WellFair Effect on Labour Rates

How does the introduction of WellFair reduce labour costs?
Because WellFair services provide everyone with guaranteed access to the basics of life, the minimum amount of pay anyone is prepared to accept for their labour is reduced.

WellFair is a ‘Living Wage’ equivalent
The point of having a minimum wage or a ‘living wage’ is to guarantee that going to work is worth it, and to stop people being coerced into shitty jobs just to survive.
By providing the services necessary to sustain life, WellFair makes it unnecessary to have a minimum wage or ‘living wage’ set by law.

Doesn’t this just make everyone poorer?
No, because the reduced pay is in exchange for equally valuable services that are available for free, such as local transport, basic phone and Internet access.
No one is forced to accept less pay, the reductions in labour rates will be entirely voluntary.

Won’t people be exploited if there’s isn’t a statutory minimum wage?
No, because no one will have to work to survive.
If someone wants to offer a job they will have to offer sufficient pay to attract people to do the work. No one will have to work to live, eat, go to school, get healthcare, access the Internet or use the local bus.
Employers will also have to provide decent working conditions to attract employees. Health & Safety Regulations will remain in effect any way, but WellFair will place additional onus on employers to provide good work conditions.

How much will labour rates be reduced?
We expect that labour rates will decline by 10% to 50% of the current minimum wage. Every £1 reduction in basic wages removes approximately £30Bn of cost from the economy.
We cannot know the precise effect WellFair will have to labour rates, and the effect will be different for different jobs. The lower the skill level required for the job, the greater the proportional reduction in pay will be. i.e. the effect on pay for a Doctor is going to be marginal or none, but the reduction in the pay for garden maintenance will be significant.

Will this reduce tax revenues?
Most people earning low wages are not tax payers today, and reducing basic labour rates will have little or no effect on income tax revenues. The LIFE budget calculations are based on minimal increases in earnings of only 1% a year to accommodate the effects of reducing labour rates.
WellFair services will replace some spending in the economy, reducing tax revenues from VAT. The effect will be minor because most of the services provided are not included in VAT, e.g. food.

What will be the effect of reduced labour rates on the cost of WellFair?
The reduction in labour rates will have a positive impact on the cost of delivering the WellFair services themselves, to the extent that those services include labour. Many WellFair services include substantial basic labour costs, such building maintenance, bus drivers, street sweepers, cooks and many other labourers who will accept marginal reductions in their pay.
We have budgeted for a 10% reduction in the overall cost of services, resulting from the reductions in labour rates after the introduction of WellFair. This budget calculation is based on a 70%-75% labour component in the services, and a 15%-13% reduction in labour rates.

This table includes workings for the value of the WellFair services to citizens:

WellFair Services (£Bn)

Current

New

2015

2016

2017

2018

2019

Efficiencies Introduction

£Bn

Local WellFair delivery

-54

Inherited

25%

50%

75%

100%

Labour cost reduction

-61

0%

10%

50%

75%

100%

Effect on Cost of Living

Mthly

£pppm

£pppm

£pppm

£pppm

£pppm

Shelter

£280.90

281

211

140

70

0

Sustenance (Food + UCC)

£210.66

211

158

105

53

0

Health & Care

Education

Transport

£122.67

123

92

61

31

0

Information

£33

33

25

17

8

0

Legal Services

Budget before WellFair

648

486

324

162

0

Monthly Cost Reduction

0

162

162

162

162

Hourly Cost Reduction

37.5

0

£1.00

£1.00

£1.00

£1.00

Minimum Wage Effect

£6.31

£3.99

15.8%

31.6%

47.4%

63.2%

Average Wage Effect (ex SS)

£12.74

£0.96

7.5%

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