Raising the Minimum Wage is a moral duty

The UK is the sixth largest economy in the world and the third largest in Europe, behind France and Germany, with predictions being made we could even overtake Germany by 2030.

So why are we still not paying our unskilled and semi-skilled workers enough to eat and heat in Britain today? The Minimum Wage – the hourly take-home pay set by law – is £6.31 for over 21s. This is immoral considering the inflation-busting cost of energy and food we have seen in this country over many years and boosted by the Labour Party-induced crash of 2008. And this does not even take into account the exorbitant rents and house prices.

It seems George Osborne – at least on the surface – thinks the same. The Chancellor has signalled he intends to raise the Minimum Wage to £7 an hour. This will still leave many living from hand to mouth and still heavily reliant on housing benefit and tax credits to make ends meet but it is a start.

I personally am in favour of the ‘Living Wage’ being enshrined in law. This would be £8.80 in London and £7.65 in the rest of the UK. 

This isn’t a Right versus Left argument (anymore). Labour’s Ed Miliband’s advocates a Living Wage as does Tory London Mayor Boris Johnson who has said he is in favour of people being paid a decent wage for a decent day’s work:

“Paying the London Living Wage is not only morally right, but makes good business sense too.”

We don’t know how Boris (if he was ever in national power) would implement a Living Wage. We do know Ed Miliband would bribe businesses by offering a tax rebate if they sign up to his policy.

But I don’t think businesses should be bribed one penny. The Living Wage should be legislated and let the businesses suck it up. Oh, what’s that? Do I hear some sections of the Tory squirearchy, who opposed the Minimum Wage at its inception, braying it would lose jobs? No it wouldn’t. Read the first paragraph of my post again. Britain is awash with money – it’s just mainly funnelled to the top 1% or to the Exchequer in middle-class tax intake. It is disappointing to read Ipswich’s very own Ben Gummer is not even in favour of raising the Minimum Wage let alone imposing a Living Wage. I personally like Ben so I won’t try and guess why he thinks this – I am happy for him to use the Comments to let us all know.

Raising the Minimum Wage then looking at introducing a Living Wage is a win-win scenario. It means more people paying tax and less money spent subsidising wages through tax credits and rents through housing benefit. In an economy which is the third largest in the EU single market, it is frankly obscene the British Government is forced to subsidise unskilled and semi-skilled workers’ wages with tax credits. This will not end overnight but we must travel in the direction of businesses paying their workers a decent wage commensurate with the profit they make for their owners.

Coupled with the Government’s policy on welfare, soon to be capped at £26,000 and hopefully being pushed lower in the coming years, a raised Minimum Wage will help to show the thousands languishing on benefits that work pays. And it may just help with the number one concern of British people after the economy: uncontrolled immigration. With more incentive given to the indigenous workforce for taking unskilled jobs, it will make Britain less attractive to temporary foreign workers.

The politics of New Labour and Gordon Brown never wanted to deal with the problem of low pay, happy instead to pay unskilled people off with tax credits and benefits, even ghettoising them into whole neighbourhoods. But the politics of George Osborne (even if it is insincere) may help to make this country a more moral place to live.

A living wage should not just be the goal of the Left

Labour leader Ed Miliband: He’s not as stupid as he looks

I know it is fashionable to laugh at Red Ed and patronisingly say he’s not that smart when it comes to economics. Except, he is VERY smart and was the Chancellor of the Exchequer’s right-hand man when he worked alongside Gordon Brown before 2008.

It would be very trivial to suggest either Gordon Brown or Ed Miliband are stupid. Misguided, yes, and certainly socialists but they also have the requisite skills to create a socialist economy just not a free-market economy.

But I think it has come to a point in the year 2013, where the debate between socialism and free-market economics is becoming redundant, just like the old Left versus Right arguments. I am a strident believer in capitalism, which is the foundation for free-markets, but in my view capitalism, in the UK at least, is broken and no longer serves the masses. We need reform. When Margaret Thatcher unleashed the power of the market during her reign in the 1980s it was abundantly clear socialism and 90% income tax rates were strangling ordinary workers financially and something had to be done.

But once the blue touchpaper was lit it was very difficult to stop the subsequent chain reactions. Between 1985 and 2000 the good times were there for all to enjoy: privatised utilities gave shares to the masses (unlike the Royal Mail sale where most were locked out because of the £750 threshold), people were lifted out of the dirt (literally) in manual labour jobs and allowed to become bankers, IT consultants, small business owners because of mass deregulation and low taxes brought about by Thatcher’s chancellors. The babyboomer generation fell smack bang right in the middle of the economic boom and they have done extremely well. As I am reminded when I see the new Range Rover parked outside my house as a babyboomer tends to his cash-buy terrace house a few doors down in preparation for renting it out!

But the wily boss class spotted an opportunity to get even richer and took control of the “free” market and since 2000, if not before in the 1990s, ordinary workers wages have been pushed down year-on-year. This does not just affect the unskilled and semi-skilled, but professionals in engineering, law and IT. Millions of people working in our biggest businesses haven’t had an above inflation pay rise for almost 15 years whereas the boss class have seen their salaries rocket, with it now unheard of for a CEO not to take home at least £1 Million in cash each year – before bonus, share options and their pension.

The money is there. It’s just now all funnelled to the top. This is why I scratch my head when I hear the boss class say with a dreaded look on their face that if they are forced to pay their employees a living wage, prices will need to go up. I’m not convinced anymore when there is such a gulf in wages between the top and the bottom of an organisation. There is clearly money about but perhaps greed has got the better of those at the top.

In the seventh largest economy on Earth, surely the private sector who create this wealth can afford to pay all employees enough so they don’t have to choose between eating and heating each winter? I will be accused of being economically illiterate. So be it. But when there is such disparity of wealth in one of the world’s richest countries, you have to question everything. When Labour brought in the Minimum Wage, the boss class said the world would end – except it didn’t. Labour’s Living Wage isn’t even as half as radical as the Minimum Wage with a tax break being offered to businesses who pay it.

Of course, this new policy from Labour is massively tinged with political campaigning but that’s the result of a democracy and rightly so. I even suspect Dave will be desperately trying to find his own living wage policy pretty soon…