The increase to the minimum wage should be welcomed, but the fight against inequality is being lost
Yes it is not really a Living Wage and it is not as progressive as it seems but we should still celebrate the increase in the minimum wage today. Thousands will see their wages jump up - from living on the edge their worries to something at least slightly easier. Fitting also that it comes at a time that many in the USA are celebrating commitments to $15 wages. For the many activists and trade unions who have been and continue to fight for decent wages this is some vindication, and a sign that we're winning the battle.
I want to use this moment to reflect on the war for greater economic equality. A war that an increase in the minimum wage will do little to advance. The introduction of the minimum wage in 1998 did reduce inequality between those at the bottom and those in the middle of the income spectrum. But it did nothing to halt the growing difference between the 99% and the 1%. And it is only when we look at how incomes and assets for the top 1% are still growing exponentially that it is clear that the war for equality is being lost.
- The top 1% have accumulated as much wealth as the poorest 55% of the population.
- A typical FTSE 100 boss is likely to have seen a bonus increase of nearly 50% of salary since 2015, while the annual pay of the average UK worker has increased by just £445.
- The UK has more than three times as many high-earning bankers as the rest of the EU combined.
Some may say that as long as the poor are getting paid more it doesn't matter what the rich get paid. Or as Peter Mandleson famously put it, "we should be intensely relaxed about people getting filthy rich." But he recanted his position several years ago, recognising that inequality is bad for society and the economy. Higher minimum wages help the poorest, but are likely to do nothing to stop the filthy rich inflate house prices, lobby against more regulation on the finance sector and undermine our ability to grow the economy.
In any case, as the wage share has fallen from 63% to 53.5% between 1975 and 2008, we must be careful not to take our eye off the real prize - better distribution of profits.
So yes let's celebrate today, but let's save the best bottle of wine for the day we see wage ratios in common use. A time when bosses won't be able to get paid 183 times more than the average worker - rather wages and profits are shared to reflect the team work required to make businesses and society function at its best.