wages | ukwatch.net

Fair Wages are a Fantasy

Ellie Keen — Mon, 05 May 2008 21:55:41 +0000

... in the brutal underside of Cowboy Boss Britain

With Labour reeling from the worst electoral drubbing for four decades, you could argue that this week is not a good moment to bring out an exhaustively researched, carefully thought-out report on the blight of insecure, low-paid work in the UK, 18 months in the making. But this Wednesday was set for the date of the launch of the TUC’s Commission on Vulnerable Employment (of which I’ve been a member) many months back, and no one envisaged then that one of the biggest research initiatives of the TUC since 1997 would thump its catalogue of the inadequacies of Labour employment policy on Brown’s desk at such a point of desperate soul-searching. But I would argue that this investigative analysis is exactly what Brown needs if he is to understand what happened last Thursday.

Brown makes much of his commitment to poverty. Even his most grudging critics concede that some headway has been made on child poverty even if it has not been enough. But the headline figures obscure how stubbornly persistent the phenomenon of working poverty has been. Many poor families may now have an earner, but it has not got them out of poverty: the number of poor children living in working households is 1.4 million – exactly the same figure as it was in 1997. Half of all children living in poverty have a parent in work. The advances in child poverty have been among those on benefits, while the number of poor working households with children has actually increased by 200,000. Labour promised it would “make work pay”. It hasn’t.

Low pay is not just a problem of an extreme underclass or of migrants; it is endemic across the country. One in seven of all working households are poor; one fifth of all workers, 5.3 million people, are paid less than £6.67 an hour (two thirds of the median), the worst low-pay rate of any in Europe. It works out at less than a £12,000 salary. In some regions, the proportion of low-paid is well over 25%, while in some constituencies (in Wales, Birmingham, the West Midlands, even the rural West Country) it is comfortably over 40%. For those scratching their heads over the mystery of Labour losing Merthyr Tydfil, perhaps they should look at the pattern of low-paid, insecure work. This is the shocking record of a country after 11 years of Labour rule and economic boom. It explains why the 10p tax debacle caused such resentment: these are the “hard-working families” extolled in Brown’s speeches and yet they are scrabbling to make ends meet. The Brownite rhetoric of “unleashing potential” is a nonsense to those trapped in jobs that consign them to fall ever further behind.

This report challenges another of Brown’s much-used rhetorical flourishes: fairness. He talks of it as a national characteristic, but it’s not one that the 5 million-strong army of low-paid, insecure workers would recognise. This is the section of the labour market where regulations about the minimum wage, holiday pay and employment rights reach only intermittently or not at all. The chance of an employer being inspected on the minimum wage is once every 330 years. Given such odds, an unscrupulous employer takes the risk.

Labour has made much of bringing in the minimum wage and the working time directive (which gave many workers their first rights to paid holiday) but after these advances, the reality is that progress in tackling Britain’s chronic problem with low-paid, insecure work stalled. Increases in the minimum wage are not keeping pace with average earnings, and it is set at a considerably lower rate than in other countries. A combination of political cowardice (Brown didn’t want a fight with the CBI) and indifference – it earns no political capital with middle England – ensured that Labour has repeatedly prevaricated in tackling this brutal underside of Britain’s economic boom. It has fudged crucial issues such as equal treatment for agency workers or the much-needed clarification on worker status, a legal loophole which makes a mockery of employment rights – both were manifesto commitments.

The months of sitting on the commission listening to people’s accounts of their working lives and to those who tried to offer advice when things went wrong provided a glimpse of what an obstacle course it is when you’re poor. It’s not always the lack of material resources that cuts deepest, but the lack of power and the absence of options. When you’re sacked or when you don’t get the sick pay or holiday pay you are owed, how do you fight back? How do you find the employment adviser to help or the courage to stand up to an employer and the sheer guts to take a case to an employment tribunal with no legal aid or a lawyer to help you? The answer is that more often you don’t, you can’t – and that’s how you get trapped in bad jobs.

Poor pay is inextricably bound up with a culture of institutional negligence: no one ensures workers know their rights or how to find out about them; a myriad of enforcement agencies with tiny budgets confuse everyone, and the legal system to arbitrate on abuse is slow and inaccessible. While the government has consulted and dithered, low-paid, insecure work has flourished like some rapacious mould. The face-to-face legal advisers (which the most vulnerable are known to find easier to deal with) have been axed and replaced with cheap websites and telephone helplines (but how do you know about them?). English language lessons have been cut. While millions of pounds are devoted to advertising for benefit fraud, the amount allocated to advertise the national minimum wage was, until a recent increase, a sixth of that spent on a government campaign urging people to use tissues when they sneeze.

