Living wage campaigners have hit out after it emerged a third of people in some North East towns are not earning to enough to get by.
Unions, politicians and even the new Bishop of Durham have called for more firms to take up the Living Wage, currently set at £8.80 in London and £7.65 across the rest of the UK.
Just 20 North East firms pay the higher than minimum wage to their lowest paid staff, a move the unions say has to change.
Latest figures show more than one in five people receiving less than the living wage, with some parts of the region faring much worse.
Darlington tops the region’s blackspots with 37.6% of people paid less than the living wage, with Blaydon at 34.2% and Berwick 31.7%.
Northern TUC boss Beth Farhat said the unions were looking to see more support for their pay battle: “Extending the living wage is a vital way of tackling the growing problem of in-work poverty across Britain.
“Working families are experiencing the biggest pressure on their living standards since Victorian times. Pay has been squeezed at all levels below the boardroom and it’s costing our economy dear.
“The number of living wage employers is growing rapidly and unions are playing their part in encouraging more employers to sign up and pay it – but Government must show equal initiative.
“We need to see a far greater commitment to pay the living wage from Government and employers, and modern wages councils which could set higher minimum rates in industries where employers can afford to pay their staff more. During Fair Pay Fortnight we’re asking workers to back our call to MPs to get all political parties to put decent pay at the top of their agendas in the run up to the election.”
The TUC campaign is today backed by Paul Butler, the Bishop of Durham, who said: “The Living Wage is good for everyone: good for the employee and their family – they have enough to live on; good for the employer in recruitment, retention and morale of their staff; good for us all.
“The Living Wage makes sense for everyone. It makes sense economically, socially, morally and spiritually. It helps us all build better lives and a better society.”
Union research suggested that for working women the picture is even bleaker.
The campaign has been backed by Hexham’s Conservative MP Guy Opperman, who has said he supports the need for firms to voluntarily take on the wage increase.
He said: “I have long been a supporter of the Living Wage. The campaign has really taken off in London and the South East, but what I hope to do today is to bring the campaign right here to the North East.
“I understand the concerns that business has, but I really want to explain the benefits it can bring. As many people will be aware, I am a huge advocate of the regional banking system we see in Germany. There are lots of things we can learn from our Germanic neighbours, especially around productivity.
> Is this guy (sic) really a Tory ? He won’t get far with opinions like those.
“Paying the Living Wage can have a hugely positive impact on things like productivity, quality of work, reduced absenteeism and retention of talented staff.
“In a recent independent study 84% of businesses believed paying the living wage led to increased productivity.”
Source – Newcastle Journal 01 April 2014
TUC General Secretary Frances O’Grady explains why North-East workers need a pay rise.
Next Tuesday, April 1 will mark the fifteenth anniversary of the minimum wage – a historic milestone in British labour history.
Before its introduction in 1999 some workers were being paid as little as £1 an hour. The minimum wage has helped to end such abuse. It has proved to be a vital safeguard for employees across the North-East.
The Low Pay Commission recommends the level of the minimum wage. Its first ever chair Sir George Bain said last month “with more than one in five workers in Britain suffering from low pay, it’s time to talk about how we strengthen the minimum wage for the years ahead.”
Sir George is right. The minimum wage has undoubtedly lifted many out of extreme low pay, but research shows that many employees start work on the minimum wage and then stay there – failing to lift their pay above the minimum even after years at work.
In the North-East over 75,000 workers are on the minimum wage. Many are likely to stay on this rate for a large part of their working lives.
Lifting the minimum wage above inflation as politicians of all parties now support will help these. But many employers could do more by adopting the higher voluntary minimum standard known as the living wage – set at £7.65 an hour.
But it is not just those on low pay who have been left behind. New TUC research shows that the gap between the top ten per cent of wage earners and average pay in the North-East has grown by 5.3 per cent since 2000.
This should worry everyone. Those with the biggest pay packets may dismiss this as the politics of envy, but income inequality is bad for the whole economy. It helped drive the financial crash as banks lent the savings of the wealthiest to those in the middle who took out credit to keep up their living standards.
