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Posts Tagged ‘Living Wage’

The Living Wage is as much Labours’ child as it is the Conservatives’ and their MP’s Band Aid parody highlights the political culture of creating policies which deny the realities of consequence

December 21, 2016 Leave a comment

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The principle of the Living Wage or rather the concept that everyone should at least earn enough to provide them with a basic standard of living is a good one for many reasons. But in isolation, the coercive nature of such a policy being unleashed upon business and industry was always going to be seriously flawed.

The indirect impact and ripple-effect of this Policy – which have led to consequences outside of political control, were as poorly considered when it was launched and implemented by former Chancellor George Osborne as it was when it was first mooted by Labour Leader Ed Milliband.

That big business has adopted a rationalisation of employee terms and conditions as a method of offsetting the additional expenditure which the Government has effectively imposed upon them should not come as any surprise.

Profit is for many organisations a god after all, and whilst to many the implementation of the Living Wage appears to be a highly positive step in making life better for the lowest paid, it also overlooks many facets of its knock-on effects or indirect impact upon those it was not designed to benefit. Above all, it fails to consider the responses and choices that employers of all kinds would make as a result.

Whilst the behaviour of successive Governments and the City would suggest otherwise, for the rest of us, money doesn’t simply grow on trees. The impact of paying employees more money has many effects besides using up a company profit margin and whilst it may be a principled idea to expect business to warmly welcome such an apparently altruistic move, it is also extremely naive. Would these very same companies not already be paying everything to staff that these politicians expect them to, if the owners or managers making the decisions already believed the idea or principle was right?

Perhaps most concerning when considered in this context, should be the fact that in April 2017, the Living wage will rise by another 30p to £7.50 an hour, and that a further rise will follow the next year. The consequential impact of the Living Wage will become continue to become worse as it becomes more widespread, and the economies and efficiencies that have been made to service the inflation-busting rise so far, will simply become unsustainable as the costs escalate beyond where they are today.

There are currently too many factors outside of the control of government, such as the escalating prices charged for services and goods that are essential to a basic standard of living, for isolated meddling to have a genuinely sustainable positive impact. And that is without even factoring in whether the many marketplaces in which different organisations operate can sustain low margin companies paying their staff more.

As things stand, MP’s and activists can bitch about the injustices of the Living Wage all they like, as the story they are telling will in some ways certainly ring true. But until they accept that they must all think differently about how they address the impact of all that they do, it will continue to be the very same people they are telling us they are going to help who will be the ones who will ultimately suffer as a result.

image thanks to http://www.totalpolitics.com

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….

March 16, 2015 1 comment

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

Change is what we need; not revolution. And it’s all about getting the basics right…

November 13, 2014 Leave a comment

images-13For all politicians, the opportunity genuinely exists to revise and create new polices which will work for the benefit of all. It’s not an option which is restricted to Ed Milliband and Nigel Farage who both hope to have very different roles in power from May; but one which even the Coalition Government could begin to embrace right now.

Sounds quite a stretch when you think about it though. Tribal politics and the media chasing political circus that Westminster has become, has, after all created a cynical and disenfranchised electorate; one which in the majority experiences little each day, to make it feel that the system actually relates to any of us in any way.

Perhaps without even knowing they do it much of the time, even the most modest members of the political classes somehow succeed in exploiting this very real perception to their benefit, using the media and disingenuous rhetoric they employ to leave individuals and families feeling as if they are themselves alone in going through what for many has become a very trying experience.

It wouldn’t be so bad. But being left feeling guilty because you cannot afford to buy food; to pay bills; to buy clothes; to pay for transport or because you are having some other form of negative experience of life which you really shouldn’t be have in 21st Century democratic Britain is certainly in no way fair.

It is certainly not what you would call right in an age when equality has for a long time been sold to us as a given.

Its not what you expect when successive political generations have told us all that they, and only they, possess the holy grail to putting everyone first.

When you have Government after Government run by people whose only true priority is to gain or retain power, it stands to reason that many people do not see or feel that the electoral system is working for them.

Ignoring elections, or throwing support in the direction of a new Party which is at the very least attempting to sound like it is in touch with the issues that people are facing, then for many becomes an attractive proposition indeed.

