Wednesday, 5 June 2013

Time to abolish benefits for the working class

Hear me out: it's really simple and it's really socialist (this is a positive word in my lexicon).

Read this: it's about the State of California's move to fine Wal-mart $6000 per employee who uses the state's minimal medical care. It's $6000 because that's how much each employee costs California. Wal-mart doesn't pay its workers enough to live on. It encourages them to use food stamps and other state assistance to make up the gap between what it pays them and what it costs to actual stay alive.

It's the same here in the UK. We have a 'minimum wage', which is set by the government. Very, very weirdly, it's much lower than the 'living wage', the amount calculated to be that required to survive.

The gap between the two is profit for employers and a massive loss for the taxpayer. By providing benefits for people who work (i.e. most of the people who claim social security), we aren't helping them. We're subsidising corporate profits. We're also using taxpayers' money to prop up the economy: maybe this is a little Keynesian, but I'd prefer corporate profits to be recycled into the economy as pay rather than ship them offshore, as Amazon and friends do.

It's so simple. We just vote to equalise the minimum wage with the living wage. Bingo: companies have to pay their employees more, taxpayers don't have to shovel money directly into corporate shells in the Cayman Islands. We could spend our taxes on schools, trains and street lighting, or (if you're a Tory), just pay less tax. We'd probably be healthier and happier too: people who take home a decent wage will lead healthier, happier lives. People who have to depend on the bureaucracy and suspicion of the social security system have a much harder time. And we'd have a much simpler and smaller social security system.

There really is no downside.


Ghislaine Dell said...

Perfect! I totally agree that the NMW should be equal to the living wage - I know it would vary place to place but that shouldn't be too hard to sort out, should it? The only thing I would add to this is that no-one should be able to advertise unpaid work experience that should be paid at NMW either. One of the biggest obstacles to social mobility is that people are priced out of opportunities that those better off can afford to take.

The Plashing Vole said...

Agreed: all these internships, sometimes lasting for months, that can only be paid for by well-heeled parents. Particularly true of politics, the law and media.

The Red Witch said...

I wonder that they don't raise the minimum wage for tipped employees like those in restaurants. The minimum wage for food service workers is $2.13 an hour, a wage that makes Walmart wages seem generous.