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Raising London's minimum wage won't help rebalance the economy

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Forty-six of the 50 unemployment hotspots are in northern England, Scotland and Wales. A living wage for all is what's needed, not another fillip for Londoners, argues Daniel Silver

London Mayor Boris Johnson declared in the Telegraph that "we should be humbly thanking the super-rich, not bashing them". This seems a rather odd aspect of social unfairness to focus on.

Many people across the country would think that it is more important for the Conservative-led government to stop bashing people living in poverty through the so-called welfare reforms, which are relentlessly stripping away our social security net and driving increasing numbers of people into poverty – punishing them for a crisis delivered to us by many of the same people that Boris thinks we should be doffing our caps to.

With wages not keeping up with the costs of living, we are now in a situation in which more people in poverty work than do not. Boris says that it is time that we recognised the "heroic contribution" of the super-rich. What about the heroic contribution of people toiling every day to keep our cities functioning and who are rewarded with wages not enough to have a decent standard of living?

There has been an argument put forward by Kitty Ussher in the Evening Standard that states that London needs a higher minimum wage, arguing that it could be done in a way that would not cost any jobs. As a northerner, the costs of living in London are quite frankly eye-watering and anything that supports 175,000 of the lowest paid people in our country to have a better standard of living is to be welcomed.

It is not the plight of people in low-pay that creates destructive regional imbalances and paying people in poverty slightly higher wages in London will not affect the low-paid in Manchester, Burnley or Middlesbrough.

But what happens in London, and in particular Westminster, does have a direct impact on people's lives. The government came to power claiming they would rebalance the economy. It is neither rebalanced geographically, nor in terms of the type of jobs that are available, nor in terms of the huge wealth and income inequalities that exist in the UK.

There are vast and insidious differences between London and the rest of the country. There is an unemployment pattern that has clear regional dimensions. In September it was reported that 46 out of the 50 "unemployment" hotspots are in northern England, Scotland and Wales. As Daniel Knowles shows on Buzzfeed, since September last year, 96% of employment growth has been in London, the south-east, the south-west and the east of England. Northern towns and cities are still dealing with the long-term effects of de-industrialisation, which resulted in many secure jobs based in manufacturing leaving and never coming back.

The problem is not just in terms of unemployment. Where such jobs have been replaced, it is quite often through low-paid and low-skilled jobs that provide employees with little security. In the award-winning book Poverty and insecurity: life in low-pay, no-pay Britain, there is stark evidence of people adapting to survive in places where opportunities for standard employment have drastically reduced and many examples of people living in a condition in which they are moving in and out of low-paid work.

Within these sectors, the average rates of pay are often below the living wage – for instance: for people employed in caring in the north-west, average pay is just £6.03 per hour. Indeed, for many people involved in home care, they do not even receive minimum wage. Boris should get out more – this is some of the real hidden heroism happening that should be recognised.

The public, private and voluntary sectors in the north need to think about how they can deliver a living wage for all and provide secure and sustainable employment opportunities. There are many different things that can happen in our towns and cities independently of London, and of course there are major improvements that are already happening. But northerners can quite rightly ask of government: whatever happened to your promise of rebalancing the economy?

• Dan Silver is co-director of the Social Action & Research Foundation. He tweets @DanSilverSarf


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