First published: Prospectmagazine.co.uk,
Higher minimum wages are the start of a bigger shift
Zizzi, the Italian restaurant chain, is the latest company to push back against Chancellor George Osborne’s decision to raise the minimum wage. Employees are to have their free food allowance restricted, and waiting staff will receive a lower share of tips. Other companies, such as Caffé Nero and Tesco, have also announced changes to compensation schemes to offset the rise in the minimum wage to £7.20 an hour, and then to £9 by 2020.
On the face of it, it looks like Osborne’s policy is backfiring. But that would be a rush to judgement. While some companies clearly object to the impact of higher minimum wages, others take the position that better-paid staff are more content and motivated, and that the challenge is to change business models to derive higher productivity.
Moreover, the rise in the minimum wage is part of a larger international trend. In the US, a strike by New York fast food workers struck a chord and led to the creation of the Fight for $15 campaign, supported by Democratic presidential candidate Bernie Sanders. Wage policies are being rethought in many countries—bringing attention to the concept of the universal basic income (UBI). The idea of UBI is to replace existing social security benefits with an unconditional subsistence-level income given to all citizens, poor and wealthy alike. Finland and the Netherlands are conducting experiments with this system and on 5th June, Switzerland will hold a referendum on whether to introduce UBI, though it seems unlikely to pass….Read more:
