The new Minimum Wage

FDRThe decision by the Labour Government to establish an Independent body to set a national minimum wage in 1998 and led to its introduction in 1999 was an important if contested step. However it was clearly a good thing to do, even if the number of prosecutions for failing to adhere to it have been few and far between (and much fewer than the number of infringements). In personally setting a new, higher minimum wage but calling it something different in 2015, George Osborne has on the one hand provided a very positive filip for those earning the minimum wage, but on the other created a number of challenges. The change from a figure determined by economics to one set by politics has all sorts of potential challenges. The change of terminology is very irritating for those of us who have been involved in campaigns for a real ‘Living Wage’. I recall debating the potential for determining a regional living wage with the CBI when I was part of the South East England Regional Assembly (SEERA) in 2004. It would have been a way of showing the value of the Regional Assembly to ordinary people whilst at the same time achieving something that individual councils were not likely to be able to do alone. Sadly it did not get anywhere close to serious consideration because the Conservative dominated SEERA argued it was not part of the remit of the Assembly. The point about living wage levels is that they relate to the cost of living, not to a level set by a politician or an economist who is taking into account the level that the market will bear. A living wage is an indication to an employer what it would cost for his employee to live in a relatively comfortable lifestyle where his health won’t suffer and he won’t be forced to take additional part time jobs. Living in Sussex, but currently writing from Merseyside I know that the cost of living varies across the country. Hence a living wage in Brighton will be closer to the London living wage than the Liverpool living wage. I hope that the positive outcome of the politics that George Osborne employed to establish what he incorrectly calls ‘The National Living Wage’ won’t prevent living wage campaigns to continue to operate, nor remove the safety net provided by the low pay commission should a future Chancellor decide that his National Living Wage will be lower than the calculations provided by the LPC. It is clearly good news that for many people today, their pay has risen. However it would be better if employees were provided some incentive to set pay to a level which matches or exceeds the real living wage, beyond the moral incentive. There are numerous arguments that suggest that a living wage for all, would lead to lower health costs for the state! One such incentive would be for the Government to pay all of its employees the real Living Wage, and then only contract with Companies willing to sign the Living Wage pledge. This is something that could easily be modelled in Brighton where the Council and the Chamber of Commerce have run a very successful Living Wage Campaign.


About ianchisnall

I have a passion to see public policy made accessible everyone who want to improve the wellbeing of their communities. I am interested in issues related to crime and policing as well as in policies on health services and strategic planning.
This entry was posted in Brighton & Hove, Charities, Economics, Parliament and Democracy and tagged , , , , , , , . Bookmark the permalink.

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