Monday, December 24, 2012

Why a Living Wage is not enough

It may seem just a little churlish on Christmas Eve to try and take anything away from this very worthy article by the Archbishop of York, Dr John Sentamu, on the “imperative for a Living Wage”. This is also at a time that it seems likely that in the public sector at least, the Living Wage will become a reality for all directly employed and contracted staff.

Yet I think it falls on me to be a bit of a Bah! Humbug! Christmas misery guts on the issue.

While anything that increases the amount of money being put in the purses and pockets of the low paid should be welcomed, it will not get rid of the evil of low pay and poverty.

The Living Wage level is set right on the poverty line. There is no element for any saving. Nothing to put aside for being sick or for when you retire.

So if you do become ill while at work and there is no sickness pay you will go straight back into poverty and be dependent upon the taxpayer. The same thing will happen when you retire. With no company pension you will retire and die in poverty. Again, being dependent on the State.

What we need is a Living Wage “plus”. A Living Wage, a Living Sickness benefit and a Living Pension in the public and private sector. The best way to delivery this is by strong trade unions and binding national/sectorial pay agreements.

In the last depression in the 1930’s we had a Tory government introducing such “Wages boards”. Like their modern day counterparts, this was not so much any wish to get workers out of grinding poverty but unlike this lot, they realised that to get the country out of doldrums you had to increase demand. The best way of doing this is to increase the pay of the low paid who will spend any increase (and not give tax cuts to millionaires who will just save it).

A Living Wage in the public sector would (if it happens) be a huge advance but can only be a first step.

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