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article imageOp-Ed: The Archbishops' follies on wages and Wonga

By Alexander Baron     Jul 26, 2013 in Business
The Archbishops of York and Canterbury have recently spoken out on low pay and high interest rates. They mean well, but do they know what they're talking about?
John Sentamu and Justin Welby are both unusual types of senior churchmen. African Sentamu is a good, old-fashioned fire and brimstone type of Christian; although he hasn't openly condemned practising homosexuals to burn in Everlasting Hell, it is clear that people will only bend over to pray in his cathedral, and there will be none of that funny stuff with the choirboys.
Justin Welby is if anything even more unusual. A former oil company executive, he took holy orders relatively late in life and has obviously been fast tracked, though it remains to be seen if this was due to the Old Boy Network or something less temporal. Welby is an alumnus of both Eton and Cambridge.
Both men have been in the news recently after commenting on the economy. Last November, Sentamu spoke out in support of the living wage, and more recently he has spoken out claiming low pay is a national scandal.
On learning about the usurious interest rates charged by payday loan outfit Wonga, Justin Welby vowed to put the company out of business by starting credit unions only to be embarrassed by the revelation that his employer - the Church of England rather than The Man Upstairs - helped fund the company.
Let us deal with the Sentamu claim first; contrary to his pronouncements, there is nothing wrong with inequality of income, after all, he receives a higher salary than your local vicar, and people as disparate as Beyoncé Knowles and Bill Gates make considerably more. It is though as he says, scandalous that some people earn or are able to earn so little. Alas, neither the minimum wage nor the living wage is the solution to this very real problem.
Here are the facts about the minimum wage; the living wage will have even more detrimental effects on account of its being higher. The real solution to this problem is unconditional Basic Income, something that would be practicable in Britain today, and many other industrialised countries.
Now, to the Welby follies. Firstly, companies such as Wonga lend real money and suffer real losses if clients default. This does not happen with the banks, and don't let anyone kid you otherwise. Because they are lending real money to people who can't get credit elsewhere, it stands to reason their interest rates will be a lot higher, sometimes astronomically so.
If Justin Welby wants to help the poor and those in desperate need, there are things that can be done besides setting up credit unions. To begin with, a lot of the downtrodden need practical help which can save them money. Here is the sad story of an American woman. America is a bad place to live without medical insurance, but look at her experience and see if you can't see how her problems could have been averted, perhaps by an act of charity from a medical perspective for one. Time banks and foodbanks can help. Barter, LETS schemes and networks like Freecycle are existing systems that can and should be developed.
Ultimately though, we need to totally reform the corrupt debt-based money system, a system based on usury that sadly the Church has tolerated since at least the foundation of the Bank of England in 1694.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
More about Archbishop of Canterbury, church of england, justin welby, wonga, Basic Income
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