Tuesday 31 January 2012 11.11pm
Dee Dee wrote:
some employer do use it as a top up which is wrong but other employers genuinely cannot aford to pay more than the minimum wage and may not be able to take on staff if thay had to pay more
Suppose you were a decent employer, wanting to pay a living wage, but in competition with another business with a less scrupulous boss.
Now, your competitor could take on cheaper staff, in the knowledge that their incomes will be made up by the taxpayer and, hence charge less than you for your product. They will out compete you, forcing you out of business.
Therefore, the existence of in work benefits (eg Working Tax Credit or LHA) forces employers to underpay their staff and take subsidies from the tax payer. The employers aren't necessarily evil, but they have no choice.