Public service workers in the front line of the attack on wages

Tomorrow, UNISON’s local government members in England, Wales and Northern Ireland will be going on strike, joining with other public sector workers in their effort to secure a decent pay rise. In Scotland, local government workers have voted for industrial action by two to one in a consultative ballot and will be considering the next stage of their own pay campaign later this month.

Matt Sykes, at the Touchstone blog sets out why public service workers are taking action. He argues that it’s a wider manifestation of the anger and frustration felt by public sector workers over pay and living standards. Industrial action is the inevitable consequence when you have a government that makes announcements over pay, rather than engage in a meaningful dialogue. The declaration that pay restraint will continue until 2018 is another example of this.

UNISON’s Heather Wakefield sets out the local government case at the Public Finance blog with a damning set of statistics on pay and the long-term impact on pensions. Again, there have been no real talks and the employers have refused to join the trade unions in independent arbitration.

The TUC has published figures that show how the UK government has frozen or limited pay increases to well below the cost of living. This has left local government and other public service workers on average £2,245 worse off in real terms since this government came into office.

Concern about the standard of living stretches into retirement. Research published by Aviva indicates that a fifth of people in Britain believe they will have to “work until they drop” because they cannot afford to retire. Money worries mean millions of over-40s are expecting to carry on working until they cannot physically continue. Others are concerned about paying their day-to-day bills without the regular income from employment coming in.

An important element of current pay claims is the Living Wage. The final report of the independent Living Wage Commission, chaired by the Archbishop of York, Dr John Sentamu says that the number of people on low pay in the UK can be slashed by over 1 million by 2020. The Commission warns that, if the government does not support the voluntary extension of coverage of the Living Wage, some working families will continue to rely on emergency measures, such as food banks and unsustainable debt, to get by. Currently 5.2 million people earn less than the Living Wage in the UK and the majority of people in poverty are now in working households.

This message is reinforced in the largest study of poverty ever conducted in the UK. The Poverty and Social Exclusion in the UK (PSE) project details how, over the last 30 years, the percentage of households living below society’s minimum standard of living has increased from 14% to 33% – despite the fact that the economy has doubled in size over the same period. These findings seriously undercut the UK government’s claim to be lifting people out of poverty through work. Cuts to welfare benefits add to the low pay misery.

The Joseph Rowntree Foundation’s annual Minimum Income Standard report looks at how much people have to earn taking into account family circumstances, the cost of essentials and changes to benefits. This shows that a lone parent with one child now needs to earn more than £27,100, up from £12,000 in 2008. A couple with two children need to earn more than £20,200 each, compared to £13,900 each in 2008. Single working-age people must now earn more than £16,200, up from £13,500 in 2008.

Public service workers are at the front line of the attack on wages, while this government awards handouts to the super rich. Tomorrow is just the start of a fight back to keep workers out of poverty.

No recovery in living standards for working people

There is no recovery in the wages and living standards of working people since the rich and powerful crashed our economy.

A number of reports have analysed the latest data on household incomes and wages. The Scottish Government's paper highlights that the number of people living in poverty in Scotland increased to 820,000 last year. The 2012-13 figure, which accounts for 16% of the population, was 110,000 more than in the previous year. The number of children in poverty rose by 30,000 to 180,000.

The figures indicated:

• 16% of people (820,000) were living in relative poverty in 2012-13 - 110,000 more than the previous year and an increase from 14%.
• 19% of children (180,000) were living in relative poverty in 2012-13 - 30,000 more than the previous year an increase from 15%.
• 15% of working age adults (480,000) were living in relative poverty in 2012-13 - 70,000 more than in 2011-12.
• 15% of pensioners (150,000) were living in relative poverty in 2012-13, 10,000 more than the previous year and an increase from 14%.
• Typical income in Scotland in 2012-13 was £23,000, equivalent to £440 per week.

For some real stories behind the statistics you can read a survey, commissioned by UNISON's NHS Greater Glasgow branch. Nearly a third of respondents said they constantly struggled to pay household bills, with 11% falling behind on mortgages or rent. 17% were behind on council-tax bills, 15% on hire purchase payments and 20% on credit-card payments. Borrowing from family was common and 16% of workers used credit unions. 4% had used payday loans. 58% said they could not meet an emergency expense of £500.

The Scottish Parliament research unit (SPICE) has produced an interesting analysis of long term trends in Scottish household income. There is a lot of discussion about how wealthy Scotland is in the referendum debate. However, this tends to focus on GDP rather than the incomes of people that actually live in Scotland. This paper shows that the average level of disposable income per head in the UK is £16,791. Scotland comes in just below this at £16,267. However Scotland is catching up since devolution. Between 1997 and 2012 household income in Scotland increased by 27% as against 24% in the UK as a whole. Within Scotland we still have significant inequality. Glasgow City has the lowest level of disposable income with just over £14,000 per head, compared with just over £19,000 per head in Edinburgh.

Official UK figures from the ONS still show median and mean incomes in 2012-13 6% and 9% below their 2009–10 peaks respectively. This follows a period of slow income growth that began in the early 2000s. The net result is that the official measure shows both measures of average income no higher in 2012–13 than in 2001–02.

In 2012–13, 10.6 million individuals in the UK (17%) had a household income below the official absolute poverty line (e.g. below £272pw for a childless couple, net of taxes and inclusive of benefits). This is actually a poverty rate no higher than before the recession. However, when incomes are measured after deducting housing costs, the number below the poverty line (e.g. below £235pw for a childless couple) rose by about 600,000 in 2012–13 to 14.6 million (23%). This is about 2.0 million higher than in 2007–08.

Of course not everyone is suffering. The bankers in the City and their friends in the media may not have noticed growing poverty, because the share of post-tax income captured by the richest 1 per cent leapt from 8.2% to 9.8% in 2013/14.

There may be a modest economic recovery, but the official data shows that household incomes have not recovered, except for those who caused the crash. And they won't, until we see real wage growth.

 

 

Posted with Blogsy