October 14, 2015    8 minute read

The Minimum Wage, Unemployment Benefits, Natural Morality and Social Cohesion

   October 14, 2015    8 minute read

The Minimum Wage, Unemployment Benefits, Natural Morality and Social Cohesion

Prefatory Remarks

This is a qualitative examination of how a legislated Minimum Wage and Unemployment Benefits leads to a severe distortion of many individuals’ morality and an argument that these two crucial policies are detrimental to the very idea of a so-called “Big Society”.

Socialists often deride those who espouse Free-Market Capitalism on the basis that Capitalism encourages a materialistic mentality in society. Personally, I would agree with Socialists with respect to the fact that the Pseudo-Capitalism we live under does indeed encourage a gross, materialistic tendency amongst many. However, realising genuine free-market ideals would have quite the opposite tendency (especially if they were to be realised in conjunction with other policies that promote freedom). In a truly free market, there would be neither a state-sanctioned minimum wage nor unemployment benefits – both of which help foster an unnatural tendencies, disinterest towards our fellow people and alienation of society from the individual.

Brief sociological analysis of the Minimum Wage Mentality

Robert Skidelsky wrote in ‘How Much is Enough?’ that “Money as an ends in itself is madness”. The idea that money is merely an instrument or means in procuring the object of our needs and wants (an idea that dates back to Aristotle, at least) might escape those who chase money as an ends-in-itself; this might, as Skidelsky claims, be a sign of a serious mental illness. On this reading, the legislated Minimum Wage may help propagate a severe mental illness in society.

I wouldn’t go so far as to claim that the activity of pursuing money as an ends-in-itself is definitely indicative of severe mental illness (each to their own preferences, after all) but I would say that the legislated Minimum Wage is a serious, though curable, ailment in any society that suffers from it.

One need only observe youth who take up salaried jobs that require relatively little or no skill; in this situation, it is not uncommon to hear “I’ll be getting paid ‘£X’… which is ‘£Y’ above the Minimum Wage” – and hence, this subtle indoctrination that initiates self-reinforcing mechanisms which perpetuate tendencies in our society begins at a tender age as many young people entering the labour force are conditioned into evaluating their wages’ value in relation to an arbitrarily legislated benchmark, rather than evaluating them as solely being instrumental in obtaining other ends.

It is easy to see why this conditioning may then subsequently manifest itself in adulthood (albeit in a mutated form of comparing one’s wages to someone else’s – especially when those doing the comparing earn wages that are significantly higher than the minimum wage and they are looking for a new benchmark) and this mentality of comparing earnings in relation to certain benchmarks can, thereby, spread even to those who have never worked jobs that pay near the minimum wage or who had even ever thought that the activity of comparing their wages to others’ would be remotely fruitful.

One could easily argue that comparison of wages is trivial since it is natural for people to want to compare themselves with other people. Yes, though it is easy to see why it may be natural to compare one’s self with others because we all do it on such a regular basis, what one cannot justifiably argue, however, is that it is natural to do so in the way that many of us do. Given informational and time constraints, coupled with the limits of mental exertion, comparing ourselves even to just one other person is done so only with respect to a limited number of aspects. The psychological prioritisation of those aspects that are to be examined (which may be, for example, facial features, clothing, speech, employment, education, family, wages etc.) is directly determined by both internal psychological and external sociocultural factors.

What happened to valuing a job for the job’s sake, rather than for its instrumentality in obtaining money? Yes, we value those who give their time freely for what they see as being beneficial for society; volunteers at charity shops, soup kitchens, orphanages, old-age homes etc. but the intrinsic value of many other jobs are often ignored whilst we compare their respective salaries. This might discourage some people from doing unpaid activities or activities whose pay is too close to the minimum wage purely due to the fact that they may believe that the monetary compensation for a job is directly proportional to its intrinsic value. After all, the minimum wage essentially dictates to society that a certain level of monetary compensation is required for a job to have an acceptable level of intrinsic value in a person’s life; therefore, it imposes a restriction on value judgments that one makes with respect to use of one’s time.