Regrettably, such a political environment like the one we are experiencing today provides a wholly fertile seedbed for popular voices advocating seismic change of a kind that would be more akin to opening the Pandora’s box which accompanies public unrest, rather than heralding the arrival of some new and golden age. However well intended, Russell Brand’s recent political outbursts and the publication of his book Revolution are in reality little more than an aspirational touch paper of anarchy – based on the views and interpretations of many other Writers – promoting the release of one terrible genie that any sensible person – however frustrated with the system they might be – really does not want to see let out of it’s bottle.

images-12Overnight change – which is essentially what revolution is, doesn’t usually end well. It is more likely to lead to a situation far worse than most will have experienced before, and one which will probably be a lot harder to change.

We have to work to make what we have better, rather than breaking up the workable framework that already exists; throwing it all in the air and then leaving it all to pure chance to see – and then experience where the unconnected pieces will then all fall.

It is top to bottom reform and change that are essential across public services and all areas of Government Policy, before people are in any way likely to feel they are being treated fairly.

This will not come about by continuing to base arguments and disquiet on wealth or demographic class, and whilst advocates of wealth redistribution may find an audience which is very receptive to the idea that either taxing or simply stripping wealth from the rich, and sharing it out equally amongst the poor may give them all a much better life; this idea is indeed as illusory as the money is itself.

Non-earned wealth will in most cases disappear just as quickly as it arrives – if not through private spending, then through the exponential and inflationary economic changes which would almost certainly accompany the instantaneous arrival of so much personal wealth.

The aim of solving the problems of breadline Britain or the cost of living crisis will no better be served by penalising the potential of high earnings, than it will be by enacting an unsustainable rate for the Minimum or Living Wage.

Such solutions may provide a temporary fix, and give a moment of perceived justice to many. But those with money will soon move away or lose the incentive to keep earning – whether they are companies or individuals; whilst those who have found themselves with more money in the bank at the end of one month, will soon lose it the next when employers and the suppliers of all the goods and services that they think they can now afford put their prices up to support the rises in wages that they have themselves had to pay.

No. Dealing with problems in isolation simply does not and will not work, because by attempting to solve one problem in this way, the process soon leads to the creation of many more – if it doesn’t just make the original one a whole lot worse for those who are experiencing it.

To build a better life for all, getting the basics right is the very first step. It is about reviving, living and promoting a sense of ethical balance and consideration for all.

This will most likely be achieved by ensuring that at the most fundamental level, adults can afford to feed, clothe, and house themselves – and any dependents that they may have – to a minimum and workable standard. A benchmark level which cannot be subjected to the influence of any third party.

Working to address the many issues that require policy changes will not be simple. But Politicians are elected with the expectation that they can deal with complexities on behalf of the people they represent, and if they have taken their election that seriously, this is exactly what they should now do.

The possibilities for solutions are probably endless. But solutions are indeed possible if the needs, benefits and consequences for everyone are considered properly.

If politicians genuinely want to help and provide a level-playing field where there is opportunity for all, why are they not looking at policy areas that have the potential to make an immediate difference. Examples might be:

Releasing the restrictions placed on employers AND employees through Legislation such as the European Working Time Directive: The days when legitimate business thrived on the unbridled exploitation of the working classes have long since passed and we today have some of the most restrictive working practices on the planet. If everyone in the workplace was completely happy, furthering and maintaining the cause of such horrific levels of bureaucracy would make sense. But many people want the opportunity to work beyond the requirements of their contracts of employment, whilst employers would benefit greatly from increased input and flexibility from existing – and often more experienced staff. The real key to ensuring fairness is simply allow workers to do additional work when THEY want to, or just as they have formally agreed. Employers have to be trusted not to embrace unsafe working practices and the nanny state has gone too far in basing industry-wide restrictions on the behaviour of the unscrupulous few, or upon idealistic views of bureaucrats of how business actually works. Imposing business-breaking fines – and being seen to do so, would be a far more effective way of encouraging good working practices and management, rather than allowing officials with no business experience to attempt to direct industry professionals on how they can staff their business.

