Lifting boats and raising pay

It’s been a good week for the political debate about living standards and the cost of living crisis.

Over recent months analysis by the likes of the Resolution Foundation and TUC has put the stark story about falling wage share, and the way in which those on low to middle incomes have not been sharing in the proceeds of growth, at the top of the political agenda.

This week’s announcements from Labour on jobs, national minimum wage enforcement, energy prices and childcare have made significant in-roads into developing a programme for government that begins to tackle the issues which address our movement’s core business.

However, let’s be clear at the outset.  The problems of low pay and the squeeze on living standards in our economy are deeply entrenched.  Not just because of technological change on the jobs market or the impact of globalisation.  But because of the impact of cumulative policy choices made by governments of all shades over recent years that have created downward pressure on pay.

As such Labour’s agenda does need to be both broader and more ambitious if the party is to be confident of tackling the living standards crisis faced by so many people on ordinary incomes.

Three areas stand out for additional action and firmer commitment.  The first is on procurement and low pay.

There are currently one million public service workers on low pay, most of them women.  These include health and social care workers and local authority employees.  Many are outsourced, working for community and voluntary sector organisations or private contractors.

These are people who could benefit directly from action to implement the living wage through public sector supply chains.

We know from recent announcements that part of Labour’s approach to extending the living wage is to learn from those local authorities who have used their procurement powers to extend the living wage.

But whilst this is part of the way forward, it will only take us so far.  At the same time we have to look at the structural causes of low pay in public services, and the approach to  public spending which underpin them.

Social care is a case in point.

This is a sector riddled with zero hours abuses and other appalling practices.  Its where you run a high risk of not being paid the national minimum wage, let alone the Living Wage. It’s where there is a strong chance of not being paid for the time you spend travelling between clients. And where you might well see money docked from your pay to cover the cost of your uniform.

We know anecdotally from some home care providers that they feel they have no choice.  That government spending cuts have resulted in local authorities paring contracts to the bone, and care providers then behaving like they do to stay in business.  Clearly this has to change.  Social care and public services more broadly have to be funded properly if we are to get the social care we need, and ensure people are properly paid.

Of course this means difficult choices on public spending, but it would be disingenuous to commit to tackling the living standards crisis and then preside over a model of public service delivery that continues to push down pay for those doing some of the most important caring jobs in our communities.

Secondly, we need Labour to commit in a very explicit way to a different type of Labour market.

One of the reasons that we are confronted with the cost of living crisis is because policy makers for more than three decades have been wedded to flexible labour markets.  Zero hours, the proliferation of agency work, temporary contracts and bogus self employment – all these policies and more are just as responsible for pushing down the wage share across both public and private sectors as the emergence of the hour glass economy.

What Labour has said so far about zero hours contracts begins to address the problem and is in stark contrast to what the Tories want to do. But again we need to go further, to make different policy choices across the board if people are to feel forces pulling them upwards rather than pushing them down.

When Ed spoke recently at the TUC he said flexibility yes – exploitation no.

If our labour market is to deliver better pay, policy choices should instead be guided by an approach that is more flexibility yes – insecurity no.

This would recognise the way in which people are more creative and industrious, better able to bring up their children and think about training and career development when they are not spending all their time worrying about whether they will have enough hours to pay the bills the following week, whether their job will be outsourced and their contract ripped up, and whether they will get a pay rise.  What Ed said about needing a race to the top, rather than the race to the bottom was impressive – now it needs to be translated into a whole new labour market regime.

Worker voice has to be at the heart of this, at the workplace and in the boardroom, including a new respect for collective bargaining.

As with the living wage, procurement can be way of extending good practice, with an incoming Labour government ensuring  that all organisations providing public services are engaged in collective bargaining.

The third area is the public sector pay cap.  As a public services trade union breaking through the current cap is obviously UNISON’s priority.  Our members have seen significant cuts in their living standards as a consequence of the pay freeze and the pay cap over recent years.  For millions, including many on, or around average earnings, the coalition’s public pay policy and the cost of living crisis are two sides of the same coin.  As such raising all boats, not just the yachts, will mean breaking through the pay cap and rebuilding the earnings lost during the years of austerity.

Karen Jennings is Assistant General Secretary at UNISON