3 October 2014

By Rae Delanie Passfield

Income inequality in the UK is one of the worst in the developed world. With the five richest families holding more wealth than the bottom 20 per cent of the entire population, it is unsurprising people are so frustrated with the system.

The Centre for Labour and Social Studies (Class), together with the Institute of Employment Rights, published a report that discusses this disparity and how trade unions can offer vital empowerment for those battling against it. It highlights how inadequate work, low pay and the rising cost of living is trapping working people into poverty and compromising any chance of a balanced economic revival.

“Inequality is increasingly seen as the scourge of our age – bringing profound misery and insecurity to countless families, while a new super-rich 0.1 per cent of the population emerges,” said Class chair Steve Hart.

“But growing inequality is also at the root of our unstable economy. The government claims Britain’s economy is in recovery, but with the gap between the rich and the poor widening and living standards plummeting for most – whose recovery is it?”

With five million people earning less than a living wage in the UK – three million of which are women – and hundreds-of-thousands of people earning less than the national minimum wage of £6.31 an hour, low paid insecure jobs are booming. Along with measly pay, these kinds of jobs also come with a platter of poor terms and conditions, insecure contracts, no guarantee of hours and reduced access to employment tribunals.

Additionally, Class’ report states that through below inflation increases, the UK government has “effectively decreased the level of the national minimum wage every year because those on the lowest wages have far less to spend on the cost of day to day living.” And, according to the UK government office for budget responsibility, wages look set to continue falling. Meanwhile, corporate profits are predicted to grow faster than overall economic growth.

“The Coalition has stacked the odds against working people,” Lisa Nandy MP told Class. “Whether it’s over energy bills or News International, they’ve consistently sided with the wealthy and powerful. This is the government that chose to prioritise protecting bankers’ bonuses over saving the educational maintenance allowance for the poorest young people in our country. They’ve tried to tell us there’s no alternative, but in reality these are clear political choices and they’re on the wrong side. These “unavoidable” austerity measures have pushed people to despair, meanwhile chancellor George Osborne’s little brother Theo, runs a concierge company for ‘Ultra High-Net-Worth Individuals’ – charging up to £50,000 a year for “support services”.

Clearly, the “recovery” is working for the Obsorne’s, but, as Steve Hart explains, “Working people struggling to make ends meet are certainly not feeling the benefits. Real wages have fallen so far that now, for the first time, the majority of those living in poverty are in work. Low wages, as well as rip-off rents, energy bills and transport fares, have led to a cost of living crisis. Restoring the power of workers and their trade unions is essential if we are to reduce inequality and get real growth in the economy.”

Despite a clear public support of value of unions in protecting workers’ interests, the number of members has fallen since the 1970s. A decline, the Class report says, rooted in anti-union laws, attacks from politicians and misrepresentation in the media.

Collective bargaining is an essential facet of establishing equality and unions have an impressive track record of utilising it on behalf of workers. It is, as Class explain, important to ensure that decisions are the outcome of negotiation and rational argument, rather than the whim, brute force or bullying of those with all the power.

Empowering a workforce through unionisation can be a first step towards regaining some control over the spiralling inequality in our country.

This blog was first published on UNITElive, via Class

Trade Unions and Economic Inequality by Lydia Hayes and Tonia Novitz is available now.