Compass is one of those wildly left wing non thinking tanks which would normally never attract our attention. However, I have to say that they’ve come up with a corking idea here. An absolute cracker:
Protect working people by index linking the minimum wage
Now I don’t think there should be a minimum wage at all so why am I supporting this? Why do I applaud their campaign to make this happen? Because it will lead to, over the years, the minimum wage becoming an irrelevance.
The truth is that, over time (no, not in every year, like this one, but over the decades) wages rise by more than inflation. It’s precisely and exactly this which makes each successive generation better off than the one that preceeds it. So if we link the minimum wage to rises in inflation only (the usual meaning of indexation) then it will become an ever smaller proportion of the average wage in the country. As an example of this, the state pension was linked to inflation, not earnings, in 1980. This has led, over the past near 30 years, to it falling from 23 % of average earnings to 15% of average earnings.
So, given that, despite my wishes, no one is going to abolish the minimum wage the next best thing is for it to whither away, falling behind average earnings until it is entirely an irrelevance. So I therefore entirely support this idea from Compass, for all that I think that everything else they come up with is ludicrous.
The only fly I can see in this ointment is that I rather suspect the proposers of this plan to be either too dim or too ill informed to understand what it is that they are proposing. But we’ll not tell them, eh? Just keep it as our little secret?