Tag Archives: low-wage

Cometh the hour, time for a party

140505UPIP

A new political party has been launched – on International Workers’ Day – to represent the interests of people whose opportunities in life have been restricted because they earn low wages.

The Underpaid People’s Independence Party – UPIP – will campaign for better pay, better rights and a better say on behalf of all those who currently earn less than they need in order to pay their own way.

The new party has announced several policies already:

  • A living wage for every working person, ensuring that the overburdened benefit system does not subsidise greedy corporations
  • A guaranteed ‘income floor’ for all British citizens, ensuring that those who do not work because of illness or unemployment are able to live with dignity
  • The guarantee of employee benefits including sick pay, holiday rights and both lower and upper limits on the number of hours worked
  • Strengthened – and rigorously-enforced – health and safety regulations for all workplaces, to limit the number of workplace-related illnesses and disabilities
  • An end to corrupt ‘workfare’, ‘work programme’ or ‘mandatory work activity’ schemes that allow governments to collude with corporations in forcing citizens to work for no payment other than benefits that are subsidised by other working people
  • Tax incentives to encourage all companies to transform into co-operatives, with responsibilities and profits shared among the entire workforce

UPIP founder Nobby Fulsom, a former mineworker, said Britain’s hardworking poor had suffered for too long under neoliberal profiteers, and the time had come for a party they could all enjoy.

“I have stayed underground for too long; now is the time for working people to stand tall,” he said.

But he admitted: “It is too late for us to field any candidates in the European election.

“If we could, we would be opposing the Transatlantic Trade and Investment Partnership that would push workers on both sides of the Atlantic into ever-worsening conditions of employment.

“Europe should be pushing for an agreement that will guarantee the best possible conditions for all workers. The fact that the EU doesn’t seem interested in supporting its constituents poses questions about its own role, and that is why we support a top-down reorganisation of the European Union, with authority granted to nobody unless they can prove they started their careers at the lowest level and worked their way up, rather than just walking in from a position of privilege.”

Mr Fulsom said it was not true that members of UPIP had been posting anti-corporatist Tweets on the internet, nor had they been targeting members of the aristocracy with derogatory remarks.

“UPIP is an inclusive party,” he said. We believe in uniting people – not in the divisive rhetoric of the Coalition government or certain minority parties with similar initials to our own.

“Any corporate executive who is willing to turn his organisation into a co-operative is welcome to join us, as is anyone from a family of wealth who accepts that the people who made that cash for them are entitled to the opportunities they and their forebears enjoyed.”

He added: “We don’t want much, but what we want is fair – for everybody, not just those with a private education and independent wealth.”

Undoubtedly, UPIP will have a great deal to say about the current election campaign and the future direction of British politics.

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A tale of two plans

Both the Labour Party and the Conservatives have unveiled new plans to revive the UK economy, in the wake of last week’s deeply unimpressive Cabinet reshuffle. Let’s take a look at them.

Labour is offering us the impressively-titled ‘Pre-distribution’ – a system which asks employers to pay their staff more money in wages, in order to eliminate the need for the government to take higher taxes and then redistribute the wealth, thereby lessening the huge differences between the benefits enjoyed by the very wealthy and the privations suffered by the very poor.

Labour leader Ed Miliband, announcing the policy, called for firms to be responsible in their attitude to wages, and to focus on the long-term.

He said it would require a major shift in philosophy for the Labour Party, as many redistribution options – for example, increasing tax credits – will not be possible when Labour next returns to power, although redistribution of tax wealth will always be necessary.

He said pre-distribution – a term he has taken from US economist Jacob Hacker – is about lifting the UK away from being a low-wage economy, because this has made us unable to pay our way in the world. We must have higher wages – and therefore our workforce needs higher skills.

In fact, this is just an impressive title for something Labour has already spent a considerable period supporting – the ‘Living Wage’. The idea is that, while the minimum wage went some way towards lifting people out of poverty, it did not finish the job.

Consider workers who do 29 hours a week on minimum wage. They do not qualify for tax credits and the amount they earn may not cover their outgoings. How do they survive?

Under the current government, the only choice is to borrow, if they don’t have savings. So they go to richer family members and ask for a handout (a humiliating experience, made worse if a person is working full-time) or, much worse, they go to loan sharks.

Recent reports have indicated that people working full-time – 37 or more hours a week – are still not earning enough to cover their overheads and are having to do the same.

The current system therefore makes it possible for people to get into phenomenal amounts of debt, and we know that debt is what caused the global credit crisis of 2008. As more and more people go overdrawn, banks will fall into trouble. The amounts might not be as much – individually – but cumulatively they become a problem.

Also, consider the working atmosphere created by the current attitude to wages. Employers have enjoyed wage increases that have multiplied their earnings by – what is it – eight and a half times over the last 30 years. Employees have seen theirs rise by something like 27 per cent – less than the rate of inflation. Therefore their earnings have dropped in real terms, and that’s why we see the problems I have outlined above.

