Ed Miliband’s proposal to link the national minimum wage to median earnings is at first sight a sure seller. With the Labour lead in the polls steadily narrowing, last week was a good time to reveal his offer to the UK’s squeezed wage-earners. As expected, the CBI issued a warning about ‘political interference’ with wages: but their new deputy director-general, Katja Hall, acknowledged last Sunday that a failure to share the gains of recovery are leading not only to record levels of mistrust in British business, but also strong support for activist government policy amongst the electorate. There is strong political support for action on low pay, and pressing economic reasons, but the devil’s in the policy details. Low wages are tied to low productivity business models, as the report behind the Labour leader’s announcement recognises. Even before the recession, the gap in productivity – measured as the output of … (To read the full article, subscribe below)

Tom Jeffery is an independent researcher focussing on working life and innovation. He contributed research to the Living Wage Commission, and is currently events coordinator for a specialist economics consultancy.