Commenting on MP's resignation after refused to back raising the Minimum Wage to £15 an
hour, Professor Len Shackleton, Editorial and Research Fellow at
free market think tank the Institute of Economic Affairs, said:
"When bypassed the Low Pay Commission to introduce the
National Living Wage, and detached the target for minimum wages
from ability to pay, he set off a bidding war which has
culminated in demands for £15 an hour.
"Such a rate would be among the highest in the world. If the
minimum were applied to all workers irrespective of age, as is
currently Labour Party policy, it would lead to hundreds of
thousands of young people, disproportionately those from ethnic
minorities, losing their jobs or failing to find one.
"Frankly, many of the 13 million currently employed by 6 million
small businesses – restaurants, shops, deliveries, childcare,
cleaning – do not produce enough added value to justify a wage of
£15 an hour. Their employers could not pay this rate and stay in
business.
"The minimum wage is in any case a poorly-targeted measure to
assist the poor. Most minimum-wage workers are part-time, and
even at £15 an hour could not generate a genuine weekly ‘living
wage’. But many do not need to, as they are students,
semi-retired or second earners in a household.
"Genuine poverty amongst full-time workers needs to be tackled by
the benefit system and by improving our failing education and
training systems to build skills which will prevent workers being
dependent on state-determined minimum wages.
"Mr McDonald’s demand is a piece of political opportunism which
would greatly damage our economy and the prospects for economic
recovery."
