Wednesday, September 30, 2020
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Mark Ellse: The old, the young, the poor all lose from the National Living Wage

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A few years ago it was immigration that one couldn’t discuss. All three parties collaborated to label any such discussion as signs of covert racism. And we got ourselves in a pickle that we are belatedly trying to address. At the moment, our position on Europe is not one for polite conversation. Try raising it as I did with an acquaintance a few days ago. The first thing that he wanted me to hear was that he totally dissociated himself from anything said, or possibly thought, by Nigel Farage. Obviously attention to the issues involved was entirely secondary.

Today, appropriately All Fools Day, the National Living Wage comes into force. There couldn’t be clearer evidence of virtue signalling from the government than their rebranding of the National Minimum Wage under this banner. We are the good Tories, the nice guys. We take Labour policies and, because we are magicians, we do them even better. You can never call us the nasty party again!

And one hears not a single voice of opposition.

We know why one dare say nothing. It is the egalitarian spirit of our age. Of course there are real issues associated with the bosses of FTSE 100 companies having astronomical pay, but that doesn’t mean that government should tinker with wages. The last attempt to deal with the income of the bottom of the pay spectrum was the tax credit regime, which even Labour has realised was a financial mistake.

Be not deceived. Though one daren’t say it at dinner parties, though it sounds like an utterance of the nasty party, the National Living Wage will prove to be a greater disaster than tax credits and it will be a Dickens of a job to roll it back.

Of course it would be nice to pay everybody loads and loads more but having some on low wages is necessary. There will be real losers if the NLW continues its rise, as announced by George Osborne, from the current £6.70 per hour to £9.00 over the life of this parliament. For example, think about care of the infirm. Many of them have low incomes. They have a limited resources to pay for care. When wages increase, they are simply unable to afford so much care. Nor will the local authority be able to afford so much care.

Care homes will be more expensive and have lower staffing. The vulnerable will be looked after less well. The NHS will have a much larger bill and services will be cut. Bus companies will have greater staffing costs and fares will rise. Fewer will use buses and services will be cut. Who loses? The old, the young, the poor. Child care becomes more expensive, solely the province of the rich.

Not only does the consumer need low wages, but some workers need low wages. For the unemployed and the low skilled, low pay jobs are the way into the world of work. Regrettably, for some people, low-skill, low-wage employment is all they will achieve. One hardly dare say this in today’s egalitarian climate. Sadly it happens to be true.

When wages go up, low-skill jobs that would otherwise not have been considered, become attractive to the higher skilled. We know what that means. The less well educated will be pushed out of the workforce in part by married women. Most of them would much rather they could transfer their tax allowances to their husbands. But, since they can’t do that, they will succumb to the attraction of a cleaning job at the £19,000 per annum that the NLW will rise to, pushing out dear old Gary who did his best for years but really wasn’t very bright.

Oh, and, of course, there will be even more Eastern European graduates acting as waiters.

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Mark Ellse
Mark Ellse
Mark Ellse is a physicist and author. He is a former headmaster, independent school inspector and A level chief examiner.

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