Raising the benchmark

A new report by New Economics Foundation for Unison is a stark reminder, if one were needed, that public sector pay will be central to the debate about the cost of living crisis over the coming months.  As such, what the two Eds say next on this issue, as well how the coalition respond to growing discontent at the pay cap, will be crucial in making up the minds of about 5.7 million people who work in public services about which of the parties has the best plan for tackling falling living standards and ensuring the economic recovery works for all.

Some commentators would have us believe that the coalition has already abandoned this territory.  That if you work for public services the government see you as a sworn enemy – a contemptible bureaucrat, crowding out private enterprise.

There is no shortage of facts on the ground to back up this proposition.  The report, ‘Raising the Benchmark: the role of public services in tackling the squeeze on pay’ shows that one million people working across our public services are paid below the living wage and that one in four in local government are low paid, earning less than 60% of the median.  It also demonstrates that since 2010 a combination of pay freezes and pay caps have resulted in the average worker in the public services now being £2000 worse off a year in real terms than in 2010.

Is this continued assault electorally credible?  That depends to a large extent on what Labour offer – not simply in a crude ‘vote for us to get a pay rise way’.  But in terms of what the party offer in terms of a convincing story about how pay and the labour market will be fairer under a Labour government.

Commitments on the living wage and national minimum wage enforcement have been encouraging.  But more important than this is getting off of the downward escalator on pay that has been the hallmark of the UK’s labour market since the 1980s. Living Wage and National Minimum Wage are important, but doomed if the direction of travel continues to be down towards an ever shrinking wage share – driven by artificial wage caps, more outsourcing, zero hours contracts and ever greater non negotiable flexibility.

Nef remind us that public services have historically played an important role in setting benchmarks in the labour market, moving first and furthest on equal pay, setting standards on collective bargaining and workplace relations and using procurement to influence wages and conditions in the wider economy.

The current race to the bottom in our public services, in which the benchmark is the worst corner of the private sector, is clearly incompatible with a concerted effort to improve living standards.  The millions working in public services, most of whom are women and central to Labour’s electoral prospects, get that.  Lets hope Labour do.

Dave Prentis is the General Secretary of Unison