By A minimum wage of £7.45 per hour, coupled with modest corporation tax cut for small and medium size businesses is economically viable in the UK. It would lift millions of adults out of poverty, and children too.
The current minimum wage of £5.73 per hour is not enough to live on for one person, and falls below the poverty level of pay according to many studies and the general public.
Luxembourg has a minimum wage of €9.08 per hour which is £8.26 per hour at the current exchange rate. France has a minimum wage of €8.71 per hour (£7.92 per hour) and Ireland has a minimum wage of €8.65 per hour (£7.87 per hour). So a minimum wage of £7.45 per hour is hardly radical.
The trade union Unison recommends a minimum wage of £7.45 per hour by 2010. Labour could promise to bring this in before the end of its 4th term, once the economy has been back on track for several years.
18% of British children lived in workless households in early 2008. One of the major reasons for this is because work still doesn’t pay. The basic rate of income tax threshold should be pushed up to £10,000 (see later New Ideas contribution) and the minimum wage should be raised to £7.45.
Somebody has to do the low paying unskilled service sector jobs, so offering parents education alone isn’t good enough to end child poverty and create a society where everyone is of equal worth, knowledge worker or unskilled service worker. A living wage would reduce the number of workless households and reduce the need to spend on the working tax credit and jobseekers allowance; in the long term it would save billions of pounds.
In recent years, low income groups have seen their wages fall in real terms, while the middle income earners have had wage stagnation. As the ratio between supply and demand for low skilled labour increases due to knowledge economy expansion, unskilled workers will see their wages fall even further. So government must take action to prevent their wages from falling to an unacceptable level.
For all the fantastic new education opportunities for adults, too many are on far too low pay and often voting for political extremist parties as a result - this will get worse unless the minimum wage is raised to a living wage.
A living wage would benefit the economy because it would increase the amount of disposable income for the poorest. Most of the extra money available as a result of a living wage go back into the economy, and particularly benefit local Small and Medium Enterprises. Some of the lost government revenue from the SME corporation tax cuts would be made back through increased consumer spending by those on the living wage.
Scrapping pension relief for high earners could also bring back some of the lost government revenue. It would provide some more bottom-up stimulus that we need in the economy both today and in the future.
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If Brown wants a truly radical Policy to reduce Unemployment, I will give it to you...
Tell every unemployed young person (currently a million) to go to whatever Company they wish to join and if the employer agrees to take them on he will be paid a guarenteed £12,000P.A.to start. The Gov't agrees not too charge Employers NI for 3 years. The Employer will have to pay £3000 in the first year, rising by £2000 a year. The Gov't will pay the £9,000 a year (of which it gets back 32% in Tax & NI, so really costing £6,000 P.A.
This influx of a million workers will help small Companies such as mine to grow, I would love to expand but in the present climate simply can't afford it, but could easily create 5 jobs now, which within a couple of years would produce enough Profit to pay the full salary in time.
1,000,000 x £6,000 is 6 Billion, I appreciate that this may be a higher cost than simply paying Benefits, but it will give the Country a boost and will certainly ensure stopping another generation of people living on Benefits.
The only reason I can think off that would stop Brown doing this is losing your clients (currently changing to the BNP anyway)as keeping people in a perpetual state of Poverty will always push up Labours vote! I hope I am wrong and would love the L.L commentators/bloggers to tell me if I am missing something? or I have a great idea?
Sometimes there are ideas for the sake of just having ideas. In the filing cabinet there is a file headed 'Brain-dead plans thought up whilst desperate to look impressive and terribly provocative'...this idea should live there for some considerable time.
AND we would give employment to many many more officials during the downturn. This would prove that Labour Cares about people. Not like the Tories.
This would do nothing for small businesses. This just would not work. SO few men, if any, take extended paternity leave as they simply can not leave thier careers for any amount of time.
When our first daughter was born I was back to work (4 days a week) when she was 5/12 old. Realistically at the time given the combining of my health authority with another I could not be away for any longer than 5/12 and I am a woman. I think the pressure is more intense for men.
What do New Labour supporters think of my idea?
The proposal to remove tax relief on pension contributions suggests that Mr Green is either very young or works in the public sector or both. Gordon Brown has already done his best to wreck pensions in the private sector, but this would the final straw.
Mr Green might care to read the excellent paper produced by Iain Duncan-Smith's research group on welfare reform to see what should be done.
No, the reason is that the State pays them to sit at home instead of working. Instead of asking a crippled industry to pay them more than you do, why not just reduce benefits so it DOES pay to go out and work.
Ye gods...£10.5 BILLION went unclaimed in benefits last year alone.
You'll just change the choice from "work for not enough money" or "do nothing for more money" into "work for not enough money" or "do nothing for not enough money".
If you're looking to increase crime, it's a fantastic plan.
Surely the logical answer is job creation first, ensure people can actually live off wages without having to be propped up by the state with tax credits and then those people who are capable of work but refuse to, apply the rod at that point?
Jam tomorrow then. Very, very weak and not even an argument. Why, considering all the spin, broken promises and lies, would the public ever trust Labour to bring this in if they were gievn another term in office?
A desperate attempt to buy votes by promising that in 5 years time the mug in the voting booth might have a couple of extra quid per hour in their pocket is all this is.
A living wage would benefit the economy because it would increase the amount of disposable income for the poorest.
"One of the major reasons for this is because work still doesn’t pay"
Which is the fault of the current government, right? After all they have been in power for over a decade and had plenty of time to sort this out.
"Somebody has to do the low paying unskilled service sector jobs..."
And under Labour this work has been done by immigrants, legal and illegal. Low pay for them, less jobs for the British.
"...society where everyone is of equal worth..."
People aren't of equal worth. I do a job that has real value to people and helps them help the community but I'm nbot deluded to think I'm of equal worth to society as a surgeon, GP, fireman, etc, etc.
"A living wage would benefit the economy because it would increase the amount of disposable income for the poorest."
People should SAVE their money, especially if they have less of it. That is what this whole 'credit cruch' economic lesson is all about.
"Most of the extra money available as a result of a living wage go back into the economy.."
Some evidence of this would be nice.
In the public sector efficiency drives which outsource to cheaper private firms paying less than in-house counterparts for new employees simply mean that for the reasons outlined above the taxpayer merely subsidises low wages through the working family credits and other benefits.
Even with a minimum wage set at £7.45, over a 40 hour week that would what, £300? Take tax and national insurance off that and what are you left with?
There's only so long that the left (and apologies, but it is basically the TUC and Labour movement) can keep saying "Tax the rich!" when they don't have funding for these things.
Why are employers now able to get away with paying the minimum wage? Immigration is the answer and if you lift the minimum wage, immigration will increase and the rate of pay will stagnate at that level instead of naturally increasing above it. Which means we will end up in the same position a few years down the line.
Immigration, it isn't a race issue, it's a social and economic issue and it needs to be dealt with.
Immigration and wage-lowering may have racial prejudices mapped onto it by some, but for most people it is not a racial nor a nationalist issue. It is a financial one. Looking forward, there is a massive problem for the Labour party here in that the middle-class policy thinkers are more interested in the injustices concerning race/nationalism/religious bigotry than they are in the difficulties of the working class/hardworking families/whatever this decade's term is.
The former inhibits them dealing with the latter, which is fine electorally so long as they can still build a base to win an election. But without the old core vote that feels betrayed because their bosses have been able to use the availability of cheap immigrant labour, the party has a big recruiting job to do - on past evidence it will lead to them drifting more and more to the right.
Having said that, removing the minimum wage will in some areas drive wages down well below basic living standards.