Jon Powell on minimum wage, living wage, CEO pay…
The Chancellor recently announced the introduction of a National Living Wage. This isn’t going to replace the National Minimum Wage and isn’t on a par with the Living Wage, so what is it?
From April 2016 the National Living Wage (NLW) will apply but only to those aged 25 and over and will be set at £7.20, 50p more than the National Minimum Wage (NMW) for 25 year olds but less that the Living Wage (LW) recommended by the Living Wage Foundation of £8.25.
Assuming 233 working days of 8 hours that equates to an approximate salary of £12,500 on the NMW, £13,420 on the NLW or £15,378 on the LW.
So a 25 year old on the NLW will receive a salary of £13,420, but a 20 year old doing the same job would be salaried £9,880 (£5.30 hr on the NMW). And that doesn’t take into account the full cost to the employer e.g. NI, pension etc. The salary will be 36% higher for the 25 year old. And don’t forget the employer cannot discriminate on (w)age and just employ the younger applicant.
So that begs the question of a fair days pay for a fair days work. Does the 25 year old doing the same job deserve a 36% higher salary?
With all the confusion over what employers should legally pay their employees, what about the moral viewpoint? Dan Prince CEO of Seattle based tech company Gravity announced earlier this year that he would raise the salary of every employee to $70,000 (£47,000) and cut his own salary to the same amount. The figure was based on research by the University of Princeton, which found that an income above that point did not have a significant impact on a person’s happiness.
So if you are an employer that now has to pay more for the same “fair days’ work” or an employee that will benefit from an increase in salary as a result of the National Living Wage, do you feel any happier? Or are you still wondering how much your CEO is taking home and wishing you worked for Dan Prince…..
Jon Powell is the LU Enterprise Team Manager and a Director of Enterprise Educators UK, Lancaster District Chamber of Commerce and Employer Solutions Ltd.
…and choose your co-founder wisely
Ian Brooks advises that you should choose a co-founder for your startup as you would a spouse. You wouldn’t marry someone you despised with an incompatible personality to yourself (or at least you should seriously reconsider if you do…), and neither should you start a business with someone you hate – in many ways it is probably easier to divorce than divide a business partnership!
When research suggests that co-founders are four times more likely to be successful than solo entrepreneurs, there is a strong case for starting a business with a friend, relative or colleague with similar interests and complimentary skills. Finding a business partner, however, should not be rushed into; your relationship should be able to withstand disputes, uncertainty and undoubtedly a little bit of chaos as you start to make things happen.
Read more from Ian here and find out what attributes to look for in finding a co-founder.
If you’re looking for a co-founder, why not come along to some of our Make It Happen events in week 7? Network with fellow students, staff and external businesses who can help you to get started and collaborate with entrepreneurs with similar interests.
Is entrepreneurship really a world of arrogance, back biting and dishonesty?
The Apprentice is back, marking ten years of searching for that illusive apprentice who embodies the entrepreneurial spirit, and determination, required to succeed in the business world. However – is The Apprentice an accurate portrayal of what it really takes to be an entrepreneur?
No, it is not.
According to a recent YouGov poll, business related TV programme like The Apprentice and Dragons’ Den have significantly affected the nation’s understanding of entrepreneurship, and it appears that we now see this world as “dog eat dog” with corrupt and dishonest individuals. Whilst small businesses and apprenticeships are promoted and hailed by politicians as encouraging opportunities for young people, this fictitious, stereotypical portrayal of apprentices are unhelpful and damaging, with only 3% believing that the entrepreneurial world is populated by considerate, caring people. Parents may no longer encourage their children to become business leaders, whilst young adults will not see the value in pursuing their entrepreneurial ventures for fear of the ruthless business world.
Viewers understand that these programmes are produced with controversy and entertainment in mind; the contestants are playing the game and are arguably chosen for their personality and character, rather than their business acumen. With this in mind, why is there so much distrust for ‘entrepreneurs’ and why have we allowed entertainment to cloud our perception of hardworking people who make things happen?
Read more here, and let us know what you think – do you watch The Apprentice and what does this negative perception of entrepreneurship mean to you?
