'Let people pay much lower than the living wage, then let the welfare state pick up the slack' leads to the odd situation where the government are basically subsidising businesses that pay low wages.
Consider someone on less-than-living wages; if the government tops up their pay until they can afford to live, what incentive do they have to try to get a pay rise? If they get paid more, the government will just take some support away, leaving them exactly where they are, unless they can get paid _enough_ more to be over the minimum living sum...
And generally it's assumed you should have workers who have an incentive to want a pay rise, because then they will work harder in order to impress their employers enough to justify a pay increase.
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Date: 2013-04-16 05:13 pm (UTC)Consider someone on less-than-living wages; if the government tops up their pay until they can afford to live, what incentive do they have to try to get a pay rise? If they get paid more, the government will just take some support away, leaving them exactly where they are, unless they can get paid _enough_ more to be over the minimum living sum...
And generally it's assumed you should have workers who have an incentive to want a pay rise, because then they will work harder in order to impress their employers enough to justify a pay increase.