Is the convergence in British wages a "Clean Hand Tax"?
Are British workers paying a Clean Hand Tax?
This is something that came to me recently, with minimum wage increasing each year at a decent clip, it feels, at least, as a feeling that the wages of an entire raft of employees are being compressed.
So what is the Clean Hand Tax?
My belief is that compensation for many office and similar roles has decreased relative to traditional bastions of minimum wage jobs like retail and hospitality.
Supermarket workers now earn roughly what a large amount of the insurance industry's administration and clerical staff make.
Indeed, Lidl and Aldi both offer pay around £12 per hour (roughly £24,000 per year). Which many roles in PR and Advertising agencies will be paying their junior staff.
I am dubbing this the Clean Hand Tax.
Why am I calling it this?
Calling it the great workers' salary convergence does not have the same cache as calling it a Clean Hand Tax. Because, in a way this is a tax by private businesses on the wages of educated and skilled workers.
This tax has come about due to several reasons.
- Ever increasing minimum wage (which is a good thing) has closed the gap.
- Educated graduates will see work like retail and hospitality as below their skill level, so they will opt for a similar paying role in a clerical or admin function. Some of this could also be snobbery.
- Many "professional roles" advertise in annual salary, and roles that are traditionally minimum wage advertise on a per hour basis so workers may not grasp the differences. Especially when unpaid overtime is taken into account.
- The British class system does engender snobbery around certain jobs, even when the pay and conditions are far better than others.
- The value of office work is ever decreasing as automation and computing eliminate many of the executive functions and learned skills that were previously required.
Final Thoughts
Now, this is more of an opinion than a deep dive into the data; however, there does seem to be a trend developing where there is convergence across a large number of workers in the British economy.
What are the long-term implications for this? I do not know or can predict at this time.
What I do know is that for many workers this is a good thing and we should welcome this increase in wages.