Monday, 16 January 2017

The maximum wage: Why it matters.

I have been moved to write this blog following some of the comments I have seen on Twitter and elsewhere following Jeremy Corbyn raising the prospect of a maximum wage and the Oxfam report on global inequality as some people seem to think that in a so called civilised society that vast inequality is somehow inevitable and even desirable and certainly not something that needs to be addressed.

In their ground-breaking book The Spirit Level: Why More Equal Societies Almost Always Do Better (Wilkinson and Pickett, 2009), the authors highlight the "pernicious effects that inequality has on societies: eroding trust, increasing anxiety and illness, (and) encouraging excessive consumption".

They, and other academics argue on the basis of strong evidence within and between countries, that health inequalities mirror income inequalities and that inequality is in itself a determinant of ill health. As a consequence some academics, such as Professor Danny Dorling, argue that we should be addressing maximum pay in private and public sectors and reducing the ratio between those on the lowest and highest pay. Such responses were recently mirrored by a suggestion by Jeremy Corbyn, leader of the Labour Party, that the UK should explore the possibility of introducing a maximum wage. The mere suggestion of this policy seemed to stimulate some to apoplectic rage as if entitlement to the wealth of Solomon was some sort of inalienable human right.

Since the early 1980s, economic inequality in the UK has grown astronomically. The richest 10 per cent of households now own 40 per cent of the UK’s wealth. This is 850 times the wealth of the bottom 10 per cent. If income distribution was the same as it was in 1977, the bottom fifth would get £2,000 a year more, the top fifth £8,000 less. Given this growth in economic inequality, it is perhaps unsurprising to see a similar growth in inequality in health outcomes. Although life expectancy is generally increasing in the UK, as it has done for the past 100 years, inequalities between the rich and poor is widening.

Analysis by The Equality Trust has found that in the last 20 years alone, the gap in life expectancy for those in different local authority areas has increased 41 per cent for men and 73 per cent for women. This most glaring of inequalities manifests itself in the most basic of inequalities i. e. that of living a long or short life. For instance male life expectancy in East Dorset is 8.9 years longer than those in Blackpool. The gap is just as dramatic for women where those in Purbeck live over 7 years longer than those in Manchester.

Even more alarming are the differences in healthy life expectancy (the number of years likely to be lived in good health) as these inequalities are even more marked. For instance there is now an 18 year difference between women living in Richmond (72 yrs) and those in Tower Hamlets (54 yrs): two communities that are only 15 miles away from each other.

These are just the inequalities in the UK I am sure that I don't need to do a detailed break down of   the inequalities that exist globally but suffice to say that the longest life expectancy in the world is Monaco on 89.52 years while the shortest is Sierra Leone at 50.1 years.  Inequality is killing us in droves and surely, as a species ingenious enough to put people on the moon, we can at least attempt to come up with a solution to this blight on the human race and not lambast those who raise the subject as "communists" that subscribe to the "politics of envy".

There is no more basic inequality than being alive or dead and if we are going to accept the frankly obscene inequality that sees eight  men being richer than the combined wealth of half the world then we must also accept that in doing so we are going to condemn vast swathes of humanity to unnecessary suffering, sickness and an early death. The choice is ours.


  1. As is the case with most policy proposals, it's not about how successful the policy will be, it's about whether the public will stomach it or not.

    When Corbyn says "I won't allow you to earn more than £X millions of pounds", you will get large swathes of the public who feel agreived at the prospect of not earning a wage which will almost certainly never apply to them.

    But if Corbyn left it at "CEOs will only earn up to 50 times more than the lowest earner etc etc" then it will be much more palatable to voters. It will make sense to them, it is relatable. It will allow voters to still perceive a day when they too can earn millions of pounds in one year, however unlikely it is.

    Instead, Corbyn lost the media battle last week when he mused about this 100% tax proposal (which looked like he had just thought about it two minutes ago and didn't appear to tell his own cabinet). It's all a little predictable.

    1. You are right and really that is what the blog is aimed at commenting on. For all the rights and wrongs of it politics is all about spin and how policies are marketed. As I have expressed in the blog I do believe a maximum wage is a desirable policy and that uncontrolled inequality is bad for society but yes it did appear it was not handled well by Labour. Although I do believe the press appears to be hostile to Labour in general and Corbyn in particular the party need to be cognizant of this and tread carefully. Rather than coming out with some vague thoughts they should have come out with a costed formula and suggestions as to where savings could be used at least then there would be more chance of successfuly marketing the policy.