Michael Meacher

This man doesn\’t know what he\’s talking about:

including the hyper-rich non-doms who pay no tax at all

Eh? Non-doms pay exactly the same taxes on their UK incomes as anyone else does. Not knowing that means everything else he says is highly suspect, don\’t you think?

Money is power, too, so raising the minimum wage, currently just £5.52 an hour, to at least £7 in the first instance would empower many with little opportunities.

A good example: minimum wages have bad effects as well as good, and the bad effects become dominant if the minimum is too high. Setting the UK minimum at around the US average hourly wage would, in my humble opinion, be high enough that we\’d see a great deal more of the bad effects.

6 comments on “Michael Meacher

  1. A minimum wage high enough to shut anyone out is a device of the employed to reduce competition from below. One low enough not to shut out anyone is meaningless (though much better from an economic viewpoint)–that’s why there’s clamor to raise it.

  2. I hate socialists. If you raise the minimum wage that high, you will increase unemployment overnight and leave many small businesses unable to employ the people that they need.

    The non-doms comment shows how ignorant many people still are on this issue.

    http://lettersfromatory.wordpress.com

  3. Just looking at this from a London perspective, in theory, £7ph minimum wage wouldn’t be such a bad idea. £7 is about the bottom end of what I’d expect to be paying anyway. It’d make investing in equipment, to make each hour more productive, attractive. It’s they way we should be going as an economy any way. Labour intensive should be expensive. It’s so bloody inefficient. I’d also be able to continue with my employment policy of ‘British jobs for British workers’ which would no doubt please Gordon Brown.
    Unlike Meacher, I don’t give a stuff about equality. But if we want to build a first world economy on service industries we shouldn’t be throwing cheap labour at the problem. That’s been the answer since the 50’s & it’s never worked.
    Of course, what I suspect would happen is a growth in the black/grey economy because when you’ve got an almost inexhaustible labour pool there’s any number of ways round regulations.

  4. pj,

    “It’s they way we should be going as an economy any way. Labour intensive should be expensive. It’s so bloody inefficient.”

    You’ve got it the wrong way around – labour intensive often is more expensive and inefficient. Therefore, people use automated solutions.

    Imposing less labour intensive solutions is unnecesary. People will use and create technology if it makes them more profitable.

    Raising minimum wage to £7 means that technology that works out at £6.90 would be chosen. But it someone in China is prepared to use humans to do the work for £6.50, then no work is produced.

    If you want a greater service economy (and government shouldn’t really be involved in picking winners) you get it through skills, and reducing the burdens on business to encourage investment and growth.

  5. TimA,
    Having actually done this stuff for the past few years rather than talked about it I can tell you I got that the right way round.
    It’s only worth replacing or supplementing unskilled labour with tech when labour is markedly more expensive. Tech costs money up front. Labour you can fire tomorrow.
    “People will use and create technology if it makes them more profitable” but an equally valid way to maximise labour efficiency is by employing more & paying less. That makes the guy running the company rich but each individual worker poorer. Do it with an entire economy, the GDP goes up but the productivity of individuals doesn’t change. However, as a lot of the infrastructure those individuals need are in the short term static – things like housing, transport, roads – scarcity pushes prices up so they’re effectively poorer still. Because they’re poorer the proportion of their income that has to go on basic necessities rises & they’ve less to spend on the services that give them jobs in the first place.
    Keep this up & you could run the Industrial Revolution through backwards.
    I totally agree with TimW when he says that free trade is the most efficient use of resources. You must benefit buying a product from China for £6.50 rather than produce it yourself for £7.00. But only if you have the £7.00 in the first place. If the Chinese come here & make the £6.50, you haven’t got the £7.00. You’re effectively part of the Chinese economy.

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