The National Minimum Wage as it is at the moment is detrimental to businesses, employees and the economy. Anyone who wishes to employ is currently is forced to pay at least the minimum wage even if they deem the employee to be worth less than this amount. This leads to the predicament of employees being unable to afford or be willing to employ which, when the economy is suffering as it is at present, increases unemployment and subsequently Government expenditure through benefits such as job seekers allowance.
Instead employees should be free to pay whatever wage they deem appropriate and if this is lower than the current minimum wage the employee can apply for top up benefits from the government to take their pay up to the minimum wage value. This would decrease the amount of benefits paid out, lower unemployment and increase the number of economically active people.
Why is this idea important?
Given the fragile state of the economy this reform of employment law would be perfect for reducing government spending in the biggest spending government department and increasing private sector enterprise as well as opening opportunities for less skilled people who have tried and failed to gain employment in tough economic times.
It is important for the Government to act responsibly and make provisions for people to become economically active whilst providing benefits to ensure reasonable living standards.