I don't see the point of these discussions if the bottom line is that we can't compete with places like China on workers wages. 
I think the UK's greatest hope lies in specialising - ie, we are good at finance, and that needs nurturing and equally important, creation. We have inventors, architects, creatives, etc. We can invent and market, but have to have products manufactured abroad. And unless you can get rid of a lot of unskilled people who won't have jobs, then we will stay in limbo.
If that makes sense.
I once heard BBC reporter Euan Davies make that point.
He said that "once we used to have factories where people spent their days making biscuits. Now we have offices where people market and brand the biscuits that are now made abroad"
He made the comment selling it as a good thing.
I totally disagree. developing a brand takes a few people an afternoon sat round a desk. making the biscuits relies on a production line operating 5 days a week for 8 hours a day, (or more likely 24/7 these days).
What is more, we have to accept that not everyone is right for these soft-skilled jobs, its the thinking of cloud cuckoo land and IMHO is why we have an underclass of millions who can't get jobs.
When I was young, people from my background left school with few qualifications and went straight down t'pit, or into the steelworks, hard and dirty work, but a job for life it seemed, and a decent wage. Those people are still there, but the "unskilled" jobs aren't, so we encourage people to go to Uni and con them into thinking they can get a job in an office and earn lots of money...but not everyone is suitable for office work, or wants to go to Uni, and its become so much part of our society that if you asked a young person today to go and spend 8 hours in the dark, on their knees, to earn a wage, they would run a mile, so opt for benefits because its all thats left for them.
There is no easy answer, and there are lots of causes, but the main thing is that we have priced ourselves out of the market, with the minimum wage, pensions, etc...all stuff Chinese workers don't have so I do think there needs to be a balancing where we make it labour costs cheaper in this country and that includes removing the minimum wage. Over the past generation we've pushed up costs, and then subsidised peoples living by such things as tax credits, which then means taxing people more to pay for it and its a visious circle. Let the market control wages, but reduce taxes more so that those on low incomes can afford to live.
We also need to look at the other side as well, and encourage the Chinese / Indians etc, to improve their working standards, etc. How can India spend millions on a space programme when they have such abject poverty.Of course, they will resist, but bit by bit things will change and in a global market, they will see that in 30 or 40 years time, they could be where we are now, and they could be losing all there work to the African continent...so it needs global agreement on some basic practices for example.
All this might seem pie in the sky, but you have to take a long term look at things, some people for example, blame Thatcher for todays wrongs but that was 30 odd years ago, so work on that time frame, where do you want us to be in 30 years time. The problem is our modern day politicians are only interested in the headline in tomorrows paper.
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