Letter to Observer on need to end low pay.

Although technically correct to say that the first "big downside" to the way the labour market works is that "the taxpayer ends up subsidising low pay through tax credits and the benefits system", your Business Leader could have strengthened its argument with more appropriate wording. (Workers have become management`s prey and a natural balance needs to be restored,18/05/14) The more apposite way of expressing this would be that the "taxpayer ends up subsidising" the profits of the companies which refuse to pay their workers a living wage. One way of achieving a reduction in the level of inequality in this country is to force companies to accept lower profit margins, and therefore smaller dividends for their shareholders, by paying their workers more. If George Osborne thinks the minimum wage could go up to £7.00 an hour, then clearly it could increase substantially more!

       The article correctly puts much of the blame for low pay on "the loss of labour`s bargaining power", and this could be remedied by a commitment from Labour to introduce co-determination, as in West Germany from the 1950s onwards; there, union representatives sat on companies` boards, having a say in all decisions, and the result was less industrial action, no obscenely high rewards for bosses, and, of course, increased productivity. Britain may be "well advanced down the road" to the situation where capitalism "ends up eating itself", but if Miliband is serious in his support for "responsible capitalism", reducing inequality and restoring fairness to our society, he can offer the electorate policies which would guarantee a u-turn! 

 Under a Labour government there should be no such thing as a Low Pay Commission; it`s got to be changed to Fair Pay at least!