Giving low-paid workers a decent increase will make very little difference, writes Dr Robert Nicholls
I fully agree with Larry Elliott (So what’s so wrong with labour shortages driving up low wages?’, 29 August) and take issue with your correspondent (Letters, 30 August). As a former wages inspector, I well remember Margaret Thatcher and other rightwingers’ arguments for the abolition of the wages councils that set minimum rates in traditionally low-paid and usually non-unionised industries. Their arguments were basically the same – that it would increase inflation.
It is surprising to me that so many people who I suspect consider themselves to be leftwing are opposed to poorly paid workers improving their pay. Inflation does not have to be a consequence of increased pay. When the wages councils introduced yearly pay increases, there was no subsequent increase in inflation. This was because the rates were still quite low compared to the average pay rates throughout the country as a whole. The decision to abolish the wages councils was purely ideological on the part of the government. We have legal minimum rates at the moment without any detrimental effects on inflation, and giving low-paid workers a decent increase will make very little difference.