New Facebook feature to increase brand awareness
Facebook is no longer just a tool to share your latest selfie. A new feature has recently been announced which will allow facebook users to search for items to buy from business pages and groups.
New products can already be promoted using Facebook and other social media. We’ve all seen buy and sell pages from our local areas, as well as Facebook ads for products and services, so what’s new? Instead of creating random pages or groups to sell products, businesses and consumers will be able to use a single area or shop section to advertise and buy whilst browsing on Facebook. Some commentators point out the similarities between this new platform and existing retail areas like Amazon marketplace.
Read more here.
Support social enterprise and unleash your spending power
October 10th is Social Saturday – the national day to celebrate and buy from our social enterprises.
Every spending decision a business, public body or an ordinary consumer makes has a social and environmental impact. Social Saturday is a national initiative to encourage consumers to think about their spending power and the importance of supporting our social enterprises. Find out more here and search for UK social enterprises that would benefit from your spending this weekend.
Use the hashtag #SocialSaturday2015 to share your spending pictures and support the campaign.
Fintech is reshaping the money transfer industry
The internet and the growth of mobile technology has transformed the way we manage our money and mobile banking apps, contactless payment, Apple pay and even Facebook payments have revolutionised our spending habits.
Approximate figures show that the number of people with access to their bank account via a mobile device grew by 700 million between 2011 and 2014. Financial tech (fintech) therefore, is more prominent and more lucrative than ever – so much so that some experts predict that it will replace cash payments in future years.
There’s really never been a better time to launch your fintech startup or think seriously about your financial solutions ideas; last year, investments in fintech startups quadrupled to $12 billion and crowdfunding is expected to bypass venture capital investments by 2016.
Read more here.
Help refugees build new lives in Britain
If you have an idea or solution which meets the long term needs of refugees and asylum seekers starting their new lives in the UK, UnLtd can help.
UnLtd CEO, Cliff Prior, has announced a new £100,000 fund dedicated to tackling the emerging challenges faced by local authorities, churches, mosques and charities with the influx of refugees feeling conflict overseas.
UK residents may apply for one to one support and up to £5000 to develop their sustainable idea for greater integration.
Find out more here.
What does the election of Jeremy Corbyn mean for small business owners?
New Labour leader, Jeremy Corbyn, made a number of promises to SME’s with his campaign of ‘standing up for good businesses’ , prior to his election victory last weekend.
Following a turbulent start to his leadership, Enterprise Nation ask five small business owners for their take on Corbyn’s chances of success as Labour leader, and how confident they are that he will protect their interests.
Read their reactions here.
What do you think of Jeremy Corbyn’s promises to small businesses, and what would you like to see him do next?
Enterprising graduates are better suited to start up companies, rather than big business grad schemes
Graduate schemes are incredibly competitive and often big businesses can be selective with their chosen graduate employees due to the large number of applications they receive every year. These large corporations, it seems, have their pick of the crop and smaller businesses miss out on top talent.
The Guardian report that due to the popularity of graduate schemes, there is a growing issue of skills shortages affecting smaller business owners who struggle to attract univers and more must be done to encourage graduates to consider start up firms as well as well known, national brands to ensure a healthy recruitment pipeline for all.
Whilst it may be true that there is often greater job security working for large corporations, this does not necessarily outweigh the job satisfaction and varied, fast paced roles offered by new and ambitious business ventures.
Read more here.
Digital skills are increasingly in demand; knowing how to code is vital to your tech business
Britain will need 745,000 additional works with digital skills for continued economic growth. Great news for techies, but what about digitally illiterate entrepreneurs with a tech start up in mind?
Daniel Thompson believes not knowing code is a significant disadvantage to a tech start up. ‘Ideas guys’ can be dead weights, productivity can be affected if you are reliant on external experts, and as the use of apps and e-commerce is increasingly important, knowing at least basic code will allow you to think about your digital content and initiatives.
Do you know your HTML from your CSS? Heard of Java, C#, SQL?
Read more about the importance of coding to your tech start up here.
Photo by Alamy