Enterprise - Living Wage - Inequality

How are we to encourage entrepreneurs AND raise the minimum wage to the level it is generally accepted people need to live in today's Britain? You may think I have forgotten the third point from my title but I haven't. The issue of inequality in the work place, at least in terms of remuneration, comes down to the balancing act I have just outlined. People take risks, make sacrifices, 'invest', in all the senses of that word, because of what they hope to get back. They have to judge if the extra effort, if the extra risk is worth what they will be putting in. Every time the minimum wage rises it reduces either the profits of investors or the share of the wage pot going to people taking on more risk or putting in more effort (training included). Every time the minimum wage rises it requires more investment to start up and maintain a new business. These are not reasons to not do it, they are however reasons why being for both these things, coherently, is no easy task.

Government, unlike the Unions, does not, in a narrow sense, represent just the interests of the 'Workers'. Government also represents the interesets of 'Business', i.e. the entrepreneurs and investors. Without entrepreneurs and investors there are no jobs for the workers and the question of their minimum wage is irrelevant.

For equality to be anything but the leveling out at the lowest common denominator of everyone, wealth creation and not just distribution needs to be at the heart of Government.

This is nothing new, nothing that hasn't always been the case, no new challenge. This was the case in 1997, and in 1907, and it is the case today.

Something else that hasn't changed though is this: Pay a minimum wage and you get a minimum work force. Minimum in the effort they will put in, the commitment they will give, and the service they will deliver. More than that you get a minimum work force in that those who don't need to work won't, as the effort to find ways not to and the risk of getting caught seem at least as worth while if not more so than paid employment.

Getting the balance of reward right, both for those who provide as well as those who do jobs, is the key to raising standards of living and reducing benefit payments and crime. You can tell this story in terms of money saved or in terms of lives enriched but whichever way you tell it the story remains the same.

There is no future in telling people how big the reward for their efforts is allowed to be, as if doing well was a thing to be done in moderation only. Government must be about everyone doing as well as they possibly can. Clause Four commits us to that.

We need to find a way where the rewards we reap are matched by the responsibilities we take, be they the responsibilities of further and ongoing training, or the responsibilities of taking decisions that effect others.

We need to find a way where the choices we make as a society can be informed by a true sense of the the cost of those same choices.

We need to find a way where the cost of living is well within the reach of those who work hard.

Tackling inequality does not mean choosing between the demands of enterprise and the demands of a living wage but it does mean developing a global, if it is to be coherent, approach.