• The Choice

A race to the bottom

In Norway, there is no minimum wage. Wages are agreed by employers and employees via collective bargaining agreements, i.e a union. As Unions here in the UK set their eyes on a £15/ hour minimum wage, I would argue that this is counterproductive.


I've spent nearly two decades working in the maritime industry. I fast learned that there is always someone willing for less than you. My career started out on bulk cargo ships operating between Australia and China. Working with mostly crew from India life was tough, and compared to my peers in the cruise and offshore industry my salary was down near the bottom of the pay scale for the industry. After two years as a qualified officer working on these cargo ships, I put my issues regarding salary and working conditions to my employer, their response was you have a contract, you can take it or leave it. I resigned immediately. It wasn't until 2 years later that the company replaced all British crew with Indians. I'm glad I left. I then moved to the offshore working on ships which did prospecting and surveying in the oil and gas industry. When I first started, there were plenty of UK qualified staff, gradually over the decade I worked for the employer, they were replaced from staff from mostly Eastern Europe who were on less generous terms and conditions.


Who do we blame for this? For me, I accepted that this was the way of the world, I moved to employers who compensated me what I believe I deserved, I never relied on government to set my wage. But it did get me thinking why things are the way they are, and why it's getting harder to maintain a salary at the level I enjoyed over the past decade.


When we go to the shop, we want the quality products at low prices. If we want to fly somewhere, we want to do it at the cheapest possible prices, it's no wonder that Ryanair are famous for paying their staff what would be considered below UK minimum wage. Take the recent example of P&O firing all staff as a more publicised dispute in my industry, yet this has been happening for decades in shipping. To get low prices, corporates need to pay low wages. Never more so in a time of pandemic when business has been obliterated by lockdowns and travel restrictions.


Whilst we can also look at greedy corporations, many of them deal in fine profit margins, it is only through economies of scale that their profits look enormous. Granted there are some business out there which have been ripping people off whilst offering low value for money. However, in my opinion that we shouldn't look to companies which make pennies off every litre of fuel or every item of clothing or every flight sold, to lower their prices.


Back to a minimum wage. In a time with record breaking inflation, which will already see businesses on the brink of bankruptcy, increasing the minimum wage will only push companies further towards the edge. My belief is that wages should be set by supply and demand, if there is too much supply (labour force), then government is doing something wrong and that's where it should intervene. The problem is, and this is one of my biggest reasons for Brexit, many people often argue that immigration is good for the economy, what they don't understand is just because it is good for the economy, doesn't mean it's good for them. If you increase a labour market, then wages are driven down. This means business (the economy) can expand from large profits and low wages. What we have seen since Tony Blair opened the immigration floodgates in 1997 is a linear race to the bottom in wages because there has always been someone else prepared to work for less than you or I. If employers could pay less, they would, hence the need for government to impose a minimum wage.


Recently we have seen announcements that the government is about to allow temporary measures for certain areas of the economy to relieve workforce pressures. Healthcare, airports, hospitality. Again, this is counterproductive, the government should instead refuse such requests. If these businesses want to attract people, they must pay them more, if they won't pay, they won't get the staff and then lose out on profits. Take Heathrow airport for example where they have had to limit the number of flights, or some restaurants in the South of England which have had to shut part time due to labour shortages. The market should dictate wages, not government, and when a government or anyone pro immigration argues that it's good for the economy, well take a minute to think what the economy is, are you the economy?


Decades of incompetent government has seen a wage stagnation whilst the cost of housing, and living has only increased. It is a trend which is set to get worse and with a clueless government, it's worrying. I worked on some of the most modern ships in the world, ships which could be input with a comand to sail itself around the world at a push of the button, it could be controlled from anywhere in the world. We were only there because the rules said we had to be there. The rules will change and we're not far away from that. The world will soon see autonomous taxis, trains, buses and maybe even planes. Shelves will stack themselves, drones will do deliveries. Robots will lay bricks for construction. Banking will all be done online. My local bank concierge never asks me what I want anymore when I walk in. The first time he did it, and I told him, his response was that I could do my task online, or if I want to deposit cash, I can use the machine. I said if everyone did that, then nobody would have a job in here. After a few times, they got the point. If I did everything online, I'd never step out of the house.


Society is going to face some real problems in the near future in terms of employment and wages in the near future. It will take good government leadership to ensure that people can stay in meaningful employment whilst earning a decent wage.