Labour love to self congratulate on their management of the National Minimum Wage or as some prefer to call it the ‘poverty trap’.
All three UK parties toy around with the National Minimum Wage and the Living Wage. They suggest the differential should be broken down. They labour over the impact this may have on business and business competitiveness.
So, talking to these politicians as if they were 4, I am going to offer a little bit of uncommon sense.
A penny less than a Living Wage is a penny into poverty and deprivation. Unless you oppose designed or planned poverty the absolute base line must be the Living Wage – full stop.
The minimum wage should really be an inspirational figure ABOVE the living wage that says our company is not satisfied with the living wage and we don’t want to reward any of our workers less than ‘our’ minimum wage. If you like, this is a company promotion. You may wish to consider a company with a higher minimum wage – but at least you know you are achieving a Living Wage. There, that was not difficult.
But, as always, there’s more. Let’s take the case where a worker earns less than a living wage. To bring them up to ‘Living’ they must rely on Welfare Benefits or Supplements. Let’s say that was £10 per week. Does anyone with a minimum intellect (slipped that one in) think you can pay someone £10 per week in a supplementary benefit without a vastly greater amount of administrative overhead than the £10. Add the administrative costs to the £10 and the actual below living wage and you have a figure well in excess of the Living Wage or the Minimum Wage.
That’s why Welfare is our biggest spend by a mile ….Daaaaaah!
The biggest drain on the economy is the Welfare Spend. This is not because of the total of all the supplements, it’s because of the massive administrative overhead in paying out all those £10s – what price stupidity?
And there’s even more. Welfare and the Cost of Living are inextricably linked. The cost of living has a specific barometer called ‘Inflation’. The guy in charge of ‘Inflation’, if you will, is Mark Carney, Governor of the Bank of England. BoE uses the Consumer Price Index in it’s calculation of inflation. This is a EU wide measure; but it does not include housing. Next time you apply for a loan and they ask you for details of your housing expenses, simply say ‘Mark Carney, the Governor of the Bank of England doesn’t bother with this – so why should I’. After that, it may be a Pay Day Lender for you? The other measure that does include housing, welfare etc is RPI. RPI includes a representative sample that determine a typical basket of goods based on probability and statistics. When I did probability and statistics at Uni I discovered it was a black art. Amazing at analysing certain things. But , I believe, useless in terms of calculating the impact on the family budget for the bottom 5% of the population. If you want a better figure get out to Aldi, Lidl, Poundsaver and the foodbanks in Possil, Easterhouse, Milton or Drumchapel. That’s where to gather your statistics – and guess what? you end up with real reliable date that requires no fancy algorithms to avoid getting down and dirty. Most people in these areas work but earn so little they are bumping along the bottom of society. That’s your fate when you perform low grade jobs like keeping our hospitals clean, removing our rubbish and keeping the streets clean, caring for the elderly etc. Why can’t these people not just get a PC and try their hand at the Futures Market, buying and selling currency or speculating on the Stock Market?? really!
Basically, there is an inflation figure, targeted by Westminster at 2% (+/- 1%). But there is something missing. If inflation has an impact on the Welfare System then as inflation varies those people on an absolute minimum slip in and out of poverty. And worse, if inflation attributes include things that don’t apply to those people at a subsistence level then they could be slipping in and out of poverty due to instability in the cost of servicing your Bentley – if you get my drift.
I appreciate that we must maintain a commercial inflation figure. We must also maintain a Welfare related inflation figure that includes everything that relates to minimum subsistence and nothing that cannot be traced back to minimum subsistence. For example, it is not a matter of minimum subsistence to go on a continental holiday. However, nobody on minimum subsistence is immune to the cost of electricity. If we maintain a Welfare Inflation figure that would guarantee that all those on a minimum subsistence level would at least be in a stable situation rather than slipping into poverty every time the day ends in a ‘y’.
The Green Party have come up with an idea. I thought of something similar in an earlier blog and no doubt lots of people have similar thoughts. A ‘Citizen Income’. The Greens suggest £71 per week – the figure doesn’t really matter at this stage. The Greens offer a justification for their idea on their Web sites, so I am not going to duplicate their logic. What I would say is this. When you judge this idea, as for example, Andrew Neil did on Sunday Politics [25 Jan 15] you must resist the alarmingly simplistic balanced equation approach. How much does this cost? How do you pay for it? Add up all the components and see if you can get it to work out. This is basically how the political parties balance their budgets.
Now I am not saying I am right and they are wrong – no – but I am saying their total debt is in the region of £1.7 Trillion – so you chose whose version you prefer.
The Citizen’s Income is remarkably simple while at the same time is vastly complex. Don’t use maths to judge it; try common sense and decency. Some people will say ‘what a stupid idea, people will abuse it’. OK, they will. But if that is the reason not to do it, let’s also scrap the Stock Market, the Welfare State, the NHS, Global Banking, the Insurance Industry – let’s see, who do we have left? Mother Teresa, that’s about it. People abuse all these systems, but we still have them.
I like the idea. Everybody knows they have basic subsistence. Everyone, depending on your aspirations can top this up with other work without worrying about losing your basic subsistence. And guess what, when people have their little bit of income, their little bit of self respect – what do they do with it? they spend it – and that grows the economy!! The rich in society buy their German cars, their Swedish hifi, their villa in Italy and they holiday in Monaco – they spend fortunes – yes, but not here?? Of course you must put safeguards in place. Some people will spend the Citizen Income on drugs and alcohol. If you have the smarts to come up with the Citizens Income, solving spend on drugs and alcohol will be a breeze!
For example, this is how I would tackle drugs. If someone is found using and is an addict I would whisk them off to a treatment centre, possibly as an outpatient. Give them the drugs they need but get them into a programme to get them off the addiction. Make sure they are fed, a roof over their head, get them working, give them an address. Unfortunately, unemployment would rise a little as the drug barons, the peddlers and pushers go out of business, boo hoo?
The problem in trying to introduce such a concept is the way our society is measured; usually financially. How do you measure all those whose homes were NOT burgled. How do you measure all those people that were NOT mugged or murdered for a few quid to buy drugs. How do you measure the impact NOT felt by the friends and family of the addicts. How do you measure the impact on those people who do NOT stay at home because they fear their environment. When we become grown up enough as a society to do the things that are a little more difficult than the politicians can manage, then perhaps we can start to solve problems in society.
On the day when a young girl in Egypt was shot dead by police protesting about social justice – I would say to everyone – there is no rule that you can only join one party. If you are committed to the concept that we only borrow the planet from our children, then join the Green Party as well.
PERHAPS WE BECOME A CIVILIZED AND CARING SOCIETY WHEN WE CAN SAY THAT WE ARE MEMBERS OF THE GREEN PARTY BASICALLY – AND ANOTHER PARTY, IF YOU MUST!