Making Work Pay

Published on New Left Project, Interview with Ed Lewis, by Daniel Garvin, June 6, 2012.

Pay Up is a new national action network challenging an economic model in which remuneration at the top of the income scale is extracted through paying poverty wages. NLP’s Ed Lewis spoke to Daniel Garvin about the campaign.

Pay Up is focusing on low pay. Why? How serious is the problem of low pay?   

  • Low pay is a very serious problem, which we argue cuts to the biggest issue at the heart of our economy. The past 30 years can be defined by two diverging pay trends. The first is common knowledge: those at the top have seen eye-watering rewards, with some companies giving pay rises to CEOs of up to 4,000% since 1979. The second is more stark, yet it has gained far less coverage in the media. In 1977, of every £100 of value generated by the UK economy, £16 went to those in the bottom half of the national pay scale. By 2010, that figure was £10 – a fall of 37%. Productivity has risen, profits have soared, but we’ve had growth without gain. Sky-high pay packets at the top and poverty wages at the bottom are undoubtedly two sides of the same coin, but the Pay Up campaign believes that the latter is a far more pressing an issue.
  • Today, there is a real crisis of in-work poverty. The Joseph Rowntree Foundation puts the number of children living in “in-work” poverty at two million and rising. David Cameron repeats that the government is cutting welfare “so it pays to have a job” but for millions of people, work does not pay. Wages do not cover household bills, let alone provide a decent standard of living. The minimum wage is at its lowest level since 2004.
  • Instead of pay rises, we have helped pay our own wages through the £20bn of in-work tax credits spent each year. While tax credits are a lifeline to the five million households in the UK that rely on them, they have allowed private companies to shirk responsibility for wage bills, shifting it to the public instead and creating a subsidy for private sector profit.
  • Instead of wage rises we have been given credit cards, loans and mounting household debt to maintain a degree of purchasing power. Low pay is an unexamined factor in the current economic crisis which started in the US housing market with banks first dishing out high-interest mortgages to low-income families, and then turning that risky debt into highly profitable financial products to trade.
  • While we think that traditional definitions of growth and demand need re-shaping, pay rises would not only create a more stable and sustainable economy, but would also start injecting demand in a double-dip recession that is suffering from a suffocating concoction of austerity, unemployment and low pay. Capitalism’s critics have often focused on high CEO pay in isolation. Imagine, if a CEO gets a pay cut of £1m next year, what does that actually mean for the rest of us? Not much. Far less is being said about low pay which affects 20% of the UK workforce directly – entrenching poverty and axing opportunity – and the other 80% through the impact this has on social wellbeing and the economy as a whole.

At a time when unemployment is high and people in work may feel lucky to be so, are you confident that your message will strike a chord?

  • Sure unemployment is high, and just getting work will be on many people’s minds. However, life on the minimum wage does not earn that much more than unemployment benefits. Employers and the Conservatives will use high unemployment as a reason to keep wages low and we can’t fall into that trap. We feel that unemployment is a key political battle ground, but no-one is talking about low pay. 20% of the population go to work and earn a wage that is less than the living wage, i.e the minimum to maintain a basic living standard. We need to talk about the wider impacts of low pay on society and the economy.

Your website says you are ‘built on the model of UK Uncut’. So can we expect a range of direct action tactics from Pay Up?

  • Yes, it’s not up to us to define what the campaign will look like. We’re holding a big nationwide day of action against poverty pay at Sainsbury’s on July 7th July 8th that could entail all sorts. Go into your local Sainsbury’s and just imagine what could be done. There will ideas on the website too. We want this to be even more varied than uncut, having something for everyone.

Why have you decided to focus on Sainsbury’s in particular? What connection is there between Pay Up and the campaign for a living wage for Sainsbury’s workers that Unite has been running? …  //
(full interview text).

(For more info, go to Pay Up’s website or follow on twitter @payupuk. See footage and podcasts from the launch action here).

Links:

PayUp.org.uk; About PayUp;

Why we need to start talking about poverty pay
, on PayUp.org.uk;

The Banking System at the Root of the Crisis, on New Left Project, by Lydia Prieg, June 11, 2012.

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