For some the pay squeeze has been even sharper. To take just one example, academic staff at the universities of Durham, Teesside, Newcastle, Northumbria and Sunderland have seen real-terms pay cuts of 13 per cent over the last five years. And this is just one instance of jobs that were once secure and decently paid slowly being turned into insecure work that can no longer deliver the living standards once thought fair.
This real wage squeeze is a key aspect of a wider cost of living crisis. Energy bills have risen three times faster than inflation over the last decade, while rail fares rose above inflation yet again this January.
Childcare and housing costs have also grown as a share of average income.
People are now spending over a third of their disposable income on essentials such as food and fuel. People think of the cost of living crisis in terms of prices but the main cause of the problem is that their wages are not going far enough anymore.
So can we do something about it? Or is it just an inevitable fact of life that living standards are in decline and that for the first time in history future generations will have lower living standards than their parents?
Economic growth alone is not the answer. The economy has grown by £60bn in the last four years but real household disposable income has barely increased. Disposable incomes have fallen by nearly £500 per person.
A first step is bolder increases to the minimum wage. Had it kept pace with prices since 2007 full-time minimum wage workers would be nearly £800 a year better off. We need to make up this lost ground but also ensure that companies who illegally pay staff less than the minimum wage face the full force of the law – including being publicly named and shamed.
Secondly, we need an increased commitment to the living wage from employers in the public and private sector so that their own staff, as well as those in their supply chains, can have a decent standard of living.
Employers in many sectors can afford to pay more without job losses. That’s why we need to find new ways for employers and unions to work together to set higher wages, agreed at a sector level by modern wages councils, so that workers and businesses can both get a fair deal.
More collective bargaining can stop employers skimping on pay and get wages rising back in line with prices. Even the International Monetary Fund (hardly known for its radicalism) concedes that the decline of collective bargaining has increased wage inequality and reduced wages for ordinary people.
This month the TUC is organising Fair Pay Fortnight – a series events and street stalls throughout the North-East – to raise awareness about Britain’s cost of living crisis.
We need to put fair pay at the top of the political agenda and ensure that policymakers and employers create more high-quality jobs to boost productivity and raise people’s living standards. People need more money in their pockets if local economies are to thrive.
The North-East needs a pay rise.
Source – Northern Echo, 26 March 2014
The wage gap between the highest and the lowest paid Sunderland council workers is now more than £163,000.
At the top, Sunderland City Council’s chief executive – currently Dave Smith – takes home an annual wage of £175,699 before tax, while a cleaner earns £12,435 per year for a 37-hour week.
Union representatives have now called for the difference to be slashed ahead of TUC’s Fair Pay Fortnight, which starts today.
The campaign comes as the full council is due to meet on Wednesday, when members will be asked to recommend approval of the draft pay policy statement for 2014 to 2015. If passed, it will then be formally adopted and published by the end of the month.
In justifying the salary level, a report – to be presented at the meeting – says the post is in line with a large city authority, with responsibility for the provision of wide-ranging services to 275,743 residents and a £678.8million service budget.
It reads: “The chief officer pay policy is designed to be easily understood and be transparent to the post holders, key stakeholders and the public.
“The structure and level of the pay arrangements is designed to enable the council to attract, motivate and retain key senior talent for the authority.”
Sunderland Unison branch secretary Diane Peacock said the union has campaigned for the difference in council salaries to be addressed as part of the Living Wage Campaign – which says people should be paid the amount needed for a basic standard of living.
She said: “Public sector workers have lost on average £4,000 since 2009, due to the pay freeze and increase in the cost of living.
“Many workers in the council earn below the Living Wage, forcing working families to rely on food banks, and hitting the local economy as people don’t have money to spend in it. The TUC’s Fair Pay Fortnight campaign starts next week, and our branch in Sunderland will be playing a part to urge the authority to work towards reducing this ratio and reward public sector workers for the excellent service they provide.”
Other high-earners within the authority, include the deputy chief executive, executive director of commercial and corporate services and executive director of people services, which all fall within a salary range of £117,572 and £128,063 per year. Deputy executive and corporate directors, of which there are four, are on between £81,960 and £97,327.
The lowest paid employees at Grade A are newly-appointed cleaners for the first six months of service.
Apprentices are not included in the report.
Source – Sunderland Echo, 24 March 2014