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How generous of the Miliboy

Ed Miliband pledges big pay rise for Britain’s poorest workers

Very generous of him, don’t you think?

Labour leader says he would raise minimum wage to £8 by 2020 in move that ‘reveals core party values’

Ah, not so much then. He’s spending other peoples’ money, isn’t he?

41 thoughts on “How generous of the Miliboy”

  1. The Tories should pledge £12.

    Then Labour have to go higher, and when they get elected they will be in a heap of trouble.

    OTOH, if the Tories get elected with an actual majority they can have a ‘policy rethink’ on the £12 while sorting out the boundaries and bringing in legislation to bans Scots MPs from voting.

    Time to play these fuckers at their own dishonest game while we still have a team on the pitch.

  2. Lab: Vote for us and we’ll give you £8 min at the end of that term in office – just in time for whoever follows to pick up the attendant consequences.

  3. So Much for Subtlety

    He’s spending other peoples’ money, isn’t he?

    In fairness it does reveal the Party’s core values.

    What he does not say is that it will screw the least well paid by making them not paid at all. People will be fired. The young and immigrants will suffer most.

    He is welcome to his core values. No decent person should touch them.

  4. A party conference headline grabber that will collapse under the weight of scrutiny later today, tomorrow or the next day. If he’d said he was going to drastically reduce NI for the very low paid that would do more good. As it is, this is just a “Hey, look over there” moment to distract attention from the English answer to the West Lothian question. Hopeless effing New Jerusalemism.

  5. The new political lexicon:

    A vow is a last minute concession.
    A pledge is a promise to do something, later.
    A promise is there to be broken.
    A commitment is a vague promise.
    An aspiration is to do with dropping (or not) your aitches.

  6. We should expect nominal wages to grow at rate of inflation plus rate of real economic growth so 4 pct per year should be something like a baseline expectation.

    If anybody thinks a 5 pct increase is going to have much of an effect on anything, I suggest they are hysterical ideologues

  7. I’m surprised you missed the obvious opportunity to mention tax & NI thresholds, he’s left an open goal here for the evil tories.

  8. Simple solution for employers is cut hours or cut staffing to keep wages bill the same with this £1.70 planned increase. Alternately simply raising prices for everyone – including pensioners and benefit claimants – who won’t get a £3,000 increase in gross income over the same timescale.

  9. I wonder where the point is that with unskilled labour becoming increasingly more expensive, these jobs either end up being done exclusively by under 21s (lower minimum wage) or disappear entirely.

  10. Strikes me as a shrewd meeting move.

    Everyone below the new level will believe they will benefit and will vote Labour and it can be used to bash the cruel heartless Tories.

    When it’s implemented lots of people will be able to hold up their new pay packet and thank Labour, those losing their jobs will just be seen as part of the creative destruction process. Nobody will associate their lost job or reduced hours with the rise in minimum wage, unless their employer gives that as a reason, in which case the employer will be blamed as a heartless capitalist rather than Labour’s rise in minimum wage.

  11. Not even spending other peoples money, he’s directly ensuring (with the force of law) that the low productive are unemployable.

  12. @Interested: £12 too high. Too obvious.

    Go for £8.50.

    And then berate the Labour party for being heartless and evil.

    It’s all settled by the Low Pay Commisison anyway, so there are f -all consequences for making such demands.

    Miliband’s screwed up by moving first. Way too much time for GO to trump him.

  13. If capitalism does not deliver rising real wages for the many, but only for the few, why should the many support it? Wise capitalist should see the case for sharing the pie more equitably

  14. Luis Enrique – “If capitalism does not deliver rising real wages for the many, but only for the few, why should the many support it? Wise capitalist should see the case for sharing the pie more equitably”

    It is interesting how many question begging assumptions you can fit into two short sentences.

    If. Capitalism, of course, does.

    Because it depends on what the alternative is. The Gulag is not an improvement for most people.

    It does not follow that people want misery to be equally shared. They may be happy with rising wages even if others’ are rising faster.

    It is beyond the ability of any capitalist to make society more equal.

