In the 923 comics of the Batman series published by DC to date, I’m pretty sure that there was never a storyline involving the perils of central planners maintaining a wage price floor in an unconstrained unskilled labour supply environment (though if this inspires such a comic, I will speak to The Critic about a royalty share of the movie rights). However, with economic villains not just using the minimum wage to commit price signal crimes but threatening to expand their scope, a bat signal should be going up for a hero to save us all.
Batman is for many the archetypical conservative hero — the alter-ego of Bruce Wayne, a billionaire who exemplifies voluntaryism by using the proceeds of his industry and wealth to give to charity and endow the arts. Bruce, like his father, who invested in Gotham’s monorail system, continues to use private enterprise to make up for the state’s shortcomings with Wayne Enterprises’ fusion reactor project, intending it as a gift to humanity for sustainable energy. As Batman, concerned by the deleterious effects of violent crime on society, and as a firm believer in the liberty of the individual to protect private property with force, he rids Gotham of a villain spewing gas making people believe in crazy things.
But there’s also an unintentional lesson for the Conservative Party, with Harold Wilson playing an unlikely flashback villain.
There’s a scene early on in the second instalment of Christopher Nolan’s superhero reboot where pretenders take it upon themselves to dress up as the caped crusader to fight the dangers besetting Gotham City. They have the outfit, they’re generally well-intentioned, but they’re thoroughly useless and would have been more helpful without the silly pretending.
Anyone who heard Kemi Badenoch taking pains to invoke Margaret Thatcher and her ideological mentor Keith Joseph when she launched her showy Policy Renewal Programme will know where I’m going with this, but the endlessly empty and tedious speech, full of unconnected, seemingly chatGPT-generated talking points, was a reminder that you shouldn’t pretend to be a superhero when you’re wearing hockey pants.
On the face of it, the minimum wage didn’t lead to the unemployment that free-marketers warned Britain would endure
The problem with Batman analogies is that eventually you run out of Batman analogies. But nevertheless, there are a great number of reasons why a Thatcherite cult of personality is not helpful for modern Conservative Party leaders. For one, it is often easy to forget how not-of-the-21st century Baroness Thatcher was. Born a century ago, she was deeply and utterly rooted to a certain kind of England and to a certain idea of England — one that was predicated on a high trust society and low church belief in the values of hard work and thrift. That a belief in and an adherence to these things are no longer the route to a comfortable life in an England of Somalian moped gangs and free Motability BMWs is not necessarily the fault of a girl who grew up enthralled by the music of Charles Wesley rather than Lethal Bizzle. But when modern Tories speak of Thatcher in response to these problems, they also open the door to her detractors imposing a teleological burden of omniscient consequentialism on her, bereft of hindsight and right of reply.
More importantly, when a modern wannabe superhero politician invokes Margaret Thatcher whilst avoiding big problems and focusing on minor skirmishes at the fringes of culture wars, you’re left wondering what on earth they thought Thatcherism was. Vibes? Essays?
The great news for fans of high-budget fight sequences is that there is a great big bruising battle on the horizon in the form of a return of wage and price controls, and it’s going to draw everybody in the Westminster cinematic universe into it, whether they like it or not. Unlike Lethal Bizzle, it’s something that Baroness Thatcher certainly had strong opinions on.
In fact, like most of these things, it’s a bit of a reboot. The battered and exhausted Conservatives of the late 90s surrendered the argument to Tony Blair’s Labour government with the National Minimum Wage Act of 1998. Since then, it has even become Conservative Party policy to support the minimum wage — the thought of fighting so ideological, so nasty, so thoroughly Thatcherite a battle as the state setting wages has been anathema to a modern Tory.
Part of this is also because, on the face of it, the minimum wage didn’t lead to the unemployment that free-marketers warned Britain would endure. After all, when the government institutes minimum pricing laws for alcohol or tobacco products, it does so with the express aim that fewer of those products will be consumed. Free marketeers warned that the same should follow with employment — by making cheaply priced labour illegal to sell, employers will demand fewer workers, leading to a surplus of labour and so higher unemployment. But with the minimum wage set at the time at a modest level relative to the median wage, it did not have an immediately observable impact on headline employment numbers.
