Get the Facts

Graph showing real terms wages in decline over thirty years

Wages by the numbers in detail

Real consequences

Single parents forced to rely on tax credits.

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We can't afford to go on like this

Last year the High Pay Commission detailed examples of how some FTSE 100 CEO’s pay and bonuses have risen by 4,000%. Even in 2010, the average CEO pay in the FTSE100 went up by 49%.

In 1977, of every £100 of value generated by the UK economy, £16 went to the bottom half of workers in wages; by 2010 that figure had fallen to £10, a fall of 37%.

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Some figures show that over the past 10 years, pay for those workers in the bottom 10% has decreased in real terms by around 10%.

The Joseph Rowntree Foundation has shown how the number of children living in ‘in work poverty’ has risen to 2million.

20% of the British workforce are earning below the living wage.

On average, the personal debt to income ration has risen from 90 to 158% in 30 years.

The minimum wage today is worth less than in 2004.

On average, for those on low pay, it would take someone 47 years saving 5% of their income to put a deposit on a house.

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Eight reasons to end poverty pay

Poor pay is deeply unfair, it's bad for society, and it's economically damaging. It contributes to:

In work poverty:

The minimum wage is simply inadequate to meet people's basic needs. The real scandal in this country is not that welfare is more attractive than work, it's that for millions of people work itself simply does not pay the bills and provide a basic standard of living. 20% of the UK population receives wages less than the living wage.

Inequality:

We live in a deeply unequal society that produces opportunity for some but disenfranchisement and marginalization for others. The gap between the people at the top and the people at the bottom is rapidly growing. Corporate Britain and their executives are swimming in cash, and there really is no excuse for keeping wages low. The Living Wage will not fix inequality. It is the start of a process towards reversing the suppression of wages.

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Economic exclusion:

The UK economy is also 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.

Listen: Stuart Lansley argues that raising wages is a solution to crisis

Financial crisis:

As wages have stagnated, our purchasing power has been maintained through the availability of credit cards and loans, pushing up household debt levels and creating shaky economic foundations. Low pay is the unexamined element in the latest credit and financial crisis.

Listen: Stuart Lansley on why low pay was behind the economic crisis

Taxpayers subsidising business:

Taxpayers money that is given to individuals and families who are working is known as Working Tax Credits (WTC). They are a vital lifeline to many millions who could not make ends meet without them. However, in many cases, where people are employed by profitable private enterprise, the taxpayer is simply subsidizing the profits of businesses by enabling business to keep wages low and then picking up the bill. Although the living wage - at its' current rate of £7.20 and £8.30 - will not mean less is paid out in tax credits, the living wage does start a process towards companies not shirking their responsibility for pay. Currently £20bn is spent on WTC every year.

Corporate cash reserves:

Corporate Britain is making a lot of cash and simply sitting on it. An estimated £60bn in corporate cash reserves has been taken out of the economy. This money needs to be injected back into our economy through investment, but also through higher wages for those on low incomes.

Corporate Social Responsibility:

Most big companies now have social responsibility programmes which will typically talk about energy efficiency and 'ethical' consumer products such as Fairtrade branded goods. It is shocking that wages and exploitation in the UK is not part of the CSR debate. If companies genuinely see themselves as part of a wider community then paying fair wages needs to be at the very top of their agenda.

Austerity and the attacks on the labour market

The coalition's plan for growth involves shrinking the public sector and creating the conditions for the rapid expansion of the private sector which they hope will create jobs faster than public sector jobs are lost. Their solution to the failings of neoliberal economics is to have more of the same. They are lowering tax rates for businesses and wealthy individuals, but they also want to make the labour market more business friendly by stripping away rights from workers.

Listen: Stuart Lansley talks about the Government plans for further attacks on Labour

With an economy that isn't growing, the Conservative Party are clearly becoming impatient, with many wanting more 'radical' measures. It is clear that to boost private sector investment the Tories want to attack the labour market by tearing up employment regulation, attacking unions, but also potentially trying to supress wages further.

Watch: David Harvey talks about wages and the economic crisis

We need to be prepared to confront these argument head on. Neoliberalism has failed. We need higher wages not lower wages. Sainsbury's profits have risen by x times in the last five years.

Debate

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A future to fight for

With youth unemployment soaring - many bright young people have no choice but to work for low wages for big corporations.

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Further Reading

Details on the impact of the financial crisis

More on economic exclusion