| 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 in? 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 people. *The current job seekers allowance is set at £64 per week, which is 50% of the government's own poverty safety line for adults (Source: 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 wages. 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 conditions. 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 potentials. |
| A Working Class Alternative to Labour |