CHANGE TO THE LAW WILL CREATE JOBS, CLAIMS CONSERVATIVE MP

A Conservative MP has suggested that workers should be allowed to ‘opt out’ of their right to be paid the National Minimum Wage, claiming that it would help to reduce unemployment as businesses would find it easier to pay for the staff they need to stay afloat. Graduate Fog believes that this would be a disaster for the most vulnerable workers in society – including graduates.

Christopher Chope proposed a Bill in which employers and workers would be left free to agree a wage that was acceptable to both of them. He argued that both parties were “freely consenting adults” and that this measure would mean “liberalising and deregulating the labour market.”

Are you shocked that anybody is suggesting reducing the NMW? Me too. The NMW needs to be increased, not decreased. (Actually, it is set to rise in October – to £6.05 an hour – but Graduate Fog thinks an extra 12p an hour is unlikely to a big difference when the cost of living is soaring).

Already, we know that it is impossible to survive on such a low wage and pay for everything you need – that’s why people earning this wage are having to supplement their meagre income with welfare hand-outs such as housing benefit. The momentum behind Boris Johnson’s campaign for the London Living Wage (£8.30 an hour) is proof that most people in the capital are already aware that the NMW is far too low, in the capital at least.

Graduate Fog believes creating the possibility for any exemptions to the existing NMW legislation would be a disaster for graduates.

Looking at the catastrophe of the unpaid internships scandal, we have already seen what happens when the NMW law is not enforced. But at LEAST they are there to protect you in theory. That is a start. Changing the law would be a serious blow to the interns’ rights campaign. I also predict that graduate salaries would be affected – dragged down even further than we have already seen.

If you take away this minimum wage ‘floor’ (currently £5.93 an hour), desperate workers are left to compete for work on price, undercutting each other further and further, until wages are so low that everyone suffers – everyone except the employer, that is.

Mr Chope – who opposed the introduction of the NMW law in 1998 – argued that those currently unemployed would be happy to work for less than the minimum wage but are prevented from doing so by government legislation. He said:

“Under current law, we restrict British citizens from selling their own labour at a price of their own choosing.

“We discriminate against those who are young or inexperienced or seeking on-the-job training. We prevent people from agreeing to cut their wages to protect their jobs and we impose nationally uniform rules on the job market, ignoring regional and local variations.

“If we are going to provide good quality jobs, we’ve got to be able to have the freedom to allow people to compete, and we’ve got to allow people the freedom to work and reach an arrangement with their employer if they want to.

“…Giving people the freedom to opt out of the minimum wage would help not only those who are out of work but those in the hard-pressed retail and hospitality sectors where businesses are going down like ninepins. How many such small businesses could be saved if those working in them had the freedom, in conjunction with their employers, to agree to reduce their wages?”

When questioned by Labour MP Andrew Mackinlay, Chope insisted:

…We are talking about the marketplace and people should be free to compete in the marketplace without restriction… This Bill is about liberalising and deregulating the labour market. It is about removing the barriers to work that have been introduced since the last recession. It is not only an essential supply-side measure; it is also a restoration of that basic human right-the right to work.

Thankfully, Chope’s Bill was shot down in flames – with 33 votes to five.

And former Labour minister Denis MacShane blasted Chope’s proposal, saying:

“The assault on the minimum wage, that thin line that protects the poorest workers in this country from employer exploitation, that is contained in the thrust of this Bill is the meanest, most miserable act, from a mean and miserable party that hates the working people of this country.”

Labour’s Tony Lloyd claimed Chope’s Bill revealed:

“…just what a rotten, nasty party the Conservatives are. In our society there are people who have genuine social difficulties. They need our protection, they don’t need us to take away those minimum floors.”

And shadow business minister Gareth Thomas said Mr Chope’s Bill would:

“…drive a coach and horses through the National Minimum Wage legislation… There is no significant evidence to suggest either the minimum wage has led to job cuts or that economic recovery is being held back by the continued existence of the national minimum wage.”

*Should workers be allowed to accept less than the NMW?
Should you be allowed to work for as little as you like – or is it important to that there is an agreed ‘floor’ below which wages cannot drop? Would a change like this benefit graduates – or make life even tougher?