By Adam Luscombe
The UK minimum wage currently stands at £7.20 for those over 25, but many people consider this a figure that doesn't represent the social justice that politicians are all too eager to say are true Great British value. So it it really feasible to raise it further?
The idea of a higher minimum wage is very attractive, and without little considerations of the economic implications it will have, is certainly something that is very hard to say no to. The public opinion reflects this, with in a survey done by, IsideWith, a Political Poll website, 74% of the sample population believed that the Government should raise the minimum wage. Further polls suggested that of those who wanted a raised wage, 8% wanted to make it a living wage, a figure currently predicted by HMRC to be £7.85 in everywhere except London, where the figure is £9.15. The Coalition's wage rise was vital and something that I'm sure any party would've had to do, but the main argument is as to what the wage should be set at. Again, his causes a dichotomy in views between idealism and pragmatism, with the idealistic viewpoint being that it should be a wage that provides enough for all, while the pragmatic viewpoint shows that in a time of economic fragility, especially post – Brexit, that this is not economically feasible, and if it were, would only result in further austerity in order to fund the rise.
Furthermore, the whole debate over minimum wages only highlights the many flaws of the globalised world we live in, and how countries have become like temporary accommodation for multi – national corporations, where they can move in and out of depending on the economic situation of that country, meaning no job is secure. A rise in the minimum wage would have a huge impact on these corporations, as they would obviously have to pay more wages, reducing profits. Ergo, the company leaves the country, and goes somewhere where they can find cheap work, such as in Asia, where people are so desperate for a job, the wage does not matter, leaving many people in the original country, unemployed, and thus worse off than they were before the wage increase. This means that in a wage increase, as good as it sounds to the poor, the poor become poorer, and the economy weaker.
It is of course possible that nobody would benefit from an increased minimum wage, as companies would find cheaper ways to manufacture their goods. Until now, it has always been cheaper for companies to pay wages rather than replace every worker with a robot, but a minimum wage rise could unbalance that fact, and thus, people would instead be replaced with their automated counterparts. Again, this would only make the poor, poorer.
Furthermore, a minimum wage rise would not only affect large companies; a minimum wage rise would also massively, and negatively, impact small businesses, as they would simply not be able to fund a large amount of their staff, thus further increasing unemployment. This would rather contradict the ideals of raising a minimum wage, as it would not promote social justice, but instead completely abolish it, replacing it with a further globalised world in which governments have little control over their economies, and all that control is given to those who would then control the workforce in large multinational corporations.
Regardless of economics, there are also many geographical impacts of an increased minimum wage. In many rural areas, where people tend to rely more on small businesses, they will run out of a supply of jobs, and will be forced to have to find work where the big companies that are able to pay the new wage will be, a place that will most likely be in the big cities, causing a rapid amount of economic migration and urbanization. This would create unseen amount of strain of the infrastructure of these places, causing yet more problems.
The solution therefore, is unclear. It seems hard to find a balance between social justice and fairness and stable economies. A fair solution remains though, in a small wage rise or decrease each year that follows the trend of inflation, meaning that people will benefit from a stronger economy with a solid workforce, and is also a solution that will not negatively impact large and small companies. Despite this, poverty will still exist, so, how can we reduce poverty in such a globalised world?
Should We Raise the Minimum Wage? Reviewed by Student Voices on 21:10 Rating: