Britain needs a pay rise - Message from Frances O'Grady

Next Saturday workers from across the North East will travel to London by coach, train and car to take part in the TUC’s Britain Needs A Pay Rise march and rally.

They, like me, want fair pay to be at the top of the political agenda as we head towards the election–and with good reason.

The government says that the economy is growing. But that is not true for most people’s pay packets.

As the Governor of the Bank of England told last month’s TUC Congress workers have suffered the deepest cut in wages since the 1920s. And you have to go right back to the 1870s to find a time when it took longer for wages to recover after a crash.

Workers in the North East are, on average, £25 a week worse off since 2010 and real wage growth shows little sign of returning anytime soon.

We have three big problems with pay.

Firstly, one in five workers in the North East earns less than the living wage of £7.65 an hour, a number that rises to over one in three in places like Darlington and Blaydon.

For women the situation is particularly bleak.  In Hartlepool, Redcar and Cleveland and Darlington more than half of women working part-time are paid below the living wage.

Ministers celebrate new jobs. But what they do not say is that our economy has only become very good at creating low-paid jobs. It is good that unemployment is not as high as many warned at the time of the crash, but creating poorly paid insecure jobs is not good enough. This is the world of zero-hours contracts where no-one dares ask for a rise, because they are frightened of losing their hours.

And while there is nothing wrong with proper self-employment, too many of the recent self-employed are struggling to make ends meet. Others are pushed into self-employment by employers who do not even want to issue zero-hours contracts.

Our second big problem is that even those with steady jobs have not had pay rises that keep up with inflation, especially when we look at the price of basics such as food, fuel and housing.

There are no local authority areas left in the North East where local house prices are less than four times the average local salary.

Even previously affordable areas, such as Darlington and Redcar and Cleveland are now out of reach for many local people. House prices in both of these areas are more than 4.5 times average applicant’s salary – the threshold at which Bank of England has told banks to limit the proportion of mortgages they offer.

If this trend continues future generations have little hope of ever getting on the property ladder.

Our third big problem is growing wage inequality. In 1998 top chief executives earned 45 times than average workers’ pay – enough for anybody I’d say. However, they now earn 175 times the average salary.

A real recovery would ensure everyone got a fair share. That is why the TUC is organising the Britain Needs a Pay Rise march and rally in London on 18 October. We hope you will join us.

Frances O’Grady, TUC General Secretary