The case for increasing wages to cut the welfare bill

Learning from Joseph and the Chocolate Factory.

Writing in today’s Times Philip Collins produces a powerful and eloquent article arguing that we should cut the welfare bill by increasing wages. What’s more, he argues for a more moral form of capitalism to underpin it.

So what’s brought this on? Well, today JRF published our annual Minimum Income Standards report. This research asks members of the public what are the goods and services every household needs to be able to afford in order to achieve a minimum acceptable standard of living in the UK. As Collins notes:

Whether or not you agree that a few pence a week for Blu-tack is necessary, most of the costlier items are hard to dispute and they come to quite a price.

And our research shows the cost of that decent standard of living is rising fast – up 25 per cent over the last five years, higher than the official rate of inflation, which was 17 per cent for the same period. This means people today need much higher earnings just to afford the same standard of living they had five years ago. As Collins argues:

The gap between the minimally decent life and reality is growing. People on low incomes are subject to a higher rate of inflation than those who are a little richer … The gap between the life that people think others should be able to afford, in a rich and lucky country, and the life that most people lead is huge.

So what would it take for people to afford a better standard of living? The research costs the basket of goods and services people say they need for a decent standard of living, and works out what that means for how much you need to earn, once tax and benefits have been factored in. The resulting hourly wage rates are substantially higher than the national minimum wage (which is currently £6.19 per hour). A single person would need to earn £8.16 an hour while a couple with two children would need to earn at least £9.91 an hour each. 

Collins argues employers have responded to this challenge before and they should do so again, learning from historical figures like Joseph Rowntree:

When he opened his chocolate factory in York in 1869, Rowntree established good pay, housing benefits and the first occupational pension scheme for his workers...

He understood that the corporation was and is a public entity, underpinned and given a license to operate by the laws of limited liability. He felt, as all the pioneers of the American joint stock company did too, that his private accumulation came with a public obligation, which he fulfilled by paying his people well.

Low paid jobs remain prevalent in the UK, and a fifth of the workforces is on low pay. This costs us all dear as the state subsidises low income working households through the tax credit system. 

For those employers not persuaded by the moral case for change Collins argues the rate of the minimum wage should be ratcheted up as a backstop, a view that is starting to gain more support. This undoubtedly has to be part of the solution, but alone will not solve the problem. Instead a more comprehensive strategy is required that looks at why we have such an endemic low pay problem in the UK; what is driving up the cost of essential like housing, childcare and energy; and yes, as unpopular as it is right now, how best to support people through the social security and tax systems.

Katie Schmuecker is a Policy and Research Manager at the Joseph Rowntree Foundation (JRF) 

Joseph Rowntree. Photograph: Getty Images
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The Tinder dating app isn't just about sex – it's about friendship, too. And sex

The lines between sex, love and friendship are blurrier than ever, as I found out quickly while using the app.

The first time I met someone using Tinder, the free dating app that requires users to swipe left for “no” and right for “yes” before enabling new “matches” to chat, it was an unqualified success. I should probably qualify that. I was newly single after five years in a committed relationship and wasn’t looking for anything more than fun, friendship and, well, who knows. A few weeks earlier I had tried to give my number to a girl in a cinema café in Brixton. I wrote it on a postcard I’d been using as a bookmark. She said she had a boyfriend, but wanted to keep the postcard. I had no date and I lost my page.

My Tinder date was a master’s student from Valencia called Anna (her name wasn’t really Anna, of course, I’m not a sociopath). When I arrived at the appointed meeting place, she told me I was far more handsome IRL (“in real life”) than my pictures suggested. I was flattered and full of praise for the directness of continental Europeans but also thought sadly to myself: “If only the same could be said about you.”

Anna and I became friends, at least for a while. The date wasn’t a success in the traditional sense of leading us into a contract based on exclusivity, an accumulating cache of resentments and a mortgage, but it had put me back in the game (an appropriate metaphor – people speak regularly of “playing” with the app).

According to Sean Rad, the co-founder who launched Tinder in late 2012, the service was invented for people like me. “It was really a way to overcome my own problems,” he told the editor of Cosmopolitan at an event in London last month. “It was weird to me, to start a conversation [with a stranger]. Once I had an introduction I was fine, but it’s that first step. It’s difficult for a lot of people.” After just one outing, I’d learned two fundamental lessons about the world of online dating: pretty much everyone has at least one decent picture of themselves, and meeting women using a so-called hook-up app is seldom straightforwardly about sex.

Although sometimes it is. My second Tinder date took place in Vienna. I met Louisa (ditto, name) outside some notable church or other one evening while visiting on holiday (Tinder tourism being, in my view, a far more compelling way to get to know a place than a cumbersome Lonely Planet guide). We drank cocktails by the Danube and rambled across the city before making the romantic decision to stay awake all night, as she had to leave early the next day to go hiking with friends. It was just like the Richard Linklater movie Before Sunrise – something I said out loud more than a few times as the Aperol Spritzes took their toll.

When we met up in London a few months later, Louisa and I decided to skip the second part of Linklater’s beautiful triptych and fast-track our relationship straight to the third, Before Midnight, which takes place 18 years after the protagonists’ first meet in Vienna, and have begun to discover that they hate each others’ guts.

Which is one of the many hazards of the swiping life: unlike with older, web-based platforms such as Match.com or OkCupid, which require a substantial written profile, Tinder users know relatively little about their prospective mates. All that’s necessary is a Facebook account and a single photograph. University, occupation, a short bio and mutual Facebook “likes” are optional (my bio is made up entirely of emojis: the pizza slice, the dancing lady, the stack of books).

Worse still, you will see people you know on Tinder – that includes colleagues, neighbours and exes – and they will see you. Far more people swipe out of boredom or curiosity than are ever likely to want to meet up, in part because swiping is so brain-corrosively addictive.

While the company is cagey about its user data, we know that Tinder has been downloaded over 100 million times and has produced upwards of 11 billion matches – though the number of people who have made contact will be far lower. It may sound like a lot but the Tinder user-base remains stuck at around the 50 million mark: a self-selecting coterie of mainly urban, reasonably affluent, generally white men and women, mostly aged between 18 and 34.

A new generation of apps – such as Hey! Vina and Skout – is seeking to capitalise on Tinder’s reputation as a portal for sleaze, a charge Sean Rad was keen to deny at the London event. Tinder is working on a new iteration, Tinder Social, for groups of friends who want to hang out with other groups on a night out, rather than dating. This makes sense for a relatively fresh business determined to keep on growing: more people are in relationships than out of them, after all.

After two years of using Tinder, off and on, last weekend I deleted the app. I had been visiting a friend in Sweden, and took it pretty badly when a Tinder date invited me to a terrible nightclub, only to take a few looks at me and bolt without even bothering to fabricate an excuse. But on the plane back to London the next day, a strange thing happened. Before takeoff, the woman sitting beside me started crying. I assumed something bad had happened but she explained that she was terrified of flying. Almost as terrified, it turned out, as I am. We wound up holding hands through a horrific patch of mid-air turbulence, exchanged anecdotes to distract ourselves and even, when we were safely in sight of the ground, a kiss.

She’s in my phone, but as a contact on Facebook rather than an avatar on a dating app. I’ll probably never see her again but who knows. People connect in strange new ways all the time. The lines between sex, love and friendship are blurrier than ever, but you can be sure that if you look closely at the lines, you’ll almost certainly notice the pixels.

Philip Maughan is Assistant Editor at the New Statesman.

This article first appeared in the 26 May 2016 issue of the New Statesman, The Brexit odd squad