This morning on Radio 4’s Today programme Adam Marshall from the British Chambers of Commerce was being interviewed as a result of the very positive predictions of growth by the Chambers for the year ahead. As part of the interview he was asked his view about the raising of the minimum wage. Like a number of organisations that may be expected to resist a rise, his view was to welcome a meaningful increase. However he also pointed out that their view is that the best way of increasing wages for individuals, was for them to increase skills. This view reflects comments of someone I met last week who works for the Conservative Party. Leaving aside the empirical case for paying all people a living wage which tends to be higher than the current minimum wage, there is another failure in this single focus on skills.

All of us should hope to increase our skills over time, and certainly to fulfil tasks that we could not have achieved previously. If this justifies an increase in our income then we can be rightly pleased and enjoy an increase in our standard of living. However it is a very different model of economic growth from the one that rewards Bankers through bonuses, and retiring Cabinet Ministers through Non Executive Directorships. It cannot in any case be the whole picture. If we assume there are certain jobs which attract a minimum wage and for which low level of skills are needed, simply increasing the skills of these people will not change the level of income they can hope to attract for the same tasks from year to year.

My point is that whilst upskilling our workforce is surely a good thing in itself, that we need a more sophisticated understanding of the limits and value of this process, and its link to the income of people in society whose health and well being depends on earning sufficient to avoid having to carry out 2 or more jobs, just to keep their heads above the water. The low incomes paid to these people create social problems for those around them. These are the arguments behind the living wage and it is vital that people such as Adam and the person that I met last week can understand the economy in terms of value as well as cost. If the minimum wage remains pegged to inflation or even below it, the problems of relative poverty will also remain. With the news that the Co-op is to reward its executives with greater pay and bonuses, we need to hear debates on our radio and hope for the same within our political parties that focus on the well being of our economy in a more holistic sense. This debate should consider the impact on the NHS of the low pay of large numbers of people who are constantly in the ‘increase your skills’ category. There is also a cost to you and me of the inequality of people who earn so much that they are constantly looking for new ways of spending their wealth.