February 11, 2014 by Nash Riggins
Britain is on the brink of a disaster. The prices of food and fuel have been allowed to spiral out of control. Meanwhile, affordable accommodation is quickly dissipating – egged on by the coalition’s dubious desire to slash cost-cutting holes in Britain’s social safety net.
With that in mind, it only makes sense that entrenched politicians should point the finger at the country’s pitifully low minimum wage. For the better part of four years, many within the Labour camp have been whinging about Britain’s criminally stagnant wages – which are constantly being marginalised by relentless hikes in inflation and living costs that relegate even full-time workers to lives of poverty.
Now, it’s easy for an opposition leader to moan about low wages – it’s harder to draft tangible resolutions. But across the pond, President Obama is preaching an identical message of hope for America’s working class. As momentum builds, even a characteristically stubborn George Osborne has been forced to hop on the bandwagon by promising to authorise some muted legislative pay raise in the run up to the 2015 general election. But try not to hold your breath.
As housing costs continue to soar, most of us would need our salaries doubled in order to scramble onto the lowest wrung of the property ladder. Meanwhile, without addressing the core issues at hand, even the most ambitious wage increase would only serve to widen the country’s ever-increasing poverty divide further still.
Let’s talk economics.
When governments force employers to hike their wages, we tend to see a swift impact upon those minimum wage workers who are most in need. Warm fuzzies ensue. Yet because employers want to maintain differentials, this increase at the bottom inevitably produces a domino effect that eventually reaches even the plushest chair in the boardroom. In turn, real inflation rises because more people have more money – driving basic living costs up with it. Ultimately, the status quo remains quite unchanged.
To some extent, this knock-on effect actually hurts a lot of workers more than it helps them. That’s because when companies are forced to increase wages without seeing any sort of profit increase, they end up with a tattered bottom line that renders future investments meaningless. Thus, new jobs are lost – and the chances are, a few old ones will be made redundant in order to cut corners.
Faced with such a tragically grim outlook, it’s hard to say what we should make of all this buzz surrounding people’s wages. It would be political suicide not to jump on the bandwagon and call for a higher minimum wage. After all, whilst bankers in The City are proudly high-fiving each other to celebrate the alleged end of a five-year global recession, most of us have yet to witness a damn change. Our bills are still rising and our High Street shops are still closing. But like it or not, a minimum wage increase alone can’t change that – it will only perpetuate it.
If politicians are truly serious about solving Britain’s cost of living crisis, they should start by addressing the painfully obvious questions first. For example, what can we do to subsidise food costs for people? What about Britain’s cutthroat energy market? Or, perhaps most pertinently, how can we provide more affordable housing for those in need? A short afternoon of soul-searching, and politicians on all sides of the spectrum would be shocked to find the answers to these questions aren’t so complex – they just involve making a few tough decisions.
Until that happens, let’s just go ahead and call this latest push for a higher minimum wage by its true name: shameless politicking. This is precisely the sort of substance-free policy agenda that’s meant to turn our attention away from demanding tangible legislative solutions to society’s biggest problems. Because, believe it or not, there’s a better way to fight homelessness than with a bedroom tax – and there’s sure as hell a better way to combat high living costs than with a hollow hike in wages.