Times are hard. But should the minimum wage rise?
No! Say employers. Their stooge Tim Worstall, who is probably paid significantly more than the minimum wage, agrees:
It really shouldn’t come as a surprise that if you raise the price of something then people will buy less of it – and this applies to labour just as much as anything else.
Which is an argument against having a minimum wage (or the much more effective living wage). And of course, Tim is completely against the minimum wage – though, I wonder, if he found himself in a low-paid job, would he remain a devout free marketeer?
Since the terrible things forecast by Worstall’s ilk did not happen upon the implementation of the minimum wage, should we listen now?
Think of this: if we are, as consumers, cutting our spending because of soaring utility bills, etc. won’t we cut our spending even further if our wages are frozen? If so, this will exacerbate the slump in consumer spending which will lead to greater job losses in the retail and service sectors.
The question of profits is one which Worstall doesn’t adequately engage. If we think low wages are immoral, he says, we should reach into our pockets. The only problem is that morality doesn’t come into it, which Worstall should know…
I am interested in the idea of a citizens’ income, which would make life much easier for the low paid, and towards that end – the living wage campaign. These things don’t come about because workers and consumers vote with their wallets, though.
What collective mechanisms exist to raise low wages? Erm, that’d be the minimum wage. And trade unionism – currently hampered by legal restrictions.
Mind you, I’m not sure employers would accept a frozen minimum wage in exchange for the restoration of workers’ rights…
hat tip: John’s Labour blog