Stopping the escalation of property prices:The UK is culturally obsessed with property and its financial value in a way that few other Countries are. Prices have continued to inflate at dangerous levels which keeps borrowing artificially high, and makes rental prices equally excessive for entrants to the markets who have to rent, but desperately want the opportunity to own. Government could and arguably should step in to regulate the property industry and introduce policies which keep prices as they realistically can. The potential need for a resetting of property values is very real, and whilst Government behaves as if the answer to all problems is to build, build, build, while prices keep on going up (When do you ever see new developments come on to the market with prices that are lower than the local comparative market?), Politicians are never going to solve the housing problem or the massive drain that property prices has become for young people entering the market. Putting this problem off until tomorrow has long been the way; but tomorrow may already be here!

Working with Utility companies to keep prices manageable: The term ‘utility company’ has been a misnomer since privatisation, when the priority switched from the supply of services that are essentially supposed to be for the public good, to shareholders who will almost always be looking for a profit. No man can serve two masters, and the monopolistic strength of these companies has equipped them with the ability to write their own ticket, whilst ensuring their profits are secure. In the absence of Government regaining ownership, it should nonetheless step in to cap profits, or at the very least buy supplies direct for those who qualify at rates which reflect the wholesale purchasing power that the Government could and arguably should have on our behalf.

Buying services and goods direct from suppliers for those on benefits and low incomes or using smart card technology to deliver just the same: A massive opportunity exists for Government to step in and buy products and services on behalf of those on low-incomes and on benefits. Without the need to provide subsidies, Government could easily realise all the benefits of procuring food, fuel and essential goods as a significant bulk-buyer, just as big companies like supermarkets already do. The immediate concern that would be raised by the implementation processes such as administration, distribution and monitoring could be easily overcome through the use of IT, and whilst we hear horror stories about the stupendous cost of government-wide software implementation projects, the technology already exists to provide such a system through the use of personal smart cards, without big business profiteering, or the end user having to collect goods from anywhere other than the stores that they already use.

Creating a ‘retail’ arm to the Bank of England: Provide full current account services and not-for-profit based lending for pay-day-loans and to support small business – just seeking to return the operating costs for the benefit of everyone.

Lining up what are just a handful of suggestions makes it sound simple. But nobody would have unrealistic expectations for delivery from a Government that communicates with the public using openness, honesty and respect.

People do know that they deserve something better than what they currently have, and the time has come for a kind of Government which actually gets the basics right, rather than just talking about it before the usual grandstanding begins.

Whether income for those on low incomes comes from earnings or in-kind from benefits, there exists a cultural expectation for British Government to ensure a Basic Standard of Living.

Whatever the Political Party in Government might be, it is time for the philosophies, protectionist policies and ideas which benefit only the few to be binned and replaced with delivering something better as the priority for all.

When Government has these basics right, the many dominoes which stand beyond will very quickly begin to fall.

 

 top image – imgarcade.com

The Cost of Living crisis: – It’s those money men, stupid

August 15, 2013 Leave a comment

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Hypocrisy has become an artform for many of today’s Political class, and talking up politically expedient issues, spinning away inconvenient truths or criticising others for doing no more than they would do themselves has become the apparent norm.

After a media splurge targeting their inactivity in the sun whilst Cameron has been busy making hay under his, Labour have returned to the stage this week focussing their less than lacklustre performance on the ‘cost of living crisis’, giving every indication that this is the ‘issue’ that will steward their return to majority Government in 2015.

If tackling every issue were seen to be as simple as giving it its own branding or strap-line like this and waiting for it to go viral, we would have a marketing man in Number 10 already – which of course we actually do.

Sadly, the ‘cost of living crisis’ is probably the most dangerous issue that any of our Politicians could ‘play’ with, in the run up to the 2015 General Election, and we should perhaps all be concerned by its apparent adoption by the political left in order for it to be manipulated as a vote-winner. After all, the future of most of us is tied up with it, and its genesis reaches far deeper into the fabric of our society than any of our leading Politicians seem willing to contemplate or have the moral capacity and determination to deal with – even if they have apparently now acknowledged it for their own political ends.

