Monday, 27 October 2014

The scandal of Britain's low pay economy

My article for this coming week’s Cornish Guardian will again focus on the issue of low wages. It will be as follows:

A new report from the Resolution Foundation think-tank has revealed that more than five million British workers are in low-paid work.

Titled “Low Pay Britain 2014,” the report records that 5.2 million workers earn less than two-thirds of median hourly pay (which is equivalent to £7.69 an hour) – an increase of 250,000 on 2013. It also states that “almost a quarter of minimum-wage workers have remained on that rate for the past five years.”

Launching the document, Matthew Whittaker the chief economist at the Foundation, pointed out that the number of low-paid workers has “reached a record high,” and that “being low paid – and getting stuck there for years on end – creates not only immediate financial pressures, but can permanently affect people’s career prospects.”

But as well as identifying the problem for individuals and families, he stressed that the scale of the problem was also a “financial headache” for the Government because it “fails to boost the tax take and raises the benefits bill for working people.”

I personally consider it a scandal that hard-working individuals – in jobs that need to be done – are not earning enough to make ends meet and are ending up being reliant on in-work benefits.

Indeed, it is so bad that, in 2012, the Joseph Rowntree Foundation and the New Policy Institute (NPI) estimated 4.3 million families were both in-work and on some form of benefit.

The Social Mobility and Child Poverty Commission has meanwhile warned “endemic levels of low pay mean that millions of families are worse off today than they were before the recession,” and that too many of the jobs that are being created through the economic recovery are “low income” and “high insecurity.”

This is certainly the case in Cornwall, where low pay is an entrenched problem, with average wages long having been more than 20% below the average for the UK.

Figures released by the Cabinet Office, earlier this year, show that in North Cornwall, 33.6% of employees earn below the living wage (presently £7.65). In South East Cornwall, the figure is 33.3% while in St Austell and Newquay it is 31.6%.

An earlier analysis by the TUC recorded that 29.7% of all full-time employees and 44.6 percent of part-time workers earned less than the living wage in April 2013.

This all shows how the “cost of living crisis” is very real for many people throughout Cornwall and elsewhere in the United Kingdom.

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