The possibility of increasing the minimum wage in Ireland (it’s currently €8.65 per hour) has been the subject of heated debate over the past few months, with our leading union SIPTU clashing with ISME (Irish Small and Medium Enterprise association). In May, amid much fanfare, the minimum wage in the UK was increased to £6.70 (€9.25) per hour.
But an increased minimum wage might not be social panacea. In this article in the Guardian today Robert Sidelsky argues that raising the minimum wage while simultaneously cutting tax credits only increases the numbers of the “working poor”. He moots instead the idea of a “living income”, whereby all citizens would be given a basic income in the form of a tax credit which “could be built up gradually as the rewards from work fall”:
Reading about the minimum wage got me thinking about the idea of a “maximum wage”, of which the economist Herman Daly was a big fan (Toward a Steady-State Economy – 1973, Beyond Growth – 1996. For The Common Good – with John Cobb, 1992). It turns out that in Switzerland of all places they had a vote in 2013 to institute a maximum wage at a ratio of 12:1.
As the above article explains, the proposal didn’t go through, but it set a foundation for another intriguing proposition set to go to the vote next year. In 2016, Switzerland will vote on whether to institute a “basic income” for all citizens, equating to €29,000 a year. Right or wrong, it’ll be interesting to see what happens! For a review of the Swiss situation, here’s a great Irish Times article, and there’s another link after that for a snapshot of the minimum wage debate in Ireland.