More than a minimum?

The minimum wage has fallen back to the level it was at in 2004 – what are the prospects for a futur

Once in a while a policy moves from being partisan and divisive to representing the mainstream consensus in a very short period of time. That is, or at least was, the case with the national minimum wage (NMW). It wasn’t so long ago it was denigrated by much of the business community and the then Conservative opposition - but only a few years later it acquired a very different status as a statement of the bleeding obvious. The result, according to a timely new report by Professor Alan Manning, is that it has ‘settled down into a premature staid middle age’ following a noisy infancy without ever having passed through a teenage rebellion.  

Yet for all its fast won respectability – it was recently voted most successful policy of the last 30 years by a group of experts convened by the Institute for Government – there has, over the last year or so, been growing chatter about the potential damage of the NMW culminating in the recent decision to freeze the youth rate. Hard evidence of it having a negative effect on employment is, however, hard to come by. Recently the IFS produced a major study of the impact of the NMW on youth employment and educational prospects, concluding that there is little evidence that it has hindered job prospects. Now Professor Manning provides something of a cold shower for those getting het up about the alleged burden of the NMW, showing that in real terms (adjusting for inflation) it’s now at lower level than it was in 2004.  

Looking closely across different regions in the UK he finds no evidence that the NMW has cost jobs, contrary to the dire predictions of the late 1990s. And this was achieved at the same time as there were – early on at least – major gains for low earners. Its history to date has been strong growth at the start of the millennium, followed by slower increases, then stagnation, and finally real terms falls over recent years.

The difference the policy has made in the distribution of rewards over the last decade or so can be seen in the significant shifts in the nature of wage inequality.  As the chart below shows, the gap between the very lowest paid (ie those on or around the NMW) and the middle fell considerably (in marked contrast to the gap between the top and the middle). In addition, the gap between those on low - but not the lowest - pay and the middle also fell, as increases in the wage floor trickled upwards in the workplace (as differentials were partially protected). And we can also trace its impact in the finding that since the late 1990s the steadily falling share of GDP going to the bottom half of wage earners has flattened out.

Changing shape of wage inequality in Britain
(Hourly wage ratios, 1975-2010)

The question, then, is what next for the minimum wage given the highly uncertain economic times?

At the moment the public debate on low pay is dominated by the credible caution of the statutory approach taken by the Low Pay Commission on the one hand, and the spirited insurgency of the grass roots (and voluntarist) living wage campaign on the other. Both have considerable merits. But the result is that there is relatively little fresh thinking about the wider policy framework on low pay, including the minimum wage, and whether the current one - conceived of in the late 1990s – is still fit for the very different challenges we now face.
   
Since the NMW’s inception in 1999 the ground has shifted in many ways – the rise and recent demise of tax credits being an obvious case in point. There has always been a crucial interaction between them: a NMW is supposed to provide a strong wage floor; tax credits top up household incomes to support those with children who will be unable to get by on a minimum wage which, on its own, will never be high enough to ensure a decent family life. Both need to be thought of in tandem.

Looking back it’s possible that the still chunky increases in tax credits in the mid 2000s outpaced the more incremental rises in the minimum wage. Today we face severe cuts to tax credits twinned with a falling minimum wage (in real terms). And looking forward prolonged fiscal austerity means that we may need the minimum wage to do some of the lifting that might have otherwise been undertaken via tax credits (a LPC study back in 2007 showed that a 10% increase in the minimum wage would generate gains to the exchequer of between £560 and £680 million per year via increased tax revenues and reduced spending on tax credits).

More generally, given the underlying weakness of the labour market, there is of course a risk that a significant hike in the NMW could cost jobs – though there is little solid evidence as to where exactly this pinch point lies (currently the minimum wage in the UK is around the international average when measured as a percentage of the median wage, and there is an absence of hard data confirming that those countries with a higher wage floor have paid a price in employment).

It’s against this backdrop that Professor Manning considers several ideas for how minimum wage policy could be developed over the medium term in order to secure rises where possible without running a high risk of increased unemployment. These include a ‘premium rate’ for specific groups or localities where the data suggests these could be sustained: for instance, the over 30s or those in London. Intriguingly he also considers whether the authority of the LPC could be used to influence pay bargaining more generally – producing evidence to demonstrate whether sectors could absorb wage rates above the NMW without there being a negative impact on jobs.  

It’s not hard to come up with practical objections, some of them potentially fatal, to at least some of these ideas. Given the strong track record of the LPC in governing the NMW it is, of course, wise to tread carefully. And yet.  In a world of scarce public money, plummeting tax credits, stagnating wages and relatively flush corporate balance sheets it must be right to ask challenging questions, informed by evidence, about how to lift low pay.

Given the fiscal outlook it’s even more likely that we will need the minimum wage to play a substantial role in lifting living standards over the medium to long term. And one way or another that is likely to mean unsettling some of the established wisdom about how it should work. Perhaps it’s time for a rebellious middle age.

 

Gavin Kelly is chief executive of the Resolution Foundation 

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No, Jeremy Corbyn is not antisemitic – but the left should be wary of who he calls friends

The Labour MP's tendency to seek out unsavoury comrades is a symptom of an intellectual and political malady: the long-term ideological corruption of that part of the left in which he was formed.

