£10 an hour for minimum wage – the audacity!
Had TUC delegates lost their minds in passing a motion calling for an increase in minimum wage? A 50% rise on the current rate – it would never happen, not in one go.
Yet give it some thought and the magnitude of the request begins to look like the perfect Trojan horse for getting the concerns surrounding UK wages on the agenda and, more importantly, into the headlines.
There is no denying that family wages have slumped in the aftermath of the global recession. During the recent TUC conference, Mark Carney, Governor of the Bank of England, acknowledged the huge impact the recession has had on wages, with households facing a relentless squeeze – the worst in almost a century. A situation compounded by soaring inflation.
Not only have wage increases frozen for many people, but wages in real terms are actually falling. Worryingly it is expected to get worse before it gets better with interest rates expecting to rise: a situation that could lead to more than 1 million households facing a problem with debt repayments.
The situation is made more confused by the fact that this national anxiety is played out against a backdrop of Premier League mega transfers and footballer wages running into the hundreds of thousands a week. It’s fantasy stuff. What’s more, UK bonuses for industry leaders have risen this year to nearly 5% to more than £40bn, 4.9% up on previous year. Whereas bonuses for public sector workers were negligible.
Labour have sought to make the ‘cost of living crisis’ a central theme in the debate ahead of the next general election in May, indicating that the issue of wages will continue to dominate the headlines in the months to come. The Coalition has rebuked the notion of a crisis, suggesting pay pressures suffered since the downturn are part of a longer-term structural shift rather than a short term recession.
It is encouraging to see figures showing increases in the number of people in employment. Yet scratch the surface and there is a number of reports signalling that, whilst employment is indeed rising, wage growth is actually declining due to the growth in employment coming from low paid jobs. The gap between good and poor quality jobs has widened leaving a growing number of people trapped in insecure low wage work – recent reports putting this at 1 in 5 employees. All of which indicates that pathways to upward mobility have been severely eroded as more and more people are trapped in poverty cycles.
How to react if you are an employer?
Employers will benefit from improved employee engagement by simply showing empathy and acknowledging that their staff are anxious about their financial future. Talk to your employees about their stresses and worries. It will help them release the burden and help them focus on their work. Understandably many companies are unable to increase wages in these difficult times. Rather than shy away from the issue, the employer should be more vocal in communicating the total benefits package each employee receives, rather than narrowing focus simply on take home wage.
Money talks, increasing in volume as the years roll by. Yet employment for many is not just about money or the linear exchange of labour in return for fee. Employment also reinforces one’s integrity and identity. As such, it is always beneficial to consider how the concepts of fairness and reciprocity play a key part in motivating workers.