As a result of this, workers become demoralised. What’s the point of going to work for a business where the bosses make out like bandits and the people who actually create the wealth are treated like dirt? As a result, productivity slumps. Of course it does. Where’s the incentive to produce high-quality work at high speed? This leads to a drop in sales as orders fall off due to dissatisfaction. If the trend continues, the company fails. I have seen this happen to a major employer in the town where I live. It has been forced to remodel itself, cutting back and back, but still fell into receivership and may now be under its second new owner within 10 years. The problem for managers is they never decide to cut back on the source of the problem – poor managers who take too much of the profit; they always cut down the workforce, reducing their chance of profitability still further.

This is also what happened with my last employer – a newspaper company that is struggling because it is top-heavy. I left because bosses ignore my advice and went ahead with a plan that I knew would harm sales of the edition where I worked. Sure enough, within a few months it had merged with another edition. The solution from management? Cut down on anything other than management. Ridiculous.

And, by the way, British industrialists: A saving is not a profit. If you cut back one year in order to keep your head above water, what do you do when it doesn’t carry over into the next?

Labour’s alternative would pay workers enough money to have something left over, after they have covered their costs. They will have spending power. This means they will be able to buy more, invest more – they will have breathing space, and a sense of personal worth. From that will come a sense of pride in their work and a feeling that they are valued by their bosses. Productivity improves, as does the quality of the product. Orders increase. The company flourishes and is able to employ more workers. The cycle of growth then repeats itself.

Isn’t that better?

The plan also shows up the Conservatives’ lie that cutting benefits will ‘make work pay’. Forcing people off of a benefit system that doesn’t pay their costs and into a job that doesn’t pay their costs is no solution at all and any Tory who spouts this nonsense in the media is to be mocked and targeted for unseating at the next election (in my opinion).

In contrast, the Conservatives have announced that home owners will be allowed to build large conservatories and extensions without needing planning permission. The Tories hope a home improvements boom will stimulate the economy.

Don’t laugh; they’re serious.

They haven’t realised that this will only benefit those who, firstly, own their houses; secondly, have enough spare cash to pay for what has been described as a “large” extension to their dwelling and; thirdly, want one. Apparently there are around 200,000 applications a year – that’s a drop in the ocean when you live in a country of more than 60 million.

The relaxation of planning rules will only last until 2015, because the Tories want to persuade homeowners to get on and build these extensions as soon as possible – again, failing to realise that we are in the middle of a time of fiscal austerity, which they are enforcing, and we simply don’t have the cash.

Therefore, the solution proposed by the government is for private individuals to borrow more, in order to fund the scheme and pay the builders. Isn’t that what the Tories have been mocking Labour for proposing on a national level – even though Labour isn’t currently proposing that?

Also, what about the 20 per cent VAT that goes on home improvements?

And what about the increased aggro between neighbours, as our quiet leafy suburbs get turned back into construction sites?

So the choice seems to be: Pay workers more, see increased long-term productivity and less concern over debt; or get homeowners to put themselves in debt by borrowing to pay for home improvements they probably don’t need and create a short-term boost in the construction industry.

Which one gets your vote?

The government’s plan to make sure work WON’T pay!

I’ve got to share with you some words by Justine Greening,the Transport Secretary. She said them on the BBC’s Question Time, broadcast July 28, 2012: “The first thing to do is bring in a welfare cap, so we put an upper limit on how much people can get in welfare in the first place, that is fair. Let’s make sure we reform it in terms of Universal Credit, so that work does always pay.”

How does capping benefit ensure that being in work will always pay?

Whether in work or not, people are finding it hard to make ends meet because housing costs – either rented or mortgaged – are very high and nothing is being done (for example) to cap the amount of rent being charged by private landlords; utility bills are high and nothing is being done to encourage the gas, water and electricity companies to pass on any savings that come their way; and the price of groceries is outstripping people’s ability to pay for them – inflation has dropped but remains above the percentage rate of annual wage rises (unless you are a fat-cat company boss and have awarded yourself a huge salary increase).

Capping the amount available to honest people on benefits will not be fair on them, as they will have even less to live on than at the moment!

Worse still, it won’t help people who are in work! It’s ridiculous for the Transport Secretary – who previously worked in the Treasury, so she should know what she’s talking about – to suggest this. Benefit payments and wages are completely separate from each other.

In fact, while the British people continue to subsist in a low-wage economy, the government is in danger of repeating the debt crisis that created the huge deficit it is supposedly trying to pay off at the moment – the one for which it continually and inaccurately blames the previous Labour government.

It was imprudent bank lending that created the deficit. The government had to step in to save the banks, after they got into so much debt the entire western financial system was put in danger of collapse. The money to do this had to come from somewhere, and that is why it has to be paid back.

But what happens when a poor working person cannot make ends meet, because their job doesn’t pay enough? They borrow money to make up the difference – even if they know they can’t pay the money back!

What happens when too many people borrow money they can’t pay back? The banking system overbalances and we get a debt crisis. That’s where the Coalition is taking working Britain.

The only action the government can take to make work pay would be to reach not only adequate, but exemplary pay deals with public sector workers, and then take action to compel private companies to reach similar deals.

A living wage for hard-working employees – that’s what’s needed.