The gap between the lowest paid workers in London and those elsewhere is shrinking. Something must be done, says Kitty Ussher, to widen it. That something, according to the former Labour Treasury minister, is to raise the minimum wage but only in London. Ussher proposes a separate minimum for London at £6.75, and argues that this is necessary to combat the market effects of higher unemployment in London on rates of pay, and prevent Londoners from suffering a penalty for their geographic lot.
But a key value is missing from the equation; what is the UK’s minimum wage worth? Does the national minimum meet the most basic needs of the average worker? The UK sits behind France, Ireland, Germany and Belgium in a simplistic currency-exchange comparison of wages, and well behind Australia and New Zealand. Ussher’s own political colleague Ed Milliband claims that Britain has become one of the worst places in the developed world for low paid workers. So does giving alone Londoners a lift address the issue of Britain’s dismal pay? Will it raise living standards in a meaningful, good value way?
No significant proportion of workers in Britain should struggle for the basics. The minimum wage is designed to protect those at risk of severe poverty and employer abuse. The London Living wage is calculated according to the basic cost of living, and is currently £9.15 an hour. It is set independently, updated annually and enjoys cross-party support in Westminster. The City of London is also a Living Wage Employer.
“We are very keen on trying to move towards a living wage, work should pay, that’s the key” – Iain Duncan Smith.
A separate capital minimum wage has never been necessary elsewhere in the world. Living in the capital or not should be a choice open to all, and all should have to weigh that choice with the higher cost of urban living. But while the UK traps workers in employment with no prospect of choice or savings to relocate this is not a policy option that is morally acceptable.
The UK needs to reassess its formula for the pricing of the minimum wage, and take a leaf from the US administration’s push to have it calculated according to the needs of people, not those at the peak of the market. In the mean time, city councils can take the initiative to set Local Authority minimum’s ahead of the national mandate, and watch the tide turn with them. The City of Manchester has already implemented rises to support the regeneration of the North’s industry.