Being priced out of the job market – What’s wrong with paying the living wage?

By Mike Swadling

Many of us are used to buying and selling goods on eBay and similar sites. You will have bid, suggested, or offered a price, you will have agreed the price and exchanged the goods. As the buyer, would you have wanted the council to come in and tell you that price is wrong, and you have to pay more? As the seller would you want the council to have increased the price and have maybe lost you the sale?

I originally wrote a version of this article in 2018 about my local councils plan to make Croydon “a living wage borough, not just a living wage council”. The council was already paying the living wage for their own staff and expecting it of its contractors. Predictably the council went de facto bankrupt with the issuing of now three Section 114 notices. 

The living wage is a voluntary minimum hourly rate for those 18 and older set by the Living Wage Foundation. In London, the rate is £11.95 per hour and in the rest of the UK it is set at £10.90.  This compares to the legal minimum wage of £9.50 per hour for those over 22. 

“If an employer can only make £10 an hour of value from someone, but must pay above this, they simply won’t employ them.”

Now on the face of it what’s wrong with paying people more, and who doesn’t want more pay?  The problem comes when some outside force, say a branch of government, decides the best rate of pay for an employer to pay. If an employer can only make £10 an hour of value from someone, but must pay above this, they simply won’t employ them. We know if governments increase the price of something it sells less, and we get less of it in the market. Tax on cigarettes has been part of the reason for the collapse in the number of people smoking. We tax energy to reduce its use to theoretically help the environment. It follows on that increasing the price of work will lead to less work.

” If, however, you want to earn some money but don’t have the skills to generate value above the living wage, then the rungs of opportunity have been removed from your ladder.”

What jobs are there going to be less of? It’s quite common for well-educated, middle-class children to use a period of unpaid internship as a means of getting into a profession. This is fine if you can afford periods of unemployment and are suited to the types of roles offering internships. If, however, you want to earn some money but don’t have the skills to generate value above the living wage, then the rungs of opportunity have been removed from your ladder. These aren’t jobs or wages that will sustain families but are jobs that give you opportunity to build and grow your skills.  In a cost-of-living crisis these might simply be jobs that allow you to heat your home or keep that roof above your head.

Rational people will take jobs that earn them the most money consummate to their skills and desire to select specific types of roles. Increasing your skills and taking risks improves your work opportunities. If, for whatever reason, you leave education with relatively few qualifications, you will likely need what the Americans call ‘burger flipping’ jobs, to build up your experience to a point where you can command ten, twenty, or more pounds an hour. With rampant inflation hurting those often-older people on fixed incomes, you might need these jobs to keep your financial head above water.  The government and many well-meaning councils, businesses, and charities are interfering in the rational choice and freedom of someone to earn the most, and cope as best they can.

This article was also published by Blacklist Press.

Is this how a council is meant to function and Does democracy travel at 20mph?

In three articles from 2016 and 2017 Mike Swadling writes in the Croydon Citizen – ‘Is this how a council is meant to function?’, ‘Does democracy travel at 20mph?’ and about a local Special Needs School, St Giles.

Is this how a council is meant to function?

“Alison Butler, answered most of these questions. It is fair to say that the cabinet councillors’ answers did little to pacify the view of those that I was in the room with. This is understandable given the amazingly dismissive attitude that councillor Butler displayed”

“Two answers underlined the attitude. When asked about traffic problems, cabinet member for transport and environment councillor Stuart King didn’t know the difference between the A232 and A23”

“The whole meeting continued on this theme: we didn’t see councillors debating the issue of Croydon, instead we saw politicians point- scoring. Given the lack of local media coverage of these meetings they were mainly doing this for their own party members”

Full article:

Does democracy travel at 20mph?

“The Merriam-Webster dictionary definition of democracy includes the definition of “the absence of hereditary or arbitrary class distinctions or privileges”. This leads to a question – why is Croydon Council looking to have a two-tier democracy in the borough?”

“The people had a chance to respond to the opinion surveys, and they responded in favour of the 20mph speed limits. Whatever your personal view on the speed limits, believers in democracy would therefore agree that they should be implemented”

“Why are council officers, people paid by us to serve us, recommending taking away our right to a democratic process?
Why does the Labour council not consider the people of Coulsdon, Kenley, New Addington, Shirley, Waddon and other areas worthy of having the same democratic rights as the people of Thornton Heath and Addiscombe?”

Full article:

St Giles: a very special school indeed

“Croydon has six dedicated special schools and over a dozen Enhanced Learning Provision units inside mainstream schools. These schools meet a wide range of needs for pupils with profound, severe and moderate learning difficulties, autism, physical disabilities and speech and language difficulties. The six schools have between them over 700 pupils on the roll.”

Full article:

Potholes and pointless art and what kind of Croydon do you want?

In two articles from 2017 and 2018 Mike Swadling writes in the Croydon Citizen – What has Croydon’s Labour council actually achieved? and sets out his priorities for next year’s local elections.

Potholes and pointless art

“The Fairfield Halls redevelopment has closed off a major car park and our main cultural venue. This has resulted in a corner of the town that is covered in graffiti (sorry, ‘street art’), and in which businesses keep closing down”

“To top all of this, Westfield hasn’t discernibly progressed. As I have written before, trade in Surrey Street has dropped despite – or maybe because of – council investment”

“In Barcelona, they have been building the Sagrada Família for over one hundred years. Maybe Croydon will become the Barcelona of northern Europe with – at four years and counting – not a single house having been delivered by Brick by Brick”

Full article:

As elections loom, what kind of Croydon do you want?

“The Conservatives took steps to reduced stop and search in 2010, and are cutting police numbers. Labour supports reduced stop and search. Neither propose any action beyond soft words to stop knife crime”

“Both the Conservatives and Labour support green taxes on landfill. They have slowly reduced and made more complex our dustbin collections. Now you need permits to enter the council tips, and yet they all feign surprise we have rampant fly tipping across the borough”

“Stop this folly of green taxes reducing the quality or people’s lives. Locally asking for new refuse collection contracts to simplify the service”

Full article:

Being priced out of the Croydon job market – Croydon Citizen

As part of his acceptance speech at the local election count last month, Tony Newman suggested within the council’s powers, they do just that. The new council wants to create “a living wage borough, not just a living wage council”.    Michael Swadling writes in the Croydon Citizen about the folly of this plan.

Comments on the Facebook post give an interesting insight into the lack of awareness of the downside of minimum wage policies.