Stagnation: years ago, the Living Wage Commission said the fall in take-home pay had left millions of workers struggling to make ends meet
You’re a lot worse-off than you thought you were.
Official data from the Office for National Statistics (ONS) shows that Conservative governments since 2010 have presided over the longest period of wage stagnation since the Napoleonic Wars:
Real average earnings are at the same level as they were in 2005. Then weekly pay stood at £497 — the same figure as it was in April.
Economists described the figures as “completely unprecedented”, saying that there was no comparable period since the Napoleonic war when wages had been so stagnant. They attributed the slump to the series of crises that have hit the economy over the past 15 years including the financial crash, Brexit and the consequences of the war in Ukraine. They warned that with inflation still running at nearly 10 per cent, it was likely to be about 18 months before real-terms wages began to rise again.
The figures show that, between the turn of the century and 2005, seasonally adjusted average weekly earnings rose by about 15 per cent amid a buoyant economy. They then increased more slowly, by 5 per cent, in the run-up to the 2008 financial crisis. The impact of that crash on public and private sector wages effectively wiped out all the gains in the previous eight years, before recovering slightly in the three years leading up to the Brexit referendum.
Since then, excluding the effects of Covid which distorted the figures because lower paid workers in sectors such as hospitality were furloughed, wage growth has never recovered.
Apparently, if wages had continued rising as they had been before the financial crisis, your pay packet would have been £200 per week thicker.
Who benefits from this?
Who profits by depriving you of the fair wages that help make life worth living?
Here’s a hint:
UK’s top bosses paid millions despite cost of living crisis, annual reports show | Executive pay and bonuses | The Guardian https://t.co/bWMNiWHvLX
Number of people employed on a “zero-hours contract” in their main job was 697,000 for October to December 2014, representing 2.3% of all people in employment. In the same period in 2013, this was 1.9% of all people in employment (586,000).
The number of people saying they are employed on “zero-hours contracts” depends on whether or not they recognise this term. It is not possible to say how much of the increase between 2013 and 2014 is due to greater recognition rather than new contracts.
Number of contracts that do not guarantee a minimum number of hours where work was carried out was 1.8 million for the fortnight beginning 11 August 2014. The previously published estimate was 1.4 million for the fortnight beginning 20 January 2014.
The two estimates of contracts should not be directly compared. They cover different times of year so changes in the numbers may reflect seasonal factors.
On average, someone on a “zero-hours contract” usually works 25 hours a week.
Around a third of people on “zero-hours contracts” want more hours, with most wanting them in their current job, compared with 10% of other people in employment.
People on “zero-hours contracts” are more likely to be women, in full-time education or working part-time. They are also more likely to be aged under 25 or 65 and over.
Over half of businesses in Accommodation and Food Services and a quarter of businesses in Education made some use of no guaranteed hours contracts in August 2014.
This is at a time when the Organisation for Economic Co-operation and Development has said the UK has bounced back strongly from the recession and has one of the strongest economies in the G7 nations.
Admittedly, the OECD has said productivity – stagnant for many years now – must improve in order for living standards to rise, but this is not part of the zero-hours plan. The Conservative-led Coalition wanted to put as many people as possible into jobs of any description, in order to claim a drop in unemployment – but zero-hours contracts, while helping businesses by eliminating in-work benefits like sick pay and holiday pay, do not help productivity at all; they use more people to achieve the same result.
In the case of the UK, it seems, they have been achieving worsening results, as dipping tax receipts have made all-too-clear. George Osborne claimed a surplus in January, but this is clearly a manufactured result, formed from panic after the last few tax revenue figures became public.
So what does Labour say about all this?
Scottish Nationalists will be surprised to learn that the party Pete Wishart believes is “cuddling up to the Tories” was unequivocally critical.
“The Tories’ plan is failing working families,” said Chuka Umunna, shadow business secretary.
“While they prioritise a few at the top, for others there’s a rising tide of insecurity. Ministers have watered down every person’s rights at work and zero-hours contracts have gone from being a niche concept to becoming the norm in parts of our economy.
“The ONS’ findings today that there are now 1.8 million zero-hours contracts and that the number of people reporting they are on a zero-hours contract for their main job has risen by almost 20 per cent is yet another stark illustration of a recovery which is not working for working people.”
