Britain Must Compete. Regulate To Win

The IMF meeting reports show that the US wants China to allow the renmimbi to revalue.  China while agreeing to incremental changes which will happen over many years, is not willing to allow a faster revaluation, which would take pressure off the USA, Europe and Japan.

There is another solution.  And that is that wages in these countries have to fall to a level which makes them competitive.  If commodities are allowed to fall in price, and goods come in from around the world cheaper and cheaper, it is not unreasonable to look at reducing wages as a way to bring the world’s economy back into balance.

If China would revalue, it would not be necessary.  But as she won’t, the rich countries have got to find a way round the problem.

If taxes on low pay were removed across the board so that someone earning GBP 7000 ($10,000) a year paid not a penny of Income Tax or National Insurance, and if that became the effective tax-free minimum wage, this would enable the western countries to start getting back to work, in a world where pay in many countries is nearer 15-20% of that level.

Through the use of technology, and without shipping costs and inventory costs involved in importing, high quality lower volume manufacturing could start to make a comeback, and the millions of unemployed, already idle, could find jobs, let alone the numbers that will be thrown out by a double dip recession.

It is pointless trying to force employers to pay a minimum wage of nearly double this level as is happening in Britain right now.  Simply put, pay must near-halve while our economy rebuilds itself.  Lawyers must be dragged out of the workplace, and taxes raised at higher pay levels, and, until we are back at full employment, that’s got to be the way to go.

How else can the world find a balance?

The Tap Blog is a collective of like-minded researchers and writers who’ve joined forces to distribute information and voice opinions avoided by the world’s media.

4 Responses to “Britain Must Compete. Regulate To Win”

  1. Anonymous says:

    I can see your point in what you say, but in a previous reply I made I made the point about the cost of living for people on low wages.
    You say put up taxes for higher earners , again I agree (and that would be as someone that would be paying higher rate tax).
    But we both know there are many well off people who avoid paying their fair share, because they can afford to live abroad, or accounts to do their magic like Barclays offered a few years back, that would have to be addressed.

    You would also need to address the wage structure of those in the higher paid jobs, on the basis that every part of the engine is as important to the next ie instead of giving bonuses to ministers, quangos et al give the bonuses to the low paid, they will spend it in this country more likely than a big bonus going on a house in france or a new bmw.

    But most importantly the wage of £7k a year will not allow someone to live even a simple life if the housing costs remain what they are.

    So i would encourage a the stopping of speculation in property, so no more people buying up lots of houses or plots of land to squeeze houses onto with the token amount of social housing.

    Everyone would benefit from lower housing costs as they would have more to spend on goods and services in this country as opposed to going to the small in relative size of landlords.

    Gone would be the days of even people moving to this country and building up property empires to live off which in my opinion is immoral anyway. I encourage the vision of working hard and reaping the rewards but property portfolios require no effort in a rising population where the housing stock has been purposely kept low.

    It will mean hurt for the property owners but if this is a true capitalist system then they have had the good times,they need to accept the down side too as it does not compare to the downside the majority of the normal and low waged people face and will contribute to through their labour

  2. Tapestry says:

    Property prices are falling in Britain and could well keep falling for a while.

    I am only advocating a different minimum wage, not a universal wage. The idea is to create employment. Once full employment returns wages will get bid up anyway, and profit sharing schemes could boost earnings.

    Setting a high minimum wage is suicidal in a deflationary recession.

  3. Twig says:

    Some people criticize landlords, and say it’s a easy way to make money.

    Give it a try.

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