Sir, – Charles McLaughlin (Letters, February 11th) argues that increasing the minimum wage will lead "multinational employers [to] question why it costs the same to hire a dishwasher in Dublin as it costs them to hire a research chemist in Lisbon."
First, it is foolish to think about hiring workers exclusively as a business cost. Businesses depend on labour to produce their goods and services. Worker productivity has increased enormously in recent decades, at a much greater rate than wages. The constraint for businesses is less to do with the “cost” of employing the worker, and more to do with market demand for the business’s products.
Second, higher wages boost purchasing power, and therefore increase demand for goods and services. Wages swallowed up by rent and other essentials are not available to buy consumer goods.
It is in every business owner’s interest that workers in general are paid well enough to afford the goods they themselves offer for sale. This is a co-ordination problem: essentially, businesses want all workers to be paid well, except their own. Hence the need for a minimum wage that applies to everyone, that must be high enough to make sure every worker can also function as a consumer.
:fill(white):background_color(white)/static.themebuilder.aws.arc.pub/irishtimes/1647534191476.png)
Third, the cost of living in Dublin is significantly higher than that in Lisbon. Therefore, workers here need a higher income not only to support the consumer market, but merely to afford essentials (including ever-escalating rent).
Fourth, nobody is saying employers must pay kitchen staff the same as research scientists. Employers may continue to incentivise people to become research scientists by paying them more than those people would earn working, for example, in the food service industry. But Mr McLaughlin suggests the only way to stop businesses locating their research laboratories in Portugal instead of Ireland is to make sure that workers in food service are not paid enough to live on. In other words, that those who work in kitchens are less deserving of a civilised standard of living than those who work in laboratories.
Finally, if employers (and Mr McLaughlin) are so exercised by the cost of paying a minimum-wage employee in their kitchens enough to live on, they are more than welcome to wash their own dishes. – Yours, etc,
ALAN EUSTACE,
Magdalen College,
Oxford,
United Kingdom