Here is a compelling moral purpose on which that famous Brown compass could take its bearings. I haven’t a clue if it will restore his electoral fortunes, and frankly that’s not the point. This is an issue that any Labour government worthy of its name should have sorted out by now and yet it has devoted a fraction of the effort and energy required. If Labour cannot ensure that at the end of a hard week’s work, someone has earned enough to keep themselves and their children out of poverty, then it doesn’t deserve power.

Tony Blair boasted that Britain was the “most lightly regulated labour market in the world”. The OECD puts Britain second only to the US for the lowest levels of employment protection in the developed world. This is Cowboy Boss Britain and it leaves a long trail of anger and resentment – the Citizens Advice Bureau alone deals with over half a million employment problems a year.

The most frustrating aspect of these meetings, though, was with the representatives from the political parties. Labour’s was doggedly complacent; the Conservative’s, all charm, finally admitted he knew nothing; the Liberal Democrat’s didn’t seem to have quite worked out which meeting they were in. It was a deeply depressing demonstration of how detached the political process has become from issues which are absolutely basic to the lives of millions of people.

It's hard not to chuckle

JamieSW — Tue, 15 Jan 2008 20:18:32 +0000

IF you are of the left, it’s hard not to chuckle at the plight of the Police Federation after it has been refused permission to march through Parliament Square in protest at the truncated pay deal which has been forced upon its members by the government.

But it’s a temptation that is going to have to be resisted by all of us. After all, police officers are as much victims of this government’s attacks as anyone else and, as with other public servants, they have families to support, mortgages or rent to pay and bills that stack up just as fast as anyone else’s.

The so-called “phasing” of their 2.5 per cent pay award, was merely a euphemism for a clear government refusal to accept the verdict of the pay review body and to hack police pay rises back to a below 2 per cent level as required by our cuts-fixated Prime Minister.

It is however, gloriously ironic, especially given the behaviour of elements of the police territorial support group towards protesters in and around Parliament Square last Saturday, that the federation is being forced to adopt the subterfuge of a “mass queue” outside Parliament in order to get its point across legally.

And it will come as no surprise that the federation is being careful to point out that it isn’t “instructing” officers to do anything specific, since any such instruction would be illegal.

But there can be no doubt that the federation is justified in its anger about the government’s dirty little tricks with its members’ pay.

The statement by Suffolk Police Federation chairman Matt Gould, that “police officers do not have the right to strike so we expect the government to act honourably in their dealings with us,” might seem to betray a weakness in the federation’s understanding. Mr Gould appears to infer that anyone who has the right to strike must expect the government to act dishonourably.

Although, considered another way, this may just be a restatement of reality, in that almost every public-sector employee who cherishes the right to strike has, indeed, suffered from dishonourable conduct by this government, as witness Justice Minister Jack Straw’s dirty tricks with the rights of the Prison Officers Association and the mass sackings faced by PCS members.

Human rights group Liberty director Shami Chakrabarti’s offer to represent the federation in a test case over its right to peaceful protest may at first appear to be a tongue-in-cheek offer with sarcastic undertones, but Ms Chakrabarti is making a serious point which should be taken on board by individual officers.

When the right to peaceful protest is undermined by a dishonourable government in order to escape criticism and avoid resistance to unacceptable measures by that government, the structure of democracy itself is at risk.

And it is perfectly acceptable for people to protest against that threat, whether they be police officers, prison officers, civil servants or any other group of citizens.

Mass action is one of the only recourses open to inhabitants of a democracy whose government and opposition are both united in abusing the trust placed in them by the electorate.

So, while it may be tempting for the trade union movement to offer tellers to the police in order to guarantee that the numbers on their protest are reported accurately, that not being a noted strength of the the Met, the temptation should be resisted.

In the course of their wages struggle, individual police officers may learn something about the reality of life in Gordon Brown’s phoney democracy and that is a lesson which could benefit us all in the end.

Why Gordon Brown wants to hold down wages

JamieSW — Tue, 15 Jan 2008 20:09:58 +0000

Gordon Brown has ratcheted up his attacks on workers’ pay by demanding three-year below inflation pay deals in the public sector.

These deals – which Brown insists must be held below 2 percent even though inflation is more than double that – would lock millions into effective pay cuts for the next three years.

It is a further assault on the hundreds of thousands of working people in Britain who are already wondering how their wage can be made to stretch until their next payday.

According to a poll for the Norwich Union insurance firm, almost three quarters of monthly paid workers ran out of money last week and are now paying for food and other everyday necessities with a mixture of loans, credit cards and overdrafts.

But this situation does not seem to concern the New Labour government.

