Minimum wage
Comparison with benefits
A lot of comparisons are made between the national minimum wage and unemployment benefits. In April 2008, jobseeker's allowance was raised to 60.50 pounds per week for most single people, rising to 64.30 in April 2009. Those under 25 are paid a reduced rate, while different rates apply for couples and lone parents. Of itself, this would be well below the national minimum wage for a full week's work, but unemployed people are also entitled to housing benefit (or local housing allowance) and council tax benefit. Some claimants are entitled to other benefits too. It is also true that unemployed people don't pay national insurance contributions, though it's worth pointing out that many unemployed people paid those contributions in the past, which is something that many people choose to ignore.
In my case, the amount I receive in housing benefit actually exceeds the amount I receive in jobseeker's allowance, though as I explain on my Housing benefits page, it's much more complicated than you might expect. I never see my council tax benefit, it being paid on my behalf; if only housing benefit were that simple. Even taking all that into account, my total unemployment benefit doesn't come close to the national minimum wage for a full working week.
London
As I explained in my page about Tax, if I lived in London, where housing costs are much higher, my total benefits would be much closer to the national minimum wage, which is set at exactly the same rate throughout Britain, so perhaps the government needs to consider having a London minimum wage at a higher rate than the national minimum wage. It wouldn't help the unemployed directly but it might incentivise those of them that live in London.
Stick to the facts
I'm always keen on getting the facts right, so while I don't go along with those who try comparing jobseeker's allowance directly with the national minimum wage, I also don't go along with those who exaggerate the amount that unemployed people actually receive. I'm happy to compare like with like, as near as possible, difficult as it is with all the variables to consider. However, I wonder if the way the system is set up makes it easy for large families to live off benefits.
Exemptions for self-employed and "New Deal"
The rules governing the national minimum wage contain some exemptions, the main one being self-employed people. Although not mentioned by name, New Deal is also exempt, coming under the heading "Government employment programmes".
At first glance, it seems sensible to exclude self-employed people; however, such people aren't usually working for themselves in the true sense of the word. I spent much of the eighties as a freelance computer programmer, during which time I had self-employed status but I was actually doing work for whichever organization was willing to pay for my services, which often involved working a long way from home. Of course, such work pays well, but there are other types of work that pay poorly, where it might be tempting for an employer to circumvent the national minimum wage by only using self-employed people.
I am always suspicious when I see low-grade job vacancies that stipulate self-employed status. In these cases, the employer is implying that they will use the services of the successful applicant, but because they aren't offering a job conventionally, there is no real commitment on their part. When I was a freelance computer programmer, I knew that I was being paid considerably more than regular staff members doing the same type of work, but when I see low-grade jobs offered on the basis of self-employed status, I don't necessarily see them the same way.
Leaflet distribution
Most leaflet distribution job vacancies require own transport, which rules me out because I never took a driving test. While I was living in Bushey and working in Watford, I took many driving lessons and eventually had a provisional booking for a driving test in nearby Berkhamsted in January 1975. That was as near as I got because it was obvious that I wouldn't have passed and I gave up the idea of driving, which is something I later came to regret.
Hey, if leaflet distribution is all that anybody is willing to pay me to do and I don't need to drive, I'll do it. I enquired about one leaflet distribution job that didn't mention transport, expecting to be told that I didn't qualify as I don't have my own transport. Not so. Here is an excerpt from their response, but I'm still not happy.
The job is very straight-forward and by following some simple advice you will be able to earn very good money. There is no selling, you just need to be friendly, happy and energetic and distribute our cards to people’s letterboxes and people in the street. Our good people are earning over 280 pounds a week by working hard.
The job involves posting our cards through the letter boxes of people's homes and handing them out in the street on busy days. For seven years now, people have used our card to make phone calls and from these calls we pay you a generous commission. We know how much commission to pay you because the cards we give you have a number on the back of the card that is unique to you. So when people use the cards you have given them, you start earning money.
We used to pay people a basic amount per hour to hand out the cards and a small commission, but so many people dumped our cards and just took the basic salary. We started paying people commission four years ago and since then it has prevented dishonesty and enables us to reward honest, hardworking people like you.
We know it means that you have to trust us in the first week and we are very happy for you to talk to some of our top people if you want to hear what they have to say about the job.
It sounds fair enough from their perspective, but I wouldn't trust them in my present circumstances. It's the sort of thing that might be worth taking a chance on if one isn't claiming benefits for whatever reason. But in any case, while there is no selling, the job clearly requires somebody with an outgoing personality.
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