Monday, 13 January 2020

Subsidising Wages: Continuing Labour Party Plan to Sunsidise Big Corporations.

It's been reported that Labour Leadership hopeful Jess Phillips' latest plan in her bid to win is to promote free childcare for all.

Honourable as that is, you have to ask a few questions. The first is why do we need it and the second is who is going to pay for it?

The first reason is the fall in effective wages over the past 40 years or so. It seems that hand-in-glove with feminism, wages have depressed. Women have fought for the right to have equal rights to jobs and pay, but with that influx of labour into the market, wages have depressed. After all, the more people you have able to do a particular job, the less you can pay for it. It's supply and demand.

After all, you don't think big corporations would pay previous wage levels if they could start to reduce wages and see where people stop applying. Nope, a larger workforce means more people able to do the work and lower wages as a result.

Such has been the depression in wages that it's pretty rare one person in a couple can earn enough to run a family and for the other person to stay at home and do all the childcare stuff. I've been a house husband in the past, so I make no remarks on which member of the family works and which does the childcare.

So, wages become depressed so both parents have to work. The Blair government then introduced tax credits for families because wages had become so depressed families with both parents working couldn't raise a family.

Let's be clear about this: tax credits is taking money from people without children and giving it to people with families, to bolster wages supressed by big corporations. In effect subsidising the big corporation's wage bills at the taxpayer's expense.

So, we start importing even more workers from Europe and wages became even more depressed. Guess what? Now Labour are talking about providing free childcare. I assume funded by the taxpayer again. So people without kids have to subsidise those with kids so they can go out and earn wages depressed by big business that have also to be subsidised by the tax payer.

Where does it stop? We're already paying for people not to work (benefits), we're paying to top up the wages of people with families (tax credits) and now Jess Phillips wants us to pay for childcare too?

Why can't we flip the coin and start to put in place a regime where big corporations have to pay decent wages? Why can't we stop importing cheap labour? Why can't we start moving tax credits over to corporation tax funding, instead of from general (i.e. mainly income tax) funding?
Why can't we aim instead to limit the supply of labour and thereby increase wages?

I assume the answer would be the big corporations would go elsewhere. Well, let them. But each big corporation that leaves would find themselves the subject of big tariffs if they tried to import goods instead. And the government would let them know this before they left.

Instead of Labour rushing to the bottom, how's about trying to improve the quality of labour and the level of wages in this country.

With Jess Phillips' childcare policy aiding big corporations, you could almost call her policy Thatcherite....