Friday, 1 October 2021

£15 per hour is overwhelmingly popular, so how could it be made to work?

In the middle of his first Labour Party Conference Keir Starmer engineered the resignation of his Employment Minister Andy McDonald by instructing him to argue against moving towards a £15 pounds per hour minimum wage, and decent rates of Statutory Sick Pay for UK workers.
People were quick to find pictures of Starmer himself protesting for £15 per hour for McDonalds workers in 2019, meaning he had to perform the most absurd mental contortions to pretend that he meant only McDonalds workers deserve £15 per hour, not care workers, nursery staff, hospital porters, delivery drivers, or anyone else!

By instinctively favouring the interests of capital over the interests of British workers, Starmer made an absolute fool of himself, and it's only been worsened by a Survation poll showing that moving towards £15 per hour is an overwhelmingly popular policy, with 65% of people saying they strongly or moderately support it, and only 14% saying they strongly or moderately oppose it.

It's an astonishingly popular stance that has majority support across supporters of all political parties, and all age demographics (the least enthusiastic are the 65+, but they're still 59% in favour!).

Starmer's vehemently insisting that in order to be "electable" Labour has to fiercely oppose a policy that's overwhelmingly popular with the public! 

He's sent out ministers like the moral contortionist David Lammy to argue against public opinion with a series of misleading claims, but let's say Labour did want to actually appeal to the public, how could they actually make £15 per hour work as a policy?

Here are a few considerations:

Increased tax revenues

If UK workers' wages are dramatically increased, that obviously means the government will benefit from significantly increased Income Tax and National Insurance revenues, which would be enough to offset a significant proportion of the increased public sector pay bill.

Increased demand

If millions of UK workers are lifted out of destitution over the next few years, then people will actually have a bit of money to spend on nice things, rather than desperately scrimping and saving to get by. This means higher economic demand, which means more economically productive activity, which means more jobs, and more business opportunities for entrepreneurs.

Savings and investment

Lifting millions of people out of poverty would create new opportunities for people to save and invest. Financial experts have been repeatedly raising concerns that current generations of workers simply aren't saving enough for retirement, but a big pay raise for UK workers would help to reverse this trend.

Any government approaching the policy sensibly would do it in combination with innovative savings and investment policies, such as giving people the option to save a proportion of their wage directly from their pay packet, for example, via a National Savings and Investment Bank.

Massive social security savings

If all workers began making decent wages, that were actually enough to live on, the social security savings would be absolutely enormous. Government spending on Universal Credit/Working Tax Credits could be virtually eliminated over the course of a few years.

Housing benefit savings

In recent years the UK government has been spending £20 billion+ per year on housing subsidies like Housing Benefit, which mainly goes to subsidise the unearned profits of private landlords.

If a £15 per hour minimum wage was introduced, along with rent caps to prevent greedy landlords extracting it all for themselves through hiked rents, then this £17.9 billion housing subsidy expenditure could be dramatically reduced.

Small businesses

One of the most commonly raised objections to the policy of increasing minimum wage involves plaintive cries of "how will small businesses cope?", but this attitude betrays a belligerent resistance to finding ways to make the policy work.

If a government really wanted to make £15 per hour work, they could offer all kinds of business support schemes.

As long as the small business demonstrates that they're tax-compliant (UK registered, no offshore holding companies, transfer pricing scams, or other tax-dodges) they could be made eligible for business support to cover a decent proportion of their workers' wages. 

Small businesses would get the support until they become profitable enough to pay their own way, while massively profitable tax-dodging behemoths like Amazon simply wouldn't be eligible, meaning they'd have to pay wage rises out of their own profits, not out of the taxpayers' pocket.

The beauty of supporting workers' wages this way is that it changes the dynamic completely. Instead of supporting low-paying businesses by using public funds to top up the paltry below-subsistence wages they pay their workers, the businesses themselves would have to apply for the support, and demonstrate that they actually need it, and that they comply with basic norms and conventions like paying their fair share of tax. 

Incentivising difficult jobs

There are two main reasons for the massive labour shortages that are causing empty shelves, petrol panic, rotting food in the fields, turkey shortages, and a proposed mass cull of pigs.

