Home > Banking & Finance, Budget, Equality, Ethics, Local Government, National Politics, Poverty, Principles, Taxation, Uncategorized > Labour’s coercive plan to fix the living wage is as real world as the Tories apparent belief that unemployment and poverty are the same thing….

Labour’s coercive plan to fix the living wage is as real world as the Tories apparent belief that unemployment and poverty are the same thing….

SNN0713XA---280_1419151aAt first glance, Ed Milliband’s promise to roll out a requirement for employers to pay the living wage sounds like it recognises the biggest issue facing so many families across the UK.

It could work. Or rather it could be seen to work temporarily, and that’s the most cynical part about it.

If our economy was on track, managed by politicians who considered the real impact of policy and performed as it could and arguably should, a working adult would be able to financially support them self on the most basic wage, without any need for support from the Government, or any third party organisation such as a food bank.

The political tomfoolery or short term opportunism which Labour are investing in their manifesto plans as part of their General Election Campaign doesn’t however recognise or consider the role that such policies play within the ecosystem that business and the economy around it actually is.

Like the Conservatives flawed idea that poverty evaporates the moment the unemployed are offered a job, fixing a basic wage for all gives absolutely no consideration for all the other factors that come in to play, nor the consequences which will almost immediately follow.

Whilst the suggestion of an apparent £1.50 an hour raise will give the lowest paid the feel-good factor that might win their vote, Labour’s sound-bite gives no thought for the fact that small businesses might have to reduce their workforce, just to pay the higher wages for fewer staff that the law would require.

This fag-packet plan gives no thought to the likelihood that the productivity of small companies could inevitably reduce because there would be less staff hours available to do the same amount of work.

It doesn’t consider the reality that profit margins may be so low for some small businesses that being required to pay the living wage to employees might actually force them out of business because they cant compete with bigger companies which have the economies of scale and significantly wider profit margins to help them out.

For big business, that might be seen as good news. Companies that thrive on the use of low-paid, low skilled workforces such as the supermarkets and branded coffee bar chains do after all have the ability to raise prices almost at will. They would certainly then be able to cover the rises that the living wage would require, as they inadvertently make the cost of living more expensive for the lowest paid workers, preserving the profitability of their business models.

Put in these terms, we can soon appreciate that the living wage as it is being presented by politicians is in fact just another one of those red herrings that they keep on spinning. It doesn’t accurately reflect what it costs to live. It certainly doesn’t reflect the manner in which the government continues to subsidise large company profits by providing the many welfare incentives for those on the lowest pay, such as tax credits and housing benefit – even if it keeps some small businesses afloat by doing so.

Many people would simply not be self-sufficient on Labour’s Living Wage, any more than they are on the Minimum now. Its coercive implementation would just begin a spiral of inflationary rises that would once again hurt the members of our society who need a basic level of income which genuinely reflects the cost of living the most.

In real terms, we would in effect very quickly be back exactly where we are again right now, with some politician promising yet another quick fix which isn’t actually going to ever solve the problem, just keep the wheels turning by moving the goalposts and them themselves in government (or knocking on the door of it) until another day.

We need the political establishment to begin taking the longer view. To consider the concept of cause and effect. To appreciate, recognise and work with the reality that all decisions they make, and that all policies they implement will have consequences that when made in isolation, often have the result of hurting the wrong people whilst benefiting those don’t actually need any kind of financial assistance at all.

Decision makers must become conscious of the fact that money may be the common thread which runs through almost all of the problems that we have in the UK, whilst money is not the problem in itself.

Westminster has to accept that fire hosing money into problems – and in this case, not even the government’s money – is not a solution. Unhinged spending only extends the magnitude of the problems that already exist, whilst increasing a mountain of debt that for any organisation other than the government would have long since have resulted in bankruptcy.

Whether it is wages, Welfare or the NHS, reform needs to take place on a wholesale basis and comprehensive scale; throughout and across the system of government and everything it touches or ultimately has responsibility for.

Real lives are not completely populated by one-off black and white decisions and even when they are, the ripple effect of consequences will go in all directions and often end up hitting completely different – and usually innocent things.

Above all, government must lead on the reassertion of ethical practices throughout business and government itself. This needs to travel from the top to the bottom of society and remove any suggestion of there being one rule for us; for you another.

The best place to begin would be for the Conservatives to stop behaving as if telling people they are no longer poor will make them believe otherwise when everything they are experiencing says not, and for Labour to stop pretending that barking an order will make a free-thinking business world sing happily without consequence to its nanny-state tune.

The real living wage – or point where the lowest paid can live self-sufficiently, can only come into being within an economic system which produces its own equilibrium.

Government must stop interfering where it shouldn’t, and do more where it should, preventing other forces from manipulating or skewing the balance which has already travelled so very far away from a point of being good.

Poverty, immigration, radicalisation, unemployment and many more serious issues which the UK is facing are all made worse and worse by the behaviour of short sighted and inconsiderate politicians. Its time that they all realised that life is not like a bedtime story book for those who live outside the Westminster bubble, and real life for real people doesn’t simply hinge on getting re-elected every five years.

image: http://www.thesun.co.uk

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: