27 Sep 2010

A living wage for public sector workers has been proposed at Labour’s conference today. But why should any workers have to work for a wage that is not enough to live on? Surely the minimum wage should be set at a level where ordinary folk can live on it.

It is obviously good that there is a minimum wage at all. Previously security workers in Glasgow would get £1 per hour or little more. And tax credits are also welcome as they boost the incomes of low paid working families. But both of these should only be the starting point, not the finishing point.

The reality is that big profitable companies can pay the minimum wage knowing that their employees can claim tax credits to be able to actually live. This is effectively a state subsidy to the private sector. If the minimum wage was raised, less people would need tax credits and that public money could be targeted at those most in need.

Another problem is having a higher living wage for the public sector while the private sector is allowed to pay less. This means that when a contract to build a school, clean the streets, or provide home helps is up for grabs, it is harder for the public sector to compete with the private sector. Therefore, there should be a higher minimum wage that applies to both public and private organisations.

John Mason’s experience at Westminster was that Labour ministers continually ducked this question. They congratulated themselves on the minimum wage and on tax credits. But when the Welfare Reform Bill was discussed they refused to tackle the minimum/living wage level, saying that was the responsibility of a different government department. Yet if we want to get people back to work, surely there have to be carrots as well as sticks. And what better carrot than a decent higher living statutory minimum wage.