Frances O'Grady of the TUC, writing in The Grauniad today, seems to favour more unemployment. Lots, lots more unemployment:
The twin track of wage growth since the turn of the century is illustrated by a statistic calculated by One Society, which found that if the minimum wage had increased at the same rate as the pay of FTSE 100 directors since its introduction in 1999, it would now be almost £19 an hour, rather than its current rate of £6.19.I'll accept that statistic at face value.And in return, I'll note that UK unemployment since 1999 has risen from 6% to 8%; and the minimum wage purchasing power standard has risen from an index value of 800 in 1999 to 1150 today, or nearly a 50% jump.
If we raised the UK minimum wage to £19/hour as Frances O'Grady implies she wants us to, I wonder what would happen to that unemployment rate?
Perhaps we shouldn't be too hard on Frances since her BA in politics and modern history and diploma in industrial relations and union studies means that she has never been troubled by such considerations as wage costs. Given that, though, it's surprising how keen she is to spout confidently such rubbish...
We need fairer wages for those in the boardroom, with employees having a seat on remuneration boards and packages that run in line with the long-term health of a company and not its short-term share price. And, of course, we need strong unions and more collective bargaining.Ah, "fairer". That wonderful word. What's fair, Frances? Who judges? Now, I'm all in favour of better alignment of managerial remuneration with a company's medium-to-long-term profits; the temptation to loot the company with terrible short term decisions in order to general a temporary blip in salaries is deplorable. I'm not, however, convinced that putting regular employees on the board is going to make much of a difference.
I'm also not convinced that unions are particularly weak these days; they seem to be very solidly represented in the public sector. If Frances feels that unions don't have much traction in private companies where the management are actually accountable for profits, she should ask herself why that might be. Perhaps a relentless focus on the wages of the average worker and ensuring that the company is unable to sack bad employees or reward good employees might actually be counterproductive to gaining wider union representation?