Unsurprisingly, Friday’s second reading of the Minimum Wage (Amendment) Bill has managed to sneak under the radar of the national media (even though it has got passed some pretty hysterical bloggers). The bill has been sponsored by Tory MP Chris Chope who has been on the receiving end of a lot of hysterical flak from Labour for his (purely academic, they’ve no chance of becoming law) proposals to amend the minimum wage.
Firstly let me make a point clear. I support the good intentioned ambitions of the minimum wage – namely, to ensure that workers get a reasonable and decent living wage. That said, I am not an uncritical supporter of the minimum wage in its current form. That doesn’t mean I’m some evil bastard who wants the poor in workhouses, I can just see the downside as well as the upside of the MW and have concerns about the effects on the young and the low skilled.
It is true that the creation of the minimum wage in 97 did a lot to help the low paid and this this should be applauded. However we should not forget the facts; its was introduced at an artifically lower level than expected and in a boom period of higher employment. We now live a period of low employment (argue amongst yourselves as to the reasons) and flexibility of labour is what is required to meet the circumstances. Like it or lump it but the evidence of the last decade clearly supports that a booming economy will support a minimum wage but will reduce low skill, low paid jobs available in a recession.
Unemployment is now up to 20% of the 18-24 labour force. This is a
big huge problem. Not having a job at that age is bad for later job prospects. If we are not careful we really will have a “lost generation”. Currently, many coming straight out of school, particularly those with low skill levels and a lack of experience, are priced out of the market – as hard as it is to hear but their labour is worth less than the minimum wage and most employers can’t hire them without losing money. This doesn’t affect most workers like you or me, whose experience makes us more valuable, but it creates an artificial barrier to entry for the young who lack these skills.
We already recognise this as a fact by having a lower minimum wage for young people but given the unemployment rate, it is clearly still too high. Of course we could just create a grand ‘New Deal’ to skill up the young which is all very well but the best skills come from having a job (this is why I’m unhappy about the scrapping of the future job fund). Perhaps another option would be to make it voluntary for under-25s – if Jane Bloggs feels that her prospects are damaged by the minimum wage, she can opt out of it and work for less. The minimum wage would still be there for young people, but it would be functionally irrelevant – that’s the point.
This is a debate we need to have but every time it is brought up we just get hysterical mudslinging. It’s as disappointing as it is pathetic. Does having a concern about youth unemployment really make you “barbaric”?