Polly Toynbee: Welfare dependency isn't Britain's gravest economic problem. Pitiful pay is
....On Monday, this year's new living wage rate will be set, currently £8.55 an hour in London, £7.45 elsewhere. It's calculated annually by the Joseph Rowntree Foundation's minimum standard, a sum set by what public opinion says is the least people need for a socially acceptable standard of living. A man should have a pair of shoes and a pair of trainers. A child should have four outings a year to a zoo, farm or Christmas panto. Parents should be able to afford a £50 birthday present for a child, plus £50 for a party. That's luxury for those surviving on less, with the minimum wage at just £6.31. There are five million full-timers earning less than £13,350.....
....What could be done? The Treasury would save £3.5bn if the living wage became the minimum wage in the private sector, by receiving more in tax and paying less in tax credit subsidies. Even paying the living wage in the public sector saves £2.2m, according to the Resolution Foundation. What better way to cut the benefit bill?....
Polly Toynbee points out that the Treasury spends billions subsidising workers paid less than a living wage. A similar situation existed in southern England after the Napoleonic wars, when agricultural workers received extra money from poor rates to supplement inadequate wages. When the burden of rates was deemed too onerous, the system was replaced by the New Poor Law. Instead of subsidy, the poor were threatened with incarceration in the workhouse, where conditions were meant to be worse than for those living outside. This least-eligibility principle is echoed by Iain Duncan Smith's mantra that the universal credit should ensure that benefits are always less than wages. Should we be worried that, rather than consider laws to enforce the living wage, IDS will reinvent the workhouse?