"If you pay peanuts, you get monkeys!" (?) I can remember the Britain that existed before the Labour party came into power in 1997 and I can remember the Britain after. Labour introduced the minimum wage. Britain before the minimum wage was not too different, though arguably it is worse after it. The minimum wage has not really changed a thing except to make it harder for desperate people like me get money when I'm desperate. Most of the press and population, indeed the general consensus seem to go along with the minimum wage - it is argued that it was a good thing that can give a civilized wage. For me a wage is a wage and if you don't like it, you can try getting another one. Welfare provision should exist and should not be conflated with the minimum wage. It should be there to help the too young, the too old or otherwise sick and incapable people of living in reasonable comfort.
There is an argument for the minimum wage in agriculture. Before the Labour party of 1997 in the UK, a minimum wage existed for farm workers. Agriculture is often subsidized as food production can be an urgent matter, particularly taking into account wartime shortages or periods of scarcity or hyper-inflation. Given that food is so vital, farmers will always need workers and traditionally if not a minimum wage, workers were looked after to an extent on the farm, receiving a portion of the food and in a modern context, where they may have to be peripatetic, a legally enforced minimum wage. Similarly, soldiers who fight on behalf of the state would be entitled to receive some sort of minimum wage.
Leaving aside exceptions as above, a minimum wage is decided by the market. The typical cost of a weekly rent or a loaf of bread will dictate the sort of wages workers will expect to work at the lower end of a spectrum. Workers in a certain guild will know what their fellows are paid and will refuse to work for masters who pay below what their peers get as an average. In an interesting experiment, two chimps were required to work and one was paid cucumbers and the other paid grapes. When the cucumber chimp discovered what its peer was paid, it literally downed tools and refused to work until it too was paid grapes - grapes being more desirable in taste and energy than cucumbers. People will tend to react no differently. People understand what a minimum wage is and will make choices based on what is available and what they need. The terrible problem with a legallyenforced minimum wage is that it rises quite exorbitantly along with inflation, and year on year, the minimum wage goes up, and employers are required to keep pace.
Here is one result of the legally enforced minimum wage: A thriving black economy. In Britain today there is a cadre of workers, especially immigrants who are not even legal residents paid way below the legal minimum wage in industries such as gathering shellfish or in care homes for the elderly. These people are very happy to earn below the minimum wage as they typically earn a lot more than they may do in their country of origin. They get to live contentedly where they are without being detected by the authorities and they can keep their options open about saving up and going back, or working themselves up to becoming legal residents with proper wages. The authorities don't really take as much action as they could and these people make a huge contribution to the "British Economy" saving the government welfare provision and helping the middle classes to obtain their necessities in life or luxuries, without having to pay through the nose for them. Unfortunately, the under-classes, those with not much experience or education in Britain, the native people, can't get jobs so easily as they would legally require to be paid the minimum wage and many employers prefer to get the same work done cheaper using the black economy. This leads to resentment, racism and a growing wave of crime with so many people, born and bred in Britain losing out in competition against foreign workers.
The bottom line, enunciated by critics before the minimum wage came along remains the devaluation of the local currency and spiraling wage inflation. The great and the good politicians who gave us the minimum wage have been voting themselves huge pay rises ever since they came into power. Most of them don't get paid according to what they do but according to who they are. When a politician decides what a minimum wage should be, he/she will willy nilly award himself/herself a maximal wage given they place themselves so far above the minimum level. Similar wage rises apply to the top civil servants, lawyers and judges. It actually contributes to a disparity in wages between the private and public sectors, with the private sector paying closer to the minimum wage for jobs less than the white collar level. The money that I earn simply is not worth what it is meant to be with a minimum wage in place. If I earn one pound, it is immediately rated against the standard of the minimum wage rather than against its own intrinsic merit. Pretty soon, the pound becomes small currency and loses its status. As an institution the one dollar or the pound come to be regarded as worth a fraction of what it was once considered and treasured to be. Every penny just does not count any more, until you make a certain packet of them first. The minimum wage does contribute to price rises in most goods and services. As a wry observation, it is not the employer who will administer a legally enforced minimum wage, it is you the customer or the taxpayer. You will invariably be required to pay more in costs and taxes.
I've never had a proper job in my life. I have done more than ten jobs and still don't earn an average wage (I happen to be a student at the time of writing). For this reason, given the high standards of paper qualifications I've obtained, I should be begging for a minimum wage. However, the best jobs I have done were done on, or below the "minimum wage". One of them included pulling up birch saplings in a forest, where birches were not considered appropriate for the heathland they were trying to encourage. This was the sort of job where I could rest on a bed of moss and stare at the blue sky before getting back to work and counting my hours of work. Sadly, the people who employed me then could not afford to employ people in the same capacity without obtaining a substantial grant, thanks to legally enforced wage inflation. They would not stoop to employing people below an affordable level illegally, and this sort of job remains undone in the modern, minimum wage world. Similar jobs that can't really get done as efficiently include litter picking, clearing up weeds from rivers to make their courses swifter (stopping them flooding their banks when excess rain falls), clearing up drains or sewers. Hence we end up with mountains of rubbish, rivers flooding their banks, overflowing sewers and a countryside that is not effectively managed. There are of course voluntary bodies and people who would be willing to work for nothing, but this is a crux in the argument against a minimum wage.
When it comes to labour the minimum wage represents the punishing adage "my way or the highway". You have the option of working for nothing on a voluntary basis or not working at all in that particular job on a longer term as they could not afford to pay you. This particularly applies to vital but often unsung jobs and services. E.g., a charity dealing with taking care of wildlife or animals could theoretically only rely on volunteers, but most of them would be short term and they would lose some of their best people who could possibly only afford to work a short while. The only long term volunteers they may get would be retired older people who lived off their pensions and could afford to sustain a voluntary effort. Thus, even if you enjoyed such a voluntary role, if you wanted to work for this organization you would be barred from it as the only two options would be, working for nothing (which you can't afford), or working for the minimum wage (which the charity can't afford). Surely it would be better if you worked for something in between and you may be able to just, afford that. The most satisfying job in the world may be a low paid one, but the minimum wage could take away your right to work if that organization can't afford the minimum wage. Thus the minimum wage creates unemployment, underemployment and destroys so many vital niche jobs that could be starting points for many careers. It abolishes my right to work for a wage I choose should it be below the minimum wage within a legal framework. It creates a thriving black economy that demands illegal immigrants or the jobs are exported to countries where the wage is a lot smaller. Consequently the local population where the wage is enforced lose jobs and get resentful (how many factory closures have you heard of?). Charities and the voluntary sector suffers without being able to afford key members of staff who may start on a voluntary basis and the minimum wage discourages several menial jobs essential for the well being of the environment such as rubbish clearance. The rich still get richer and your money loses its value, year on year. I would rather have something rather than nothing when it comes to income - so thanks New Labour for nothing. If you pay peanuts you get monkeys? Tell that to the monkeys in the houses of parliament.
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