Ho hum, another campaign from the UK Uncut jobbies. This time about a living wage for all.
It\’s the usual nonsensical mishmash of barely understood figures. The big chart on their website is this familiar one:
The point being made is obvious: wages as a share of national income are down so it must all be going to the bastard capitalists!
Except, of course, as Britmouse charts for us, this isn\’t quite exactly true.
Corporate operating surplus is, by eyeballing, pretty much bang on long term trend. Employers\’ NI has risen substantially, taxes less subsidies has risen substantially (most of that being VAT I think?) and so has other income.
That money just hasn\’t moved from wages to profits. By and large, it\’s moved from wages into employers NI, VAT and a rise in self employed income.
They\’re simply wrong. Again.
There are other errors. For a start, real wages have not fallen they have risen. But the really big one is in this:
Instead of pay rises, we have helped pay our own wages through the £20bn of in-work tax credits spent each year. While tax credits are a lifeline to the 5 million households in the UK that rely on them, they have allowed private companies to shirk responsibility for wage bills, shifting it to the public instead and creating a subsidy for private sector profit.
It\’s a failure of logic.
Assume that the market pure and unadorned does not produce the incomes that we think people should have. Absolutely all of us think this to be so of some portion of the population (none of us think that those in a near vegetative state should sim[ply be left to die in the gutter. The arguments come over where and by what means the resources needed for their sustenance are going to come from, not whether they should come from somewhere or other. At the other end, not all of us are sure that someone straight out of school should be able to afford a 60 inch plasma…at others\’ expense that is).
OK, so, by what mechanism should those too low market incomes be raised?
We\’ve essentially two sources. We can insist that, through a higher minimum wage for example (what is now called a living wage), employers pay more in wages.
This has its downsides. The costs of such higher wages will fall on three groups. Those who employer lower paid workers, those who are customers of lower paid workers and lower paid workers in the form of unemployment. That last will come mostly from changing the capital/labour costs calculation, ensuring technological replacement of that very low cost labour. The first is what is trying to be achieved and the middle one, well, as it turns out, the major consumers of the products of low cost labour tend to be other low waged people.
Just not a good idea.
Or, given that we as a society say that these wages are too low then we as a society get to pay to raise them. All of us: that means the tax system. Meaning that the moral answer is indeed tax credits, or a cbi, or benefits.
Assuming that you buy the original idea: that the market unadorned does not provide sufficient incomes, then we should all pay to top up those incomes. Not dump the costs on employers of low waged workers or those low waged workers themselves.