The aim is to remove the burden from the taxpayer of tax credits and housing benefit as subsidies to employers who don’t pay their staff enough to live on. If an employer can’t afford to pay their staff properly then they don’t have a viable business.
Out with subsidies! Nobody earning a “wage” should receive benefits – this can only work if employers pay what the job is worth. And for the record “no” jobs in marginal businesses are not worthwhile
This is getting the idea of in work benefits entirely arse about tit.
What someone gets paid for going to work is determined by those market processes. The supply of labour with those skills and the demand for labour with those skills.
It is indeed possible to construct models where this does not hold: monopsonist employers for example. But that’s not a condition that holds in the UK at present. We really do not have one or two employers who are able to dictate wage rates. We have millions of employers who really are not colluding on the wages they offer.
In the absence of that workers are being offered the wages their labour is worth as determined by the market.
Now, as it happens, as a society we’ve decided that for some people those wages “aren’t enough”. Through some combination of morals, squeamishness, charitable impulse, whatever, we’ve decided that trying to bring up a family on £6 an hour just isn’t on. Therefore we’ve set up a system whereby these people get an addition to their wages. Maybe this addition is too much and maybe it’s not enough.
Two examples as to why we do this. Clearly, we don’t expect someone with severe disabilities to pay their own way through life. That Down’s Syndrome (serious case, not minor), quadriplegic, chronically ill person. They’re just not going to earn the wages they need so we all chip in to help them.
Or say the family with many children: their wages are set by how valuable their work is in hte market. Their spending requirements by the size of their brood. We don’t say that the employer should pay more to the man or woman with 6 children than to the couple with none. Thus it is us, as the society, that chips in to pay those higher costs, not the employer.
And that’s the point of in work benefits. It isn’t a subsidy to the employer. It’s a subsidy to the employees. Your labour isn’t worth what we think it ought to be. Thus, here, have some of our money.
We can test this quite simply. All those who think that in work benefits are a subsidy to employers. Obviously, if this were so, then cutting off such subsidies would lead to employers raising wages. Thus we should simply stop paying in work benefits and wages would rise.
Does anyone advocate this? No, they don’t: they advocate that wages must be forced up first (that Living Wage) and this will reduce in work benefits. So the actual campaign itself is agreeing: these are not subsidies to employers. They are to employees.
As to jobs in marginal businesses not being worthwhile. Well, if the wages are raised and the business goes bust then, erm, there aren’t any jobs at all and those who previously were getting £6 an hour will now be getting £0. I tend to think that’s some value myself.