The great wage con is keeping you poor

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Is anyone else sick of employers bleating that the minimum wage is hindering their business?

They must think we’re all stupid.

A few of them were on the BBC’s Any Answers on Saturday, saying the minimum wage keeps pay down, and that people can’t afford to go to work – especially if they live in London – because their housing costs are paid by benefits. This is nonsense.

The minimum wage is exactly what it claims to be – a minimum. And if people aren’t getting up to work for it because benefits give them more, we can see that it is not enough.

But let’s take this further: We all know that Landlord Subsidy is being restricted – especially in London, where landlords charge more than in the rest of the country. This means that people on low incomes in rented homes will be unable to pay the bills and will be forced to move somewhere cheaper (if they can find it), as intended by our extreme right-wing government.

Where are all these minimum-wage employers going to find their minimum-wage workers then?

Even that isn’t the limit of it, though. We know from such sources as the summer’s excellent Dispatches documentary on Channel 4 that employers have found ways around the minimum wage.

• They have taken people on as self-employed contractors who are paid a flat rate for a day’s work – no matter how long that work takes – and being self-employed, these people pay their own taxes and National Insurance, and get no time off for holidays or if they are ill.
• They have taken on workers on part-time contracts, meaning reduced or non-existent holiday and sick pay entitlements – and then boosted up their hours to full-time levels with fake ‘overtime’ offers.
• They have employed workers on zero-hours contracts, meaning they can demand an employee’s presence at any time and make them work for as long – or short – a period as required. Again, there are no tax administration obligations, NI, sickness or holiday benefits.

The result is very nice for a government of liars such as the current Westminster administration, because it seems they have managed to increase employment (in fact the last figures showed unemployment is greater than at the end of the Labour administration in 2010, but by such a small amount that it’s not worth mentioning).

Production, on the other hand, has remained flat. If more people are in work, it should have increased.

That is how we know we are looking at a con.

If more people are in work but production hasn’t gone up, we must question the incentive for this increased employment. It has already been mentioned: The lack of holiday and sick pay entitlement, National Insurance and tax admin obligations. The larger the employer, the larger the saving – but this doesn’t mean small firms aren’t feeling the benefit.

The minimum wage worker’s income is topped up by benefits – but the government is cutting these back. Landlord Subsidy in London won’t be enough for people on the kind of contracts described here to stay in their homes, and this means a consequent job loss if they have to move out of the area.

Tax credits are being removed; child benefit restricted. Universal Credit (if it ever works) will operate in real-time, adjusting benefits to ensure that low-paid workers remain in an income trap for as long as their wages remain below a certain level.

Employers reap the benefits. But even they are being conned, because this can’t last forever.

Imagine a Britain without in-work benefits but where the living wage has not been introduced nationwide (this will be a reality in a few years, under a Coalition or Conservative government). Workers on the self-employed, part-time or zero-hours contracts described here will not earn enough to survive.

Private debt will increase exponentially, leading to increased mental illness as the stress of trying to cope takes its toll on the workforce. Physical illness will increase as people cut back on heating in their homes and food in their fridges and larders. Result: malnourishment and disease.

What happens then? It’s hard to say. It may be that employers will take on increasing numbers of cheap foreign workers – but there is already resentment at the influx of immigrants from the European Union and this could lead to civil unrest.

It seems likely that the largest firms will leave these shores. If we compare them to huge parasites – and we can – then the host will have been drained almost dry and it will be time to move on and find another to treat the same way. These are the companies who have reaped huge rewards from tax avoidance, aided by the ‘Big Four’ accountancy firms – KPMG, Deloitte, PricewaterhouseCoopers and Ernst & Young – who have been writing – into British law – ways for them to get out of paying their share.

The smaller employers might keep going for a while or collapse; it depends how much their bosses save up for the inevitable crash. Deficit financing of their business will support them for a while but, if they don’t have any ideas, they’ll go under.

All because a few very greedy people just won’t pay a reasonable amount for a hard day’s work.

They get on the media, telling us they can’t afford higher wages. In that case, why are they even in business? If they need a workforce of a certain size, but cannot pay a living wage, then they simply should not bother. All they are doing, in the long run, is contributing to a monumental confidence trick that will cause immense harm to the economy and the nation’s health.

Of course, the UK did not always have in-work benefits. People used to be paid enough to make ends meet. We should be asking why that changed and who benefits. A return to that situation would benefit the country enormously – but it isn’t going to happen on the minimum wage, and it isn’t going to happen on zero-hours contracts.

It’s time to name these firms and ask bosses who employ on these terms why those contracts are necessary and why they feel justified in the damage they are causing.

And while we’re at it, it’s time to ask our MPs why they tolerate it, too.

Get your votes out, lads and lasses!

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The only power you have: Pensioners keep their benefits because they vote; youngsters are told they can’t change the system, so they don’t bother. They give up their democratic power and, as a result, are made to suffer.

Is the government is right to maintain benefits to older people, whatever their financial situation, while cutting benefits to more vulnerable people?

This was the popular issue on BBC radio’s Any Questions/Any Answers this week – popular because it highlighted the contrast between pensioners, who influence governments, and youngsters, who don’t.

The simple fact – nailed by a tweeter – is that old people vote more than young people. Therefore, it is the choice they make that can decide who forms the next government. Therefore any party (or parties) in power will pander to them and try to ensure that they take as few hits as possible during a time of cuts.

Remember the old adage that, if you don’t vote Tory when you’re old, you’ve got no brains? They try to look after their support base.

So pensions stop being linked to RPI and get linked to CPI instead, meaning a drop of 0.4 per cent in their annual rise (which was 5.2 per cent last year – well above average pay increases). They get a Christmas bonus. They get winter fuel payments whether they need them or not. Free TV licence.

Meanwhile, youth services are cut hard. Student tuition fees are tripled. The number of young adults out of work skyrockets and they are faced with crippling sanctions on their Jobseekers’ Allowance if they don’t comply with slave-labour Workfare schemes. The Universal Credit will cap the amount of benefit they receive to keep them in poverty. The Localism Bill will bring in county-based council tax relief schemes instead of Council Tax Benefit, which will push low-earners (traditionally the young) out of their homes to look for accommodation in less-desirable areas.

The government can get away with this because young people don’t vote – so they are no threat.

Of course, we’ve all heard the naysayers banging on that there’s no point in voting because it won’t change anything; whatever happens, you’ll end up with a politician representing you. We’ve all heard that sort of tripe. Their point – that politicians are no different from each other; that they’re all in it to line their own pockets, may seem valid. But just look at the evidence of the last century in Britain alone and you will see that it is not true.

Was Aneurin Bevan lining his own pockets when he set up the NHS? Of course not – but Andrew Lansley and many other MPs are lining theirs by breaking it up. And that’s just the obvious example.

So, young people of the UK – and in that I count anybody from 18 up to retirement age – it’s time to start thinking seriously about your situation.

Do you really want to be a Conservative politician’s helpless pawn? Do you want to be consigned to poverty, to a life of endlessly being shifted from one inadequate set of digs to another? From one Workfare placement to another?

Or will you take charge of your own political life and make it clear that you won’t be pushed around like that?

There are more of you than there are pensioners. You can choose a government that is fair; that actually wants to help you. Remember, the government that formed the NHS did it when there was supposed to be “no money left”, and in a time of far worse proportionate debt. And it wasn’t a Tory government. Or a Liberal Democrat one.

So get your votes out.