John Sentamu, the Archbishop of York, for whom I have a great deal of time, is backing a campaign to require employers to agree, voluntarily, to pay what is deemed to be the Living Wage, rather than the rather lower National Minimum Wage. The Living Wage is set at £7.65 an hour, or £8.80 in London; the minimum wage is £6.31.
None of these exactly represent a king’s ransom – or even a half-way decent salary in London at least. The phrase “working poverty” is used to describe people in employment but still on the breadline. I asked the chief executive of a company with an interest in the jobs market about this. He said any increase in the amount businesses had to pay their employees threatened their competitiveness and could derail the economic recovery. This is the standard line put out by the business lobby.
It doesn’t seem to address the question, though. Any company that pays its staff so little that they are required to take state benefits to bring themselves up to a decent standard of living, as we assess it, is being subsidised by the state, that is, by you or me out of our taxes. Their business model requires the employment of low cost staff whose wages are then topped up by the very people who are probably also their customers.
There are companies like this, in the hospitality or catering sectors, and elsewhere. As a business writer, this does not seem to me to be a sustainable model, nor one that exactly equates with the free market such firms generally claim to support. One suspects such employers are the first to complain when the state intervenes in business elsewhere.
There is a broader philosophical point here. The American writer Ursula Le Guin wrote a thought-provoking story four decades ago, “The Ones Who Walk Away From Omelas”. It is an allegory about a city of that name where life is perfect for everyone. This utopia has one flaw. It is predicated on the existence, deep in a basement below the city, of a child who is forced to live out its life in filth and abject misery.
On reaching adulthood, every citizen would be taken to see this child and told that any attempt to alleviate that misery would mean the perfect life enjoyed by everyone else would automatically disappear. Most accepted the bargain; a small minority each year would walk away from the city, to a more uncertain, less perfect future.
What Le Guin was doing, of course, was examining the philosophy of utilitarianism. This says that any society should attempt to achieve the greatest good for the greatest number. If this meant that a number of people led less than perfect lives, then this was an acceptable bargain. Most societies in history have operated on that basis. It is clear what Le Guin’s view was.
We live in Omelas. The strength of the London economy, and on the UK’s as a whole, is dependent on a large class of poorly paid labour, often immigrant, who put up with lives that would not be tolerated by most of the population.
These are the hidden people. You see them out of the corner of your eye, groups of shabbily-dressed men standing smoking at the street corner at dawn, waiting for the van. The cleaners who start work in the small hours, the care home staff working 16-hour days.
Should they be paid a wage sufficient to fund a decent lifestyle, or should the wages those jobs pay be forced to rise to a level where they might tempt the indigenous population and obviate the need for immigrant labour, we are told economic growth would sputter and cease. We accept the bargain. Few walk away from Omelas. But at least someone is asking the question.