Thursday, January 30, 2014

Owen Jones’s hopeless agenda


Writing in the Independent on Sunday (26 January), ubiquitous Labour leftwinger Owen Jones proposed a nine-point ‘Agenda for Hope’.  It is essentially a wish-list of reforms to capitalism, as illustrated by the first of the points:
‘A statutory living wage, with immediate effect, for large businesses and the  public sector, and phased  in for small and medium  businesses over a five-year Parliament. This would save billions spent on social security each year by reducing subsidies to low-paying bosses, as well as stimulating the economy, creating jobs because of higher demand, stopping pay being undercut by cheap labour, and tackling the scandal of most of Britain’s poor being in work. An honest days’ pay for an honest days’ work would finally be enshrined in law.’

The ‘finally’ is a nice touch since the campaign for a ‘living wage’ was started by the old ILP, then still part of the Labour Party, over 80 years ago in the 1920s. Since Jones has demonstrated in the past that he has some knowledge of Marx’s ideas, he must have chosen the phrase ‘an honest day’s pay for an honest day’s work’ deliberately. It is of course a modern version of the demand for ‘a fair day’s wage for a fair day’s work’ which Marx, in a talk to British trade union leaders in 1865, described as a ‘conservative motto’ as opposed to the ‘revolutionary watchword’ of ‘abolition of the wages system.’

Jones does not give a figure for what he considers to be a living wage. At the moment the so-called living wage which some employers and especially local councils have agreed to pay no one beneath is £8.80 an hour in London and £7.65 in the rest of the country, compared with the legal minimum wage of £6.31 an hour. This ‘living wage’ is only about £15,000 for a year of full-time employment outside London. Although this would be an improvement on what many workers are getting now it is hardly a living wage in any reasonable sense of the word ‘living’.

What Jones is advocating is a legally-decreed wage increase for millions of workers. This is unlikely to have the effect he intends. It could well ‘save billions spent on social security each year by reducing subsidies to low-paying bosses’. The Tories are on to this too and favour an increase in the minimum wage for precisely this reason. On the other hand, it could lead to employers laying off workers or even going out of business, so augmenting the ranks of the unemployed and social security payments to them. Not that the cost of social security should be of concern to workers. It’s only a problem for the capitalist class since they pay for it.

One thing it won’t do is stimulate ‘the economy, creating jobs because of higher demand.’ Since the extra wages will have to paid by employers this will not result in any ‘higher demand’; the increase in demand resulting from higher wages (to the extent that it happens) would be offset by a fall in demand derived from employers’ profits. It’s a zero-sum game. So it won’t stimulate the economy or create extra jobs. In fact, since it is profits not wages that drive the economy, the reduced profits could have the opposite effect.

Owen Jones has failed to grasp that capitalism is not a collection of random bad things that can be tackled piecemeal. It’s an economic system with its own mode of functioning that cannot be reformed by legislation to work other than as a system that gives priority to profits not wages and which has to be done away with altogether in one revolutionary change.
ALB

1 comment:

ajohnstone said...

Jones is in good company with members of the capitalist class supporting higher minimum wage because it will save their tax dollars going in subsidies to other capitalists

Raising the wages of lower wage workers by about $150 billion a year would be about $40 billion reduced in social welfare spending.

http://www.alternet.org/economy/ron-unz-makes-case-higher-wage-then-president-obama?paging=off&current_page=1#bookmark