The Low Wage Economy

       Somewhere along the road the struggle to get a larger slice of the
pie for the low paid lost its way - the idea seems almost to have been
forgotten by the major political parties.
       Low wages have been presented as a means of competing with
overseas producers. It isn't. The low wage economy is largely merely
an unequal distribution of the wages bill, and quite simply an unfair
distribution between wages and profit, with little or no effect on
competition abroad. The reason is that we don’t compete with low
grade manufactures produced by cheap labour. Our fields of exports
compete, often unfavourably, with for example, Germany and Sweden
who pay themselves high wages. Low pay can be about competition
between rival domestic firms (if it is about competition at all). In fact,
low pay has a negative effect on British companies competing abroad;
1) It leaves more profit for large corporations investing abroad in
foreign companies 2) It creates a weak domestic market for British
goods which means they lack a springboard for exports. In a recent set
of Treasury figures, for example, wages had fallen by 3.5%, and so had
exports.  Most of the low paid in Britain are not involved in the
production of exports. No, rather they are involved in producing
profits that can be invested in foreign companies.

Where are the low paid jobs? - Not in export
industries as the list below shows:

Retail  2,682,000
Hotels, Catering 1, 689,000
Social Care 638,000
Employment Agencies 625,000
Cleaning 619,000
Leisure, travel, sport  485,000
Food processing 325,000
Agriculture 203,000
Security  174,000
Hairdressing 84,000
Textiles 79,000

Total     8,040,000

(Source: Office of National Statistics, doesn’t include self employed
and family workers, and government training schemes)

       Greater equality of wages is inevitable - the only question is how
long does it have to take? It is inevitable and common sense  requires
it. There is simply no good reason, either moral or economic, why 30%
of the population should  have hardly enough to get by on while others,
who work no harder than they do, get more than they can spend.
Poverty is something we are choosing to keep, it is a drain on the
economy, it is unnecessary and expensive, and it keeps the country
poor. If it is supposed to make British exports more competitive then
it clearly hasn't worked, as our manufacturing exports shrank in the
1980s and have never recovered. Exports have shrunk during the
period of low wages. Low wages do not benefit the export industries
because quite simply they are not usually the ones paying low wages.
Low wages benefit chiefly the large retailers whose profits are kept
high by the invidious practice. The profits  go to the shareholders,
themselves large corporations, not individuals. The corporations
which own everything are getting bigger and bigger,
and the money
they own benefits our society less and less
. The "trickle
down",  promised by Thatcher, never materialised, as we have the
opposite, a
trickle up economy, where wealth is consolidated in the
hands of progressively fewer, larger bodies. It is  a simple choice we
are making as a society to keep 8 million poor, while nameless
(unknown to most) organisations, take what the low paid have
generated through their work. How long are we going to accept such a
sordid arrangement? When are we going to have the dignity and
common sense to share out the material wealth more fairly? When are
even the middle classes going to tire of living in a society where the
social cost of  poverty is all around them?
       Is it right that the tax payer should subsidise low
paying employers though benefits, housing benefit, and
other costs of poverty which the low wage economy results

       It is as if we are sleepwalking in our acceptance of what  is an
entirely unnecessary blight upon our national life. The two major
parties know about it and do nothing, except, within the limited scope
of their imaginations, to look after the poor, through benefits and
other piecemeal measures. But neither of them seem to consider
getting rid of poverty by sharing out the money - by ensuring
significantly higher wages for the lowest paid workers.  

A minimum wage at 80% of the median*, and
unemployment benefit above the poverty line.

*(See Appendix for how the exact figure was arrived at)

        If the minimum wage was raised so that all workers
were paid the same as the lower middle classes, £9.30 per
hour which is £19,400 pa, (London £11.38phr   £23,670pa)
and if unemployment benefit* was raised to a level
somewhere about 20% below that, then there would
eventually be an end to poverty in Britain for millions of

       *The current job seekers allowance is set at £64 per week, which is
50% of the government's own poverty safety line for adults
Joseph Rowantree Foundation, HM Treasury).

       Benefits aren’t too high, wages are too low.
       For the unemployed poor, the difference between being
unemployed and getting a job is not enough, because jobs are so low
paid. Because wages are so low,  getting a job when you are poor does
not mean your troubles are over. It is necessary for any mature
society to realise the level of hopelessness that fact brings to anyone
suffering long term unemployment. We are used to thinking,
mistakenly, that unemployment benefit it too high, the "benefits trap"
as it is known. In fact the lack of incentive to get work lies in the  low
       The dreadful social cost of generations of grinding poverty - the
misery, the crime, the degradation, the violence, the abuse, the
ignorance and the suffering, would eventually lose its grip upon the
millions among us who suffer this man-made blight; the ugliness, the
depressing run-down decline that haunts many British towns, would
eventually disappear, as people were paid enough to take control of
their own lives, to invest in their improvement and betterment of their
       It would also provide a more healthy domestic market as a basis
for the revival of British industry -  which is essential if we are to avert
long term national decline into poor nation status.
       Why haven't we, why don't we, take the simple and obvious step to
clear away the awful waste of poverty and its endless and hideous
consequences? Why do we fiddle and tinker with  inadequate measures
to ameliorate the plague instead of simply giving people the means to
cure it immediately themselves - better pay; A proper wage that leaves
a surplus at the end of the month; The surplus that the middle classes
have that enables them to live full lives and invest in their children's
futures. The working classes, who are not paid that kind of amount, do
actually produce that amount and much more, but it is taken by their
employers, as profit. A fair wage would return that surplus to the ones
who earnt it, so that we all can benefit in the same way, so that we all
can afford  to live decent and civilised lives, and to reach our
A Working Class Alternative to
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