Charles Moore Charles Moore

The Spectator’s Notes | 8 November 2012

President Obama’s victory is the first major victory for incumbency in the West since the credit crunch began. It was to help achieve such a victory that the eurozone leaders listened to Mr Obama and Tim Geithner and postponed their own day of reckoning. All excellent news for the status quo, but possibly not for the rest of us.

This is Living Wage Week, according to someone or other. The Living Wage is a brilliant propaganda idea. It probably owes its intellectual origins to Pope Leo XIII, who argued that ‘wages ought not to be insufficient to support a frugal and well-behaved wage-earner’. Now it is not just a principle but a specified amount, reported utterly uncritically by the BBC. The ‘right’ wage has just been increased to £8.55 per hour in London and £7.45 everywhere else. Shamelessly, Boris Johnson backs it. Ed Miliband wants public procurement contracts to go only to Living Wage employers. All Downing Street can say to oppose it is that this might run counter to EU rules. We already have a minimum wage, which is currently set at £6.19 per hour. So any employer offering more than the minimum wage and less than the new, invented ‘Living’ sum can be accused of inhumanity. If the Living Wage is really morally right, the minimum wage is clearly wrong. In fact, both are wrong. They discriminate in favour of big employers, who can better afford them, helping them squeeze out new entrants (which they love doing) and making them seem virtuous as they do so. They destroy or prevent jobs, particularly for young people, particularly at this time of low growth. It is disreputable to apply the same rate to all. Young people with no family responsibilities need far less than young parents, for example. They can afford to earn little — or even nothing — in the short term if by doing so they advance their employability.

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