Social Welfare the Bane of Society
While we were in the UK, checking out our houses, we realised that one of them had several defects. Previous guests had damaged window locks, locks to the porch, kitchen. There were overgrown weeds, nettles that stung me, fences blown over.
We called someone to clear the drains for us. It cost us £75! I bet it took less than 2 hours of work!
The fence costs us £600 for half a day of work. The materials probably cost £20 to 40.
In Dublin, I backed into a pole and the rear light was cracked, the bumper scrapped. It cost me £1041! Now when you are overseas, if you rent from reputable car companies like Hertz, Avis, etc. it is always insured comprehensively with an excess of around £1500 to 2000. When you reach the office, the person registering you will usually try to upsell you their own insurance for the excess, to reduce it to zero. A car without that excess insurance may cost £50 to 60 per day for an auto, family-sized car. With excess insurance, you may pay 50% more per day, which is £75 to 90!
I bought excess insurance from a third party.https://www.rentalcover.com/
For the whole trip of 15 days, it costs me £55! It took about a week to two to get the full sum. When Hertz Belfast sent me the comprehensive invoice, it has a breakdown of labour and parts costs. As usual, material costs around £200, while labour was £800. What a rip off in Europe. But the good thing is upon receiving the comprehensive invoice, "Rentalcover" paid me.
Why is labour so expensive in Europe? £75 to clear my two drains! That's SGD128. In Singapore, maybe I can get someone to do it for SGD60 to 80?
For the same damage for my car, I could probably get it done for SGD300 - 400? That's £175!
My theory is this: minimum wage and social welfare reduces supply of labour. As a result, costs go up. If your minimum wage if £20 an hour, a simple job like gardening for half a day could easily cost you £100 to 200! If you are a labourer, you won't work unless the call-out rate is over £45 and the job is at least another 20 to 50.
If you need help around the house, you'd probably do it yourself to save the money! That meant, I had to help my uncle and aunt clearing weed, cutting trees. Instead of me going out to enjoy a walk by the park, having a lunch that costs £40 to 50 for 3 persons. Spending money keeps the economy going. The restaurant owner earns £50. The handyman earns £50. Everybody wins.
But minimum wage reduces demand for labour.
If the government removes minimum wages and let market forces dictate, and allow free movement of labour, wages of blue collared work will definitely plunge. But it will also mean there will be a lot of work going around!
The problem with totally free movement of labour, and no minimum wage is the GINI coefficient will be very wide. It will be like Singapore and Hong Kong!
I suggest reform in the UK and Europe should be to restrict labour movement, especially for blue collared ones. Then reduce or remove minimum wage. It will bring down wages slightly but increase demand. My 70 year-old uncle will not need to do his gardening for one to two hours a day! I know it's great exercise but he can still do it for exercise and fun, but not because he has to!
Now social welfare is the disease of the west. I've never seen so many people living on the streets, able bodied, high in drugs, not willing to work. The attitude of entitlement of the people totally destroys work ethics. Welfare should not be in the form of hand outs, but work training, job opportunities.
If the UK cannot reform, Asia will definitely catch up. Labour is very flexible in Singapore, Vietnam, Hong Kong, Thailand, even China.
We called someone to clear the drains for us. It cost us £75! I bet it took less than 2 hours of work!
The fence costs us £600 for half a day of work. The materials probably cost £20 to 40.
In Dublin, I backed into a pole and the rear light was cracked, the bumper scrapped. It cost me £1041! Now when you are overseas, if you rent from reputable car companies like Hertz, Avis, etc. it is always insured comprehensively with an excess of around £1500 to 2000. When you reach the office, the person registering you will usually try to upsell you their own insurance for the excess, to reduce it to zero. A car without that excess insurance may cost £50 to 60 per day for an auto, family-sized car. With excess insurance, you may pay 50% more per day, which is £75 to 90!
I bought excess insurance from a third party.https://www.rentalcover.com/
For the whole trip of 15 days, it costs me £55! It took about a week to two to get the full sum. When Hertz Belfast sent me the comprehensive invoice, it has a breakdown of labour and parts costs. As usual, material costs around £200, while labour was £800. What a rip off in Europe. But the good thing is upon receiving the comprehensive invoice, "Rentalcover" paid me.
Why is labour so expensive in Europe? £75 to clear my two drains! That's SGD128. In Singapore, maybe I can get someone to do it for SGD60 to 80?
For the same damage for my car, I could probably get it done for SGD300 - 400? That's £175!
My theory is this: minimum wage and social welfare reduces supply of labour. As a result, costs go up. If your minimum wage if £20 an hour, a simple job like gardening for half a day could easily cost you £100 to 200! If you are a labourer, you won't work unless the call-out rate is over £45 and the job is at least another 20 to 50.
If you need help around the house, you'd probably do it yourself to save the money! That meant, I had to help my uncle and aunt clearing weed, cutting trees. Instead of me going out to enjoy a walk by the park, having a lunch that costs £40 to 50 for 3 persons. Spending money keeps the economy going. The restaurant owner earns £50. The handyman earns £50. Everybody wins.
But minimum wage reduces demand for labour.
If the government removes minimum wages and let market forces dictate, and allow free movement of labour, wages of blue collared work will definitely plunge. But it will also mean there will be a lot of work going around!
The problem with totally free movement of labour, and no minimum wage is the GINI coefficient will be very wide. It will be like Singapore and Hong Kong!
I suggest reform in the UK and Europe should be to restrict labour movement, especially for blue collared ones. Then reduce or remove minimum wage. It will bring down wages slightly but increase demand. My 70 year-old uncle will not need to do his gardening for one to two hours a day! I know it's great exercise but he can still do it for exercise and fun, but not because he has to!
Now social welfare is the disease of the west. I've never seen so many people living on the streets, able bodied, high in drugs, not willing to work. The attitude of entitlement of the people totally destroys work ethics. Welfare should not be in the form of hand outs, but work training, job opportunities.
If the UK cannot reform, Asia will definitely catch up. Labour is very flexible in Singapore, Vietnam, Hong Kong, Thailand, even China.
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