From the TUC

Wages fell £500 last year – 2015 needs a pay rise

01 Jan 2015, by in Politics

Despite the recovery, 2014 has been another miserable year for living standards. The average wage is now worth £50 a week less than when the government came to power.

And current policies offer little relief. The Office for Budgetary Responsibility forecast, released with the Autumn Statement, shows growth weakening before the vast majority of workers have seen any benefit from the recovery.

If the Chancellor gets the opportunity to make the deep and rapid cuts he plans for after the election, it will not just damage our social fabric, but hinder recovery just as much as his cuts did after the last election.

We know the Conservative manifesto will seek to make legal strikes so difficult that they effectively end the right to strike. If ever implemented this would weaken the union hand in every negotiation, further depressing wages across the economy.

Our basic problem is that we have rebalanced the economy in the wrong direction. We have become very good at creating low-paid and precarious jobs, but have failed to invest in good, well-paid jobs that make the most of people’s skills and abilities.

This is why the Chancellor has failed to reduce the deficit. He has been an enthusiastic cutter, but seemed to forget that a low-wage economy undermines the tax take.

In 2015 we need a fresh start. Employers are beginning to recognise that a low wage economy is holding back growth. It is time to turn their words into action because businesses need customers with money in their pockets. Government, employers and unions must work together to promote wage led growth.

This means increasing pay for those at the bottom with a higher minimum wage and spreading the living wage.

But it also means better pay for those in the middle, and a real drive to create secure, skilled jobs on decent pay rather than relying on zero-hours, involuntary part-time work and low-paid self-employment to keep the jobless figures down. This needs active industrial policies that help create good jobs and investment in infrastructure we need to underpin success.

In 2015 we should start to reduce the growing gap between those at the top and the rest. That means putting workers on remuneration committees and using the tax system to bear down on top pay.

Voters have never been more disillusioned with politics. This has been driven by macho-politics which I worry will only get worse in the lead-up to the election. What we need rather than sound-bites and gaffe hunts is a grown up debate about the issues that really matter to working people – decent jobs, fair pay, the NHS and whether our children can ever afford to get a foot on the housing ladder.

We already know enough about the manifestos to see that this will be one contest when no-one can say the parties will all be the same. The Autumn Statement opened up a huge choice in British politics between radical cuts and pay freezes versus investment for the future and a strategy for decent jobs, homes and living standards.

2015 needs to be the year when we ensure the recovery, share its proceeds fairly and start to undo the damage done to our public services and welfare state by the crash and its aftermath.

2 Responses to Wages fell £500 last year – 2015 needs a pay rise

  1. Les Mondry-Flesch
    Jan 4th 2015, 9:15 am

    I think Frances is wrong. Osborne didn’t ‘forget that a low-wage economy undermines the tax take’.

    These people don’t believe in tax at all but are so economically illiterate that they can’t see that the policies they are pursuing are counterproductive.

    Indeed, their explanations for what they are doing, such as they are, are a variation of an old joke; an economist is someone who will tell you that something that doesn’t work in practice, works perfectly well in theory.

  2. news: Fresh start or same old story? Three resolutions for a wage-led recovery in 2015 – from
    Jan 12th 2015, 9:30 am

    […] Osborne’s Autumn Statement [has] opened up a “huge choice in British politics,” according to the TUC’s Frances O’Grady, “between radical cuts and pay freezes versus investment for the future and a strategy for decent […]