Whenever anything goes wrong in our country, the first call for the left is to argue the government is the solution – without asking if the government is the problem in the first place. It is important to ask in times of rocketing inflation, energy prices and the cost of necessities if the government is responsible. It is clear that if the government produced these problems, then why is more government the solution? It is also obvious that a business owner understands their business the most and knows how much they can pay their workers whilst maintaining a profit. Bureaucrats cannot understand how best to run a small business and how best to pay their workers.
The solution to inflation, higher bills and the cost of basic living is for a free-market approach that recognises the real cause of problems. Therefore, a £15 minimum wage is not the solution to any problem we face. It is easy to understand why the well-meaning Trade Union Congress is arguing for such a spike in the minimum wage, but this increase will cause more harm than good. Socialist policies that set out to help the poor and unskilled often have the opposite effect – and the demand for a £15 minimum wage is no exception. Such a high minimum wage could lead to higher unemployment amongst the young, the poor and ethnic minorities – groups that already have high levels of unemployment. Minimum wage laws discriminate against those who have lower skills, as many small businesses are not in stable financial positions to be charitable to the unskilled and pay them higher salaries. This is why the £15 minimum wage will hit the young hardest.
Additionally, when there is a government-mandated increase in the minimum wage, somebody has to pay for it and given how everyone is impacted by inflation, why is increasing taxation to pay people’s salaries a sensible solution? The best way to bring down inflation and ensure people’s pay goes further is to reduce the tax burden and reduce state spending.
The fact that it is the Trade Union Congress demanding this unreasonable demand in increasing the minimum wage is a clear signal of what the intention is. The real purpose of a high minimum wage is to reduce competition, add more burdens to small businesses, and disrupt the free market. A minimum wage is the same as tariffs on imported goods; they are designed to ensure that outside produce does not have an upper hand.
Trade Unions want the higher minimum wage to benefit their members, and negatively impact those who are not members. Therefore, the Unions want a higher minimum wage to keep themselves prominent and ensure membership remains up.
Finally, the sharp rise in the minimum wage to £15 will create the precedent to increase it further. We can expect to see a demand for a £20 minimum wage if inflation rises further. This will most probably be the case, as a rise in the minimum wage will lead to more inflation.
Overall, the well-meaning activists calling for a £15 minimum wage are forgetting that their pro-worker and attempts to support workers on the problems of the rising cost of living are going to cause more damage to people who need the help the most. A £15 minimum wage will lead to higher inflation, which will lead in turn to a demand for a higher minimum wage. It will negatively impact the young, poor, and ethnic minorities significantly, and will lead to discrimination against those in these groups who have the lowest skills.