The debate about wealth must start with morals

http://www.guardian.co.uk/commentisfree/2012/nov/07/fair-rather-than-minimum-wage

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Shortly before the 1833 Factory Act, a parliamentary select committee summoned a man called Samuel Coulson to describe the working conditions of his children during the mill's particularly busy weeks. They went to bed at 11pm then had to be woken at 2am, to go back to work.

"Were the children excessively fatigued by this labour?" asked Michael Sadler, the 19th century's equivalent of MP Tom Watson. "Many times," Coulson replied. "We have cried often when we have given them the little victualling we had to give them; we had to shake them, and they have fallen to sleep with the victuals in their mouths many a time."

The bill protecting children was passed pretty easily, partly because of the strength of this evidence and partly because it wasn't very radical (merely restricting nine to 13-year-olds to a 10-hour day). But there were plenty of people – the Iain Duncan Smiths of yore – arguing that it was the parents who were monsters, and not the employers. Poor people forced their children to work simply because they didn't care very much about them. And a significant minority (I suppose these would be your George Osbornes) argued that the market should decide. The worker didn't need the state, he would be protected by the value of his own labour. Even if he was nine.

Of the many lessons from history the obvious ones are, firstly, that the market will decide – but always, for some queer reason, in favour of the person who's already winning. And secondly, parliament is not as useful for workers as unionisation: it is quite good at making a case where a child is involved, less good at making the case for the decent treatment of adults; and this was as true of the child poverty rhetoric in the last two decades as it was in the 1830s.

What strikes me most, though, is this question of wages. Children were only working because the wages of the parents weren't enough to feed the family. And yet you'd have to go as far left as Marx before you'd find anybody insisting "this isn't going to work", saying, "wages have to reflect our relative input into what we've produced; they cannot be a lottery". And still, nearly 200 years later, the same squeamishness obtains.

Across the political spectrum, from Miliband to Johnson, politicians will self-identify as nice people, on the side of the little guy, by calling for a living wage. But the very terminology shows us the underpinning principle – one of pragmatism and reason, that if people aren't paid enough to live on, either the government has to step in with in-work benefits or people won't work at all.

What happened to a wage that was simply fair? It's been part of the political rubric in the past – a fair day's work for a fair day's pay – but it's slipped through Westminster's fingers so that, like Victorians, unless they can picture a child crying, they can't really figure out what their place is, between the employer and the employee, or if they have a place at all.

Slavery presents an interesting contrast. As tortuous as the route was to ending it, once society had coalesced around this idea that nobody could belong to anybody else, the matter was settled. This doesn't mean it never happens – in fact cases come up surprisingly often – but at least we don't have to have the argument again about whether or not it's wrong. There was a single, simple moral precept at the core of it – that all people are born free – and once that was established, people stopped saying "what's this going to do for business?", and "but all the slave owners will just move to Switzerland!". They simply adjusted to a new reality.

The equivalent precept, just as simple, is that all people are born equal. Taken to any logical conclusion, this would make it impossible for one person's wages to be 185 times another's (this is the current, depressing ratio between a FTSE 100 chief executive and average earnings, according to the One Society's half-term report on inequality under the coalition: a precis if you're busy – it has increased). It would make it impossible for gross domestic product to grow while the poorest third of households saw their incomes stagnate (this has happened in the United States since the 1970s; in the UK, the "trickle-down" stopped working in 2003).

It's puzzling to me how often we end up arguing for equality on the basis of outcomes – because unequal societies inherently have more problems – rather than principle: that if we were born equal, one person fetching up in adulthood worth 185 times what everybody else is worth makes no sense.

And yet it doesn't puzzle me that much. Last week saw the publication of the Resolution Foundation's report on the squeeze on living standards, which makes very grim reading – incidentally, projecting that if inequality is left unchecked, the whole bottom 50% of households will be poorer by 2020.

Gavin Kelly, now the foundation's chief executive, was deputy chief of staff in Downing Street during (some of) the Labour years. He said (I'm paraphrasing) he remembered loads of meetings about tax credits, about child poverty, about benefits, about childcare allowances; he doesn't remember going to a single meeting about wages. Nobody was talking about them. Beyond the minimum wage, it just wasn't relevant.

It's interesting that, despite fervent opposition to the national minimum wage, Tories are now broadly in favour of it, and the one thing this government has done to make people at the bottom fractionally less poor is to reduce the age threshold for the minimum wage from 22 to 21. But a wage floor alone isn't enough. It wouldn't be enough even if there weren't employers who dodged it. A living wage might be a start, but that isn't enough either. We will not tackle inequality until we start talking about wages that are fair. We cannot make any dent on what is fundamentally a moral issue unless we're prepared to talk about morals.

Twitter: @zoesqwilliams