The reality for most of us outside Westminster is that we don’t need posturing Politicians and media hype to remind us of the fact that wages are effectively standing still whilst the cost of paying our bills just seems to keep on going up and up, month after month, year after year without any sign that it will ever relent. Many hard working people simply struggle to keep themselves afloat even before they start to consider some of the luxuries that those very same politicians and newsmen probably take for granted.

Real people living in the real world already know firsthand what it is they are experiencing when the letters hit the mat; the e-mails arrive, the phone rings and when they go and shop. When the pay rises, tax breaks and bonuses that they desperately need aren’t coming to middle England and those hovering either above or below Britains poverty line– simply because the Government’s Pot is already exhausted and the Nation simply cannot afford it – these same people need politicians to drop talking up the effects of the problem and start tackling the cause head on.

This task is not one that will lend great comfort to any politician who values their place in history more than they do the lives of the people who elected them and this is problem enough with British Politics today in itself.

Facing the reality that the free market has surpassed its point of balance and therefore the good for which it was intended is not a thought that many in power will want even to contemplate. Therefore accepting that increasing freedom within the markets to pursue infinite profit, whilst that very same action is effectively enslaving great swathes of the normal population within fiscal misery is not a pill that many of today’s Politicians will swallow willingly. But it is there in front of all of them just the same.

Through the creation of the virtual monopolies which are the utility and energy companies; private businessmen, shareholders and pension funds have been given seemingly insurmountable power over the lives of everyone by being able to dictate their own paydays, whilst they go unhindered by Government and Regulators – who have nothing really but the interests of their Industry at heart.

Likewise, ever growing convoluted supply chains, often reaching the length and breadth of the Country or even across Continents allow many different traders, dealers and agents to add their cut to the margins which you would normally expect to see only from producers and retailers, then inflating prices way beyond what they should realistically be.

Further still, those businesses without control or a sizable share of their markets are also having their margins forcefully squeezed by the companies and organisations who do and many of these businesses are the same ones that cannot afford to recruit or pay more than negligible wage rises to the very same people who are now being affected financially from almost every angle you could imagine.

Whilst no reasonable person would argue that businesses exist to make a profit, it is simply beyond logic to add layer after layer of profit onto the most basic and essential of items or services and then expect end users to keep picking up and meeting these overinflated bills without any real additional income of their own to cover these exponential and wholly unrealistic rises.

Companies, traders, financiers and all manner of individuals and entities are in effect ‘vacuum profiteering’, making money ex nihilo or basically creating something from nothing in a manner which could be akin to having the midas touch, were it not for the misery that it is increasingly inflicting upon those who are wrongly being expected to pay for it.

Without those who hold this power over our economy taking steps to regulate and restrict the way that they make profit, they are through their very actions writing an agenda for Government over many years to come – whatever its Political make-up may be, that has the potential to create social and financial problems of a size and scale across our Nation that Government itself won’t be able to afford to put right – simply because the Taxpayer has no money left to fund it.

Such levels of responsibility over the health and wealth of a Nation should never have been placed in the hands of money men in the first place without sufficient safeguards in place to protect the many who could be affected by the unscrupulous profiteering of a few. But it has.

No Political Party should be seeking to take the moral or politically philosophical high ground on this issue as it is a problem which can only be tackled one way. That is by Government stepping back into the free market and taking an actively pro-market or even interventionist approach to regulating market behaviour – should it be so required. The UK needs to retain capitalism but it must also maintain it in a responsible and considerate way that doesn’t destroy the ability of consumers to consume in the process.

By taking just the key players such as the utility, energy and finance companies to task, Government could go a considerable way to putting safeguards in place that would ensure a basic standard of living can be maintained against the minimum wage, and that the minimum wage would then itself reflect a living wage and one that should keep many more people safe from harm and therefore from being a potential burden to the State.

Regrettably, action of this kind does not reflect the creed of contemporary Politicians and the point continues to be missed that wealth creation only works effectively when there are benefits – in whatever form they may be – for all.

Conservatives, Liberal Democrats and Labour don’t want to embrace the answer and neither does UKIP, which is riding high on the tide of discontentment and disenfranchisement that the lack of connection with reality amongst the other Political monoliths has created within the Electorate itself.

It’s time for Politicians to wake up and smell our overpriced coffee before it’s all too late.

image thanks to http://www.telegraph.co.uk

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