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Living standards boost needed as average wage fell £500 in 2014

In her New Year message, TUC General Secretary Frances O’Grady reveals that the real value of the average full-time wage fell by £487 in 2014 (from new TUC analysis).

This means that the average full-time employee wage has fallen in real terms by £2,509 since 2010 – about £50 a week.

She challenges employers and politicians to make wage-led growth a policy priority. She warns that voters have never been more disillusioned with politics and that rather than an election year dominated by macho-posturing we need a grown-up debate about decent jobs, fair pay, the NHS and whether our children will ever get a foot on the housing ladder.

In her New Year message TUC General Secretary Frances O’Grady says:

“Despite the recovery, 2014 has been another miserable year for living standards. The average wage is now worth £50 a week less than when this government came to power.

“And current policies offer little relief. The Office for Budgetary Responsibility forecast, released with the Autumn Statement, shows growth weakening before the vast majority of workers have seen any benefit from the recovery.

“If the Chancellor gets the opportunity to make the deep and rapid cuts he plans for after the election, it will not just damage our social fabric, but hinder recovery just as much as his cuts after the last election.

“We know the Conservative manifesto will seek to make legal strikes so difficult that they effectively end the right to strike. If ever implemented this would weaken the union hand in every negotiation, further depressing wages across the economy.

“Our basic problem is that we have rebalanced the economy in the wrong direction. We have become very good at creating low-paid and precarious jobs, but have failed to invest in good, well-paid jobs that make the most of people’s skills and abilities.

“This is why the Chancellor has failed to reduce the deficit. He has been an enthusiastic cutter, but seemed to forget that a low-wage economy undermines the tax take.

“In 2015 we need a fresh start. Employers are beginning to recognise that a low wage economy is holding back growth. It is time to turn their words into action because businesses need customers with money in their pockets. Government, employers and unions must work together to promote wage led growth.

“This means increasing pay for those at the bottom with a higher minimum wage and spreading the living wage.

“But it also means better pay for those in the middle, and a real drive to create secure, skilled jobs on decent pay rather than relying on zero-hours, involuntary part-time work and low-paid self-employment to keep the jobless figures down. This needs active industrial policies that help create good jobs and investment in infrastructure we need to underpin success.

“In 2015 we should start to reduce the growing gap between those at the top and the rest. That means putting workers on remuneration committees and using the tax system to bear down on top pay.

“Voters have never been more disillusioned with politics. This has been driven by macho-politics which I worry will only get worse in the lead-up to the election. What we need rather than sound-bites and gaffe hunts is a grown up debate about the issues that really matter to working people – decent jobs, fair pay, the NHS and whether our children can ever afford to get a foot on the housing ladder.

“We already know enough about the manifestos to see that this will be one contest when no-one can say the parties will all be the same. The Autumn Statement opened up a huge choice in British politics between radical cuts and pay freezes versus investment for the future and a strategy for decent jobs, homes and living standards.”

“2015 needs to be the year when we ensure recovery, share its proceeds fairly and start to undo the damage done to our public services and welfare state by the crash and its aftermath.”

Read the full post here.


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