As a recent report by the Joseph Rowntree Foundation (JRF), points out, it isn\’t just fares that are rising. The average family is in a vice. The minimum cost of living has soared by 25% in the past five years as wages have flatlined.
No, it does not describe the minimum cost of living. The living wage describes the cost of living the people think it would be nice that people have. This is, I hope you will be able to note, something rather different.
More formally, the JRF asks focus groups what it is that people should be able to do if they are not to be living in poverty. They then add this up, add tax, and we get a wage necessary for people not to be living in poverty.
Do note that not living in poverty and the minimum necessary to live are wildly different things. Not living in poverty includes the cash to eat out occasionally, purchase a couple of pints one evening a week. I too agree that these are highly desirable things. But not being able to have them means, in the opinion of the people of this country, that you are poor, not that you are below the minimum cost of living.
And yes, this is an important distinction. Between what it would be nice that everyone could have and…..well, what justifies taking someone elses\’ money to provide. I\’m happy enough with the idea that the welfare state should provide a minimum. Enable the kiddies to eat, the babbies to have nappies. That happiness doesn\’t extend to taking money forcibly from person A so that Family B can go to Harvester once a month.
Now, to reach an adequate standard of living, JRF says that a lone parent requires £25,600 a year
Note that this is around median household income. We\’re getting into Lake Woebegon territory here.
That may not seem much to those fortunate enough to earn significantly more than the median salary of £21,583
Significantly above median salary indeed. And there\’s a serious problem with a poverty measure that is actually above that median salary or household income. Ah yes, this is it:
The voluntary living wage is set at £8.55 an hour in London and £7.45 in the rest of the UK. The statutory minimum wage is set at £6.19 an hour for those over 21, due to rise by 12 pence in October.
Knock the tax that must be paid off and that living wage pretty much is the minimum wage. No, really, add the NI,(employers\’ and employees\’) and the income tax that this country, heinously, charges to those on low wages and the difference between the two numbers melts away to pennies per hour. The answer to the whole conundrum is simply to lift the low paid out of the tax net altogether. The personal allowance should be the full year minimum wage. That personal allowance should be for both NI (both types) and income tax. At which point the current minimum wage is that living wage near enough.
So, get on with it, as the ASI, UKIP (unsurprisingly, organisations I am and have been involved with) suggest and as I hear the Lib Dems are going to argue next election.