Though Cowards Flinch

Over any holiday, online reading material tends to accumulate. Christmas 2008 has been no exception even though no few blogs are on vacation. One that I really wanted to challenge was the post over at Mil’s place entitled, “The Petri Dish Philosophy of Politics“. Mil makes the argument that we should import regional minimum wages into the UK, allowing say Birmingham or Manchester to experiment with a higher minimum wage.

The problem with the analogy inherent in the title is that, as often as not, what we grow in a Petri dish is harmful.

Regional minimum wages exist in the US, where there is a federal, a state-by-state and in a few cases a city-based minimum wage. The San Francisco Chronicle carries an article about how the SF minimum wage is about to climb to $9.79 per hour, against the wishes of local employers, but much to the appreciation of SF workers. Economists on the other hand think it helps keep the unskilled unemployed.

This is not necessarily a bad thing, bearing in mind the racist argument that immigrants are ‘coming over here and taking our jobs’; if skilled indigenous people are chosen over immigrants, then we’re left with the reality that we should have programmes in place to train such people rather than allowing employers to exert pressure to lower wages by employing those who are the most vulnerable in the UK.

It isn’t the issue however; the issue is whether or not we should give such power to local governments in the hope that the closer legislative power is to the people, the more they will take an interest. Certainly businesses will take a big interest – and not just by funding local Conservative Associations. Regional minimum wages might pressure companies to move to where they find the cheapest labour, turning regions against one another in competition for ‘investment’.

Nor is that all. Regional minimum wages are great in that they determine the least someone might earn, they don’t determine what someone could otherwise earn. The concept of the minimum wage demotivates people in the struggle for higher wages – a struggle which, agreeing as we do that the minimum wage sucks, they should wage (aha) with alacrity. The system of the minimum wage replaces the method of collective bargaining.

This is why Sweden doesn’t have a minimum wage. Collective bargaining also avoids the nasty problem of politicians complaining about how a minimum wage makes people unemployed – unions can take specific account of layoffs when they are mobilising workers in readiness for the collective bargaining agreements. Consider the words of the Supreme Court of Canada on the subject:

• The right to bargain collectively with an employer enhances the human dignity, liberty and autonomy of workers by giving them the opportunity to influence the establishment of workplace rules and thereby gain some control over a major aspect of their lives, namely their work.
• Collective bargaining is not simply an instrument for pursuing external ends…rather [it] is intrinsically valuable as an experience in self-government.
• Collective bargaining permits workers to achieve a form of workplace democracy and to ensure the rule of law in the workplace. Workers gain a voice to influence the establishment of rules that control a major aspect of their lives.

(Health Services and Support – Facilities Subsector Bargaining Assn. v. British Columbia, [2007] 2 S.C.R. 391, 2007 SCC 27)

This is a cavalier approach to decentralization, bearing in mind that decentralization will replicate most of the problems extant at a central level. The only cases in which it won’t are those where the decentralized authorities exist in areas more progressive than the rest of the nation; it will make it worse for everywhere else. This is one more reason why the ‘progressive’ argument for Scottish independence is simply closet nationalism.