Rachel Reeves doesn’t have much to celebrate

Chancellor Rachel Reeves has taken to social media to celebrate Labour’s so-called achievements.

Rachel Reeves, are these meant to be wins?

Reeves said:

Minimum wage rising.

State pension increasing.

Two child limit abolished.

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Child poverty falling.

Rights at work strengthened.

Labour promised change. We are delivering change.

These policies are a shambles and miss the reality of an extremely economically unequal society.

Wages should be progressive

Minimum wage is rising by around 50p compared to last year. Accounting for inflation, it’s a £2 increase on its level a decade ago.

But this is nothing for large corporations, while adding significant costs to small businesses. The issue with across the board minimum wages is they ignore the capabilities of companies. For example, Vodafone makes £154,236 annual profit per employee. They can afford to pay their workers a significant amount more.

Meanwhile, small businesses with 1-9 employees have an average yearly profit of £22,000. Last year, Labour’s increase to the minimum wage added a yearly cost of around £8,000 to a small business with five employees. That’s quite the hit, but also affordable, assuming the person running the business is taking their own salary.

The minimum wage should certainly apply, but it should be progressively implemented. Small businesses pay the minimum while profit-linked wage increases apply for companies like Vodafone.

That said, the reason Vodafone is so profitable is because everyone needs to communicate. In other words, telecommunications is an essential that should be in public ownership, because it’s a risk free venture for the government. Failing that, some form of profit-sharing with workers, mandated cheaper prices and higher taxes could go some way to improve the situation.

State pension increasing? Just a Tory policy

The state pension has increased over the years and will do with Labour continuing the Conservatives’ policy of linking increases to inflation, average earning rises or 2.5% (whatever’s highest).

Nonetheless, it’s not enough for less well off pensioners who do not have the supplementary income of a private pension. 16% of pensioners are in relative poverty.

The universalism of the state pension does contribute to giving everyone a stake in the economy. But it also doesn’t make sense for multi-millionaires to receive it. Re-imagining the system through a mixed economy of common, non-profit, community and private ownership could deliver less economic inequality, while maintaining the universalism of a state pension.

Labour flailing

Labour’s workers’ rights package brings paternity and sick leave rights to day one of employment. Although, minimum sick pay is only £123.25 per week. Again, this should be progressively implemented. Companies that can afford to pay should maintain a workers’ salary. Meanwhile, companies that can’t should be topped up by the state.

Reeves and Labour shouldn’t be celebrating their achievement of very little after almost two years in power. They should actually take the initiative and improve the country.

Featured image via the Canary