Flaws in case for pay by region

September 8, 2000

Oswald's arguments about teachers and nurses hardly apply to university teachers, because universities compete in a specialised national labour market, not a local one.

The high cost of living in London and the Southeast comes not only from high wages but also from excessive concentration of economic activity in that region: government, finance and other national bodies such as charities all overheat the market.

Local wage differentials are not the solution but part of the problem (and, in any case, the private sector will win any wages race because of tax advantages). Oswald wants taxpayers all over the country to subsidise still further the metropolitan Southeast while continuing to suffer from having the economy run with that region's needs a priority. Why should they?

Tim Reuter Department of history University of Southampton

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