    Minimum wages do not do so. They push down the poorest.

  15. Luis,

    “Wow, so that about 5 per cent nominal annual increase from current level.

    Not very dramatic.”

    Well, perhaps not. But if you’re at the margin, if your job is only just viable, only just cheaper than a machine or someone in India, that’s your job gone.

    Minimum wages are as stupid as the war on drugs and making prostitution illegal. It’s an interference in trade, and like those, people find a way around the problem. People aren’t going to pay more for labour than what it’s worth to them. If society thinks that it’s wrong that people don’t earn enough to live reasonably well, society can pay the bill because individuals won’t.

  16. If capitalism does not deliver rising real wages for the many, but only for the few, why should the many support it? Wise capitalist should see the case for sharing the pie more equitably

    Socialism imported 2 million non-English speakers to vote for Labour. Socialist policy is to drive down wages for nannies/builders/working class. This is so that socialists can afford to pay someone to look after the kids and fit out a new new kitchen and bathroom while being assured that their public sector jobs are secure.

  17. Hi Luis

    I make it less than 4%. The average increase in the minimum wage since the crisis was around 1.9%, but between 2000 and 2008 it was around 5%, so this “promise” is utterly in line with where we would expect it to be assuming we get normalish growth.

  18. What the Stigler says.
    But its always a pleasure to hear the statists arguing that increasing a price of a ‘bad’ commodity will reduce consumption, whereas increasing the price of labour will not.

  19. Just think too – all those people who are semi skilled and earning more than minimum wage. Then NMW catches up with them and they are paid the same as those with zero skills.
    How hard is it to move off the bottom rung of the ladder if the bottom rung is increased a chunk? How many skills are needed to get a higher than £8 an hour job? How many employers will make jobs part time/zero hours in order to deal with increased wages?

  20. bloke (not) in spain

    “This report suggests that it does not appear to have reduced employment, but may have reduced hours worked. ”

    Now if I were one of the low paid & was told that although minimum wage had not increased unemployment, when I looked in my wage packet, found doing less hours for more money left me where I started or worse off, I’d be reckoning the bloke who made the above statement was some sort of cnut

  21. Why not just increase the personal tax threshold, that would affect everyone, more votes!?

    Ah yes, they’d then have to spend even more of our children’s money to pay for all the other grand schemes they have, those terrorist human rights lawyers don’t work for free and diversity managers don’t come cheap, and not forgetting all those “charities” that need funding (just the sympathetic ones that is).

  22. The NMW will be £6.50 from 1 October, so assuming that Miliboy means £8 by 1 Oct 2020, that is an increase of 3.52% per annum or a glorious 0.51% more than the latest increase under the “evil Tories”.

  23. Alex

    Yes, the point made by Luis and me further up the thread is that assuming normalish growth, the increase put forward by Milicret is nothing special. It’s a stupid promise to make – what if we have another recession in a year or two? But it really isnt much of a commitment.

  24. 3.52% – are benefits going to increase by the same rate? How about those earning more than £8 an hour? 3.52% increase year on year? Or less?
    The best solution would be to increase tax and NI rates so people felt the net income increase. More spending money for them, no increased cost to employers.
    Government has less money… perhaps some fewer foreign wars? Perhaps trim the civil service a little more?
    Come to think of it, considering there has been some reduction in state jobs has anyone noticed any particular problems with fewer government workers?
    I mean besides benefits taking weeks or months to have a claim allowed (a problem thats existed for decades….)

  25. These boys may have to sink a fortune into new tech.

    The nano-blade is failing to split the hairs as thin as they need to be to differentiate the political parties.

  26. A question for the more sagacious.

    Do heavyweight supporters of a Basic Income Guarantee generally propose that NMW should be abolished if BIG is enacted?

  27. Lots of Labourites on the radio today saying “we believe that people with a job have a right to a basic standard of living”. As others said above, no mention made of the fact that if it be a basic right, then it’s a right that the state is denying them by taxing them into “poverty”.

