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Has minimum wage produced a maximum headache?
IS it time to scrap the minimum wage?
It's a provocative question, asked by a politician who has proved that not all Tory backbenchers are lobby-fodder, or docile knights from the shires.
In liberal circles, the national minimum wage has come to be regarded, in the words of Sellar and Yeatman, the authors of 1066 and All That, as a "good thing". Questioning its right to exist is a form of heresy, rather like denying Papal supremacy in medieval times.
Since the days of the great 19th century social reformer, Benjamin Seebohm Rowntree, railing against "poverty pay" has been widely regarded as a sign of an active social conscience.
But Philip Davies, the maverick Tory MP for Shipley, is proud to be a voice of dissent, even if his views aren't shared by his party.
Far from creating opportunities for the most vulnerable members of society, the minimum wage has made it harder for people with criminal records or histories of mental health problems to find a job, says Mr Davies.
As the minimum wage is fixed at 5.73 per hour for anyone aged 22 and older, employers don't have the discretion to "take a chance" on somebody who has had problems holding down a job, argues Mr Davies.
Surely, employers should be allowed to pay less than the minimum wage to people who might have ominous gaps in their CV? They would be given a chance to prove themselves, even if, for a time at least, they earned less than their colleagues.
In support of his argument, Mr Davies cites the dramatic rise in the numbers of people who have been on incapacity benefit for five years or more. In 1997, this figure was 47,000, today it is more than 1.5m.
According to Mr Davies, the amount paid by an employer to an employee should be a private matter. It is no business of the Government.
Even those who support the minimum wage in principle should consider suspending it during the economic slump, says Mr Davies, adding: "Many workers have agreed to take a pay cut in order to avoid compulsory redundancies...Why shouldn't workers on the national minimum wage be given this option if the same scenario arises?"
Even employers who support the minimum wage want to see it frozen. The Association of Convenience Stores (ACS) claims that last year's increase in the minimum wage, combined with the recession, led to a reduction in the number of hours worked in around 41 per cent of UK stores. On top of this, 58 per cent of the 400 respondents to the ACS survey said they had cut the levels of investment in their business and staff due to the "unsustainable" staffing costs, which in part at least, were linked to paying the minimum wage. Mr Davies is worth listening to because, unlike many of his fellow MPs, his experience of work goes beyond the focus group and flip-chart. He worked at Asda before becoming an MP, which means he know what it's like to manage staff in the frenetic environment of modern retailing.
But is he right? Well, many bosses faced with crippling costs would welcome a more flexible approach to pay. But, if the minimum wage hadn't been imposed 10 years ago, would the long-term unemployed have found it easier to get a foothold into the world of work?
The honest answer is that it's impossible to say. It is certain that, if the rate of pay were a "private matter", many people would earn a lot less than 5.73 an hour.
There are many responsible employers who will train and motivate staff at the bottom rung of the career ladder. But there are also employers who, without the restraining influence of the minimum wage, would behave shamefully.
I can never forget the case of the man with learning difficulties who was paid just 29p an hour to work in a Leicester supermarket. This is not an injustice from the distant past.
The case came to tribunal in 2004, and, if his trade union, the KFAT, had not found out about it, his employer could have gone on exploiting him in the most cynical manner imaginable.
He was represented by lawyers from Leeds-based trade union law firm Morrish & Co, who unsurprisingly, don't share Mr Davies' beliefs.
Jamie Hanley, a partner at Morrish & Co, notes that, since the minimum wage was introduced, two million jobs have been created in the UK, and around a quarter of these have been in sectors tradition-ally associated with low paid work.
To me, it's not simply a matter of how much the lowest workers are paid, but how quickly they are allowed to advance.
It's pointless defending the principle of the minimum wage if you don't believe, like Mr Davies, that everybody should have the opportunity to rise as far as their abilities can take them.
Stamping out "poverty pay" is not enough. It's more important than ever that companies invest in mentoring and training, particularly for those workers who wouldn't be at the top of any headhunter's wish list. For these people, the path to promo-tion should not be blocked by prejudice and despair.
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Wednesday 23 May 2012
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