The solution is not an £8 minimum wage proposed by Labour, nor a £10 minimum wage proposed by the Greens for that matter.
In fact the minimum wage debate is only scratching the surface of the problem. What is really needed is that everyone – and that means everyone – have their necessities paid for through a universal basic income.
There are several problems with the minimum wage debate:
It doesn’t matter how high the minimum wage is if there are not enough jobs to go around, and due to technological unemployment that is our future.
Albert Einstein wrote that “Technological progress frequently results in more unemployment rather than in an easing of the burden of work for all,” and recent statistics have proved him right. The amount of work which needs to be done has been steadily decreasing: 100 years ago a farmer produced enough food to feed himself and three other people; today he feeds himself and 120 others; in 1982 the USA produced 75 million tonnes of steel employing over 300,000 people. In 2002 they produced 100 million tonnes of steel, employing only 74,000 people.
We are achieving the dream of having machines do more and more dreary, dangerous and mind-numbing jobs for us, but what’s the point if it means you can’t meet your needs because you can’t find a job? Everybody should be able to enjoy the fruits of technological progress.
Worsening Work Conditions
The absolute power of capital to quash labour rights has created this problem – workers can no longer improve their conditions or pay because they are stuck in debt, and in a lot of cases, working just to survive. If they kick up a fuss someone else will fill their place, or the whole department’s jobs could be offshored at a moment’s notice. For those looking for jobs they have the unrelenting stress of having constant bills but uncertain income. A new generation of young unemployed can’t leave home and are fighting for less and less jobs with more and more people – three generations of them to be exact!
We need to promote commitment to equality among all citizens through a basic income. Having one’s necessities covered means people will be able to search for better working conditions and better pay with the security that it won’t mean the risk of becoming homeless or starving. Undervalued jobs, especially those cleaning up after others, will have to pay more, and we’ll be able to move on from underpaid jobs, or those damaging their community and environment.
Increasing Inequality and Poverty
People living under the poverty line are rising every day. 17% of British children live under the poverty line as of 2011. There are:
- Around 4 million people that are not properly fed by today’s standards;
- Around 2.5 million children live in homes that are damp;
- Around 2.3 million households cannot afford to heat the living areas of their homes;
- Over 30 million people suffer from financial insecurity.
This is all the more revolting given the level of income inequality in the UK, which is higher in the present day then it was after the Second World War. If you’re a minimum wage worker in the UK the average CEO earns more than 70 times what you do.
As Goran Therborn (Professor Emeritus of Sociology at the University of Cambridge) wrote, “Inequality is a violation of human dignity, it is a denial of the possibility for everybody’s human capabilities to develop. It takes many forms and it has many effects: premature death, ill-health, humiliation, subjection, discrimination … exclusion from opportunities and life-chances.”
There is an alternative
A universal basic income (UBI) can make real systemic change possible and stop extreme poverty. And we can afford it: it will cost approximately £600 billion to give every adult in the UK over 18 years old £1000 a month – that’s still £250 billion less than what the government paid in public funds to bank bailouts in 2008!
£600 billion is only about £200 billion more than our current total welfare budget (admin and bureaucracy included) – most of which would be replaced by UBI, and it’s also the exact amount that gets pumped into the economy out of thin air every year by the private banks to fund mortgages.
To support a BI every year we could, for example:
- Raise corporation tax (it was lowered this year by 8%);
- Introduce land taxes (so those wealthy few creating an artificial housing shortage by keeping homes empty cannot afford to do so);
- Add a higher VAT for luxury goods.
And to answer the £600 billion dollar question: no, people won’t just stop working. When Canada’s UBI ‘Mincome‘ ran for five years in Manitoba, only new mothers and teenagers worked substantially less. In fact, working hours only dropped 1% for men, 3% for married women and 5% for unmarried women. Also, hospital visits dropped by 8.5%, with fewer incidences of work-related injuries and fewer emergency room visits from car accidents and domestic abuse. Additionally, the period saw a reduction in rates of psychiatric hospitalisation, and mental illness-related consultations.
Namibia’s UBI pilot study ran for two years. Six months after the launch, the project was found to significantly reduce child malnutrition and increase school attendance. It was also found to increase the community’s income significantly above the amount from grants, as it allowed citizens to partake in more productive economic activities. Moreover, overall crime rates fell by 42%, stock theft by 43% and other theft by nearly 20%.
As the plutocrat Nick Hanauer said himself, “We’ve had 75 years of complaints from big business—when the minimum wage was instituted, when women had to be paid equitable amounts, when child labor laws were created. Every time the capitalists said exactly the same thing in the same way: We’re all going to go bankrupt. I’ll have to close. I’ll have to lay everyone off. It hasn’t happened.”
The time has come to make the necessities of life a human right. Big business will adapt, it always has.
Originally published on The News Hub.