Fair shares for everyone, not just those at top

Poverty pay is a sad feature of modern day Britain. Work should be the route to a better life, but try telling that to millions of workers stuck in low-paid jobs.

New analysis published by the TUC today shows that one nearly one in four workers in the North East (23.4 per cent) is paid below the living wage and in some Parliamentary constituencies, such as Berwick-Upon-Tweed and Middlesbrough South and East Cleveland , this rises to one in three. 

The picture for women in the North East is even bleaker. Nearly half of all women working in Hartlepool and Redcar earn below the living wage.

The minimum wage has become the industry rate for too many jobs. This is bad for our society and our economy. TUC research published last week revealed that the government is collecting £33.4bn less in income tax and national insurance because UK workers' earnings have failed to grow as forecast.

This is largely the result of more people going into low-paid jobs. The sharp growth in self-employment has not helped, as much of it is poorly paid, averaging little more than £200 per week, according to the latest figures.

With less money coming in to the Treasury's coffers borrowing is going up, which is in turn increasing the size of the deficit. Low pay and stagnating wages has left a gaping hole in the UK’s public finances.

So what can be done?

The simple truth is that many employers can afford to pay more. For large companies in sectors such as food production, banking, construction and software/computing paying all staff the living wage would add less than 0.5 per cent to their total wage bill. This would immediately benefit over one million low- wage workers.

We need an increased commitment to the living wage from employers in the public and private sector so that their own staff, as well as those in their supply chains, can have a decent standard of living.

That's why we need to find new ways for employers and unions to work together to improve productivity and set higher wages, agreed at a sector level by modern wages councils, so that workers and businesses can both get a fair deal. More collective bargaining can stop employers skimping on pay.

We also need the government to take the lead by ensuring that businesses who win public sector contracts are made to pay the living wage.

A low-wage recovery is in nobody's interest. People need more money in their pockets if they are to have a decent standard of living and if local economies are to thrive. This is why the TUC last week launched Fair Pay Fortnight to call for higher pay settlements in the public and private sector.

It is time for ordinary people, not just those at the top, to be given a fair share.

Beth Farhat

Northern TUC Regional Secretary