Tuesday, 30 December 2008

Minimum Wage

How predictable. There have not only been calls to freeze the minimum wage, but also to allow businesses to pay their employees less than the minimum wage because of current economic problems. My blood pressure was going through the roof yesterday when I heard a UKIP politician on Radio 2 calling for businesses to be allowed to pay below the National Minimum Wage!

So, the cause of the current recession has been the National Minimum Wage then? Here I was thinking it had something to do with bankers, politicians, greed and the flaws of capitalism...
It is at times like this the injustice of the system becomes even more stark. There is a rich and powerful elite running this world, and then there are the rest of us. They – the bankers, business people and world ‘leaders’ - make a mess of running things, and everybody else has to pay for their failures. And it is usually the least well off and the least powerful who have to pay the most.

Let us never forget why the National Minimum Wage (NMW) was introduced in the first place. It was because many employers, left to their own devices, paid disgustingly low wages. Many people were being exploited by businesses, as they tried to keep running costs as low as possible. The introduction of the NMW is one of the few things I will praise the Labour Government for. It is a measure that has cross-party support (even the Tories don’t suggest scrapping it now/yet) and that is progress that should never be surrendered – especially not in times of economic turmoil.

Even at the current level, I still don’t think the NMW is high enough. It is no coincidence that those you hear arguing against increases earn substantially more than £5.73 an hour.
People are not mere entities whose purpose is to serve the economy; the economy is here to serve people. If a system is not delivering for people (all the people) then it is not working, and we need to look at alternatives.

Some tough choices will need to be taken in a recession, but reducing the income of the lowest paid should never be an option in attempting to keep businesses afloat. Perhaps those at the other end of the income scale should be asked to contribute more in these tough times? I have another couple of suggestions too. How about scrapping the UK’s immoral and outrageously expensive nuclear weapons and abandoning plans for useless ID cards? As I said, there are few things I would praise the UK Labour Government for and even those achievements are undermined by their continued investment in weapons of mass destruction and by spending billions on an illegal war in Iraq.

I think it is highly unlikely that the NMW will be suspended for any length of time, but I also hope the UK Government will commit to the next scheduled increase. People need the money more than ever now.


The Wilted Rose said...

The proposal has raised my blood pressure too and I have discussed the NMW here.

Low income workers (often women working in retail) are suffering enough as it is without a reduction of their wages in real terms. This proposal would affect women disproportionately.

a very public sociologist said...

I wouldn't be surprised if this call finds sympathetic ears among the government. Neoliberalism may have been dumped, but they are as pro-business as ever.

Also, freezing it is an incredibly short-sighted move that would harm capital as a whole, in the long run. In short, this crisis was sparked by the fact that many working class people had to max out credit cards and loans to makes up for the stagnation of real wages these last 10/11 years. Now cheap credit has dried up, our collective purchasing power is lower, meaning many businesses will find it difficult to stay afloat. If the minimum wage is frozen, that collective power will decline further.

If I, a humble blogger with no economics training realises that, why can't the armies of economists the government and the so-called opposition employ?

Ah-Ha! said...

You'd have more credibility of the SNP had actually voted for the minimum wage.

No doubt you won't post this comment because it doesn't suit your party line.

Julie Hepburn said...


Check this out before you embark on a typical New Labour-esque strategy of manipulation and half-truths.

If you look closely, you will see that none of the following prominent Labour politicians turned up to rubber stamp the final stage of the National Minimum Wage Bill in 1998: Gordon Brown, Tony Blair, Alistair Darling, Donald Dewar, Henry McLeish and Robin Cook - along with a number of other Labour MPs, such as Rosemary McKenna (of local interest to me). Indeed 35 Scottish Labour MPs were not there. So, were they not committed to the introduction of the National Minimum Wage?

Labour have been wheeling out this line about the SNP and the NMW for so long now, it seems some people have bought it. Why wouldn’t they? Most people will not go and check the official records for themselves – they have far better things to do with their time!

By saying this, you fail to mention the work undertaken by SNP MPs at the time to try and work with the trade union movement to ensure that the NMW, when introduced, was set at a higher level. Of course, to do so, would mean that you would have to mention that Labour opposed this work...

In politics, it is common – indeed healthy – to disagree on issues. However, I strongly believe that debate should be based on all the facts. You may or may not be a member (or supporter) of the Labour Party – but you have certainly swallowed their propaganda on this one...

K said...

If businesses go down, these people won't have a job at all. Then what happens?

Cutting nukes, ID cards, etc might save the government money, but it would have no effect whatsoever on businesses. The money doesn't slosh around in one giant bucket.