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Hard Work Doesn't Pay

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Conservative crowing on unemployment figures makes me sick. What sort of warped world is it where millions living on poverty pay, trapped in insecure work, is hailed as an economic miracle?

Wages have not taken such a battering since Queen Victoria was on the throne. Pay growth limps along at meagre 0.3% with CPI at 1.7%, blowing holes in people's pay. Let's not even think about what the real cost of living (RPI) is doing to incomes, or the explosion in fares, fuel, food and housing costs.

Unite recently undertook the first ever poll of minimum wage workers in the UK. More than 2,000 people on £6.50 or less painted a picture of life in breadline Britain. Nearly 60% of workers earning £6.50 or below (58%) feel trapped in low waged work. Over half report that they do not know what they will earn from week to week (51%), more evidence that this country is morphing into a US-style hourglass economy, where growing numbers are trapped in low waged work.

When 1,700 people queued for just eight jobs at Costa coffee, they were not doing so because they hankered after a barista's life; they did it because decent jobs cannot be found. A majority of minimum wage earners (58%) told Unite better paid work is not out there even though one in three say they have the skills and experience for better jobs.

Low waged work can be soul destroying. Over half of those we polled (57%) express despair at their current standard of living, rating it as either "poor" (20%) or "neither good nor poor" (37%). Shockingly, 20% of young minimum wage workers polled report that their household has been forced to turn to food banks in the past year.

This weekend, when Labour gathers to discuss the party's offer to our nations' peoples, top of its list must be the creation of decent jobs paying living wages. Britain's place in tomorrow's world will not be secured by offering our debt-saddled, degree-educated kids shelf-stacking or sandwich making. Economic prosperity for all has a better chance of flourishing if the economy is rebalanced.

People have given up hope that business will act in the public good unless it is forced to do so, and when it comes to addressing poverty pay this is what they expect a government to do: more than half of all workers on the national minimum wage (54%) say that it is the government's responsibility to tackle low earnings. The vast majority (79%) say that they want work to pay, not be forced to depend on benefit top ups.

Not every buck stops with government. The boardrooms of Britain have had a pretty easy ride of it in this recession, stockpiling billions of cash that ought to be spent on training and with no sign that the promised wage rises are coming this year. (BTW, unions are not sitting on the sidelines. We are actively pushing for a renewal of collective bargaining to eliminate the poor pay disease at the lower end of the labour market, with stronger trade unions to support workers acting against exploitation).

Major retailers, restaurant chains and hotels could well afford to raise wages, and should be told to do so because this raises the living standards of the communities they depend on for their profits. The big supermarkets, for instance, now account for over one million workers, in the main very low waged, yet when Unite polled staff at one of our leading supermarkets on their incomes we discovered that many earned so little that they qualified for foodbank support. A sizeable proportion (one in five) of those we polled told us that they cannot afford to shop where they work.

Big business in Britain should hang its head in shame. Today's CEOs would do well to remember Henry Ford's maxim: pay your workers well enough that they have a chance of buying your products. Or to paraphrase the Bank of England governor, Mark Carney, capitalism needs to work for the people, not the other way around.

Just one in four workers (24%) earning the minimum wage believe their employer can't afford to pay them more. And before the stock market squeals, a living wage is affordable, confirmed by the Living Wage Commission which noted in its final report that businesses in many low-wage industries would face only a modest and entirely affordable wage-bill hike if they paid the living wage: a 1.1% wage-bill increase in the food production industry, 0.5% in construction and 0.2% in banking.

But if business will not prise open the coffers, a Labour government should promise it will. It makes economic sense - shaving at least £3billion off the benefits bill - and it would give the army of low waged workers in this country a reason to vote (raising the legal minimum wage is seen as the best way to address low pay according to four out of five workers (79%) getting by on the national minimum wage).

An axis of this government and business has contrived a situation where hard work does not pay. Five million UK workers earn less than a living wage, consigned to an insecure income and increasingly shut out of the economy. They are working harder and getting poorer. The reality is that low wage work in this country is no longer the first rung on the employment ladder but actually the first step into the poverty trap.

There is a message of hope for Labour, which is that working people will respond if you act. Remind people that you are on their side. No ifs, buts or maybes - pledge that the minimum wage will be the living wage. There could be at least five million votes in this if you do.

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