It pays for North East workers to remain in the European Union
It has been - and still is - a tough time for many workers since in the global financial crash of 2007 and 2008. The average UK worker is on average now earning £40 less each week in real terms than they were at the time when the banks broke economies around the world. Squeezed incomes, below inflation wage rises and poorer quality jobs replacing higher paid jobs which have been lost have taken their toll on pay packets; £40 per week loss is a lot to miss out on.
Many ordinary people have been made to pay the price for the greed, recklessness and negligence of the banking system. It has scarred our economy and society. Household debt is rising to pre-crash levels, public services are being chipped away every month and the numbers of people requiring food banks to get by should shame our nation.
Eight years on and the recovery is somewhat anaemic in our region, partly as a result of government policies. We’re certainly not out of the woods yet. Despite new jobs being created by businesses in the region, unemployment has risen by 4,000 here over the last year.
We’re now at an important juncture with the European Union referendum and things could get a lot worse. If we vote to leave this month our economy will face severe risks and tests, with not only short-term economic shocks but longer term pain for UK workers needing to be taken into consideration.
It’s not just the risk of losing jobs, investment and rights at work that is causing trade unions concern. The further depression of wages that would follow Brexit is becoming clearer and is significant. Last week the TUC published a report showing that the typical worker in the UK would be on average £38 a week worse off by 2030 if we vote to leave the EU. This is in addition to the £40 a week that has been lost since the financial crash.
There are currently 1,196,000 people in work in the North East. Imagine the average loss of £38 a week to a region like ours in the years ahead? It’s not just individual households that would be hit hard but it would have a further impact on where we spend money in hospitality, retail and on other services. Reduced wages means less income tax being paid and this has implications for the future funding of public services such as schools and hospitals.
The £38 a week wage crunch from Brexit is a UK average. It would undoubtedly have a different impact in some parts of the country than others. Those areas with higher numbers of manufacturing jobs (which typically pay £100 a week more than those in the service sector) would be hit harder. The economies of the northern regions, East Midlands and Wales all rely more on manufacturing than regions like London and the South East.
Workers would pay a high price for leaving the European Union; risking jobs, rights and wages. The North East can’t afford that.
Neil Foster, Policy and Campaigns Officer for the Northern TUC
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