He said: “Labour’s Better Plan for Britain’s Prosperity would ban exploitative zero-hours contracts, prohibit employers from requiring workers to be available on the off-chance they are needed, ensure zero-hours contract workers who have shifts cancelled at short notice receive compensation and give employees who consistently work regular hours the right to a fixed-hours contract.
“Ministers have sat on their hands and opposed our plans, in the face of rising insecurity for people.”
By now, we should all know how these Opposition Day debates go – but Wednesday’s discussion of food banks was one of the best examples I’ve heard.
The form goes like this: The relevant Labour shadow minister launches the debate, quoting the facts that support the argument (in this case, that the rise of food banks is a national disgrace and the Conservative-Liberal Democrat government’s policies have caused it), the government denies the charge – always with the same feeble excuses, backbenchers queue up to tell their own damning stories of what has happened to their constituents… and then the government wins the vote because its members have been whipped to vote against the motion, rather than because they believe it is wrong.
The food bank debate was textbook. Not only did it carry all these features, but:
The Secretary of State responsible, Iain Duncan Smith, declined to speak at all, but turned tail and ran after listening to only a small number of speakers.
Minister of State Esther McVey, who spoke in his place, delivered what Labour veteran Gerald Kaufman described as “one of the nastiest frontbench speeches I’ve heard in more than 43 years”.
As one story of government-created hardship followed another, Conservative MPs laughed. Clearly they are enjoying the suffering they are causing across the UK.
Each of these is a damning indictment of the depths to which the Coalition has driven British politics. But the debate is only half of this matter. Now it is our duty to publicise what happened. Many people may not know about this, or may not understand its significance.
They need to understand that food bank use has risen exponentially under David Cameron’s Conservative-led government, from 41,000 people in 2010 to half a million by April this year, one-third of whom were children. People are resorting to them because the cost of living is rising while wages have stagnated and social security benefit payments have been delayed or slashed. The government promised to publish a study on food banks in the summer of this year, but has delayed publication with no stated reason. The government department responsible – DEFRA – did not even put up a minister to speak in the debate.
Probably the most damning indictment was the vote. The Coalition government defeated a motion to bring forward measures that would reduce dependency on food banks. The obvious conclusion is that this government is happy to be pushing ordinary working and jobless people into crushing poverty – and intends to continue putting more and more people in the same situation for just as long as it possibly can.
We heard that:
People in Slough are fighting each other over discount fruit and vegetables in the local Tesco.
Food banks are visited by skilled workers who are unable to get jobs because of Coalition government policies.
Serious failures including administrative error in the benefit system mean one-fifth of the people visiting food banks are there because the Department for Work and Pensions has been unable to do its job properly.
The Bedroom Tax has hugely increased the number of people using food banks.
“The working poor are emerging as the Prime Minister’s legacy, as millions of people live in quiet crisis.” (Labour’s Jamie Reed).
In response, the Tories trotted out the old, old arguments, trying yet again to sell us the long-disproved claim that Labour forced the country into poverty by mismanaging the national finances. We heard, again, the turncoat Lord Freud’s claim that people were visiting food banks because the items there were free (ignoring the fact that everyone who visits a food bank is referred by a qualified organisation, and verified as being in crisis). We heard, again, the suggestion from our ignorant Education Secretary Michael Gove, that people are turning to food banks because they cannot manage their own finances (good management makes no difference if costs outweigh income; but then he clearly hasn’t been educated well enough to understand that).
Esther McVey’s speech showed clearly why she should have remained on breakfast television, where comparatively few people had to put up with her. She accused the previous Labour government of a “whirl of living beyond our means” that “had to come to a stop” without ever pausing to admit that it was Tory-voting bankers who had been living beyond their means, who caused the crash, and who are still living beyond their means today, because her corporatist (thank you, Zac Goldsmith) Conservative government has protected them.
She accused Labour of trying to keep food banks as “its little secret”, forcing Labour’s Jim Cunningham to remind us all that food banks were set up by churches to help refugees who were waiting for their asylum status to be confirmed – not as a support system for British citizens, as they have become under the Coalition’s failed regime.
