Minimum wages for us – and maximum profits for them

When the minimum wage of £3.60 (adult) became law in 1998 many of capitalism’s apologists predicted widespread unemployment and bankruptcies galore. No such disasters occurred. On 10 October the rate was increased to £4.10 and the prophets of doom were once more out in force.

Like all reforms of capitalism the minimum wage legislation leaves intact the basic mechanism wherein a small handful live of the surplus value produced by the working class. However even by comparison with previous capitalist reforms this piece of legislation has proved woefully unsuccessful.

In the two years since it was first introduced the Inland Revenue has had to talk to 16,000 companies about non-compliance with the Act. Peter Grattidge, head of national minimum wage operation at the Revenue, reckons that staff have been paid under the minimum wage level in about 40 per cent of cases. The catering trade is notorious for sharp practices, such as counting tips in calculating minimum wage levels.

A recent example of how this reform works in practice is the swank London hotel The Sanderson. The rates for staying at this hotel vary from £210 per night for a double room to £2,000 a night to stay in the penthouse suite, a sharp contrast to the conditions of the cleaners and porters in the hotel. “From next month the hotel is proposing to switch from a shift system to a rate that will be fixed at £2.15 an hour. And rather than giving a guarantee of 38 hours a week the staff will see the minimum cut to 32 hours. A cut in hours might benefit some staff, but their contract commits them to work 48 hours a week if they are needed.” (Guardian, 24 November)

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