Upgrade ? On the contrary, things are getting worse for the UK’s lowest paid | Polly Toynbee
Tnow is the time: it is the best chance in years to shoot the “high wages, high skills economy” promised by Boris Johnson. The ratio of vacancies to the unemployed has been at its highest since the 1960s, meaning employers are in theory competing for workers rather than the other way around. If not now when?
Wherever you go, look for “staff wanted” signs in stores, care agencies, minicabs, cafes, hairdressers, on the backs of buses and vans. Finally, is the boot at the worker’s foot a deserved reward for pandemic heroism?
There is little sign of this. The Bank of England said real wages rose by around 3%, while the city expects Wednesday’s bureau of national statistics inflation rate to hit 4%. Highly skilled workers can manage to keep pace, their wages at the cost of living, but low wages cannot.
On Monday, the ‘real living wage’ – a voluntary scheme – rose to £ 9.90 an hour outside London, which is equivalent to £ 1,930 more per year than the so-called national living wage (NLW ) of the government. The Minimum Wage Commission sets this rate, unlike the government, to reflect rising prices for rent, food and fuel. The good news is that an additional third of companies became accredited living wage employers during the pandemic, have committed to paying that rate. Today, nearly 9,000 employers, half of which are FTSE 100, have signed up, covering 300,000 employees. Setting the tone, Gavin Kelly, chairman of the Living Wage Commission, says their rate is pushing governments to keep raising the official rate. Even so, nearly 5 million jobs, or one in six nationwide, are below the real living wage. If Johnson seriously meant his “leveling up” to make the country less unequal, he would start here: in the south-east of England, 12.8% are poorly paid; this figure increases in the north, the highest at 21.3% in Northern Ireland.
Yet what the budget gave it took back: As the NLW grew, 55 cents of every additional pound is lost due to changes in universal credit. Since the end of the £ 20 a week ‘hike’, the Resolution Foundation finds that despite the increase in the minimum wage, one-fifth of the lowest-paid households will lose £ 280 a year. But in the miserable world of low wages, the hourly rate is misleading. For those with zero hour contracts, what matters most is the number of hours worked: a week with too few hours can plunge families into debt. The government’s long-delayed employment bill must make guaranteed contractual hours a right. Will this bill include the power to stop the “self-employment” sham that denies security, or sick pay and vacation pay? A regulator must enforce rights. Will it ban monstrous forms of control, like algorithmic systems that make employees work like robots, harming their sanity?
Any serious level-up plan would embrace the Labor plan for fair pay deals in every sector, starting with welfare. Winston Churchill created salary councils, which set pay thresholds in every sweatshop profession, but John Major abolished them to let the market tear itself apart. Decades after Margaret Thatcher gutted unions, it’s time to force employers to let them recruit in every workplace. There is no leveling up without a rebalancing of power between employer and employee.
It also means gender, as two-thirds of low earners are women. This Thursday is Equal Pay Day, the lamentable time of the year when, metaphorically, women stop winning: this year, they earned almost 12% less than men. The deep sexism in social attitudes traps women in a downward wage spiral for all the bad old reasons: they work in low-wage sectors – care, cleaning, catering, cash – in traditional female roles, traditionally under pressure. -paid because women make them. Worse yet, the Fawcett Society points out that research indicates that when women enter a sector, wages go down.
“Change jobs to let the job market work its magic! Say economists with their failed models. They only have to venture into the real world to understand why few low-wage families dare to take the risk – the typical savings level for the poorest fifth of households, before the pandemic, was £ 473 . A mother who rushes to work and then home to pick up her children has no time to look for work. Is this job nearby, do her schedules correspond to on-call schedules, how can she be interviewed? This could mean standing in line at agencies to collect and then bring back forms with photos and certificates; a delayed start date and waiting for the first paycheck mean she risks going broke while she waits. What if the job doesn’t work?
Highly skilled people can rely on themselves to cope with inflation, but insecure and low-paid people cannot. “Improve your skills and get aspirations! Urge conservative politicians. But five out of six low-paid people are still low a decade later, according to the Institute for Employment Studies, with women the least likely to advance through training or promotion.
Sadly, this doesn’t seem like a golden age where the underpaid takes the lead. The Office for Budget Responsibility predicts a looming drop in household income, with inflation overtaking incomes, which are 1% lower than the same period a year ago. By 2024, the Resolution Foundation forecasts only a pitiful 0.5% increase in real incomes, which would make this parliament the worst on record for wage growth. It is after the virtual stagnation since the crash of 2008. Ipsos Mori reports an exceptional pessimism about the rise in the cost of living. Voters won’t judge the leveling by a handful of reopened northern rail lines: it will always be the economy, stupid.