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Proper wages benefit all

Two minimum rates of pay exist in Britain - the national minimum and the living wage

It is bizarre that two minimum rates of pay exist in Britain - the national minimum and the living wage.

Since the second, higher rate is the minimum calculated to live off in order to be able to avoid poverty, this clearly means that the first is well below the line.

Which begs the immediate question: why isn't the minimum wage the living wage?

Those councils and the few firms that have signed up to pay their employees a decent whack should be given a pat on the back.

But there is clearly something seriously wrong with the economic balance of society when billions are made in profits at one end of the scale by big business, often using armies of cheapskate subcontractors such as cleaning firms that pay their own staff a pittance.

Labour proposes a tax break to bribe employers into paying their employees a decent wage.

This misses the point of a statutory minimum and is doomed to failure.

Only by backing the living wage with the full force of the law will the policy bear fruit.

Using the tax system to coax firms into paying higher wages effectively hands a subsidy to those companies - precisely the problem that a minimum wage as a general policy avoids.

The benefits of a higher legal floor for wages are simple.

Paying people properly lessens the taxpayer-funded subsidy for wage-squeezing businesses that comes in the form of social security payments for the low-paid.

This and increased tax revenues from wages would free up more cash to spend on pensions, education, health, infrastructure and a better environment around us.

People at the bottom end of income scales are far more likely to spend on real things than the wealthy, who hoard cash or invest it in luxuries that employ few people.

This means that the living wage would put more money into the pockets of those of us who provide real economic rocket fuel within local communities, including helping smaller local businesses that would be obliged to pay higher wages.

Elsewhere the exploitative set-up that encourages the poverty-pay outsourcing model of operation would no longer be so attractive, raising the likelihood of work being kept in-house.

Modern-day gangmasters running fly-by-night outfits for their own personal benefit would be forced out of town.

We know that it works, too, not least because the minimum wage did not cause economic collapse despite dark warnings by bosses' groups and rightwingers prior to its introduction.

Those campaign groups and trade unions that have fought long and hard for decent pay have successfully placed the policy centre stage.

They should be congratulated.

The fact that even uber-Tory London Mayor Boris Johnson has retained the London Living Wage reflects the precious nature of this work - and is a tacit acceptance of the policy's value.

However, true to type, the Con-Dems as a whole are piling in on the side of the exploiters, forcing through vicious squeezes on social security benefits but letting the low-pay barons get off scot-free.

So the campaign goes on. And it won't be over until the minimum wage is also a living wage.


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