What would a higher minimum wage do to Britain’s cities?

Labour leader Jeremy Corbyn and his shadow foreign secretary Emily Thornberry campaigning last week. Image: Getty.

The national minimum wage has become increasingly popular with politicians in recent years and remains so in this election campaign. And it isn’t surprising. Pledges to increase the minimum wage offer a pay rise to lots of workers at a time when the UK is experiencing an unprecedented fall in real wages – OBR forecasts suggest that earnings will still be lower than their 2007-08 level in 2021-22.

The concern though is that any significant increase could impact on employment, particularly in low wage sectors and places. Just as the benefits to workers in low wage cities may be larger, the costs may be larger too, if employers struggle with rising wage bills.

Jeremy Corbyn launched his election campaign with a pledge to increase the minimum wage to £10 per hour, tying the minimum wage to the Living Wage rather than median pay. The Conservatives have since reiterated their commitment to increase the National Living Wage (NLW) to 60 per cent of the median by 2020.

From left or right, a single legal wage floor is always going to be a blunt tool – in part because of the significant differences between cities across the country.

The most recent increase in the NLW, which tracks towards the Conservatives’ 2020 goal, is likely to have had a much greater impact outside London and the South East where a higher proportion of people tend to work in low pay sectors. One in seven employees in Wigan, Doncaster and Hull are likely to have seen an increase in their wages as a direct result of the 2017 NLW. This contrasts with just 1 in 40 in Oxford.

Coverage of the April 2017 NLW at city level: click to expand. Source: Low Pay Commission and Annual Survey of Hours and Earnings, 2017. For further information on the LPC’s methodology see here. Local authority level data has been weighted using jobs data from ASHE.

 

Corbyn’s pledge to increase the national minimum wage to take account of costs of living would have a much larger impact everywhere, for two reasons. Firstly, the level would be higher; and secondly, it would be extended to include 18 to 24 year olds.

The proportion of workers earning the minimum wage in Oxford would rise from one in 40 to one in eight. But again the impacts are likely to be much more significant in some areas compared to others. In Doncaster, where one in seven workers currently earn the NLW, coverage would rise to over a third under Labour’s plans – virtually turning it into a one wage city.

Potential coverage of Labour’s 2020 minimum wage pledge: click to expand. Source: Annual Survey of Hours and Earnings, 2017 and OBR March 2017 forecasts. Note: coverage will be slightly over-estimated as figures include 16 and 17 year olds.

In some cities, the cost of these increases may be too large for employers to bear and low wage workers could face a reduction in their hours or redundancy as a result. Cities like Oxford where those on the minimum wage make up a lower proportion, can much more easily bear the cost than cities like Hull.

Increasing wages in a sustainable way in low pay cities means accompanying the minimum wage with policies that support businesses to pay higher wages.  This means investing in education, training and infrastructure in these places in ways that improve businesses’ access to markets, suppliers and the skills they need – and that ultimately creates an environment for businesses to thrive.


At the other end of the spectrum, even with Labour’s proposed increases to the minimum wage, rising costs in our most expensive cities mean that its impact on low earners will be limited. Over the last five years, average house prices in London have increased from 12 times average wages in 2011 to 16 times in 2016.

So a single level wage floor would on the one hand make the standard of living high in Doncaster, where the cost of housing in particular is much lower – but it would not support higher standards of living in those cities where housing costs are far past the wages of many people, and not just those earning minimum incomes.

This is not necessarily an argument for introducing regional minimum wages. But, as we’ve argued before, the Low Pay Commission could play a role in assessing where the floor could be set in high wage cities, like London, without impacting on employment, as a way of encouraging higher wages where employers can afford it. More generally, it reinforces the need to introduce other measures designed to reduce the cost of living, whether it be increasing housing supply or reducing the cost of transport and childcare.

Wage stagnation is undoubtedly one of the biggest challenges facing the next government. Without recognition of the different challenges facing different cities and an approach to policy delivery that reflects this, the risk is that the most expensive places will become increasingly unaffordable for low paid workers, while in others their employment opportunities may be reduced.

