Yesterday, the owner and proprietor
of Reform 2025 Ltd revealed
that he thinks the national minimum wage is too high for younger people and
should be cut. He has also previously talked
about cutting benefits. With their shared determination to reduce the income
and spending power of those on the lowest income in society, in purely economic
terms Reform, Labour and the Tories are increasingly looking like peas in a pod.
There is another thing they all share as well – a belief that the answer to everything
is economic growth. How they reconcile that desire with the desire to reduce
the purchasing power of millions of people is one of life’s great mysteries.
Because here’s the thing – if you want consumption-led growth, people have to
be able to consume, and that means having the wherewithal to buy goods and
services.
Instead, they share a strange belief
that enabling employers to reduce wage costs and freeing them from regulatory
concerns will enable them to cut prices, thus making their goods and services more
affordable. They simply don’t understand that making the lives of more people
more precarious is a restraint on growth. They also seem to be blind to the
experience that shows that employers reducing costs are more likely to simply
declare larger profits than to cut prices.
It goes to the heart of one of
the big contradictions of capitalism itself. Whilst individual capitalists want
to keep their labour costs as low as possible to maximise their own profits,
they also need other employers to keep wages as high as possible so that people
can buy those things from which the cost-cutting capitalists wish to extract their
profit. The idea, which seems to be deeply imprinted into the capitalist brain,
that workers and consumers are two entirely separate groups and that
impoverishing one of those groups has no impact on the other is sheer madness.
It’s also what drives UK economic policy.
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