DEBATE: Should the government tackle poverty by compelling firms in the capital to pay the London Living Wage?

Downing Street On The Last Day Of Parliament Before The General Election
We have a serious cost of living crisis in London (Source: Getty)

Should the government tackle poverty by compelling firms in the capital to pay the London Living Wage?

Miriam Mirwitch, chair of London Young Labour, says YES.

With the cost of living soaring across our capital, all Londoners in work should earn at least a real living wage. The new minimum wage proposed by the government just isn’t goodenough.

It is unacceptable that young people under the age of 25 can be paid a lower minimum wage, just because of when they were born, even though they may have the same need for housing, similar family responsibilities, and living costs as high as someone older.

Young people deserve real recognition for the work they do, and not a start in life on a minimum wage that plunges them into poverty.

Inequality is soaring across our country; a minimum wage that is not enough to live on feeds poverty and injustice. It prevents those earning it from having a decent standard of living.

The Conservative government should introduce a London Living Wage to make work pay fairly and ensure that people are fairly compensated for their hard work.

Read more: Planned National Living Wage surges defy economic reality

Nerissa Chesterfield, communications officer at the Institute of Economic Affairs, says NO.

We have a serious cost of living crisis in London, but the solution is not to force companies to increase pay.

The introduction of the National Living Wage has already put 60,000 jobs at risk. A London Living Wage that arbitrarily fixes minimum wages to living costs (without considering productivity) is risky at best, and potentially harmful for those whom it is trying to help at worst.

If the wage is set too high, companies may be forced to cut hours, end in-work perks, and even let go of some employees altogether to make ends meet. Rendering those already struggling unemployed is far from the antidote needed to tackle poverty.

Instead, politicians must address what makes living in London so costly in the first place. With Londoners spending on average two thirds of their income on rent last year, housing would be a good place to start.

Overall, liberalisation of onerous regulation is likely to be the answer – not more dangerous intervention.

Read more: DEBATE: With labour costs up, do we need a rate rise?

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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