The Agenda

Labour Isn’t Working

As the 1978 poster brilliantly put it, Labour isn’t working.

Until New Labour came to power in 1997, Britain didn’t have a minimum wage. Now, the country has a minimum wage that has been increasing at a fast clip. This is from last week’s issue of The Economist:

When it was introduced in April 1999, the main rate was set at £3.60 ($5.80) an hour, a fairly modest amount. There was a lower floor of £3 for 18-21-year-olds, because young workers’ chances in the labour market were recognised to be especially sensitive to pay.

Since then, however, both rates have risen by 59% and outstripped average earnings, which have gone up by 45% in the past ten years. The increases were particularly big in the four years to 2006, adding to the suspicion that the minimum wage was implicated in the rising rate of youth unemployment over that period. 

There is a lot to be said about the parallels between New Labour and the Obama Democrats. Like Obama, Blair and Brown came into office promising to sharply improve the quality of public services through spending increases, though the Labour party was somewhat more forthcoming about how to pay for the new spending.

Of course, British unemployment rates are now returning to rates last seen in 1997. The Tories were far from flawless. For their sake, they’ll have to do better on this front if, as seems very likely, they win the next general election.

Reihan Salam is president of the Manhattan Institute and a contributing editor of National Review.

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