Labour have promised a £10 minimum wage for everyone, including under 18s. If you believe the ranting comments of the righteous right readership of the Express, this would signal the end of life as we know it, replaced by a totalitarian regime akin to North Korea. But this is a policy that should be universally advocated, across party lines.
For Labour it’s a bread and butter matter of social justice for the proletariat. The Lib Dems have a century or more of campaigning for social justice too and when in power last were responsible for the substantial increases in income tax thresholds. But even the very much right of centre Tories seem to have embraced a relatively high minimum wage and tax thresholds.
When the Minimum Wage was first introduced there were a lot of mainly Tory voices adamant that it would result in massive job losses. I’ve no doubt that the extra labour costs did result in some people becoming unemployed. But overall, the fears were unfounded. It will be a similar situation when a £10 / hour level is set. Hospitality, care, and retail sectors will be most affected and consumer prices will probably need to increase. That is the main background argument against higher minimum wage level and, in isolation, it has some merit.
However, the likely reason why Tory Chancellors have embraced it is that if someone in full-time employment still cannot afford the basic necessities of life then the State steps in and uses tax income to pay benefits to plug the gap. Companies that pay decent wages, and their employees, effectively subsidise other companies who pay the bare minimum they can get away with. Companies that pay decent wages also benefit from greater staff loyalty, higher productivity, and better retention rates, leading to lower costs and/or higher profits.
A £10 Minimum Wage, or National Living Wage as it is now formally called, is the right thing to do both morally and economically. Some prices might rise but would be countered by a reduction in the tax take needed to support low paid workers. As for the businesses that will lose their wage subsidies, I have very little sympathy.
To me it’s an open and shut case but although the Greens also want £10, and the Tories are committed to 60% of median earnings, the Lib Dems want an independent review to consult on how to set a “genuine living wage”. Clear as mud, kicking the can down the road, call it what you will, what we actually need is a simple, easily understood message.