However, what happens when you have a huge flood of supply of low skilled labour into a market with fixed minimum wage pricing? Well, like the alcohol and cigarette minimum pricing example, you get weak beer and under-the-counter fags — a huge bloating of the gig economy and large amounts of off-the-books labour.
None of this is a new phenomenon — nobody who lives in Britain can have failed to see the proliferation of Deliveroo and Uber Eats services. They also give an insight as to what the equilibrium rate for unskilled labour looks like in the wild: significantly closer to zero than it is to the hourly national minimum wage. But it isn’t going to get too many pulses racing come election time.
Tories need to have the ideological fortitude to risk being unpopular
What is far more likely to trigger a political fight is not the minimum wage in and of itself, but the issue of wage compression and how to fight it (I promise we’ll get back to the Batman stuff eventually). As the minimum wage has been steadily increased by successive governments, out of step with any productivity increases, then combined with increasingly generous in-work benefits, the earnings of low-wage workers have risen whilst the incentives for employees to seek career-progression or higher skilled roles have declined. This is because the minimum wage has caught up with the wages that would have been paid to higher skilled workers. There are some wage spillovers as employers try to establish some differential between the lowest paid workers and more senior, higher-skilled roles, but this will typically be only £1–2 an hour difference. Firms that can’t swallow this extra cost to establish a differential (such as in the hospitality industries, where you would typically see a high number of workers on the NMW), will often restructure, cut down on job ranks and flatten pay structures, increasing wage compression. All of which has contributed to huge market distortion, as well as destroying incentives for workers to upskill. Why take on extra work and responsibilities for a negligible increase in wages? To put things into perspective, the 6.7 per cent increase in the minimum wage announced by Rachel Reeves last week means that anybody working a full-time, 40 hour week will earn over £25,000 per annum. Coincidentally, £25,000 per annum is the threshold at which graduates have to make student loan repayments, meaning that a first class graduate could very well see themselves comfortably out earned on take-home pay by the Tesco shelf stacker they cross paths with when buying their lunchtime al desko meal deal. This is going to lead to an unpleasant trap at the bottom of the market with workers dogged by universal credit withdrawal, student loan repayments and fighting to escape the minimum wage.
But how to fight this feedback of low productivity and low incentives? This is where we return to our Batman x Margaret Thatcher action adventure. Keir Starmer has it relatively easy — a villain that can appear as a saviour to the public, raising wages not by increased demand for the marginal product of labour but by government fiat — all the while compounding the problems. The recent Next worker pay case opens the door for him to go further: in establishing de jure setting of wages in specific roles by benchmarking against incomparable roles, the courts pave the way for a formalising of something resembling the Counter-Inflation Act 1972 or National Board for Prices and Incomes (of vanquished Thatcher foes Ted Heath and Harold Wilson respectively) which would see the government take a central role in setting wages.
This would be a huge step, but one that in the current climate could be politically achievable. And it’s why the Conservatives should not play act at being a Thatcherite hero. It will be easy to let it slide and to focus on the easier culture war skirmishes, but they need to be the real deal: a believer in the importance of the individual and in the evils of central planning and socialism. They should want wages to rise for all, and for that to happen there is no avoiding hard trade-offs which get economic growth. To achieve this, they need to have the ideological fortitude to risk being unpopular and take on the damaging effects of a policy that is an easy sell for their opponents. They need to destroy the accepted wisdom that state-mandated wage rises bring prosperity to workers. They need to make the case that the free market should set wages, not Whitehall, and that the price mechanism can fight zombie corporatism living off low wages subsidised by in-work benefits.
They’ll hate you for it, but that’s the point of Batman — he can be the outcast. He can make the choice that no one else can make, the right choice.
