Saturday 19 July 2014

Saturday, July 19, 2014 Posted by Jake 3 comments Labels: , , , , , , , ,
Posted by Jake on Saturday, July 19, 2014 with 3 comments | Labels: , , , , , , , ,

The economic crisis caused by the banking crash of 2008 has been used as a smokescreen for many fundamental changes in Britain.

UK GDP has already recovered to its pre-crisis level. However employment rights, pension rights, legal rights and more have been permanently cut under cover of this temporary crisis.

Among the most basic rights is pay. Since the 2008 crisis pay in both public and private sector has fallen well behind inflation. 
The graph, using Office for National Statistics (ONS) figures, shows that average earnings have grown in cash terms from £134.20 per week in January 2008 to £149.30 per week in January 2014. 

However, although Average Weekly Earnings before 2008 kept up with inflation, since 2008 in terms of buying power (inflation adjusted) average wages have fallen by 9%.

Some people firmly, and some sincerely, believe that the secret to becoming internationally 'competitive' is to push down wages. The Conservatives would legislate to make strikes more difficult to achieve this lowering of wages. They would have employees trust their employers to prevent Britain becoming a 'low pay economy'.

The reality is Britain is already a 'low pay economy' compared to other advanced economies. One in five employees in the UK earn less than two thirds of average pay (the accepted definition of 'low pay') according to a report by the Resolution Foundation.

Eurostat provides figures showing that of the five largest EU nations, the UK's average labour cost is at the bottom together with Spain.

Low pay isn't about starting cheap and working your way up the payscale. Another Resolution Foundation report shows that fewer than 1 in 5 people (18%) of people who were in low pay in 2002 had escaped in 2012. (In the pie chart below, 'Cyclers' are those who moved in and out of low pay, but happened to be in low pay in 2012).

The Conservative Party plans to make strikes more difficult, by setting a ballot threshold that has not been achieved by a single Member of Parliament at the ballot box of a national election, nor any government in recent decades.

The TUC General Secretary, Frances O'Grady, commented,

"These proposals are designed to make legal strikes close to impossible, and the Conservatives do not include a single proposal – such as allowing secret online balloting – that would increase participation.
You cannot have proper negotiations between employers and unions without some power for the union side. Making strikes near impossible will fundamentally shift the balance of power in British workplaces in favour of the employer – and as union negotiations often set the pace for pay rounds, this will hit non-union workers as much as those in unions.

“The purpose of this is clear. It is to ensure that the fruits of recovery are reserved for the few and kept from the many.”

Free marketeers say wages are set by the free market. They would have us forget that the unions are part of the free market. Disabling the unions is anti-free market. As O'Grady says "the purpose of this is clear. It is to ensure the fruits of recovery are reserved for the few and kept from the many".

When the Tories say "we are on the side of the public" in making strikes virtually impossible, don't you believe them!


  1. worthy of reflection and posted by @benefits2work

  2. Wages used to make up a much greater slice of the economy when we had full employment. There is so much to be said about this that just gets ignored. Good article.

  3. There is no point in having increased pay if we can not increase productivity. We are not working hard enough, me included.


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