Should we wage war on poverty pay?

Sunday 18 October, 16.00 until 17.15, Frobisher 5-6 Economic solutions?

Gone are the days when the idea of a Minimum Wage sparked controversy about the impact it would have on jobs. Outside of free-market think-tank circles, it is universally accepted as a standard below which no decent employer must stoop. And now the Living Wage is posited as the new minimum firms must observe if they are to be considered socially responsible, while there is also a growing consensus that so called zero-hours contracts are unfair to workers, with calls for them to be banned. Low pay has become a cause célèbre.

The Minimum Wage is worked out by the Low Pay Commission and set by government, while the Living Wage is calculated by the GLA in London, where it originated, and by academics at the Centre for Research in Social Policy at Loughborough University for the rest of the country. According to the Living Wage Foundation: ‘The Living Wage affords people the opportunity to provide for themselves and their families.’  At £7.80 an hour (or £9.15 in the capital), it compares favourably, for those at least whose employers have signed up to it, with the national Minimum Wage of £6.50. Commentators from left and right, meanwhile, have even suggested looking to Switzerland’s proposals for a Universal Basic Income – to be voted on by referendum next year – as an inspiration for alternatives to current welfare models. But where is the extra money going to come from?

Many businesses say they employ people on zero-hours contracts because they cannot afford to pay people when there is not enough work for them to do – especially if they are expected to pay a higher hourly wage. Even many who support the Living Wage, like Prime Minister David Cameron, argue that zero-hours contracts have a place. They say flexibility and job creation in a depressed economic climate trump arguments about secure pay and working conditions. But is any job always better than none? Critics argue that the government is effectively subsidising poorly-performing businesses through benefit payments to underpaid workers. And under proposed reforms, a million-plus working people claiming housing benefit and working less than 35 hours on the Minimum Wage will find themselves subject to sanctions unless they work more hours. So can businesses really take up the slack as benefits are cut? Or is the problem deeper than tight-fisted employers?

So should we welcome the Living Wage as a more civilised idea of what a ‘decent’ hourly rate looks like? Should the right of employers and employees to enter into zero-hours contracts be protected from government interference? Why can’t the UK economy generate enough well-paid work to go around? Who should get to decide what working people get paid?

James Bartholomew
writer and journalist; author, The Welfare of Nations

Jon Bryan
regional support official, University and College Union (UCU); treasurer, The Great Debate

Dr Glynne Williams
senior lecturer in industrial relations, University of Leicester

Jane Wills
professor of human geography, Queen Mary University of London

Bríd Hehir
writer, researcher and traveller; retired nurse and fundraiser

Produced by
Nadia Butt national coordinator, Debating Matters Competition, Academy of Ideas
Recommended readings
Forget Corbynomics. We need a new industrial revolution Phil Mullan, spiked, 7 September 2015

Tears, tantrums and no pay – my life on a zero-hours contract in the NHS

I endured personal attacks, felt invisible and undervalued working in administration. Our beleaguered health service is in need of urgent care

Anonymous, Guardian, 1 June 2015

Solution to zero-hours contracts is to rebrand them, says Iain Duncan Smith

Conservative work and pensions secretary blames Labour and the media for scare stories about contracts he says should be renamed ‘flexible-hours contracts’

Rowena Mason, Guardian, 17 April 2015

Most zero-hours contract workers 'don't earn a living wage' Camilla Canocchi, This is Money, 30 April 2014

Zero hours: 'It suits my lifestyle and gives me flexibility'

Zero-hours contracts allow employers to hire staff with no guarantee of work, paying them only for whatever hours they work. BBC News website readers share their experiences of such contracts.

Helen Dafedjaiye, BBC News, 25 April 2014

Inequality: Everybody’s Doing It

If everyone is concerned about inequality, what, we might ask, does equality mean? In this short introductory programme to a WORLDbytes series on equality Daniel Ben-Ami tells us that campaigns against inequality today are not about making us better off.


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