A minimum wage can be beneficial ... as long as it's set at the right level And with stubborn youth unemployment come a raft of social problems, not least crime and a recruitment pool for gangs and objectionable political parties. If the Government is intent on capping welfare payments to make sure living off state handouts is no longer a worthwhile lifestyle choice, then examining the minimum wage goes hand in hand. Getting people off benefits and into work requires the private sector to create more jobs. But if those jobs are too expensive to create, either through the minimum wage or taxes such national insurance, there is little point in employers participating. There are good reasons to have a minimum wage. It gives a workforce, without the negotiating power of employers, a stronger hand in negotiations. It can play a role in reducing income inequality and can boost demand and economic activity. But all this is true only when the minimum wage is set at an appropriate level, and that's really the crunch question. When coming to its decision on the 2012-13 minimum wage level, which may well be included in the Budget, the Coalition should consider long and hard whether the current rates are appropriate, especially for new jobs being created, given rising levels of unemployment particularly among the young. A helpful start to minimum wage reform might be a moratorium on any further rises, at least for another two years.