On Saturday evening, I was scrolling through my twitter feed and I saw The Observer frontpage with the headline: ‘The scale of low pay in Britain is a national scandal’. And you know what? I agreed with every word of the headline and story from this left-wing Sunday paper, sister title of The Guardian.
Putting aside for one moment the grotesquely generous benefits system we have in the United Kingdom where millions of people can live comfortably off the taxpayer whilst watching daytime TV all day, it is also grotesque that businesses pay so little to millions of workers they cannot afford to simultaneously heat their homes, feed their kids and save for a rainy day.
During Labour’s rule between 1997-2010, the UK was the fourth richest country on Earth and that is why the Labour Party were able to get away with boosting the benefits systems to such a ridiculous level. We are now the seventh richest country on Earth (I wonder why?) and thankfully the welfare trap is now being tackled by Iain Duncan Smith on the Conservative side of the Coalition Government. But it is not just the bone idle who are claiming benefits. So are people in work.
In-work benefits such as assistance with housing and tax credits had to be brought in to subsidise the businesses who are paying so little to their employees. In short, some businesses are so greedy they don’t even pay their staff enough to live on.
The man who calls this a ‘national scandal’ – which it is – is none other than the Archbishop of York, John Sentamu. From my experience, I find Archbishop Sentamu a sound man who is a conservative and most of the time I agree with him. Some would say he has become left-wing with his comments on low pay but I agree with them wholeheartedly and I’ve never been accused of being a centrist never mind left-wing.
Businesses who pay such low wages to the extent the worker can’t pay for the essentials in life are immoral because the money is there to pay them more – it’s just squirrelled away into the executives’ bank account. Unskilled workers have had their wages deflated by mass immigration (where there is a thriving black market of workers who will toil for below minimum wage, never mind a living wage) and even in skilled and management jobs wages have not kept up with inflation for nearly fifteen years whilst the price of food, fuel and services have rocketed.
John Sentamu is beginning his chairmanship of the Living Wage Commission and over the next twelve months he and his colleagues will be investigating how the living wage can be brought about for everyone, with a particular focus on how business can be helped to pay a living wage for those who work for them.
The BBC have also recently raised the topic as a back-story to their two-part documentary Nick and Margaret: We All Pay Your Benefits, which ably made the point the benefits system doesn’t work. One chap in the programme works as a plumber and in episode two he is partnered up with a man who is living on benefits to act as his mentor to help him embrace the world of work once again. It transpires during the programme the plumber earns less than the man living on benefits. Is it any wonder the man on benefits will not pick up any old job? Why bother when you can bring in more from state handouts.
Now this is certainly a problem with the benefits system but it is also because of the scandal of low pay. Even the Government’s welfare reforms are only bringing the benefits cap down to £26,000 – tax free. You would have to be earning £35,000 at work to make £26,000 a year. As my hairdresser said to me the other day: “Earning £18,000 in Ipswich is a lot of money”. Well it is not a lot of money at all if you a) look at the price of food and fuel and b) if you can claim £26,000 off the taxpayer.
So the question of low pay is a complicated one. But this does not excuse businesses from paying wages so low they don’t cover the cost of living. Because the money is there to pay the workers. Business executives need to seriously question if they need to pay themselves so much compared to their employees. In the corporate world the difference in wages between the CEO and the receptionist is obscene: we are talking millions of pounds. But even in small to medium sized business here in Ipswich the difference is highly questionable.
Is it really necessary to own a helicopter if your call-centre staff can’t afford to heat the house and feed the kids simultaneously?