mirrorshard: (Default)
Somhairle Kelly ([personal profile] mirrorshard) wrote2012-10-08 12:59 am

Housing benefit & the minimum wage

If you resent minimum wage requirements, and you also resent the size of the housing benefit bill, you are not only an arrant hypocrite, but a rather foolish one. Sadly, it doesn't seem to be that uncommon in the general public, who have apparently not grasped some fairly simple facts.

1) Most people who are claiming housing benefit are in work. They're claiming housing benefit because their employers are not paying them enough for them to pay their rent along with all the other useful things in life. There are a number of entirely legal ways to do this, ranging from zero-hours contracts (where you might work 20 hours a week at minimum wage, and take home £130, or you might not work at all) to "apprenticeship" positions paying £2.50 an hour. Or, indeed, paying a full-time minimum wage to someone who is trying to support a family on it.

2) Everyone needs somewhere to live. This costs money, because that's the only way you can get both security & economic independence, and for some reason we seem to have a long-running fetish for leaving housing to the "free" market and therefore making it more expensive[1]. (And no, we can't just live with our parents. Even if we all, or even most of us, had families who could support us, it's telling that this argument is only made by people who are not currently living with either their parents or their grown children.)

3) There is an income threshold below which it is impossible to save for anything more than unpredictable expenses. (Appliance repairs, vet bills, cold winters. They will happen, and the savings will be spent.) The same goes for capital, with knobs on: unless you already have quite a lot, there's not really any way to invest it which will pay off better than a decent bank account. Unless you start with money, there is no predictable way to get much richer (or much more secure) than you already are.

4) People who have lots of money prefer not to give it away. They will do everything they possibly can to avoid paying their staff any more than they can get away with, including lobbying, bribing, and bullying government officials to make sure that minimum wage legislation does not rise to a sensible amount. For a complicated set of reasons, the employer classes have a lot more power in wage negotiations than the employed classes do, and therefore much more power to command labour for their money than the employed classes do to command money for their labour.

5) The people referred to in point 3 above have no idea about the cost of living. They don't know how much it costs to rent a flat at the bottom of the market, or a room in a shared house. They don't have any idea how to keep a family fed for a week on £10 and coupons. Their idea of reducing utility bills is something like "buy more insulation and wear more jumpers". This means that their consciences are not troubling them unduly, because they can lie to themselves about the misery they're causing.

6) Somehow, the employer classes have managed to shuffle off the burden of their wage bill onto the state, in much the same manner that one person in a shared house usually ends up doing most of the cleaning. This is because the employer classes are dominated by a combination of ruthless spivs and clueless rich people, after decades of overenthusiastic application of the measurement fallacy[2]. So as a result, housing is effectively treated as a subsidised public good, in the same efficient and cost-effective way as the British rail industry.





[1] OK, that looked like a contentious statement, so I'll expand. The housing market is not free, because it's far too constrained by geography, inequality, and banking practices. It's inherently more expensive this way because there are many more people who want to live in any given area (demand) than there are properties (supply), and the profit motive means that sellers/landlords end up preferentially selling/renting to richer people. Over time, the influx of people outweighs the influx of properties, because land doesn't breed, and therefore the prices of the ever-scarcer goods rise. The ways to fix this would involve making currently unattractive areas of the country much more tempting, and capping private rents (which would involve capping private mortgage payment levels, and probably totals).

[2] "Hurrah, we know how to compare how much people are getting paid, and perform complex analysis on the numbers. We shall therefore ignore anything which is harder and more complicated than that, such as structural inequalities, mutual back-scratching cartels, and any analysis of relationships between reward levels and any actual competence or usefulness."