Monday, September 14
What I know about economics you could write on the back of a box of Swan Vesta
Frank Field wonders if George Osborne knows what he’s doing. Far be it for me to question the wisdom of raising the minimum wage, especially if it removes a need for income support. However I’m not so sure working tax credits remains the better route, at least as far as UK Plc is concerned. Wages have stagnated since Blair and Brown opened the door to immigration, in part a response to Industry bitching about the potential for increased labour costs. The fear now, with an enhanced ‘living wage’, must be the knock-on effect of differentials. If the lad sweeping the factory floor is suddenly earning X, the girls on the machines will demand X x 2 and the foreman X x 4: and all of a sudden Widgets R-Us becomes uncompetitive – and £30 billion of income support for the lowest paid appears small change in terms of maintaining a ceiling on overall labour costs. I have no idea if my premise is correct…just musing.