Too many low wages

Living wage campaign.
Living wage campaign.

The demonstrations in favour of the Living Wage reported in the Lancaster Guardian (January 1, Campaign for better wages) identified many important issues.

There has been a huge expansion in the number of minimum wage jobs over the past four years. Many of those paid the minimum wage can only manage because they receive a variety of benefits. The Government rightly judges they will need extra to be able to cope.

Because the companies have therefore been able to develop these large low paid work forces they have been enabled to build their profits in part at the expense of the taxpayer who is required to finance the benefits which make it possible.

The sums of money involved are considerable. As the number of minimum wage jobs has increased the Office for Budget Responsibility estimates that an extra £900 million will be required for tax credits alone above the sums already budgeted. Approximately 0.7 per cent of the money spent on benefits is claimed through fraud. I wonder what percentage of profits is generated when necessary benefit payments subsidise low paid work?

I note with interest your comment that both the major parties support the Living Wage. However it is improbable that Mr Miliband’s five year plan for increases in the minimum wage will bring it to the level of the Living Wage likely to be necessary in 2019/20. Meanwhile Mr Cameron has not taken the opportunity while in Government to introduce the Living Wage of which he says he approves.

Fine words butter no parsnips, gentlemen.

Nick Morgan