The problem with the IDS get-Britain-back to work campaign is going to be the internationally uncompetitive high level of the minimum wage. ‘
If tax is removed for lower paid workers, people on GBP 3.50 an hour could take home GBP 140 a week, and be able to find starter jobs and contribute to their household. This indeed is the ratefor 18 year olds who’ve completed their education. But the rate gets jacked up to the full amount by age 21.
Britain has a minimum wage 20% higher than the USA, when our national productivity is 30% lower. There should be a far lower national minimum wage in any case, as wage rates in some areas need to be lower as businesses are less profitable in slower parts of the economy and cannot afford the same levels as, for example, the south east. The higher wages and benefits have enabled supermarkets to set higher prices nationally, and suck money from the social security system, when retail prices could be set far lower.
They imagined they were redistributing wealth. In fact they’ve simply redistributed inflation and unemployment by interfering in the marketplace,.