Brown says he is attempting to hold pay below inflation until 2012 – just as many economists are predicting inflation rates could rise to between 6 and 8 percent in the coming years.

Inflation has been on an upward trajectory for more than a year, with the cost of transport, housing, food and fuel rising fast. Food prices are rising at an average of about 5 percent and some suppliers have just announced household gas and electricity bills will rise by 27 percent this year.

That is why so many workers are finding themselves worse off compared to a year ago.

Difficult

Brown said he had taken the “difficult decision” to prolong the pay limits because the government wants to “break the back of inflation” and “maintain stability” in the economy. He said that unless we all carry on tightening our belts, pay rises will be eaten up by higher prices and increased mortgage and rent payments.

But wage rises are not what is driving inflation. Higher pay for nurses, teachers or street cleaners does not lead to higher prices. These are determined by much bigger forces in the world economy – such as the rising cost of corn, wheat, gas and oil.

Companies that increase their prices as a means of maintaining, or increasing, their profit margins are also driving inflation.

Brown hopes that public sector pay restraint will start to affect rates in the private sector too.

By holding down pay, British companies and their bosses can continue to line their shareholders’ pockets with profits and dividends, while the government can hold down public spending.

In turn that means that the government can keep down or cut taxes for big business and the rich. It means it can continue to subsidise bosses to keep them competitive with other countries’ firms.

All the talk of a “tough year” does not seem to have filtered through to Britain’s wealthy.

Boardroom pay at Britain’s top companies soared by 37 percent last year as directors were rewarded with inflation-busting increases in basic salaries, big cash bonuses and substantial payouts from share schemes.

The surge in pay, which takes the average total pay for a chief executive to £2,875,000, is more than 11 times the increase in average earnings and nearly 20 times the rate of inflation.

In 2006-7, for every £1 a worker earned, bosses took home £98 – up from £93 the previous year.

The picture for top executives in the public sector is not very different. A recent report into boardroom pay in the NHS shows that, among the trusts surveyed, the median average annual pay of chief executives was £123,300 – up some 7.8 percent on the previous year’s report.

Bosses are not the only ones exempt from the demands of tightening belts.

Anyone who works in public services knows the enormous waste involved in outsourcing work to “private contractors” – the swathes of consultants who litter our hospitals and civil service buildings, and the failed multi-million pound computer schemes that were supposed to make the public sector more efficient.

Brown has not called for any form of restraint from the profiteers of privatisation.

For all his tough talk, Brown’s attempt to impose an incomes policy through wage restraint is a sign of the government’s weakness – and an extremely risky strategy.

Previous attempts to control incomes have resulted in major confrontations with the unions, and have even led to the collapse of governments, such as Edward Heath’s Tory administration in 1974, which was brought down by a miners’ strike (see, ‘Incomes policy: a dangerous strategy‘).

In that period governments talked of limiting prices as well as wages, and even suggested that their policy would benefit the lowest paid.

Today there is no sugar to sweeten the pill. One effect of imposing a wage freeze on such a large number of workers is to make the idea of workers in a variety of services striking together extremely attractive.

People rightly feel that all those who are under attack should hit back together, and that their union leaders should be co-ordinating the response.

This feeling is widespread within the public sector but extends well beyond it.

Over the last year millions of workers in the private sector have been able to secure pay deals that approach the government’s estimate of inflation.

Skill shortages and the fact that many engineering, pharmaceutical, chemical and transport companies have been making big profits have allowed unionised, and even non-unionised, workers to make some gains.

But it is possible that these same firms will use the prospect of a recession driven by a “credit crunch” to follow the lead of public sector employers.

United

Therefore a challenge over pay in 2008 has the possibility of uniting workers in all sectors and in all unions.

But for that to happen workers have to break the impasse created by the many union leaders who believe that workers’ interests must come second to the needs of the Labour government.

There is a heavy responsibility on the leaders of unions like Unison, which has over a million members in the public sector. Unison leader Dave Prentis responded to Brown’s plans to extend the pay limit, saying, “This is the most unjust pay policy I’ve ever seen.”

However, the experience of last year – when the union refused to lead a fight over pay in local government and the health service – shows that it will take heavy pressure from the rank and file of the union to make the leaders fight.

And, as the dispute in Royal Mail shows, there must be an organised rank and file in the union to carry forward that fight when the union leaders waver or seek a shoddy compromise.

Gordon Brown has shown that he has no intention of using his power to improve the lives of ordinary people. He wants to make workers pay for the crisis of capitalism.

The best way to force the union leaders to fight is to back any group of workers that stand up for decent pay. A breach of the government’s policy in one area could lead to its collapse.