To The Daily Telegraph
“Peter Kidson and others who knock the minimum wage present a weak argument. If I choose to run a business and use a person’s skills or labour for my benefit, then it is only right that I compensate that person sufficiently. If an employer cannot generate enough income to pay employees properly, then he or she should question his or her ability to run a business, rather than expect workers to subsidise the inefficiencies of their boss”. Derek Turner, Brill, Buckinghamshire
Bravo! There are too many marginal businesses that claim that they cannot afford to pay a minimum wage. If this is the case then their business plans are poor, and their owners should find work in profitable and well-managed companies. The real truth is that a lot of those who protest about the minimum wage and government interference in the “market” are paying as little as they can get away with to poor, desperate people, while inflating management salaries. This attitude towards human beings who work for you is enthusiastically held by libertarians, which is why liberatarian has nothing to do with Epicureanism. Epicureanism stands for getting along with people, helping them, not exploiting them. This is not a quote from Epicurus, but could be: “Without a willing and enthusiastic workforce your company has no long- term future”. Treating people well is the most important investment you can make in success.
In theory, I approve of what the British government is doing: raising the minimum wage, while at the same time reducing corporation tax so businesses aren’t penalised. This is more efficient than the current tax system, where the government taxes people, only to compensate or ‘top-up’ their wages by giving some of the money they took back. The trouble is, the cuts to tax credits are being implemented faster than the tax cuts and minimum wage increases, meaning that many people will be worse off in the short term. That doesn’t negate the need to cut tax credits, but the plans ought to be softened. This could be done by temporarily increasing the inheritance tax to compensate for loss revenue until the economy improves, but knowing the Conservatives, that’s not likely to happen.
In the long term, we need a living wage, which is about £7.25 in the UK and $12 in the US. Virtually all big businesses can afford this, contrary to what they may claim. Small businesses may be hurt, but they shouldn’t have to pay as much in tax so they don’t go bankrupt. Its important to note that many big businesses support the living wage, because they are more able to afford it than their smaller competitors.
The biggest problem we have in the UK, is the increase in the number of long-term low-paid people. These are people who are too well-paid to be affected by minimum wage increases, but too poor to get on the housing ladder or afford relative luxuries such as foreign holidays or eating a nice restaurants. I’m really not sure how to increase the wages of these people, any suggestions would be welcome!