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Low-wage economy increases the welfare bill

Ralph Nadar, the American consumer rights activist, believes that there are issues on which both left and right can unite to make the world a better place. One issue of concern is protection of civil liberties. Another is a fair minimum wage.

A fair minimum wage ensures that workers can live. The worker isn’t dependent on the state to survive.

A fair minimum wage protects good employers from bad employers. If an employee’s wage is too low, then the state — and that means the taxpayer — is subsidising the employer in paying the employee’s wages.

People may ask why some free-marketeers believe in a fair minimum wage? They want a reduction in the size of the state. A low-wage economy actually increases the welfare bill. If employers believe that the cost of labour is too high in an economy, that is because the cost of living is too high.

Maybe, if we want fair wages and a reduction in the burden for employers, then we should look at the cost of living and we should try to reduce it. We can envision other policies in a different world.

But in this world of ours, work is better than welfare. Work that pays ensures that welfare dependency is reduced. A minimum wage that is fair ensures that these goals can happen. The problems in our economy are due to the cost of living and not on wages people are getting in general.

John O’Brien,



Co. Cork


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