…one man's contribution to the Weeeeerly Wild World
Ensuring that no job can pay less than a certain amount, by law, seems like a good thing on the face of it. Otherwise unscrupulous employers would get away with paying their staff less, less than those people can manage to live on. Then below a certain amount, unless you work more hours than is healthy, you’d be better off on Job Seeker’s Allowance (which again is an amount that is determined as a minimum required to live on here in the UK) until you find something better.
The problem is, when the government stipulates a rise or a switch from a ‘minimum wage’ up to a higher ‘living wage’ (which is encouraged), the wage level becomes artificial, rather than dictated by what the market can perhaps manage.
What a lot people seem to think is that a rise in wages means they will be magically better off. This is a misconception, for if staff have to be paid more, that extra money has to come from somewhere.
It’s a similar issue to that which comes about when interest rates are below inflation; to save money and earn interest on that money means you are actually worse off, because overall the cost of things has increased at a greater rate during the time you have been sitting on your money.
Therefore, by enforcing an artificial, higher wage, we are no better off – the “cost of living” will increase and/or we will have to work harder or be made redundant. With less people in work there will be less buying, and then there is the knock-on effect of this.
The current system works by the amount of money flowing round it – I wrote early this year about money being a pyramid scheme [link] and they generally fail.
My personal circumstance is that I’m self-employed. I use the minimum/living wage as a benchmark for which to aim for, in order to be fair on myself relative to everyone else (since I’m part of the same system). Typically I earn less than minimum wage based on a 30-hour (full-time working) week, but I’m comfortable and have no children to feed; I have developed a way of living that is simple compared to many (yet comfortable to me), and I think this is the key (although I recognise that the current system would fail if everyone lived like me!);
It’s not about earning more, for which the mindset is then believe you have more to spend, but to live on less – cutting out a lot of the “stuff” you don’t “need”.
More money doesn’t = more happy.
I acknowledge that many people in this so-called developed world struggle, and fail, to make ends meet each week, people who do indeed live off a bare minimum, and a minimum/living wage should be in place to assist those people; and perhaps wages should drop for the highest earners to assist in meeting this requirement (although not every company/business has staff on a high enough wage to do this). I suppose it’s about making wages more fair; by reducing the gap between low and high earners – and how many people could be paid a minimum/living wage by the millionaires and billionaires of this world, even if there is nothing for them to do?