Fresh start or same old story? Three resolutions for a wage-led recovery in 2015

George Osborne’s Autumn Statement [has] opened up a “huge choice in British politics,” according to the TUC's Frances O’Grady, “between radical cuts and pay freezes versus investment for the future and a strategy for decent jobs, homes and living standards.”

2015's political sparring has already begun in earnest, but no matter how confusing the spin and counter-spin get in the coming months, the background is pretty clear. Over the last five years, Britain's economy has been good at helping create tens of thousands of low-paid, precarious jobs – and bad at investing in decent employment with genuine prospects that makes the most of people’s skills, and gives them the financial security they need. In spite of signs of recovery in 2014, living standards have continued to fall. The average wage is now worth £50 a week less than when the government came to power, according to recent TUC analysis of The Annual Survey of Hours and Earnings (ASHE). And wages – not deeper cuts and austerity – are the key to a recovery that will genuinely benefit ordinary, hardworking people. Any political party serious about running the country post-election needs to have an economic plan that also delivers decent jobs and fair pay. Just for starters, the next government should be looking to:

  1. Raise the National Minimum Wage. The current minimum wage still lags woefully behind the real cost of living – by £2.65/hour in London and by £1.35 across the rest of the country. All parties agree more needs to be done, but none have gone far enough yet. Ed Miliband’s ‘£8 an hour by 2020’ pledge is the best of a mediocre bunch.
  2. Support employers to pay the Living Wage. While the cost of living continues to outstrip the minimum wage, employers also have a key role to play in decent pay. A growing number of them are discovering that paying the Living Wage is not only fair, but also makes good business sense. Political parties can support this movement by putting more pressure on employers – particularly high-profile and large businesses who can easily afford it – to go beyond the statutory minimum wage, and by giving campaigners access to data so they can publicly challenge the accepted culture of low-pay among employers.
  3. Provide better protection to casualised workers. There are 1.7 million (and rising) casually employed people in the UK. These people are largely propping up the economic recovery, but seeing none of its benefits. The majority of them are falsely ‘self-employed’ (e.g. contracted, rather than put on the payroll) and stuck on ‘zero hours’ contracts, where they are denied basic employment rights enjoyed by traditional salaried staff (such as sick pay, paid leave and pensions) or any guarantee of regular, sustainable income, and left vulnerable to exploitation in the workplace. So far, the government has been quietly complicit in undermining workers’ rights (as explained here).

In tandem with this creeping erosion of conditions for working people, we're concerned about a particular Conservative manifesto commitment to make legal strikes so difficult that they effectively end the right to strike. (More details on this here).  This is deeply worrying: if ever implemented it would weaken unions’ negotiating position in every dispute, further depressing wages across the economy. This fundamental attack on the rights, welfare and prospects of workers everywhere must be challenged in the strongest terms possible. 2015 needs to be the year when we ensure recovery, but we also need to do more to share its proceeds fairly and start to undo the damage done to our public services and welfare state by the crash and its aftermath. Happy New Year and we hope it brings you a better and fairer year than 2014!