For our economy to grow, especially with Brexit doing everything to stifle things, people not only need enough money to live but also to have some disposable income to support pubs, restaurants, hotels, theatres, cinemas, leisure and retail facilities. If they don't, they'll go out of business and unemployment will rocket.
Surely anyone with a brain can work that out, especially as most working class and middle class people are going to put that money back into the economy, not sit on it.
All these Tory MPs suggesting that a nurse can cut out luxuries and afford to live seem to forget that. The classic tropes about not going to Costa, or subscribing to Netflix, or buying smashed avocado, all ignore the fact that these businesses need our money. Okay, so maybe Netflix isn't a great example (but it often gets cited) but replace that with any other UK based business.
Are the Tories saying nobody should have any money to spend besides giving money to their landlord/bank, and paying as little as possible on essentials food, to live?
Indeed, especially given that about 40% would come straight back to the government in PAYE taxes, however the other 60% would be going into the economy through paying for life, which then pays others (more taxes and more boost to the economy) which then....
Whilst it may not earn back all the money through taxes, it may also boost the economy so that there's less need for benefits (especially in work benefits) and so the net cost to the government may actually be positive.
Whilst there's always a risk paying someone more may increase inflation, currently the big driver of inflation is fuel costs from external factors. As such ensuring that pay isn't eroding in real terms or is only increasing a small amount above that point isn't likely to cause those issues.
Many of the very wealthy are only wealthy because they've earned money from selling stuff to lots of people, if those lots of people stop being able to buy those things, then those very wealthy people aren't going to be as well off.
Likewise those who have buy to let properties, if fewer people can afford rent then they're not going to be able to rent those properties out.
If generational houses (so parents, kids, grand kids) become more the norm (with built in childcare, sharing the household costs, more to share the household tasks, etc.) there's the potential that buy to let could become harder to maintain (especially with the new rules, such as EPC rates of C or higher needed to rent a property, making renting out harder to turn a profit when mortgage interest rates increasing pushing costs up).
The government is right we need a high wage economy, the problem is when they comes to what they are willing to pay that doesn't appear to be something that they are willing to do. Guess what that does, it means staff leave for other roles. As such either you pay them more now or you pay a lot more later to try and tempt them back. Ask the pubs and restaurants how well that worked out for them at the end of the furlough scheme (it didn't go well).
on.ft.com
