“Race to the Bottom”

The Coalition has sought to Abolish the Agricultural Wages Board. Labour oppose this, because they think the Countryside is still some Dickensian hell of near-slave labour, and that only State intervention prevents a “race-to-the-bottom” in wages. The phrase appears again in Labour shadow Education Minister Tristram Hunt’s argument about British Skills shortages.

This phrase also underpins the arguments for the Minimum wage, which Labour introduced, and every other intervention into people’s working lives. Of course the UK has been getting steadily richer over the past couple of centuries, with or without government intervention in wages and industrial conditions. Labour like to point to Laws being passed as the point at which things change. It’s not like this of course. The law changes when it becomes acceptable and economically viable to do so. The law reflects change to society. It doesn’t drive it.

The average British worker expects more than 12-hour factory drudgery for tuppence-ha’penny an hour, but in poorer parts of the world this represents a step up from subsistence agriculture, which is 14 hours of drudgery for no pay, with the ever present risk of starvation. He won’t accept back-breaking labour in the fields, which is why we import Polish fruit-pickers and Chinese cockle-gatherers. The native Brit who once would have done these jobs is better off on welfare.

As countries become richer, they take some of the increase in productivity and spend it on better working conditions, wages and so forth. Some people – the kind who become North-sea divers for example, are willing to take on personal risk for a big pay-cheque. Others, those who become HMRC tax-clerks would sacrifice pay-cheque for a near-job-for-life. The difference between socialists is they think GOVERNMENT should decide who gets to decide their working conditions. But it’s clear. The shortage is of skilled Labour.

Unfortunately, Labour cannot follow the logic. If the shortage is of skilled Labour, then skilled Labourers do not need protection. Employers will be competing in wages and working conditions to attract them. Far from being a “race to the bottom” it’s inflationary. Government has decided that there should be a minimum wage, and for those whose labour isn’t worth even that, a welfare state. And with that, you’ve protected people from “exploitation”. It’s now possible to survive in the UK while taking none of the Jobs on offer. This is true of every developed nation, and this limits employers power over people.

Labour seems to think Government is all that stands in the way of employers, who all carry whips and wear top-hats, driving down working conditions and pay. Nothing in economic history supports this view, though it’s a comforting idea, if you see everything through scarlet-tinted spectacles and romanticise the Workers’ “struggle”. If you want decent working conditions for everyone, give them the tools and let them get on with it. People, making the best of what they’ve got will, over the generations, given peace and freedom, drive up living standards.  Decent pay and standards will happen when everyone’s rich enough to afford them. Conditions we now think acceptable will be shunned by our children. There is a case for minimum standards but it’s weaker than most think. “Race to the Bottom” is a left-wing dog-whistle, which should alert you to the fact the speaker is an idiot.

Scrap the Agricultural Wages Board. It makes no difference. It’s a relic of the bygone age. Like most of Labour’s thinking.

4 replies
  1. Edward Spalton
    Edward Spalton says:

    When I was running my small business in an agriculture-related field, we had similar arrangement to the Agricultural Wages Board (National Joint Industrial Council). I found it quite helpful as it gave us a basis from which to start . We added various production bonuses and incentives for a good attendance record.

    The NJIC eventually fizzled out but I was actually quite grateful to have a bit of a yardstick to start with. In theory I support the removal of officialdom but, in practice, I found this particular bit quite helpful

  2. Luke
    Luke says:

    "The law changes when it becomes acceptable and economically viable to do so."

    I agree with much, but that's a bit Panglossian. I don't think it was economic forces that ended slavery in the US. Now, it might have happened eventually without the Civil War, but "eventually" would have been a long time for those who were slaves.


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  1. […] have the power, absent any legislation or unions, to drive down pay and conditions in a “race to the bottom” is risible. The strike then, is a 19th century solution to a 21st century problem.  […]

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