Us at the Coventry Party have observed the current economic climate of the UK economy and we believe that by raising minimum wage, this will ultimately lead Britain into a brighter future. We are proposing to increase minimum wage to £8 an hour by 2020. Along with our minimum wage increase, we would freeze income tax for the foreseeable future for the lowest earning in Britain. We would give companies a tax rebate when they sign up to become higher wage employers. This would allow them to also benefit from the increase wages by investing their money back into their company and therefore stimulating their local economy.
John Stewart Mill argues that wages determine the elasticity of supply, therefore they have to exceed the subsistence level. Because of the fact that capital is the main source of money for wages, there are only two possible situations which would determine wages to increase: increase in capital or decrease in the number of workers. When wages do rise, the supply of labour does the same. However, in this context, there is also competition among workers, fact that determines a decrease both in the minimum wage and in unemployment. One of Mill’s famous quotes regarding this situation is “demand for commodities is not demand for labourers”. In other words, when there is more income invested for wages and not for consumption, the employment rate increases. This results in the latter being in an inverse ratio to investment. The best part is that if the investment rate is high, the wage fund goes up, too, therefore witnessing economic progress.
In addition, Karl Marx’s opinion on this subject was that the source of all commodity values in capitalist society comes from the labour of the working class, the vast majority of people who live by selling their labour power.
„Working-class people do not have investments in the way that the capitalists do. We can only make ends meet by selling our ability to work for wages.”(http://www.marxism.org.uk/pack/economics.html)
An economic boost will lead to a considerable drop in the numbers of families in extreme poverty, as the income for a minimum wage will increase, providing families with more money for food and shelter. It will benefit people getting the raise in wage, as they are working but are finding it difficult to survive comfortably on the current minimum wage. It would also benefit the government, as they will not have to spend as much on welfare and benefits. Moreover, the supply and demand raise in the labour market will eventually encourage employers to create more work placements and opportunities.
In conclusion, we at the Coventry Party are confident that an increase in minimum wage will put Britain in a better economic standing for the conceivable future. We share Marx’s opinion that if the working class earned more, they would be able to contribute to society and local economies in a much more productive way. An increase in minimum wage will give society the boost it needs to respond to the pressures placed upon us by the European Union.