“The scientist is not a person who gives the right answers,” said the French anthropologist Claude Levi-Strauss. “He’s one who asks the right questions.”

The British novelist Howard Jacobson is not a scientist, but he has asked the right question about the rise of Jeremy Corbyn, the improbable-but-likely next leader of the Labour party. Here it is:  “Why can’t we oppose the inequities of a society weighted in favour of wealth, and all the trash that wealth accumulates, without at the same time having to snuggle up to Putin, pal out with Hamas, and make apologies for extremists?”

One answer to the Jacobson Question has been offered by Yasmin Alibhai Brown, a defender of Corbyn. His “tendency for unchecked inclusiveness”, as she delicately puts it, is due to his “naivety”. But that explanation will not do. We won’t find the answer in one man’s naivety, especially not a 67-year-old with a lifetime of political experience behind him.

We must go deeper, reading Corbyn’s undoubted tendency to snuggle, to pal out and to apologise as a symptom of an intellectual and political malady: the long-term ideological corruption of that part of the left in which he was formed.

This corrupting ideology can be called “campism”. It has caused parts of the left to abandon  universal progressive values rooted in the Enlightenment and sign up instead as foot soldiers in what they see as the great contest between – these terms change over time, as we will see – “Progressive” versus “Reactionary” nations, “Imperialism” versus “Anti-Imperialism”,  “Oppressed” versus “Oppressor” peoples, “The Empire” versus “The Resistance”, or simply “Power” versus “The Other”.

Again and again, the curse of campism has dragged the political left down from the position of intellectual leader and agenda-setter to that of political irrelevance, or worse, an apologist for tyranny. 

Only when we register the grip of this ideology will we understand why some leftwingers march around London waving placards declaring “We are all Hezbollah now!”. Only the power of the ideology accounts for the YouGov poll that showed 51 per cent of Jeremy Corbyn’s supporters believe America is the “greatest single threat to world peace”, and one in four think a “secretive elite” controls the globe.

The intellectual history of campism has three chapters.  

In the short 20th century, it took the form of Stalinism, a social system that was at once anti-capitalist and totalitarian, and that spread a set of corrupting mental habits that utterly disorientated the left.

Clinging to the dogma that it must have been some kind of socialism that had replaced capitalism, many imagined themselves to be involved in a “great contest” between the capitalist camp and the (imperfect) socialist camp. And that ruined them. They became critical supporters of totalitarianism – notwithstanding their knowledge of the show trials, mass killings, gulags, political famines, and military aggressions; notwithstanding the fact that they themselves were not totalitarians.

The result was the slow erasure of those habits of mind, sensibilities and values of an older leftwing culture rooted in the Enlightenment. In its place the Stalinist-campist left posited lesser-evilism, political cynicism, power-worship, authoritarianism, and sophisticated apologias for tyranny.

In the Sixties and Seventies, the New Left created liberatory social movements that changed the face of the western world for the better. But the New Left was also a cheerleader or apologist for one third world authoritarian “progressive” regime after another, including Maoist China, a monstrous regime responsible for the deaths of tens of millions of “its own” people. Believing the world was divided into an imperialist “centre” exploiting a “periphery”, the New Left thought its duty was to support the latter against the former.

And when the baby boomers grew older and made their way into the universities and publishing houses, they formed the global creative class that has been reshaping every aspect of our intellectual culture ever since. Again, much of that reshaping has been a boon. Schooling us all in the anti-imperialism of idiots, and the romantic cult of the transformative power of revolutionary violence, has not.

After 1989, much of the left didn’t miss a beat. It quickly developed a theory that the world was now made up of a “Resistance” to “Empire”. Here was yet another reductive dualism. But this time there was barely any positive content at all, so campism took the shape of spectacularly inchoate and implacable negativism.

The result has been immense political disorientation, political cross-dressing, and moral debasement across swathes of the left. How else to explain the leftwing social theorist Judith Butler’s astonishing claim that, “understanding Hamas, Hezbollah as social movements that are progressive, that are on the left, that are part of a global left, is extremely important”?

When we understand how campism creates that kind of ideology-saturated and captive mind, we can better understand Corbyn’s choice of comrades and answer the Jacobson Question. 

The ideology demands two commitments. First, “Down With Us!” – the commitment to oppose the West as malign. Second, “Victory to the Resistance!” – the commitment to side with, or to apologise for, or to refuse to criticise, any “resistance” to the West.

The commitment to oppose every projection of force by the West as malign underpins Corbyn’s commitments to unilateral nuclear disarmament and withdrawal from Nato, his attitude to the IRA, and to Putin, and his false equating of the actions of Isis and the coalition in Iraq.

Corbyn will withdraw the UK from Nato because it is the military organisation of the West and therefore “imperialist”. He turns the world inside out and “blames the USA and Nato rather than Putin’s imperialistic Russia for the crisis in Ukraine,” notes Labour MP Mike Gapes.

