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Whatever the rise, it ain’t enough
The Guardian tells us that George Osborne is calling for an above-inflation increase in the minimum wage to £7 an hour. This is to take place in two stages, one in October 2014, one in October 2015. Presumably that means that if we fail to vote Conservative in 2015, we will have only ourselves to blame if we find ourselves still on low pay. Other politicians are jumping around trying to respond. Labour’s shadow Chief Secretary to the Treasury says that Ed Miliband and Ed Balls thought of it first. Vince Cable claims he thought of it first. The things they all do to get votes.
Juggle, juggle, juggle. Or should I say smoke and mirrors? Of course the minimum wage should be higher – much higher than £7. But who knows what any of the parties will really do after the next election – on anything, but perhaps especially on this.
Others are being predictable: Mark Littlewood, the director general of the Institute of Economic Affairs, said: “Increasing the minimum wage is a triumph of political aspiration over economic reality”; and the CBI says that a rise to £7 would be “unaffordable”. I doubt it. For it to be suggested at all probably means it is, in their terms, “affordable”, and the bluster is just a knee-jerk reaction. Mandy Rice-Davies should be living at this hour!
Talking of aspiration, I am reminded of a friend who works in what he calls “the bowels of the capitalist system”, the World Financial Center in New York. We were sitting in the restaurant of the Metropolitan Museum 18 months ago and he explained his philosophy to me. It seems that to pay everybody a decent wage can only lead to inflation. In fact, low pay is A Good Thing: not only does it keep inflation down, it is actually good for the low paid. Because it gives them aspirations to higher things, training, education, better jobs where the pay is higher, and they might not have those aspirations otherwise. So don’t give them a living wage now – they just won’t benefit from it. It is, my friend said, in accordance with human nature. So I suppose this means that low pay is beneficial to society.
My friend in New York is a Christian, and I later remembered that Jesus said, “The poor you always have with you.” Capitalist Christians think that means you can’t do anything to finally get rid of poverty. More radical Christians think they ought to do something about poverty, and they also quote the Bible.
George and David, Ed and Ed, and Uncle Vince Cable and all, are not quoting the Bible, and we can at least be thankful for that. What they are doing, though, is making promises. None of us should be thankful for that.
By the way, the Living Wage Foundation last year proposed a living wage rate per hour of £8.55 in London and £7.45 outside London.
Will somebody talk to them please?
Here’s the Guardian article:
Right in it with George: making the poor pay
I see George Osborne is preparing to make the poorest people pay even more for the mess capitalism has got us into. He told the Treasury select committee that “many billions” would need to be “shaved” from welfare to avoid deeper cuts in Whitehall.
Many billions? That doesn’t sound like a shave, George. That sounds like a major operation needing a general anaesthetic.
George wants us to know he finds some of these decisions “difficult”. The decisions only seem to be difficult, however, when it comes to cutting the Whitehall bureaucracy. In the case of cutting welfare, he can just go ahead and do it. Not that he mentions the bureaucracy. He indicates that any further cuts in Whitehall would endanger education and science. Well, that’s sliced-bread territory for sure – can’t touch them. So what to do? Let George explain:
“I don’t think all the savings need and should be made within the departments. I think we should make a balanced judgment about where government spends its money and, yes, we have got to make difficult decisions to save money further in Whitehall, but we should accompany that with savings in the welfare budget.”
So what are the results of these “accompanying” savings in welfare? They sound a bit like a piano in the background, soothing, encouraging, comforting. But it’s not quite like that. Just one example will do – and it affects some of George and Dave’s favourite people: the “strivers”, the people who are allegedly happy to work for low pay rather than claim benefits because, again allegedly, “they know it is the right thing to do”. Hidden away in two sentences in Osborne’s autumn statement are £600m worth of cuts to Universal Credit. The Guardian explains that the cut comes
“because Universal Credit work allowances will now be maintained at their current cash level for three years from 2013. The Office for Budget Responsibility forecasts inflation (CPI) of 8.7% over this period, meaning that the value of universal credit work allowances is set to fall significantly in real terms. During last year’s autumn statement it was announced that most working-age benefits and tax credits were to be uprated by 1% a year for three years from 2013. Taken together, the 1% uprating and the reduction in work allowances mean that by 2017 a single-parent household will be up to £420 per year worse off and a couple with children up to £230 a year worse off.”
No wonder Gavin Kelly of the Resolution Foundation calls it “a real blow to the working poor”. “It’s the sort of stealthy measure”, he says, “that often attracts little attention but still has a real impact.”
“Little attention” was George’s aim, of course when he hid this lot away in two sentences. The question for us all is: should someone as tricky as this be in charge of the public purse? Or, indeed, our welfare?
Some of the detail: see http://www.theguardian.com/uk-news/2013/dec/12/osborne-working-families-reduced-allowances-2017
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