Timmy in The Times this morning:
The latest bright-shining idea being pushed by the Brothers Miliband is the “living wage”. Yesterday, the Labour leader said recalcitrant companies would be “named and shamed” into paying £7.45 an hour so that no full-time worker has to live in poverty. While the aim is admirable — who would applaud poverty? — there is a much simpler way of doing this: stop taxing the low paid.
The problem is that the minimum wage is £6.19 an hour, poverty wages by this standard. So companies must be cajoled into paying more, argue the Milibands. But this approach ignores the vile stupidity of the way we tax the working poor. It is perverse that a care worker on the minimum wage pays income tax and national insurance to fund the salaries of diversity officers.
We should go farther. The link between the full-year minimum wage and the personal allowance for tax and NI should be made explicit. Change one and the government of the day must change the other. If the minimum wage is the minimum moral amount that someone’s labour is worth, then that is what they should get, not the amount after Denis MacShane’s European wanderings have been paid for.
Which leaves us with two competing visions of how everyone can be free of poverty pay. The Living Wage Campaign’s vision is to shout at every employer in the country until they give in. The Worstall Way is to increase the incomes of the working poor by stopping taxing them.
All Hail The Worstall Way say I.