This post was first published by The Croydon Citizen on 21/06/2018.
Being priced out of the Croydon job market
Many of us are used to buying and selling goods on eBay and similar sites. You will have bid, suggested or offered a price, you will have agreed on the price. As the buyer, would you have wanted the council to come in and tell you that price is wrong and you have to pay more? As the seller would you want the council to have increased the price and have maybe lost you the sale?
As part of his acceptance speech at the local election count last month, Tony Newman suggested within the council’s powers, they do just that. The new council wants to create “a living wage borough, not just a living wage council”. This follows on from the council already paying the living wage for their own staff and expecting it of its contractors. The living wage is voluntary minimum-hour levels of pay for those eighteen and older set by the Living Wage Foundation. In London, the rate is £10.20 per hour and in the rest of the UK, it is £8.75 per hour.
The council has already ensured jobs at the new Westfield shopping centre will be paid at the London living wage. On the face of it, what’s wrong with paying people more, and who doesn’t want more pay?
The problem comes when some outside force, in this case, the council, decided the best rate of pay for an employer to pay. If an employer can only make £10 an hour of value from someone but has to pay above this, they simply won’t employ them. We know if governments increase the price of something it sells less, and we get less of it in the market. Tax on cigarettes has been part of the reason for the collapse in the number of people smoking. The Scottish government has recently introduced minimum alcohol pricing to help stop problem drinking. It follows that increasing the price of work will lead to less work.
What jobs are there going to be less of? It’s quite common for well-educated, middle-class children to use a period of unpaid internship as a means of getting into a profession. This is fine if you can afford periods of unemployment, and are suited to the types of roles offering internships. If, however, you want to earn some money but don’t have the skills to generate value above the living wage, then the rungs of opportunity have been removed from your ladder. These aren’t jobs or wages that will sustain families but are jobs that give you the opportunity to build and grow your skills.
Rational people will take jobs that earn them the most money consummate to their skills and desire to select specific types of role. Increasing your skills and taking risks improves your work opportunities. If for whatever reason, you leave education with relatively few qualifications, you will likely need what the Americans call ‘burger flipping’ jobs, to build up your experience to a point where you can command ten, twenty, or more pounds an hour. The council is interfering in the rational choice and freedom of someone to earn the most they can. Westfield could provide many lower-skilled jobs ideally suited to the young. These could be part or full-time jobs, for people who don’t have the skills yet, to gain a better wage. Either as a part-time job when still in education, or our first full-time job, we were all once in this position. The council shouldn’t be in the business of pricing the young and lowly skilled out of work and opportunities.