After Boris Johnson’s amusing article, I felt susceptible to Toynbee-baiting following the preposterous announcement that she would be a useful guru for the Tory party. What's more you have to ask how could she send her kids to a public school or own an Italian villa and really mean what she says about social integration?
Yet foraging for other ostensibly unrelated material on the minimum wage, the need arises to defend one of the poor woman’s views from Tim Worstall’s attack:
Higher minimum wage eh? We know that (at some point at least, for the doubters) this will mean fewer people have jobs and we're also certain that it will reduce the number of hours offered. How does this increase incomes? Note that while she calls for higher tax credits and benefits, she still can't quite bring herself to call for lower actual taxation of low wages.
Now, Worstall’s premises are clearly fine, a minimum wage will probably have a negative impact on employment, it will probably mean eventually that people are not employed to do certain jobs and that people are employed for fewer hours. Presumably though there will be more incentive for people to find work given that the wage they earn will be relatively liveable? In addition, shouldn’t the minimum wage lead to less inefficiency in the work place by employers firing unnecessary labour and not using people for hours for which they are unwilling to pay a reasonable wage and the other hidden costs of labour?
The straight answer to Worstall's question has to be that with the minimum wage incomes are increased for those in work and there is more incentive for those outside work to find employment. Maybe this is an ideological difference and simply involves too much state tinkering for Worstall’s happiness and there is clearly a good argument to raise the basic level of taxation instead. Yet given that governments are terrified of doing this, preferring redistribution, is it not better in the short term to have the minimum wage to aid redistribution to those in work so they can survive on a liveable wage?
If valid proof arises that the minimum wage will lead to an unbearable burden on the economy then it should be ditched but the proofs need to move beyond the insults traded between free market ideologues and mad left wingers. The electorate and those who are not professional economists need to know why both camps tear each other's throats out about an issue that could cut both ways.