Britain’s High Cost of Government raises the Cost of Living despite having the NHS

Posted by PITHOCRATES - November 3rd, 2012

Week in Review

One of the arguments for national health care is to relieve employers from paying the high cost of health insurance.  Allowing them to pay their employees more.  Also, without the need to find a job that offers good health care people could do whatever they wanted for a living.  It would allow them to make employment decisions less on what they have to do to pay their bills but more on what they want to do.  Because the great fear of losing or not having health insurance is no longer there.

During the Obamacare debate Nancy Pelosi (then Speaker of the House) said just think about how many could chose a career as an artist now that they didn’t have to worry about health insurance.  Wouldn’t that be wonderful?  Instead of working for corporate America they could do something more meaningful.  Well, the UK has national health care.  Provided by the National Health Service (NHS).  And yet both employers and employees are still having the same problems (see Five million paid less than Living Wage, says KPMG posted 10/29/2012 on BBC News Business).

One in five workers in the UK is paid less than required for a basic standard of living, a report has said…

The rate stands at £8.30 [$13.30] an hour in London and £7.21 [$11.56] in the rest of the UK.

This rate is voluntary, unlike the National Minimum Wage – the amount that employers must pay by law, which is set at £6.19 [$9.92] an hour for those aged 21 and over.

The higher the minimum wage the higher the costs for business.  In wages and salaries.  And all the taxes and insurances that are calculated based on those wages and salaries each payroll.  So the higher the minimum wage the greater the cost of doing business.  And the less money left for a business to invest into the business to expand and hire additional workers.  The fewer people working the fewer people pay taxes to fund government.  Requiring higher tax rates on those who do work.  In part to pay the unemployment compensation for those who can’t find a job.  Which increases payroll tax rates.  Further discouraging employers from hiring new workers.  Further reducing the tax base.  And so on.

“Times are difficult for many people, but of course those on the lowest pay are suffering the most,” said Marianne Fallon, head of corporate affairs at KPMG, which has itself signed up to pay the living wage…

“The living wage is not a luxury, and means that low-paid workers do not have to make tough choices over whether they can afford the everyday things that most of us take for granted, such as their fuel bill or a winter coat for their children.

But Mike Cherry, policy chairman for the Federation of Small Businesses, said: “Every employer would want to be as reasonable as they possibly can, but in the current economic climate it is not going to be possible for those sectors that have traditionally been unable to pay the national minimum wage.”

He said rent and rates were becoming more expensive, and so were energy costs, so the living wage was an aspiration but not affordable for some employers…

However, one 23-year-old care worker told the BBC News website that life was tough financially – even when on the living wage.

She said that the cost of petrol, when driving between the homes of the people she cared for, took a big chunk out of her pay which totals £7.21 an hour.

Could it be that it’s not that these people aren’t earning a living wage?  That it is the high taxes and high regulatory compliance costs that are pushing the cost of living beyond people’s incomes?  I mean, why is it that gasoline costs so much more in Europe than it does in the United States?  Gasoline in Britain is currently selling for approximately £1.35 per liter.  Converting liters to gallons and pounds to dollars that comes to about $8.20 per gallon.  Why is it so much more in Britain than in the US?  When it comes from the same oil?  Taxes.  And regulatory compliance costs.  This is the cost of European social democracy.  And green energy.  The only reason they need a living wage is because government makes it so costly to live.

Employees want the highest pay they can get.  While employers want to pay the absolute minimum it takes to get good workers.  When times are good people can leave and find a higher paying job.  When times are bad the business owner struggles to pay their bills.  They pay their vendors slower.  They cut back on investments into the company.  Spend money repairing equipment instead of replacing equipment.  They do everything they can to conserve their cash so they can pay their bills.  Which is why they don’t like being too generous with the employee pay and benefits.  Because once you give it you can never really take it back.  Unless you want to make a lot of surly employees.  So when the economy goes south they don’t cut pay and benefits so much as lay off people.  So they can pay their bills based on their reduced revenue.  And keep the remaining employees less surly.

These are the realities of business.  And national health won’t change any of this.  For national health care isn’t free health care.  National health care is taxpayer-financed health care.  So it will give us higher taxes.  Raising the cost of business.  Forcing people to struggle in their lives.  Such as in Britain.  Where costs are high.  For if they’re paying $8.20 for a gallon of gasoline just imagine how much everything else costs.  Especially groceries.  They deliver food with trucks.  Trucks that use those expensive petroleum products.  Which raises the cost of food.  This is the future of Obamacare.  High taxes.  High gasoline prices.  High food prices.  Just high prices.  Because the cost of Obamacare will raise taxes like we haven’t seen yet.  Taxes that every price will include.  Which will make it just so costly to live.

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