Stewart Lansley
It has become an iron rule of recessions that it is the lower and middle-paid sections of the workforce that bear the heaviest burden of the fallout. Of course, with the economic cake shrinking by 7%, pain was inevitable after 2008. Living standards on average were bound to slide. This recession, however, was meant to be different. “We are all in this together” became the much voiced refrain of coalition leaders. This time, it was claimed, the impact would be more evenly shared that in the past.
A new report that I’ve written for Touchstone, called “All in this together?“, shows just how empty those words have proved to be. Just as in the 1980s and early 1990s, it is those in the bottom half of the income distribution that are bearing the brunt of the rise in unemployment and the cuts in real wages. Those most likely to have lost their jobs have been skilled and unskilled workers in the lowest pay brackets.
It is similar story on pay. On average, real wages fell by 3.6% in the year to June 2010 and then by a further 3.8% in the year to June 2011. But those facing some of the deepest cuts in pay have been those on already low wages working in voluntary organizations, especially those working in social care. Cuts in real pay are also only part of the story. Across the public, voluntary and private sectors, longstanding conditions of work are being eroded, with staff contracts re-written to impose longer hours, poorer sickness and pension provision and fewer holidays.
