Britain still needs a pay rise

Britain badly needs a pay rise, right across the board.

Despite the economic recovery, at least 99 per cent of working people still need a pay rise, writes TUC general secretary Frances O’Grady

At the end of the TUC’s ‘Fair Pay Fortnight‘, one thing should be abundantly clear to everybody: Britain needs a pay rise, or at least 99 per cent of working people do.

In recent weeks we’ve seen government ministers denying local government workers a decent pay rise and offering a 1 per cent increase that sees public service workers £40 a week worse off in real terms since the Coalition came to power. 

Pay is so low in local government that the lowest earners need four or five per cent increases just to stay ahead of the National Minimum Wage. What a terrible message to send to our public servants: ‘work for the government; live in poverty’.

Health workers have been told they can expect ‘either’ one per cent ‘or’ an incremental rise, but not both, again resulting in workers being worse off in real terms and devaluing the ‘rate for the job’ through effectively reducing the real wages associated with job profession and experience.

At some point in our lives we all depend on NHS workers, the very least this government can do is show them some respect through a fair pay settlement.

And in education and other parts of the public and civil service, as well as a pay squeeze previously agreed incremental pay rises are being ditched while performance related pay is on the increase. It’s leading to soaring numbers of individuals being treated unfairly by gung-ho local bosses, exacerbating already serious tension in the workplace.

We believe performance related pay doesn’t lead to better teachers. Investment, training, development and treating people properly does.

Meanwhile we are seeing employers in some parts of the private sector working with unions to deliver outcomes that start to enable workers to begin to recover from the cost of living crisis brought on by the crash and years of austerity. Across the private sector unions are holding out for decent pay deals and speaking out for decent standards at work.

Living Wage deals are being achieved by unions for thousands of low paid workers. GMB has secured Living Wage agreements for cleaners in companies including Amey, Veolia, Norse; Unite for cleaners at the Royal Opera House; PCS for catering staff in the Royal Household. In some cases meaning a 20 to 30 per cent increase on the hourly rate, just to achieve a Living Wage.

In distribution and retail USDAW has recently reached a range of 3 per cent plus deals; in engineering and manufacturing GMB and Unite report 3 per cent plus settlements; while Unison secured a 3.3 per cent rise in National Grid with links to RPI for future settlements. Entertainment sector union Equity holds up its 6.5 per cent agreement with Disney and 6 per cent for workers at the Globe Theatre as a deal for real progress for workers there.

However, in the non-unionised parts of the private sector working people face a greater struggle as employers press down on wage levels and conditions and increasingly adopt precarious employment terms. The jobs are starting to return after the recession, but all too often they’re now bad jobs with low pay, zero hours and temporary contracts, piling insecurity onto workers already struggling to make ends meet.

Workers in the UK are nearly £2000 a year worse off than they were at the start of the recession, and at this rate it will be ten years before the level of prosperity enjoyed then is restored.

Today, in one of the most developed economies in the world, there are working people visiting food banks, choosing between which household bills to avoid this week and let go into the red. Workers so poorly paid they have their wages topped up by in-work benefits. Workers juggling two or three, even four insecure, zero hours contracts to make just enough to get by.

All of this while the very highest paid enjoy an ever greater share of the nation’s wealth and benefit from tax cuts that reward the richest and bypass the poorest.

Even if this level of wage inequality wasn’t morally wrong, it would still be wrong in practical terms. People need to earn and spend in order for our economy to work efficiently. As we see an ever greater share of GDP shift from wages to profits, we’re damaging our businesses as well as hurting working people.

Britain badly needs a pay rise, right across the board. Current settlements show that the best way for working people to secure that is through the benefits of collective bargaining delivered by strong unions at work, but for those not fortunate enough to benefit from union organisation at work, we need clear new wage setting mechanisms to ensure that those many employers who can afford to pay fair wages do so.

A stronger and well enforced minimum wage, modern wages councils in sectors than can afford them, and greater pressure to pay a living wage, along with fairer public sector settlements all have a part to play in making work pay more fairly for ordinary Britons.

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