David Cameron keep saying he is cutting welfare “so it pays to have a job”. Yet for millions of us it simply doesn’t pay to have a job, because wages are so low.
Since the neoliberal economic reforms 30 years ago, the UK along with other major European and North American economies, has seen corporate profits and wages for those at the top rocket skyward, while our wages at the bottom have either barely risen or fallen in real terms.
The 35 years after the end of the Second World War saw decreasing inequality as workers saw increasing gains. The amount of money the average person in Britain takes home now as a proportion of national income has dramatically declined since 1979. Despite worker productivity rising, we have had growth without gain.
Disgust about CEO and bankers’ pay and bonuses are well known, but the real crisis is at the bottom end of the pay scale. We need to shine a powerful light onto low, poverty wages, and particularly poverty wages in large companies where the profits and pay for the Executives are booming.
Instead of wage rises we the taxpayer have helped pay our own wages with £20bn of tax credits a year, creating an effective subsidy for companies who pay low wages.
Instead of wage rises we have been given credit cards and loans, pushing us into unsustainable household debt, and creating fragile foundations for the wider economy. Low pay is an unexamined factor in the ongoing financial crisis.
A lot has been said over the past four years since Northern Rock collapsed about the unfairness, greed and inequality that the financial industry represents. This anger should not just be reserved for the banks.
We need to return to an old question about the relationship between labour and capital, workers and bosses.
Action needs to be taken. For now we see the living wage (at £7.20 and £8.30 in London) as a starting point for increasing pay and bettering the lives of millions of working people. But long term solutions rest in strengthening unions, and moving towards co-operative work places and workplace democracy.
The UK economy is currently in a double-dip recession.
Demand has been stripped out of the economy by unemployment, low pay and austerity. The Tory right are clearly aiming for growth through increasing the ‘competitiveness’ of UK workers by removing workplace protections and potentially cutting pay. It is exactly now that we need to be demanding higher wages, not least because it provides an alternative demand for stimulating economic activity where it is needed, at the bottom.