[user104658]

Originally Posted by Kizzy

Not really as if the onus was on the employers not the government to subsidise wages the economy would be better off, they may even be able to reduce VAT so it would benefit working families.

This only really applies to the super - rich multinationals, though. Most businesses in the UK have a pretty strict budget for wages in order to stay in profit, and a large mandatory increase in wages across the board would simply force many of them to reduce staffing levels to compensate. Excess staff would be trimmed and unemployment would rise fairly dramatically, and there would also be no extra money (same wages going out, just to fewer people) in the consumer economy.

The only way it would be workable is if the compensation came from the other end, and the government cut certain taxes on businesses to allow them the extra money for wages. But then, of course, the money that the govt. has saved in tax credits is now swallowed up by those tax cuts.

In other words, I don't think it particularly matters where the money is coming from, at the end of the day it will all even out anyway. Although it at least might make people feel better to have bigger payslips and lower tax credits claims, I guess. More like it's really "theirs". It probably does make more sense to allow companies to keep their money to give out to employees themselves, rather than taken it from them only to pay it back out to those same employees as benefits.

It might mean those aforementioned multinationals getting even richer, though, in theory.