The PM may have given minimum wage earners a cash boost but Adam Lent argues only bringing the low paid into the heart of power will make a long-term difference.
My most terrifying duty as Head of Economics at the TUC was to lead the annual trade union delegation to the Low Pay Commission (LPC). My job was to persuade the nine members of the LPC to recommend to the Government that it raise the minimum wage by the highest amount possible. Imagine a hostile Select Committee interrogation combined with the toughest job interview ever and you get an idea of how the sessions went.
The target of our efforts were the two academics on the commission. Because the business representatives always went for the lowest rise possible and the trade union side always went for the highest, the swing votes rested with the two independent professional economists. In effect, the material wellbeing of three million of the country’s poorest citizens was in the hands of just two university professors. It struck me as a horribly patrician way of making such an important decision.
The way the Prime Minister has today – like all former PMs – sought to make political capital out of accepting the annual rise recommended by the LPC only adds to that sense of a political and economic system built around an utterly demeaning and destructive imbalance of power. Why on earth should a very wealthy, old Etonian get to decide the incomes of three million of the country’s poorest people with merely the stroke of a pen? The whole thing has the feel of a corpulent feudal Lord feeling terribly self-satisfied at his own saintliness having deigned to give his starving peasants a half day off over Christmas.
The truth is the low paid don’t just need extra money, they need a voice. Their economic marginalisation is a function of their long-term political marginalisation. They need to be heard on the full range of issues that keeps them poor and powerless. That includes far more than whether their wages rise by a few percent now and then. They should have a voice in reshaping a welfare system that punishes rather than supports, a wider public sector that is patronising rather than empowering and labour market regulation that leaves them at the mercy of unscrupulous employers. But it certainly also includes a host of other things that I and all the other policy wonks and commentators haven’t got a clue about.
To be clear this is not about getting a new party in power that is more sympathetic to the low paid. The Labour Party, in its own way, reproduces the patronising mindset of our system having long believed that all that is needed is for them to get the keys to No.10 and then wave a magic policy wand to make things better for the worst off. It is an approach that still leaves the low paid voiceless and marginalised. The feudal Lord may possibly be more benevolent but the system is still feudal.
If either main party was really serious about ending the scourge of low pay, they should start by bringing the low paid into the heart of power. Maybe a low pay commission that includes the low paid themselves. Or a citizens assembly with policy-making power focused on ending in-work poverty. How about ninety permanent seats in the House of Lords for minimum wage earners? After all, we provide ninety seats to some of the country’s wealthiest in the form of the hereditary peers.
Whatever the mechanism, the point is we need a system that hears the voiceless and powerless if we are to change the welfare of the poorest for good. That requires much more than the odd benevolent decision. It means fundamental reform of the way we make decisions themselves.