I believe Corbyn would lead Britain into a warmer relationship with Putin’s Russia, and even thinks it was a bad thing that Poland was ever “allowed” to join Nato.

Astonishingly, given recent history, he also argues that Poland should have, “gone down the road Ukraine went down in 1990”. Corbyn opposes all military support to Ukraine and seems quite uninterested in the Ukrainian bid for freedom from Russian control. What matters much more to him is adherence to the campist ideology: “The self-satisfied pomposity of western leaders in lecturing the world about morality and international law has to be challenged,” he rails.

Campism also explains Corbyn’s comparison of the actions of Isis today and the actions of the coalition forces during the Iraq war. And those comments have a precedent of sorts. Corbyn was national chair of Stop the War during the Iraq war when the leadership circulated a statement that supported the “right” of the “resistance” to use “whatever means they find necessary”. At that point, the so-called resistance was targeting democrats, including the free trade union leader Hadi Saleh.

The second commitment of the campist left has been to side with, or apologise for, or refuse to sharply criticise, the so-called resistance camp. Without understanding this, Corbyn’s apologies for the Muslim cleric Raed Salah remain a mystery, his attitude to the IRA or the antisemitic Islamist terror groups Hamas and Hezbollah will seem harmless, even ahead-of-his-time diplomacy, and the idea that he indulges antisemitism will appear to be a “slur” by a “lobby”.

Corbyn has defended the antisemitic Raed Salah in these terms: “He represents his people extremely well and his is a voice that must be heard . . . I look forward to giving you tea on the terrace because you deserve it.”

In fact, Salah was found guilty of spreading the blood libel – the classic antisemitic slander that Jews use the blood of gentile children to make their bread – reportedly during a speech on February 2007 in the East Jerusalem neighbourhood of Wadi Joz.

Corbyn said he has no memory of meeting Dyab Abou Jahjah. Within minutes, Twitter was running photographs of Corbyn sitting next to Abou Jahjah – the Lebanese extremist who said, “I consider every death of an American, British or Dutch soldier as a victory” – at a public meeting.

Jahjah then boasted on Twitter of his “collaboration with Jeremy Corbyn” and insisted that Corbyn was “absolutely a political friend”. Again, it seems that Jahjah, being part of the “resistance camp”, according to the ideology, was simply beyond criticism.

It did not seem to matter that Jahjah reportedly referred to gay people as “Aids spreading fagots”, and was arrested in Antwerp for organising a riot. Or that he claimed to have published anti-Jewish cartoons showing Hitler and 15-year-old Anne Frank naked in bed with the caption: “Put that in your diary Anne”.

As the Community Security Trust commented: “I am sure that Corbyn would be the first to condemn Holocaust denial. The problem is not that Corbyn is an antisemite or a Holocaust denier – he is neither. The problem is that he seems to gravitate towards people who are, if they come with an anti-Israel sticker on them.”

Hezbollah comes with the mother of all anti-Israel stickers. That is why – although Corbyn knows that it is a radical Shia militant group that has subverted Lebanese democracy, actively supported Bashar al-Assad's brutality in Syria, and seeks the destruction of Israel – he nonetheless (and campism is a politics of “nonetheless”) tells the left that Hezbollah are our “friends”.

Hamas too. Corbyn also calls the Palestinian Islamist group his “friends” and argues that the organisation should not be called “terrorist”. Yet Corbyn knows that Amnesty International believes Hamas to be guilty of war crimes, torture, abductions, and summarily killing civilians. He knows that when five Jews praying in a synagogue were murdered, along with the heroic Druze policeman who came to their aid, in 2014, Hamas welcomed the attack, calling it a “quality development”. They even called it a “terror attack” – embracing the label Corbyn says they do not deserve.

The problem is not that Corbyn agrees with what all these people say. It is that he agrees with who they are: the Resistance to Empire. The apologies and the contortions and the evasions all begin there.

And then there are the Jews.

The concern here is not that Corbyn indulges in antisemitism. He does not. The concern is that he is has associated with others who have. The concern is that, when he is faced with what is called the “new antisemitism”, he is lost. At best, he is an innocent abroad who – oddly, in the age of “Google it!” – can’t seem to work out who is who, or what is what.

Writing for openDemocracy about Corbyn, Keith Kahn-Harris expresses scepticism about Corbyn’s explanation of his choice of comrades. “Although he has defended his contacts with Islamists, the IRA and others as a contribution to peace-making,” Kahn-Harris notes. “Corbyn does not have the deep relationships across the spectrum [or] the even-handedness that this would entail.”

What strikes Kahn-Harris most about Corbyn’s record is something else entirely: that he “is constantly predisposed to be at least convivial towards a broad swathe of those who see themselves as opposed to ‘the west’.”

He goes on: “Much of what appears to be [Corbyn’s] openness does indeed reflect engrained political pathologies.”

And that has been the claim of this essay, too: we have to look to those ingrained political pathologies – I have used the short-hand label “campism” to describe them – to answer the Jacobson Question.

Alan Johnson is the editor of Fathom: for a deeper understanding of Israel and the region and senior research fellow at the Britain Israel Communications and Research Centre (BICOM).