they probably don't receive benefits - or at least receive less - the worse off will get the maybe 3% pay rise after benefits are reduced.

So whilst the business would be paying its full share rather than leaving the taxpayer lumbered with supplementing it (which is a good thing), the benefit will be felt predominantly by the (only modestly) better off employees, then by the tax payer and finally, to a much smaller extent, by the employees currently in receipt of benefits. Surely this is not what was intended? Or does something else compensate for this?
 
I remember all the bitter, disingenuous arguments about the Minimum Wage, the same ones being trotted out now by the usual suspects. How it will cost jobs and raise prices; it was a nonsense then and it's a nonsense now. There is a moral obligation on corporates to pay their staff enough to cover the basic cost of living.
 
Manter said:
It's the cut off point for some benefits I think- you can have £6k and still get JSA, more they expect you to spend it first before relying on the state. Puddy_Tat will know
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my understanding is this -

classicdish said:
Re. JSA (income based) and savings - you lose £1 a week for every £250 over £6k. Over 16k - you get nothing. Initially it is possible to get contribution-based JSA for a while (6 months?) where this doesn't apply.
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yes, you can get 'contributions based JSA' for 6 months, which is just on the basis of your NI contributions as an individual.

If you don't have enough NI contributions, and / or when 6 months is up, you can go on to income related JSA, which has the 'capital' restrictions as above. And it is means tested by household, so if you have a partner (and this is about the only time the state recognises a 'common law' partner) then their income / capital is also taken in to account.

The capital / means testing rules are pretty much the same for housing benefit, and usually the same (councils have more flexibility now) on council tax reduction.

Rushy said:
If the aim of the LLW is to shift responsibility for full costs onto the business - then the example above would seem to go a long way to achieving that - but that 21% increase in hourly rate only appears to deliver about 3% increase increase in net income. Can that be right?
Click to expand...

I haven't sat down and tried the same calculations, but broadly speaking, as your income rises, your housing benefit / council tax reduction will go down. Not quite at 100% but at a fairly high marginal rate.

Quite what effect working tax credits (which I don't fully understand) would have on those examples, I'm not sure, although I thought the benefits calculator would assess these as well. This one (independent of government) should do.

One of the things that IDS keeps on about is the idea that the benefits / tax system ought to ensure that "work pays" - in other words you shouldn't end up no better off if you start work / work more hours / get a better paid job. There are certainly some circumstances where you gain very little by working / working more. There are also variable thresholds, e.g. if you work 16-30 hours a week, you don't qualify for JSA, and (in many circumstances) you don't qualify for working tax credits either.

Of course whether you address this by making the benefits / tax system more sensible, or by punishing people on benefits as much as possible is a matter of policy.

The other strand to the benefits system is how complicated it gets if you're on a variable income. In theory, you can claim means tested benefits with a variable income, and it's assessed on taking an average wage over X number of weeks / months.
 
Puddy_Tat said:
I haven't sat down and tried the same calculations, but broadly speaking, as your income rises, your housing benefit / council tax reduction will go down. Not quite at 100% but at a fairly high marginal rate.

Quite what effect working tax credits (which I don't fully understand) would have on those examples, I'm not sure, although I thought the benefits calculator would assess these as well. This one (independent of government) should do.

One of the things that IDS keeps on about is the idea that the benefits / tax system ought to ensure that "work pays" - in other words you shouldn't end up no better off if you start work / work more hours / get a better paid job. There are certainly some circumstances where you gain very little by working / working more. There are also variable thresholds, e.g. if you work 16-30 hours a week, you don't qualify for JSA, and (in many circumstances) you don't qualify for working tax credits either.

Of course whether you address this by making the benefits / tax system more sensible, or by punishing people on benefits as much as possible is a matter of policy.

The other strand to the benefits system is how complicated it gets if you're on a variable income. In theory, you can claim means tested benefits with a variable income, and it's assessed on taking an average wage over X number of weeks / months.
Click to expand...

Thanks for adding a little clarity to what is a labyrinthine system. It will obviously vary considerably according to the employee and their circumstances and the calculator I used would only let me try two variations before telling me I needed a professional subscription (which seems rather uncooperative). The 21% increase from 7.70 to 8.80 equates to about £2,000 (gross) based on 35hrs. The housing benefit reduction was a little under £900 so not far short of 50%. This is then amplified by the likelihood that the extra £2,000 will be fully taxed at 20%. So, approximately, the £2,000 increase is £1,600 net of tax and £700 net of benefits reduction. That rougher calc makes it worth £0.38/hr, rather than the £0.24 in the the calculator - although I'd err on the side of trusting the calculator rather than my bodging! Either way - a huge proportion of the increase would appear to be destined to be clawed back if you fall into that income bracket.

I didn't look at JSA in my scenario since it would not apply to 16+hr workers and as far as I know is not a long term benefit.
 
Oh my gosh, i'm buzzing. Just come back from Windrush Square having showed solidarity with the Ritzy workers; what a lovely, lively bunch they are; pretty good drummers as well.
Lots of support from passing pedestrians and motorists tooting their horns. As i was walking away towards Effra Road, i caught sight of Chuka Umunna scurying away towards the Town Hall. "Oi Chuka try supporting the working class", i shouted. He turned round with an almighty frown and was about to stop but saw me confidently walking in another direction, he mumbled, "i am supporting them", "you're a Tory in disguise" i retorted.

Met some lovely people supporting the workers. There is going to be a samba band in the square later.
 
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