One is Brexit restrictions driving away workers from the continent, and the other is widespread poverty-pay across numerous UK employment sectors. 

Why would anyone do back breaking or emotionally laborious work like picking cabbages or caring for vulnerable and incontinent elderly people, for wages that are impossible to even live on?

And since we decided as a nation that we don't want to exploit Eastern Europeans into doing it anymore, the only sensible solution is to incentivise British people into doing it by paying them decent wages isn't it?

Unfortunately it's highly unlikely Keir Starmer is going to change position now.

Starmer made a huge show of trash-talking Labour's 2017 manifesto in his interminable bore-fest of a conference speech, to make out that policies aimed at materially improving people's lives and communities are unaffordable, unrealistic, irresponsible, and unwanted.

He's determined to return Labour to the spectacularly failed 2015 strategy of trying to appeal to Tory voters by offering them a watered-down version of Toryism, rather than trying to offer them anything that's recognisably better.

And to do this Tory-lite act, he's going to adopt the absurd strategy of telling the public that they're wrong, rather than trying to figure out a workable way of giving them what they overwhelmingly want.

The arguments are all there for someone to make the case that the public are right, and that Britain does deserve a pay rise.

However it seems vanishingly unlikely that Keir Starmer, or any of the right-wing dolts he's surrounded himself, with will ever snap out of their arrogant delusions that they know best. 

They're simply too far gone up their own fundaments to embrace the idea that people might actually like the hope that things could become better, a bit more than they like another unappealing serving of austere, ersatz Tory gruel from a Labour Party that really should be doing better.

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Anonymous said...

The biggest problem is that the current and probably successive governments only see this as giving money to poor people, which is totally against their learned doctorines at public schools, so it will only happen if it means one of then uses small words to explain to the rest what benefits it lead to?

Mr. Magoo said...

Putting the interests of capital over the interests of British workers, is just politicians doing their jobs. Keir Kinnock was being foolish by making the ludicrous promise of 'a £15 per hour minimum wage', 2 years ago. Of course a minimum wage of £15 per hour is overwhelmingly popular with the public, so would a £25 per hour minimum wage.

"Starmer's vehemently insisting that in order to be 'electable' Labour has to fiercely oppose a policy that's overwhelmingly popular with the public!" - The state-corporate media will decide who wins the next general election, and I seriously doubt they will back a party promising at least £15 an hour for all workers!

Here are my responses to your list of considerations:

1. "Increased tax revenues"

All tax revenue comes from the profits of the capitalist class. I don't see the point of income & council taxes; wouldn't it be easier to scrap them and increase corporation tax?

2. "Increased demand"

Isn't it easier for the capitalists to just keep their profits, rather than pay their workers more; to increase demand; to create and sell more commodities; to make profits? Wouldn't it be better for every living thing on Earth if Humans produce solely to meet their needs, instead of for endless economic growth for the sake of endless economic growth?

3. "Savings and investment"

Nobody should have to worry about saving enough money for when they are elderly. This is one of the many problems world socialism will solve.

4. "Massive social security savings"

This is a case of swings & roundabouts. Businesses would be paying money individually to keep people from destitution, rather than collectively through taxation. This doesn't seem fair on small businesses.

5. "Housing benefit savings"

Unearned profits?! All profits are unearned because there is an antagonism in society between those who possess but do not produce, and those who produce but do not possess. Can't the government cap rents now, without increasing the minimum wage?

6."Small businesses"

So not only will big businesses have to pay their workers £15 an hour, they will ALSO have to subsidise small ones too?! That will NEVER happen. The idea of businesses having to constantly prove to the government that they can't afford to pay their workers £15 an hour, sounds like a lot of red tape (which we all know businesses love) ;-)

7. "Incentivising difficult jobs"

So if businesses need more workers, but they can't attract more workers, they should offer higher wages. You don't need a degree in economics to figure that out. Also, You've done it again, you've made the left-wing mistake of thinking WE ARE THE STATE. I highly recommend you read the excellent editorial in this month's copy of the Socialist Standard:

Finally, asking for a pay rise is like having a deal with your boss that if you bake him/her 6 loafs of bread you're allowed to keep one, but you ask him/her to let you keep two. Why should we ask for a bigger fraction of what we produce, when we deserve the whole bakery?

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