From the TUC

Unequal pay is holding back the real economy

07 Nov 2013, by in Equality

Ford machinists' dispute

Ford sewing machinists vote to strike over equal pay in 1968. Photo: Pat Mantle/Morning Star

At prime minister’s questions last week, David Cameron seemed to suggest that talking about the economy meant talking about rising GDP, not rising electricity bills. But people’s daily experience of ‘the economy’ is  of what they take home at the end of a week at work, and how much it leaves them when they’ve done the shopping and paid the bills. We’ve been tracking the return to growth as well, of course, and we now know that even though the economy grew by £60bn over the past four years, household disposable income per person dropped by £500. No wonder people are hurting.

The living standards crisis that the TUC has been talking about for years has shot up the political agenda in recent weeks. But much of the debate is still lopsided, zeroing in on prices, rather than talking about pay. Prices are important but the real root of the crisis – and the solutions – lie with pay. We’re in the midst of the longest wage squeeze in over a hundred years, with average earnings worth over £2,000 less than three years ago. That’s why the TUC launched our ‘Britain needs a pay rise’ campaign this summer and why we’re pushing for fair pay across the economy as the centrepiece of a real recovery.

This week sees two highlights in the pay campaigners’ calendar coincide: Living Wage Week and Equal Pay Day.

A few weeks ago I had the privilege of meeting some of the women who took part in the landmark Dagenham strike at the Women of the Year Awards. It’s a scandal that more than forty years after their struggle led to the Equal Pay Act, women still take home just 85p for every pound a man earns. This difference comes at a cost of almost £5,000 a year for women working full time – and the pay gap in some jobs is three times higher.

At the same time, this week also sees a focus on the living wage. 1.4 million people have been pushed below the living wage by the economic downturn, and four out of five jobs created since the recession have been in low paying industries. Living wage campaigns across the country are fighting to turn this around. Many campaigns begin in the public sector, but we’re seeing councils look to use their buying power to spread the living wage in the private sector too.

These two campaigns are closely linked, for many of the starkest examples of low pay are in sectors dominated by women. Think of cleaning, catering, social care and personal services such as hairdressing. And for young women, the trend is moving in the wrong direction. New research for the TUC shows that three times as many young women are now in low paid jobs as twenty years ago – 21% in 2011 compared to 7% in 1993.

That’s why the TUC is setting out concrete measures to tackle unequal pay, backing living wage week, and calling for the restoration of the value of the National Minimum Wage and for worker representation on company remuneration committees.

But underpinning all this, the union fight is for fair pay across the spectrum – a return to the rate for the job. That’s why the TUC is also campaigning for modern wages councils. They would bring employers and unions around the table to look at boosting pay in industries that can afford it. Sectors like social care, cleaning and security, jobs that keep our economy ticking but where pay rates and other terms and conditions are often at rock bottom. Strengthening collective bargaining in this way means widening the scope of discussions too – it isn’t just the hourly rate on the pay slip that matters, but things like overtime, sick pay, holidays and pensions.

I believe this approach is what’s needed to turn the tide. Modern bargaining machinery and a seat at the boardroom table alongside wider campaigning that together allows us to tackle the slide away from decent pay and make sure Britain gets the pay rise it deserves.