Naomi Clayton is a senior analyst at the Centre for Cities. This article was originally posted on the think tank’s website

 
 
 
 

How the rise of anti-crime politics caused lasting harm to Black Americans

"I see an awareness that has developed in the Black community in the last 10 years or so about how deeply racist the criminal justice system has become," James Forman Jr. says. (David McNew/Getty Images)

The police killing of George Floyd, and the protest movement that emerged from it, has reinvigorated a national conversation around reinventing criminal justice policy in the United States.

At the same time, reports that violent crime is rising in many US cities have resurrected talk of the much-disputed “Ferguson effect,” a theory put forward by law enforcement professionals, and some researchers, who argued that police slowdowns in the wake of the first wave of Black Lives Matter protests resulted in elevated rates of violent crime. President Donald Trump is trying to weaponise this narrative, paired with images of federal officers clashing with protesters in the streets of Portland, to wage a 1968-style backlash election campaign.

“People who want to mobilise a lock-them-up style of either policing or prosecution have tried to weaponise those short-term increases,” says James Forman Jr., professor of law at Yale Law School. “Criminologists will say you have to be very, very cautious about short-term movement [in crime statistics]. We don't know whether or not what we're seeing right now [with violent crime increasing] is going to sustain itself. But the fact is, it's here and people are talking about it.”

In 2018, Forman won the Pulitzer Prize in nonfiction for his book Locking Up Our Own: Crime and Punishment in Black America. Drawing on his experience as a public defender in Washington, DC, he traced the emergence of anti-crime politics in late 20th century Black communities. Forman showed how newly empowered Black politicians fought for policies they believed would protect and uplift Black Americans, but inadvertently contributed to mass incarceration. 


CityMetric recently caught up with Forman to discuss crime trends, where he sees reason for hope in this moment and how the Black political class’s attitude toward crime and punishment has shifted since the latter part of the 20th century. 

This interview has been edited and condensed. 

There is talk right now about a resurgence of crime and violence in American cities. We saw similar, more localised concerns after the initial 2015 Black Lives Matter protests in Ferguson and Baltimore. Do you fear this could reinvigorate the kind of politics you describe in your book among segments of the Black community and political class?

I fear that it could be reinvigorated nationally and also in the Black political class. Look at the political conversations that are happening in Atlanta right now, for example, a city that also has seen a short-term uptick in crime as it is a site of a lot of protests about George Floyd and Breonna Taylor on the national level, as well as Rayshard Brooks and Ahmaud Arbery more locally in Georgia.

I think that you can already see in some of the language of the local elected officials this idea that we have to be very careful about pulling back. [They are saying] “while the protesters may make some valid points, we can't risk returning to the ‘80s and ‘90s.” Those decades really traumatised the United States, and particularly traumatised Black communities. There's a deep fear about returning to the levels of the violence that we saw in the crack years.

You write a lot about class divides among Black Americans, where middle income and elite Black people don't suffer as much from extremely punitive policies. They also have closer ties to the politicians who are creating these policies. There are very specific groups of people, even in marginalised communities, whose voices are heard.  As a result of these dynamics, you write about Black politicians fighting for things like mandatory minimum prison sentences or against decriminalising marijuana. Is there still that disconnect between those who suffer the most from criminal justice policies and those who are actually heard in political discourse?  

Let me just say a caveat, that when we talk about class divisions in the Black community it's important to hold two truths in our head at the same time. Bruce Western and others have shown the way in which class, educational status, income can dramatically reduce the likelihood of being hardest hit by the criminal system – namely incarcerated. Middle class and upper middle class Black people get some measure of protection. It's also true at the same time that Black people of all classes are worse off relative to their class counterparts in the white community. 

One area where class is least protective is policing and police stops. The police do not know how many degrees you have. They don't know how much money you have in your bank account. I want to be very clear that in making this point about class, I'm not making the argument that race or racism don't matter in this context. 

In terms of how it plays out now, I see an awareness that has developed in the Black community in the last 10 years or so about how deeply racist the criminal justice system has become. Twenty or 30 years ago they had a consciousness, but there's levels of understanding. Many of the people I write about in the book wanted to promote the interests of the Black community. They weren't motivated by indifference or callousness. When presented with mounting evidence of how awful this system has been in Black lives, they're reconsidering and recalibrating. 

Lots of former elected officials have said to me some version of “I didn't know at the time and I appreciate that you showed us in our full complexity. I appreciate that you showed the pressures we were under. If I had known then what I know now, maybe I would have been less quick to go along with some of these harsh measures.” 

