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Britain can afford to pay us more

RICHARD LYNCH says poverty pay is unacceptable in a country awash with wealth. It’s time we demanded proper wages for all

THERE are many reasons for growing poverty levels in Britain, not least among them mass unemployment, rising prices, inadequate pensions and benefit cutbacks.

But with the majority of people in poverty now in working households for the first time ever, low pay has become one of the main drivers of poverty and one of the main reasons why increasing numbers are finding themselves unable to escape from it.

According to a recent report from the Joseph Rowntree Foundation there are currently 13 million people living in poverty in Britain, including 3.5m children, 3m parents, 1.5m pensioners and 4.5m working-age adults without children.

Low pay is one of the main reasons for this, with real-terms median incomes now below what they were in 2001/2 and 8 per cent below what they were at the start of the recession in 2007/8.

The number of workers in low-paid jobs has risen and there are now around 5m who are being paid less than the living wage of £8.80 an hour in London and £7.65 elsewhere.

In addition, 6.3m of the poorest people are underemployed, including almost 2.5m who are unemployed, 2.3m who are classed as “economically inactive” but who want work and 1.4m who are working part-time but want full-time work.

There are also around 625,000 on temporary contracts who want permanent work and probably millions on zero-hours contracts which are increasing at a rate of around 50,000 a year.

The Resolution Foundation, another reputable think tank, calculates that 5.1m workers are currently low-paid and that low pay is a particular cause of poverty among workers in sectors such as the retail and caring services and among workers aged between 30 and 50 in what should be the peak earnings period of their lives.

Even more troublingly it also found that around 44 per cent of over-25s who are now in low-paid jobs have been trapped in low pay for the past 10 years.

In addition many others have been in and out of low pay over the same period.

According to the Foundation this means that in the past 10 years a massive 73 per cent of those who are currently low-paid have either failed to escape from low pay or escaped only temporarily before sliding back into it again.

This horrendous poverty is one of the reasons why food banks have become a growing necessity over recent years, with the British Red Cross and the Neighbourhood Food Collection among those who had to organise nationwide food collections to alleviate food poverty over the Christmas period.

Tesco, which allowed these organisations to collect food outside its stores, quoted a survey which said that over the past year one in four people had skipped meals, gone without food so their children could eat or relied on families, neighbours and friends to provide them with food.

It is encouraging that Tesco should recognise this but one can’t help thinking that if it didn’t put its prices up so much there mightn’t be such poverty or such need for food banks.

The Institute for Fiscal Studies also examined the problems people were having in providing food for their families and found that a quarter are struggling to buy healthy and nutritious food and are switching to cheaper alternatives.

In fact, spending on real, nutritious food has fallen by 8 per cent since the start of the recession and the results are an increase in obese and less healthy children and adults.

Yet there is no need for any of this to happen, as Britain is a very rich country and generates more than enough wealth to provide a decent standard of living for all its citizens.

The problem is that the overwhelming bulk of this wealth is in the hands of a tiny minority of super-rich individuals who live in luxury while the majority of the population struggles to make ends meet.

Not only are we the seventh-richest country in the world, we have the fourth-highest number of dollar billionaires after the US, China and Germany.

The wealth of our 1,000 richest fat cats amounts to £450 billion — a sum equivalent to the annual earnings of two-thirds of the British workforce.

The chief executives of FTSE-100 companies are being paid £4.4m a year on average — £85,000 a week — and directors of the same companies are getting an average of £3.3m a year (£63,000 a week).

We have 2,714 bankers earning €1m (£835,000) or more a year.

That’s over 2,500 more than Germany, which has 212, and over three times more than the rest of Europe combined.

And non-financial British businesses are sitting on a £419bn mountain of spare cash which they are refusing to invest.

They are expected to pay out around £80bn in dividends to their shareholders this year.

Yet we are still being told that Britain is broke and that coalition austerity policies will have to continue for years to come.

And, alarmingly, a sizeable minority of our fellow citizens are still falling for this lie, with many too quick to blame benefit claimants and immigrants for the state we are in rather than pinning the blame on the real culprits.

It’s high time that we all realised that poverty is increasing because we are being robbed blind by profit-hungry corporations and fat cats who are avoiding tax on an industrial scale and continuing to grow richer at our expense.

And it’s high time that we realised that if we want a better deal, we are going to have to start fighting more vigorously for it — and that includes in the important pay round between January and April 2014.

We need better pay.

They can afford to give it to us and we must make sure they do.

Richard Lynch is a GMB accompanying rep.

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