    But logically if it is a basic right for folk with jobs, there is a decent case that it should also be a right for folk without jobs. Unless people with jobs are better people and somehow deserve better – which doesn’t sound a very Labour ideology. If you do believe in a basic standard of living for all, as of right, then the correct prescription is Basic Income Guarantee not NMW. (Or alternatively the government could provide all basic goods and services for free or heavily subsidised, but I don’t think even the Labour Left has much appetite for that. Surely better, and less authoritarian, to simply give folk the cash and let them decide how they want to spend it.)

  28. MBE

    The economic theories behind NMW (monopsonistic labour markets) would suggest that there might still be a need for a NMW with a BIG.

    The problem with your “give people money and let them spend it*”, is that people might spend it on stupid things. I remember Frank Field suggesting that what we should do, is to allow people to borrow up front their benefits so that they could access large lump sums. What do we do when some idiot spends it all on costume jewellery? Do we let the kids starve?

    * I’m not saying that we should institute state provision of stuff, but giving people free rein might result in some unintended consequences. Which is why we dole out the money in little packets and have bureaucrats watching every step. Rather ineffectively it must be said.

  29. Martin Davies

    On the government provision thing – I think there has been an increase in the number of homeless recently in the town centre. No idea if this is linked to government spending.

    But, crime is down. Rubbish is collected. Schools function (slightly better as Gove tried to free them from the dead hand of the state). Now if we could just get rid of the H&S idiots and the diversity “managers”.

  30. Ken: at least you are being honest and admit that the case for minimum wages depend on there being monopsonistic labour markets. The logic step would therefore be to prove that labour markets are monopsonistic. Me thinks they are not, thus minimum wage laws are at best unnecessary but potentially damaging.

    On give people the money and let them spend it: you are creating a strawman in saying that someone claims that people should have access to large lumpsums of cash. I think the main suggestion is monthly payments

  31. Emil

    I’m not claiming anything. The literature on NMW tests for whether there is a negative or positive effect on employment and wages and hours worked based on the implementation of the NMW. The theoretical argument is local monopsonies coupled with search costs iirc.

    The literature tends to find that at the levels of the UK NMW there is moderate positive effect on wages, no negative effects on employment and possible negative effects on hours worked. eg, labour markets suffer from monopsonies.

    Emil: on the BIG, a far better idea is the one that says lump sums – increasing flexibility of income would dramatically improve the life chances of many. One of the major problems of the poor is their inability to shift their consumption intertemporally – eg borrow when incomes are low. This is why Frank Field suggests it – in the main it is a good idea.

  32. ken

    Thanks for interesting response.

    The intertemporal aspect is definitely relevant, on previous posts on this site BIS left some really good “view from the ground” comments about time horizons and poverty.

    In terms of access to a lump sum, wasn’t that to some extent what the Child Trust Funds were meant to be about? I guess we will never get to see the fullness of any impact they might have had.

  33. Also on the intertemporal front, shouldn’t a substantial regular (weekly or monthly) income that isn’t contingent on work (risk of unemployment / variability of part time hours or self employed profits) improve access to and affordability of credit?

  34. One of the major problems of the poor is their inability to shift their consumption intertemporally – eg borrow when incomes are low.
    Very difficult to determine whether their low income in itself makes credit unavailable, or the signalling effect tells a potential lender that they have a propensity to poor life-decisions that makes them a higher-risk borrower, even in the situation of a guaranteed regular income, as suggested by MyBurningEars.

  35. Unless people with jobs are better people and somehow deserve better – which doesn’t sound a very Labour ideology.

    Labour doesn’t favour people with jobs? I know it’s true, but it doesn’t stop it being ironic.

  36. Ken – I used to work with homeless and had access at the time to some of the national data. Homeless numbers tend to rise and fall, partly impacted by economic changes. Some factors are delayed, some are more immediate and local provision also matters.
    Government spending tends to have some impact – like it does on pretty much everything. Some helps, some hinders. Usually single males and children that get left in the cold. One by being low priority, one by not being able to access adult services officially while avoiding children services with a vengeance.

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