Excite

Raise wages to help economy, TUC argues

  • Getty Images

It sounds like the classic Catch 22. The TUC is arguing that Britain's slow economic recovery is being exacerbated by falling wages. In simple terms, consumer spending is plummeting because people don't have any spare cash any more. It sounds simplistic, but like the most basic arguments, it is persuasive.

Since the start of the financial crisis, wages in the UK have fallen by £52 billion. A substantial percentage of that money would have been ploughed back into the economy in the form of discretionary spending on the kinds of treats and luxuries that most of us are now eliminating from our household budget.

With job security a thing of the past and employment for many taking the form of lowly-paid or minimum wage part-time employment, having a job is no guarantee of staying above the breadline. The TUC believes that improving the average UK wage-packet would have an immediate positive effect on the economy, and have launched the Britain Needs A Pay Rise campaign.

"Over the last five years people have taken a massive hit in their pay packets," general secretary Frances O'Grady pointed out. "Millions more have had to reduce their hours or take lower paid work. Many people have lost their jobs altogether. "It's no wonder businesses are struggling when so much demand has been sucked out of the economy."

In essence it's a simplified version of the message that Shadow Chancellor Ed Balls and the IMF have been sending to Chancellor George Osborne: invest in Britain to save the economy from stagnating. The TUC's campaign has distilled it down to "give people more money so they can spend it."

The TUC also wants greater pay transparency to highlight the problems of companies where executives are pocketing huge bonuses while workers are fighting for a decent rate of pay. "Employers and both local and central governments need to recognise the importance of decent wages in delivering sustainable economic growth," O'Grady said. "They can start by becoming living wage employers and being more transparent about their pay systems."

United Kingdom - Excite Network Copyright ©1995 - 2018