Brief sociological analysis of the Unemployment Benefits Mentality

The effect of legislated unemployment benefits on social mentality is also disturbing. Far from helping those who receive these benefits (the provision is, of course, made with good intention), those very recipients are actually stigmatised by society; it is not uncommon to hear them being described as “dole rats” as opposed to acknowledgement of and sympathy toward a potentially serious hardship.

By providing unemployment benefits, the State sets up the illusion that this thereby absolves us (at least partially) of our duty to our fellow person who has fallen on hard times. One may argue that the government simply does the job for the citizenry who would have done the same thing anyway; however, the taxes that supposedly pay for unemployment benefits are often dwindled away due to administrative inefficiencies and far less of it goes to the needy than we might like to see. If unemployment benefits and income taxes were simultaneously cut, people would both have more resources and the moral impetus to help their suffering fellows.

Currently, the pervasive idea that the government will look after the unemployed means that they are more likely to spend more time ‘on the dole’ than if these benefits did not exist. If, instead, the local community, friends, family etc. take it upon themselves to provide support for those who are unemployed, it fosters a greater sense of identity and co-operation amongst those involved. If people directly provided support (rather than in the mediate manner of jobseekers’ allowance and other such benefits), they also have additional incentive in helping that individual find work instead of just leaving them to their own devices.

This will also help prevent or at least reduce stigmatisation of the affected individuals since close friends, family and the community will have far more incentive to interact and ultimately empathise with the individual who would have no guaranteed unemployment benefits from the government. That individual will also bear direct witness to the personal expenditure of his supporters’ resources (as opposed to the alienating, impersonal administrators of the State whom they have no real personal connection to) and this would also encourage their hunt for a suitable job.

Furthermore, it is claimed by some that unemployment benefits are simply not enough to support redundancies. It is true that, amongst those who face redundancy, some can live more effectively from their allocated portion of benefits than others. Of course, it is difficult to assess a person’s exact living standards, personal finance, life situation etc. from the State’s perspective since this would drive up the costs of provision, complicate the ‘equity’ of the arrangement and so on. If society were directly responsible for caring for the unemployed, those who are closest to the individual can, more accurately, ascertain the exact level of resources the unemployed individual requires to function optimally whilst they seek a new means of self-sustenance.

Policy suggestions and potential for increased social cohesion

However, it can be argued that during periods of relatively high unemployment and especially when there is structural unemployment, certain communities may be harder hit than others and they could not cope with independently supporting the unemployed since they may account for a disproportionately high amount of the community. In this situation, a simultaneous tax cut across all income brackets and a reduction in unemployment benefits would enable the wealthy to engage in direct philanthropy (as opposed to having their property confiscated from them in the name of helping society). Similarly, to re-iterate, tax cuts in a community means that people in the community would have more resources with which to help their fellows in the community.

Seeing the provisions of the ‘welfare’ State scaled back and enacting tax cuts across society would incentivise the wealthy to set up independent, private organisations that aid the unemployed and impoverished more so than they currently do. This increased incentive for generous philanthropy by the affluent would be experienced directly (rather than the indirect, inefficient and inequitable redistribution via high taxes) and, in this way, the disadvantaged would feel a greater connection with the affluent whilst the affluent would have significantly more empathy toward the unfortunate (instead of presuming that ‘the government will look after them with all the taxes I pay’).

This would encourage a deeper, closer integration of society across socioeconomic groups and there would, thereby, be less mutual animosity between various income groups that is currently often exploited by opportunistic campaign managers, public figures and divisive politicians; talk of ‘us versus them’ and ‘the 99% versus the 1%’ is definitely socially divisive and plays on perceptions rather than presenting reality.

Concluding Remarks

Ultimately, simultaneously cutting both unemployment benefits and tax rates (across society) by a significant proportion is the only way we can legitimately promote the idea of a ‘Big Society’ and genuinely foster compassion and co-operation between and amongst peoples in the UK (regardless of their socioeconomic background) during these relatively hard times.

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