Britain needs a pay rise, not just to bring relief to hard-pressed workers, but also to drive a sustainable economic recovery.
That’s the message from the latest research and is particularly relevant to our members in Scottish local government, who are being balloted on industrial action over pay from next week. Their pay is the lowest, even across the hard pressed public sector, as they are asked to keep public services going against all the odds.
A TUC study on the living wage showed that women earn just 66p for every pound earned by men working full-time (which is a pay gap of 34.2%). One of the main reasons for this huge gender pay divide is the large concentration of women doing low-paid, part-time work. This has led to a majority of women working part-time earning less than the living wage in over 50 local authority areas across Britain.
It’s no better for young workers. The proportion of workers aged 21 to 30 who are now classed as low paid has more than tripled over the past four decades, according to new research from the ResolutionFoundation. Almost three in ten (29%) are now low paid, equating to almost 1.5 million young workers. In 1975, the proportion earning low pay was less than one in ten (8%). This also explains why many young people are locked out of the housing market, with just 3% of buyers in June aged between 18 and 30.
Missing out on the claimed economic recovery is not limited to these groups. The Poverty and Social Exclusion in the United Kingdom project has revealed that 800,000 Scots were too poor to participate in basic social activities, more than 400,000 adults do without essential clothing and almost one-third cannot afford to heat their homes adequately in the winter. The majority of children in poverty come from small families with at least one parent in work – so much for the UK government’s ‘strivers and shirkers’ analysis.
Across the UK, the percentage of households below what the public considered a minimum standard of living has risen from 14% to 33% over the last 30 years. This is despite the size of the economy doubling, indicating the gap between rich and poor is increasing.
Low incomes are also linked to underemployment. The TUC’s analysis of the latest labour market data shows that while unemployment has fallen by over 400,000 since early 2012, under-employment has risen by 93,000. And at 3.4 million the current level of under-employment is over a million higher (46%) than it was before the recession. It also highlights that the numbers who want more hours in their existing jobs means that under-employment is still increasing. In UNISON, we see this in sectors like care, with nominal hours contracts becoming more prevalent.
The answer to what some economists call the productivity puzzle is that we have too many low-pay, low-skill and low-productivity jobs in low-investment workplaces. We need to rebalance the economy with an emphasis on creating good jobs and promoting fair levels of pay for everyone – not just those at the top.