TUC new year message: 2016 is time to end the two-speed economy, says Frances O’Grady

31 December 2015

In her New Year message published today (Thursday), TUC General Secretary Frances O’Grady calls on government, unions and employers to make 2016 the year we end the two-speed economy – and make sure no workers are left behind.

New TUC analysis, published alongside her message, shows that the average weekly wage is still £40 a week below its pre-crisis level – the equivalent of over £2,000 a year.

On wages in 2016, Frances O’Grady says:

“According to the government, we’re out of the doldrums and getting back to economic health. But not everyone is feeling it. Wages still haven’t recovered – and won’t for some years to come. It will take until 2018 for average earnings just to get back to the real value they held in 2008. Ten years of pay going backwards while everything else – transport, housing, bills – gets ever more expensive and debt piles up. A lost decade.

”Decent wages and security for your family shouldn’t just be the preserve of those at the top of the tree, but should be on offer for everyone. That’s the recovery I want to see – a recovery that’s fairly shared.”

On productivity, growth and work in 2016, Frances O’Grady says:

“Productivity is still 13% below its pre-crisis trend – a sign of the government’s failure to invest in the skills and infrastructure we need.

“I won’t ever stop calling on the government to prioritise a real strategy for productivity and growth – one that puts rebuilding our balance of trade and great jobs with decent wages at its heart.

“Without government action, Britain is at risk of turning into a ‘below-stairs’ labour market – college leavers are eight times more likely to find work in the service sector than in manufacturing. And when they do find work, it’s too often dead-end, with little chance to progress.”

On the priorities for 2016, Frances O’Grady says:

“As we embark on a new year, I want all of us – unions, employers, and yes, government too – to resolve that 2016 is the year we will end the two-speed economy.

“To every worker – freelance, contract, temporary or permanent – I say: get a group of your colleagues together and join a union. Feel that support, that confidence and that pride that only comes when you stand with your workmates and use your collective sway to make working life better. 

“To employers, I say: work with us. Help us build motivated workforces on great terms and conditions that can take pride in what they do and will back your business throughout.

“And to government, I say this: as you promised, be on the side of the workers. You say you want a high-wage, high-growth country. We want that too. So in 2016, stop attacking trade unions and start working with us instead. That’s how we’ll build a Britain where we all move forward together.”

NOTES TO EDITORS:

- Full New Year message from TUC General Secretary Frances O’Grady

“This Christmas, it was great to see high streets buzzing and most people getting a well-earned break with their families. Finally, according to the government, we’re out of the doldrums and getting back to economic health.

“But even as things get better, not everyone is feeling it. Wages still haven’t recovered – and won’t for some years to come. It will take until 2018 for average earnings just to get back to the real value they held in 2008. Ten years of pay going backwards while everything else – transport, housing, bills – gets ever more expensive and debt piles up. A lost decade.

“And for some – like those in our steel industry, cut adrift without government support – the picture this New Year looks even bleaker.

“Productivity is still 14% below its pre-crisis trend – a sign of the government’s failure to invest in the skills and infrastructure we need.

“That’s why I won’t ever stop calling on the government to prioritise a real strategy for growth – one that puts rebuilding our balance of trade and great jobs with decent wages at its heart. Without government action, Britain is at risk of turning into a ‘below-stairs’ labour market: college leavers are eight times more likely to find work in the service sector than in manufacturing. And when they do find work, it’s too often dead-end, with little chance to progress.

“A proper industrial policy, like those of our higher-performing European neighbours, is the only way to avoid a two-speed recovery. A recovery where things get better for some people, in some places, but others are left behind. A recovery built on the false economy of cuts to training and skills, and other precious public services. Exactly the sort of recovery that won’t deliver for Britain in the long-term.

“Decent wages and security for your family shouldn’t just be the preserve of those at the top of the tree, but should be on offer for everyone. The chance to get a home of your own; to see your kids grow up, discover and aspire; to save for your future and enjoy your retirement. In short, to be able to afford more than just scraping by.

“That’s the recovery I want to see – a recovery fairly shared. 

“Getting there requires a big change in how we think about work. It means every worker getting the chance to build their skills, learn and progress. It means managers working out how to genuinely engage their workers - and using technology as a help not a stick to beat them. It’s about using the rights at work we have - from the UK and from the European Union too - as a floor from which to build, not the ceiling.

“It’s not about pushing every worker to do more and more for the same pay and no security. We’ve seen where that leads – warehouses where every worker is treated as a potential thief, not even paid the minimum wage and, underpinning it all, the constant threat of the sack.

“That’s not a model for British workplaces. And it’s not a model that trade unions will stand for in 2016.

“So as we embark on a new year, I want all of us – unions, employers, and yes, government too – to resolve that 2016 is the year we will end the two-speed economy.

“To every worker – freelance, contract, temporary or permanent – I say: get a group of your colleagues together and join a union. Feel that support, that confidence and that pride that only comes when you stand with your workmates and use your collective sway to make working life better. 

“To employers, I say: work with us. Help us build motivated workforces on great terms and conditions that can take pride in what they do and will back your business throughout. 

“And to government, I say this: as you promised, be on the side of the workers. You say you want a high-wage high-growth country. We want that too. So in 2016, stop attacking trade unions and start working with us instead.

“That’s how we’ll build a Britain where we all move forward together.

“I wish you and your families a prosperous and peaceful New Year.”

END

- The TUC analysis of real wages used Average Weekly Earnings data from the Office for National Statistics and adjusted for CPI inflation. It compared the value of the average weekly wage in Q3 2015 with the peak value in Q1 2008. The average rate of growth over the past four quarters was then projected forward to find the point at which real earnings would pass their pre-crisis peak and this was found to be Q2 2018.

- The latest ONS data on labour productivity finds that it is still 13% below the pre-crisis trend when measured as output per hour: www.ons.gov.uk/ons/rel/productivity/labour-productivity/q3-2015/stb-labour-productivity-q3-2015.html#tab-Main-points

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