I support a system which delivers a minimum income. The Minimum wage in most cases is below the minimum income, so families top it up with income related benefits. The idea of raising the Minimum wage is partly to get employers to pay a higher proportion of the minimum income the state thinks appropriate. Some of the increase in wages will be balanced for the individual worker by loss of benefit top up.
The living wage is just a higher Minimum wage. The living wage is closer to the Minimum income, but there will still be income top ups from the state for many people on the living wage. The so called living wage would be difficult to manage on for families without housing, child and other support from the state.
Above all I want to promote policies that will deliver more better paid jobs. The only way we can all enjoy higher living standards is if our economy produces more, either to sell to ourselves or to sell to foreigners in exchange for imports. If we produce more we can consume more. If we fail to produce more we can argue about how much we take off the richer to give to the poorer, but on average we will no better off. If we go too far down the road of redistribution we make ourselves collectively poorer, as some of the rich leave and cease to make any contribution.
Labour’s latest idea of offering employers a tax break to pay more to their employees is mainly redistributing what we have. We will need to see the numbers. The state accounts will lose tax revenue from the tax cut but will also reduce spending from the top up benefit reductions. The employment effect will hinge on what such a scheme does to the costs of employing people. If the tax cut balances out the extra wage cost it will be neutral. Were the tax cut to be less than the extra pay cost then it could damage employment.