The second thing that has affected the Black political class has been the emerging movements, led by Black people in particular and led by young people. They not only educated leaders, but pressured them and made them understand that there is a political cost. If you're not moved by the moral argument, then you'll be moved by the political argument. You'll be moved by the people protesting outside the office of District Attorney Jackie Lacey in Los Angeles, for example, where Black Lives Matter LA has held, I believe, a year of consecutive protests against a Black district attorney who has had really some of the worst practices.

From what I can tell, she's been pressured by the movement to change some of her positions on important issues like prosecution of low-level drug offenders, for example, and the aggressiveness with which she prosecutes police officers for acts of violence.

What do you make of the calls to defend or even abolish the police?

What I find so compelling about abolition, initially in the prison context and extended to the police as well, is that it shifts the conversation and forces us to go through experiments in which we imagine what it would take to build that world. I think that exercise is very important, because it pushes us further than we are naturally inclined to go. Cultivating a broader imagination is an incredibly important part of this work, because as you know from my book, often it was lack of imagination that caused people to fall back on [punitive policies]. 

That's what caused D.C. Councilmember David Clarke to call the police rather than public health experts when he was overwhelmed with letters about heroin addicts in public space. He was anti-drug war, but he couldn't imagine responding to a call for help with heroin addicts with anything other than police. That's a very common move from even really good and progressive people. 

People who are for defunding, for abolition, are absolutely right about reinvesting that money into alternative structures that support communities. But the reinvestment part doesn't follow naturally from the terms. We might want to come up with a term that captures the new stuff we want to do. I think that's particularly important because one of the reasons Black communities have ended up supporting more police is that Black communities have always wanted their fair share of the resources.

Then, the evidence suggests the United States has too many police officers doing prophylactic, preventative, or stop-and-frisk style policing. The style of policing that leads to district level harassment, pulling people over for no reason. But we have too little investment in the parts of police departments that investigate unsolved crimes. I'm talking about the investigator or the detective who comes to your house after there's been a robbery, an assault, a rape, or homicide. 

As compared to European countries, in the United States we actually underinvest in those parts of our police departments. Jill Leovy’s book Ghettoside shows this in dramatic detail. She describes an LAPD that's stopping and frisking Black drivers wantonly and yet the homicide detectives are still relying on a fax machine and the fax machine is broken. They have to go with their own money to Staples to buy a printer. Meanwhile, other aspects of the department are kitted out in this ridiculous riot gear that makes them look like they're in Fallujah. 

That under investment is particularly damaging to Black communities because we're disproportionately victimised by crime. Because of racism and this allocation of resources, the police are less likely to respond in Black communities. The kids I used to work with in the charter schools in DC, we talk about no snitching, but one of the reasons they would never call the police after they'd been victimised by crime is they would say, “They're not even going to come. You're wasting time.” 

I did a Q&A with Jill Leovy too and her argument is one I've struggled to articulate in our present moment. She argues the state doesn't have a monopoly on violence in low-income Black neighbourhoods, because investigations of violence are deemphasised and crime victims or their loved ones often take retribution into their own hands.  But right now, establishing or preserving the state's monopoly on violence isn't an appealing talking point. 

Yes, this is another thing nobody's talking about. Whatever we're going to do instead of the police has to be accountable to the public. The best, most direct way to have accountability is to have the individuals be public employees. As long as we have 300 million guns in this country at least some of those state employees are going to themselves be armed. It's unreasonable to ask them to do the job without it. Not as many need to be armed as are armed now, but some of them need to be. But they can't be hiding behind union contracts or civil service protections which make it impossible to remove even the worst performing, most abusive officers. 

We can not call them police if we want to. That's semantic, but maybe symbolism matters. But those people have to be state employees. They can work with community-based nonprofits, but there are also communities that don't have as robust of a nonprofit network, and they deserve protection too. These [community] groups have to be accountable to the state and, when they don't exist, the state has to be there. 

Progressives get all the points I just made when it's applied to education. The notion that things be public and accountable to the state is understood when it comes to schools. It's exactly why so many people on the left are opposed to charter schools, because they say they don't have public accountability. They want these things to be a state function. But this point about the difficulty in removing this entirely from the hands of the state is, I think, one that liberals and progressives understand from other contexts.

Jake Blumgart is a staff writer at CityMetric.