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....

Wage Depression Over the Decades

Many people of my age (mid-Fifties) can still remember a time when a single parent could earn enough to run a family and have the mother stay at home.

Then in the seventies thanks to inflation, if you wanted nice things the second partner had to go out and get a part-time job. The imability of wages to support a family had started.

In the eighties, if you wanted to run a car, have a VCR, etc the second partner needed to go out and get a job. The rise of non-parental childcare in the form of child minders boomed.

In the Nineties, the two parents started to struggle to support a family. When Labour came into power in the late Nineties, they decided that the family needed help and in 2003 introduced tax credits for working families.

All the while, in the background you had non-working families fully supported by the state in the form of very generous benefits.

Over the decades wage stagnation has caused wages to depress so much that now even two people working full time cannot support a family and the government has to chip in with in-work benefits like tax credits. But that's taking money from people without kids and give it to families just because employers won't or can't pay proper wages if they wish to stay competitive. i.e. we all suffer wage deflation, even if we don't have a family.

At the same time, benefits eventually became so generous, there was no incentive to work. The differential is still pretty big. Stay unemployed and you get everything paid for: rent, council tax, National Insurance, prescriptions.... The moment you step into work, the full reality of competing in a global market hits home.Thanks to globalism you are competeing with someone in Vietnam whos housing costs amount to a tin shack with no electricity, water or sewage system. They don't have to pay for any of the utilities that western workers have to pay for.

I've yet to formulate a plan as to how to equalise the playing field. Of course as that Vietnamese worker's life style improves, pressures will increase on his wages so that eventually he will be demanding similar wages to a wesstern worker.

In the meantime the disparity is being exploited by the global corporations. It's this disparity that is causing the rise of populism in the West. The global corporates and western governments have failed to effectively manage the issue and have largely ignored the poor working class in the west. There's a lot of people at the bottom of the pyramid and they are getting increasingly angry and connected by technology.

The poor working class see mass immigration as another attempt to further depress wages, not the advantage or benefit that the elites would have us believe immigrants are.

40 years of wage depression and the various attacks on the ability to raise a family in the West from all side has created an atmosphere in the West amongst the poor that enough is enough. We're already seeing workers on zero hours contracts, workers living in tents, trailers and shacks. The workers of the West can see a future where their families live in Shacks like the Vietnamese guy and the rich get even richer.

There is an overwhelming feeling amongst the poor working class that a red line has been crossed. Especially after the financial crisis where billions of pounds of taxpayer's money was used to bail out the banks rather than allow them to fail, in the process inflating the wallets of the richest 1% of the country. There's also a growing realisation that "climate change" taxes are not being used for the purpose of mitigating the effects, but instead again lining the pockets of the mega-rich.

The past decade has seen the biggest and fastest transfer of wealth from the poor to the rich in history. Quite rightly the poor are unimpressed, and angry.