She said the Coalition government was brought in to “solve the mess that Labour got us in”, which is not true – it was born from a backroom deal between two of the most unscrupulous party leaders of recent times, in order to ensure they and their friends could get their noses into the money trough (oh yes, there’s plenty of money around – but this government is keeping it away from you).
She said the Coalition had got more people into work than ever before – without commenting on the fact that the jobs are part-time, zero-hours, self-employed contracts that benefit the employers but exploit the workers and in fact propel them towards poverty.
She lied to Parliament, claiming that children are three times more likely to be in poverty if they are in a workless household. In fact, according to the Joseph Rowntree Foundation, in-work poverty has now outstripped that suffered by those in workless and retired households; children are more likely to be in poverty if their parents have jobs.
She attacked Labour for allowing five million people to be on out-of-work benefits, with two million children in workless households – but under her government the number of households suffering in-work poverty has risen to eight million (by 2008 standards), while workless or retired households in poverty have risen to total 6.3 million.
She claimed that 60,000 people were likely to use a food bank this year – but Labour’s Paul Murphy pointed out that 60,000 people will use food banks this year in Wales alone. The actual figure for the whole of the UK is 500,000.
She said the government had brought in Universal Credit to ensure that three million people become better-off. There’s just one problem with that system – it doesn’t work.
She said the Coalition’s tax cuts had given people an extra £700 per year, without recognising that the real-terms drop in wages and rise in the cost of living means people will be £1,600 a year worse-off when the next general election takes place, tax cuts included. She said stopping fuel price increases meant families were £300 better-off, which is nonsense. Families cannot become better off because something has not happened; it’s like saying I’m better off because the roof of my house hasn’t fallen in and squashed me.
Then, on top of all that, she had the nerve to tell the country, “Rewriting history doesn’t work.” If that is the case, then hers was one of the most pointless speeches in the history of Parliament.
Labour’s Jamie Reed had the best comment on the debate. He said: “The final verdict on any Government is based on how they treat the poorest in society during the hardest of times,” after pointing out that “the laughter from some of those on the Government benches … says more than words ever could.”
On a personal note, my own MP, Roger Williams, spoke about the food bank situation in Brecon and Radnorshire. It is gratifying that he is proud of the food bank set up by New Life Church, here in Llandrindod Wells – I well remember the telephone conversation I had with the organisers, in which I encouraged them to set it up. I am glad they took up the baton – and that he has appreciated their work.
Rather more worrying is the suggestion that he considers a possible new food bank in Brecon to be only the second in our constituency. There are food banks in many other towns, including Knighton, Ystradgynlais and Hay-on-Wye – with satellite facilities in smaller towns and villages. It is disturbing that the MP does not seem to know this.
Martin Rowson’s Guardian cartoon of April 13 satirises the spectacle of Baroness Thatcher’s funeral, calling it as he sees it: A primitive tribal ritual.
“This is Hell, nor am I out of it.” – Mephistopheles, Doctor Faustus.
As I write these words, the funeral of Margaret Thatcher is taking place at St Paul’s Cathedral in London.
Unemployment stands at 2.56 million (7.9 per cent of the workforce).
The banks are not lending money.
More small firms are going out of business every day.
The economy is stagnant and the outlook for growth is bleak, according to the International Monetary Fund.
The rich elite prey on the poor – Britain’s highest-earners are billions better-off than in 2010, while wages for the lowest-earners are increased by so little that most of them are on benefit and sliding into debt (0.8 per cent rise in the year to February).
The cost of living has risen by around three per cent.
900,000 people have been out of work for more than a year.
The number of unemployed people aged 16-24 is up to 979,000 (21.6 per cent of all those in that age group).
Politicians lie to us, in order to win our support by deceit.
Assessment for disability benefits is on a model devised by an insurance company to avoid paying money to those who need it most.
Health services are being privatised, to make money for corporate shareholders rather than heal the sick.
Government policies have reinstated the ‘Poll Tax’ principle that everybody must pay taxation, no matter how poor they are.
Government policies mean child poverty will rise by 100,000 this year. It will not achieve the target of ending child poverty in the UK by 2020.
Government policies are ensuring that many thousands of people will soon be homeless, while social housing is being sold into the private sector.
And Legal Aid is being cut back, to ensure that the only people with access to justice are those who can pay for it.
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