The business argument seems to have been made quite strongly in a number of papers (i.e.staff are happier, sick less often, more productive for the company paying higher salaries) but does anyone know of any research into the more general economics of the Living Wage becoming universal (in London)?
In Ritzy's case staff need a 21% wage increase to reach it but a lot of people will be earning even closer to minimum wage so their increase would be up to 40%. I don't know what proportion of people earn less than LLW as an hourly rate but if a significant proportion of the population of London were paid 20-40% more, to what extent could it create significant localised price inflation, e.g. in rents, services, etc..?
Does it have potential to create a vicious circle (i.e. people earn more but are no better off, so LLW has to go up)?
Are there certain jobs that would be driven out of London. Or have most relocatable low paid jobs already been moved? (I can't actually think of many.)
Marx dealt with some of these issues in debate with an American socialist who argued that striking for higher wages is counter productive for the worker.
Under Capitalism there is always going to be a conflict between Capital and Labour. Its part of how it works. Even if one does not believe in the rest of Marx politics.
I agree most relocatable jobs have gone from London. From what Ive seen most of the campaigns around LLW are in the service sector.
Would general increase in wages cause similar rise in goods and services? Not necessarily. It would reduce the rate of profit if intensity of work stayed the same. If the Living Wage was introduced nationally it could mean two things.
1) Those who make money from profit of labour would have less to spend on "luxury" goods due to reduction in there profits. So that part of the economy would be affected. But those Capitalists who produce the "necessities" of life would see an increase due to increased disposable income of the worker. The Living Wage is an example of what Marx saw as the fact that each society has its own idea of what constitutes "necessities". Also our friends the Capitalists are also in competition with each other. A temporary increase in prices due to national introduction of LW would be reduced due to increased competition in the larger market for "necessities". ( I do not see LLW affecting rents).
2) Increase in wages may make Capital increase its productive powers. Heard a farmer in SE England say a while back that if he did not have access to cheap labour he would instead invest in more machinery to replace human labour. The guy who ran Easy Jet did propose setting up "Easy" cinemas with no staff.
I take your point that LLW may only be marginal increase. Though the reduction in benefits bill is not to be underestimated as a good outcome. In political terms LLW is partly symbolic as well as realistic achievable goal that has public support. I think its a first step. Despite what many might think Marx was not against reforms. He did not think they were the end of the matter.
Your figures do show that LLW should be higher to realistically provide a reasonable standard of life.
The issue of benefits came up in Marxs time. Landowners at one point in 1800s reduced agricultural workers wages to below subsistence levels as they knew they could get them topped up by the "Poor Law".
Summary of Marx
here
Value,Price and Profit
Its basically a summary of Capital volume one. What he is taking issue with is a simple correlation between increase in wages leading to higher prices.