Should we wage war on poverty pay?

A Battle of Ideas 2015 discussion that examines whether we should declare war on poverty pay.




Gone are the days when the idea of a Minimum Wage sparked controversy about the impact it would have on jobs. Outside of free-market think-tank circles, it is universally accepted as a standard below which no decent employer must stoop. And now the Living Wage is posited as the new minimum firms must observe if they are to be considered socially responsible, while there is also a growing consensus that so called zero-hours contracts are unfair to workers, with calls for them to be banned. Low pay has become a cause célèbre. 

The Minimum Wage is worked out by the Low Pay Commission and set by government, while the Living Wage is calculated by the GLA in London, where it originated, and by academics at the Centre for Research in Social Policy at Loughborough University for the rest of the country. According to the Living Wage Foundation: ‘The Living Wage affords people the opportunity to provide for themselves and their families.’  At £7.80 an hour (or £9.15 in the capital), it compares favourably, for those at least whose employers have signed up to it, with the national Minimum Wage of £6.50. Commentators from left and right, meanwhile, have even suggested looking to Switzerland’s proposals for a Universal Basic Income – to be voted on by referendum next year – as an inspiration for alternatives to current welfare models. But where is the extra money going to come from?

Many businesses say they employ people on zero-hours contracts because they cannot afford to pay people when there is not enough work for them to do – especially if they are expected to pay a higher hourly wage. Even many who support the Living Wage, like Prime Minister David Cameron, argue that zero-hours contracts have a place. They say flexibility and job creation in a depressed economic climate trump arguments about secure pay and working conditions. But is any job always better than none? Critics argue that the government is effectively subsidising poorly-performing businesses through benefit payments to underpaid workers. And under proposed reforms, a million-plus working people claiming housing benefit and working less than 35 hours on the Minimum Wage will find themselves subject to sanctions unless they work more hours. So can businesses really take up the slack as benefits are cut? Or is the problem deeper than tight-fisted employers?

So should we welcome the Living Wage as a more civilised idea of what a ‘decent’ hourly rate looks like? Should the right of employers and employees to enter into zero-hours contracts be protected from government interference? Why can’t the UK economy generate enough well-paid work to go around? Who should get to decide what working people get paid?

Watch it here: http://www.worldbytes.org/should-we-wage-war-on-poverty-pay