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LABOUR TO TACKLE LOW PAY ECONOMY

Britain is slowly sinking into a low wage, low skills economy under the Conservative led Government.

LOW PAY

Wages have fallen 2% in real terms since 2010. One in five jobs  in Britain pay below the Living Wage, which has been independently calculated at £7.85p per hour and the amount needed, outside London, to provide the essential s for a decent lifestyle and pay for rent, council tax and childcare.

Here in the Isle of Wight:-

  • 25.5% of full-time jobs pay less than the Living Wage
  • 29.6% of women working full-time earn less than the Living Wage
  • The hourly rate of 37.5% of part-time jobs pay less than the Living Wage

Many jobs on the Island are in tourism and catering and, nationally, 69% of these jobs pay less than the Living Wage.

The National Farmers’ Union have calculated that inflation in the cost of key goods and services in rural areas has been running at twice that in urban areas so the squeeze on people’s cost of living is even greater in areas such as ours.

The Coalition’s decision to scrap the Agricultural Wages Board will reduce wages in this area and so take £260 million out of rural economies.

LOW SKILLS

In Britain 21% of jobs require only primary school education.  The Conservatives will say that this is inevitable but this is nonsense – the comparable figure in Sweden and Germany is 5%.  The problem is often not the lack of education or skills of workers but the sorts of jobs that have been created – in hotels and catering 55% of employees are over skilled for the job.

The effect of all this is that there are more children living in families in poverty and working people below the Living Wage are forced to rely on Housing Benefit and Family Tax Credit, so that low paying employers are subsidised by the tax payer.  Many people have to hold down two jobs and so spend less time with their families. The last Labour Government introduced the Minimum Wage which at the time took 1million children out of poverty but its value has been eroded over time.

While improving the quality of jobs and ensuring investment in new technology will take time but a Labour Government will tackle Low Pay straight away:-

Government contractors will be required to pay the Living Wage.

Firms paying the Living Wage would get an incentive such as a tax break of £1000 per employee that they help or lower business rates for the first year that they implemented the Living Wage.  The extra tax revenue the changes would generate would more than pay for this.

Many Labour Councils and a range of firms and organisations have already become Living Wage employees. Information on low paying firms will be made public and local councils will work to recruit more firms to the Living wage.

Labour’s Low Pay Review is currently collecting evidence and will propose more changes.

Firms that want to become Living Wage employers can be accredited by The Living Wage Foundation who help them move towards paying the rate and also to insist that their contractors do the same.   The right said that the Minimum Wage would lose jobs but this turned out to be true.  A survey by GLA Economics of London employers who had become accredited showed that 80% felt their employees worked better, saw a 25% drop in absenteeism and experienced lower staff turnover.  They also felt that the image of their firm was enhanced publicly.