What should Labour’s wage policy be?
A three-point-plan to tackle wage inequality.
This week, Labour seemed to begin Corbyn’s ‘populist re-launch’. As a Corbynista, this is pretty welcome to me, although I think the basis of it is to do with Labour’s media strategy rather than any policy content. Ultimately, no matter what Corbyn does, he won’t go down well in the media.
I’m not a conspiracy theorist, just a realist (with a journalism degree though, so I feel makes me slightly qualified). Anyone with a real left-wing agenda doesn’t go down well, even in The Guardian or the New Statesman. Corbyn wants to challenge the status quo — and due to the slightly depressing fact that most people who work for any newspaper are from a more privileged background than most, and the very well-accepted fact that most media ownership is compromised of people with many vested interests — it stands to reason that they’re not going to endorse someone who threatens the very nature of their business. Which he does. Anyone as left-wing as Corbyn challenges capitalism which challenges their business model.
But I’ll try not digress into socialist ranting (it happens). The re-launch seems to be more aimed at trying to cope with promoting his policies with a media that would still rather focus on behind-the-scenes party games that threaten his leadership. Reporting on him will remain biased for some time and it doesn’t seem Corbyn’s team are eager to please journalists anyway. And why would they? Miliband’s team tried to appease journalists and it still got them nowhere.
So I think the policy this week announced on high pay would have got a bad rap no matter which way it was presented. However, I do think they could have improved the messaging and they can do it without having to pander to the press or pretend they love The Sun.
I like to be constructive, so here’s how I would have improved it: rather than a couple of speeches that will never be heard by the general public (and frankly, are just there for journalists to clip sound bites out of as they like), he should have set out a media-friendly, social-media-savvy, three-point plan to tackle wage inequalities.
This three point plan should:
1. Tackle wage disparity.
So yes, this does include maximum incomes. I understand why Labour highlighted maximum pay in particular, because it taps into the inherent unfairness that people feel when they’re on minimum wage and someone else in their company, who works the same 40 hours a week they do, earns a few million a year.
But if you want to make it sound palatable and really demonstrate the ‘fairness’ aspect, this should be done in the form of pay ratios. It tackles the problem of it looking like Labour is ‘interfering in business’ (despite voters like me really wishing governments would interfere in shoddy business practice more) and means that companies could decide their own pay ratio.
This is already a Green Party policy, which they admirably include in their own job descriptions. It functions whereby a ratio demonstrates that, for example, the highest paid member of staff in an organisation is only allowed to earn a maximum of 10 times the amount that the lowest paid member of staff does. This means that if the CEO wants a pay rise, the lowest rung of staff also gets a pay rise. Thus equaling a pay ratio of 10:1. Perhaps companies who have a lower pay ratio could qualify for more corporation tax relief, as an incentive to implement it quickly.
Seems fair, no?
2. Universal Basic Income.
This is something I’ve written about before and, intriguingly, is gaining traction by being piloted in Scottish councils and is being trialled in other countries too (like Finland). Apart from ensuring that no one has to go hungry, it would also side step all these awkward and ridiculous set of conditions that people need to fill in order to be entitled to benefits/Universal Credit (the name speaks for itself; it should be universal!)
By ensuring that no one had to ‘prove’ they were poor enough for tax credits, disabled enough for independence payments, or working hard enough to find a job for Jobseeker’s Allowance, we could get rid of all of that bureaucracy and give everyone a basic allowance where no one had to commit suicide because everything seems so bleak. It would likely even pay for itself in terms of NHS costs and homeless costs.
Seems like common sense, right? [Worth noting that this is already a policy John McDonnell would like to commit to, he just needs to convince the rest of the party…]
3. Living Wage, tied to a proper measurement.
Finally, Labour need to shout loud and proud about their pre-existing living wage policy. Especially considering the Tories have tried to re-brand it as their own policy.
Living Wage, done properly, is re-calculated every year according to the price of goods and services. This should already be our minimum wage policy. The ‘fake living wage’, as I tend to term it, is based on a target of reaching 60% of median earnings by 2020 (again, those convenient eve-of-election timings…)
This does not look at how much it costs the lowest paid people — well, those over 25, let’s not overlook that particular inequality — to eat, afford rent or pay bills. The real minimum wage (for those under 25), is calculated from recommendations by the Low Pay Commission and negotiated with businesses and trade unions. Not exactly fair. This needs to change; even responsible businesses agree that employees are better workers when they’re paid properly.
Seems like something everyone can get on board with, yeah?
So whilst I agree with Corbyn that no one should be able to earn insane amounts whilst the minimum wage keeps people in extreme poverty (in a wealthy country, no less), I’d like it to be fleshed out into a real, 21st century wage policy that deals with the problems every single person in the UK has to deal with every day.
These three policies would radically change the way our economy works and the way people are paid. Some wouldn’t like it, but those earning the highest salaries that would be negatively affected likely wouldn’t vote for Corbyn anyway. Those champagne socialists (and I use the term affectionately) that responsibly pay their tax would be delighted to see him deal with the real issues.
So preach to the low-paid choir Corbyn; only half of them are currently listening…