Proceeding towards a low-skill economy

Britain’s Finance Minister, George Osborne, wishing us to be known as a high-skill country, has raised the minimum wage. In this way he hopes that employers will be induced to raise workers’ productivity and, presumably, their skill levels. What Osborne doesn’t appreciate , however, is that, usually, productivity improvements in any particular sector come in quantum — and necessarily expensive — jumps rather than in marginal improvements. Automation only comes about when human energy becomes relatively too highly paid.

All that will happen is that many small and medium employers will go out of business, and the ex-employees thrown onto the welfare state where they will lose whatever skills they might have had. We will therefore carry on proceeding towards becoming a low skill country for the bulk of the population and where only the top educational quintile can be considered to be ‘advanced’ — adding saleable value in goods and services for export, and thus survivability.

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