Download A Living Wage or a Citizens Income

A Living Wage or a Citizens Income
Martin Allen
The introduction of a statutory Living Wage – at £7.20 an hour a 50p increase on the old
minimum wage – should be a cause for celebration, particularly if it is due to be increased to
£9 an hour by 2020. Instead it’s received a cautious welcome because of the huge degree of
uncertainty about who it will really benefit. Though some estimates show that over 6 million
workers are currently paid less it’s possible that only about 1 in 5 of these will gain directly.
Many of those who won’t, belong to the ‘cash in hand’ informal economy, some will become
converted to ‘self-employed’ status though continuing to be dependent on their previous
‘employer’ for an income. Others will suffer a cut in hours, even lose their jobs completely,
while workers under 25 will not benefit at all. It’s also been calculated that 2 million families
could lose up to £1,600 anyway as a result of cuts to tax credits.
Some of the most ferocious opposition to the new requirement has come from employers
organisations. Though it’s certainly true that many large firms continue to make ‘super
profits’ at the expense of their employees, to pay big bonuses to managers and
shareholders large dividends, it is also the case that, particularly in the more labour
intensive parts of the service sector, there are layers of small scale operators who are
dependent on low pay and an endless supply of overseas labour, to run what are basically
hand to mouth businesses with low profit margins, with no desire to invest in workforce
training; but at the time reminding us they are crucial in ‘providing jobs’.
In the care industry, cash strapped local authorities who are forced to rely on poor quality
private sector providers, fear there may be a shortage of places as care firms cut back – it’s
estimated that over one in ten care workers should be entitled to an increase in pay. A new
government committed to social justice, rather than the current ‘austerity’ would want to
invest heavily in social care, put provision under some form of social ownership or even
make it part of an expanded NHS – upping skills and establishing a proper career structure.
But this type of intervention is much more difficult in other sectors – hotel and catering and
retail are two –where low and irregular pay predominates and where the downside of further
regulation could also be increased unemployment. Of course, employers could be
subsidised but there would be no guarantee this would lead to higher pay for employees.
So, is a greatly expanded tax credit system going well beyond anything attempted by
Gordon Brown the only alternative? Rather than depending on employers, this would make
the state responsible for mediating the effects of low pay. Certainly subsidised payments for
people in work, is a new departure from traditional 20th century ideas about welfare where
many of these payments were considered to provide a safety net for those in the latter
category, while they moved back into the former.
A more radical approach would be to give serious consideration to a basic ‘citizens income’
for everybody regardless of any income received from work. Discussion about alternative
sources of income will have to become integral to debate about the long term impact of
automation and artificial intelligence on the future of work. Certainly as robots become less
and less expensive, low paid and relatively routine jobs across the service sector could
quickly be eliminated. Whereas the first round of computer technology lead to the ‘deskilling’
of much traditional office work, new developments like artificial intelligence (AI) and robotics
threatens to eliminate it. But, it is also likely that many skilled, professional and managerial
jobs will disappear in the ‘race against the machine’ – though this will be a slower process.
Discussion about a citizens income has been part of a much wider debate about the future of
work amongst greens. It rarely finds its way into Labour Party or trade union circles however.
Many on the Labour Left continue to rely on traditional macro interventionist policies centred
around new investment, particularly in the public sector for rebuilding the economy. These
are traditional Keynesian policies which along with a programme of limited nationalisation
formed the basis of the Bennite ‘Alternative Economic Strategy’ of the 1980s. While these
can still serve as a rallying cry against austerity, it is questionable if they now provide a
longer term alternative. As indicated above, new ‘high tech’ investment will certainly lead to
increased productivity, but it could just as likely lead to a ‘jobless recovery’.
There are still many issues about a citizens income. For example:

How much should it be?

Unlike 20th century welfare payments were paid for out of increased taxation revenue
as everybody got better off, a citizens income will need to be paid for by a
redistribution policy: but what form should this take?

Should there be any social obligations attached to a citizens income? (Or should
people have ‘the right to be idle’?)
There are also issues about the future of automation. For example:

Should we continue to oppose all job losses? (Or just demand ‘full automation’)

If so should these be combined with demands for a reduction in the working week?

Should there be a ‘managed approach’ to the introduction involving state
intervention? How can unions be involved in this?
Further Reading
Downloads
Carl Frey and Michael Osborne: The Future of Employment: How susceptible are
jobs to computerisation?
http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.
pdf
Martin Allen Hard Labour: Young people moving into difficult times- (pages 12-21
provide a summary of the negative changes in the labour market)
www.radicaledbks.com
Texts
Brynjolfsson, E & McAfee, A (2014) The Second Machine Age, Work Progress, and
Prosperity in a Time of Brilliant Technologies, London: Norton
Srnicek, N. & Williams, A (2015) Inventing the Future: Postcapitalism and a World
Without W London: Verso
Martin Allen taught in secondary, sixth form and more recently in higher education
and is currently employed by the National Union of Teachers. The view expressed
here are his own.
www.radicaled.wordpress.com