Under the coalition prices have risen by just under 20 per cent, while pay rises for public sector staff have been around three per cent
In the run up to the General Election, every few weeks Left Foot Forward will take a look back at the coalition’s record on a specific policy area. This week we focus on low pay, and each day we will feature a piece that looks back at the impact of coalition policies on in-work poverty over the past five years. The following is from Dave Prentis, general secretary of UNISON.
As the general election looms, there has been wall to wall coverage of what has happened to pay packets on the government’s watch – something a last minute dip in inflation cannot hide. From stories in the national broadsheets and tabloids, to the talk in almost every workplace and household across the country, pay – or the lack of it – is the hot topic.
First up was the Institute for Fiscal Studies suggesting average household incomes were almost back to pre-recession levels, but strip the figures down to the working population and they’re not faring so well.
To put it in a wider context, the International Labour Organisation recently suggested that it would take 70 years to close the gender pay gap. The TUC reminded us that five million workers in the UK are paid below the living wage. The Resolution Foundation demonstrated that two-thirds of all care workers are still below the living wage (and many don’t even get the national minimum wage, as UNISON has consistently exposed).
And to cap it all, the Office for National Statistics showed that zero-hours contract numbers had risen another 400,000 to 1.8 million, which is surely still a huge underestimate?
Step back from the trading of statistics by the political parties and you can see that over the time this government has been in office, prices have risen by just under 20 per cent, while pay rises for the majority of public sector staff have been in the region of just three per cent. The result has been that the average full-time public sector worker has seen around £3,400 in real terms stripped from the value of their wages. For staff at the top of their pay band – who haven’t benefitted from moving up their pay scale – the figure is closer to £4,800.
The government hasn’t been able to hide the blatant injustice of its policies – the latest figures show company profits across the UK growing at four per cent, the pay of chief executives running Britain’s biggest companies escalating by 21 per cent, and dividends flowing to shareholders jumping by a similar 21 per cent.
The new year began with two stories that perfectly illustrate the scale of this divide. Just two days into the working year we arrived at Fat Cat Tuesday, when the pay of Britain’s top bosses passed the average UK full-time salary for the whole year. A week later, a report emerged showing that since 2010 landlords have made £177bn in profit from the spiralling cost of housing.
However, while the moral case for tackling inequality is plain to see, where the government has unfortunately sometimes been more successful is in presenting its pay policies as painful, but necessary and beneficial for the economy in the longer term.
Yet this carefully constructed illusion masks the real effect that draining the economy of demand though a clampdown on pay has had. Some economists are talking in the same breath about both deflation and negative interest rates as a prospect.
Another tack employers have taken is to argue that pay rises are conditional not on them having the necessary funds but on increased productivity. But the so-called productivity puzzle is overstated and multi-faceted. In public services it doesn’t appreciate quality and problem prevention issues. In fact, even where you could crudely measure it – home care workers with 15-minute visits and dozens of tasks to perform in that short space of time have never been more productive. It is productivity at board level, not on the shop floor, which is holding the UK back with a lack of investment and poor practices.
For example, the race to the bottom in the care market means hundreds of companies are chasing contracts in local authority online auctions and then end up with clients spread across a wide geographical area. This means staff from dozens of companies are travelling long distances from village to village, losing all the efficiencies there were with a large council in-house care team, where one or two local care workers assisted all the clients in a particular village or suburb.
In summary, UNISON members continue to fight the gross injustices of government pay policies, not just in social care but in workplaces across the UK. We also need a new vision from Labour that it recognises the link between fair pay and boosting the economy.
Our point was well illustrated by Landman Economics last year when it published research that found that, for every one per cent increase in public sector pay, round £675m of extra value is injected into the economy, and around 14,000 full-time jobs are created.
Take home pay is the hot topic for millions,and it is time their voice was heard.
Dave Prentis is the general secretary of UNISONLike this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by becoming a Left Foot Forward Supporter today.