LIVING WAGE UP

2 November 2015

Today increases in the living wage have been announced. Outside London it rises to £8.25 an hour and in London £9.40 an hour.

Slowly the wage is spreading. 2000 businesses are now signed up to it. They include major national companies like Barclays Bank and Lidl and in Cornwall a growing number of local companies and organisations such as Cornwall Council, Volunteer Cornwall, and St Merryn Holiday Park.

However, a large proportion of workers in Cornwall, fulltime and part time, are paid less than the living wage. The Office for National Statistics (ONS) says that last year 31.6 percent of all workers in Cornwall were paid less than the then living wage.

Let us welcome the progress but push for more to get it.

Note that this is the real living wage not George Osborne’s “national living wage” which will be £7.20 an hour for those over twenty five.


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POORLY PAID IN CORNWALL

12 October 2015

The Office for national statistics (ONS) has today published data showing that last year there were about 53 000 jobs in Cornwall paying less than the then living wage hourly rate of £7.65 for those aged twenty one and over. This represented 31.6 percent of all Cornwall jobs.

Of the 293 local authorities in England outside London, Cornwall is at 250 where 1 is best (lowest proportion) and 293 is worst (highest proportion).

The voluntary living wage, set by the Living Wage Foundation, is higher than the mandatory minimum wage and George Osborne’s recently announced and misleadingly called national living wage.

Five of the thirty three local authorities in London, where in April 2014 the living wage set by the Mayor of London, was £8.80 an hour, had a higher proportion of jobs below the wage than Cornwall.

The estimates of percentages are based on the 2014 provisional ASHE data.

The data shows that poor wages are a lively issue in Cornwall. They underlie many other difficulties for many here, including poverty and housing and choices in everyday living. Cornwall Council and town and parish councils should scrutinise their spending to ensure their poor get a very fair share and none is wasted on frivolous projects.

I should like to see the parties in Cornwall responding positively to the issues raised in this post and in my post of the other day Deprivation in Cornwall 2015 and to the risks of increasing poverty for children that I discussed in the post Assaulting poverty or the poor – that is, responding to the issues (not to me) with specific and material ideas for at least mitigation of distress. Let’s hear the clarion from Labour, Liberal Democrats, Mebyon Kernow, and the Greens here in Cornwall, and, yes, the Conservatives and UKIP here too.

NOTES
ASHE: Annual survey of hours and earnings (ONS)

The ONS explains that the jobs are for employees aged eighteen and over paid at adult rates of pay; the coefficient of variation (cv) shows that the Cornwall figures are “precise”.


PAY FALLS IN CORNWALL

30 December 2013

The mean average gross wages for workers resident in Cornwall during the recession from 2008 to now have fallen in value by 12 percent. The data is published by the GMB trade union here.

For England the fall is 14.6 percent and most of the twenty areas with the largest falls are in London and the south east of England.

Although the nominal figure for the Cornwall wages has risen, inflation of 17.8 percent in the period has resulted in the fall in real value. The wages are from Table 8.7a of the ASHE data of the Office for national statistics (ONS). The fall period is April 2008 to November 2013.


The Office for national statistics (ONS) has published the provisional ASHE data for 2013.

Table 8.7a shows that the annual, median, gross pay for men and women in fulltime employment and resident in Cornwall was £22 246 [revised to £22 234: see 2014 average pay post].  The mean was  
£26 239.

For England as a whole the figures are £27 375 and £33 975.

The tables also give pay by place of work and by constituency and separately for men and women and for part time workers and at different percentiles.

Average pay in Cornwall 2014 is here.
ASHE: Annual survey of hours and earnings


FAIR PAY IN CORNWALL

20 June 2012

Both Labour and Libdems in Cornwall are opposing the Tory Libdem government’s proposals for localised public sector pay, that is public sector pay that takes into account pay in the private sector which outside the southeast of England appears to be generally lower for comparative work. In effect the proposals are not about supplementing national public sector pay levels but cutting that pay to the levels of private sector pay in each locality. Localising pay will mean cutting pay for most workers affected.

They are not exactly proposals but nor are they a vague idea. Some preparatory work is undertaking (see Note at the foot of the post for examples). However, Alastair Hatchett has challenged convincingly some of the myths about regional pay and how private sector pay is arrived at.

The Libdems in Cornwall are opposed to cornishing pay. I welcome that but although Nick Clegg opposes localised pay, Danny Alexander, the Libdem chief secretary of the Treasury, apparently approves it: see here for Clegg and here for Alexander. The three Libdem MPs for Cornwall constituencies were among the Libdem signatories to a letter opposing localised pay published in the Guardian 16 May 2012. Way back in the days when the mandatory minimum wage was originating the Libdem party advocated a regionalised one; that would have institutionalised low pay for workers in Cornwall.

Labour in Cornwall is opposed to cornishing pay. I welcome that but the Labour government began the process of localising pay and apparently even pondered localising the minimum wage.

All right, let us lethe the unprogressive past.

The Libdems apparently have a motion for Cornwall unitary council opposing cornished pay and advocating fair pay. All parties love the word fair, so redolent of righteousness and justice yet so comfortably vague and airy and elastic in meaning. I oppose localised pay and very much welcome the Libdem move but let me say bluntly that more is needed than that opposition: let me point out that the living wage for Cornwall is £7.20 an hour and I have argued before that Cornwall Council, even in these days of austerity, should give a lead and move to the living wage. Perhaps the Libdem party could put some solidity into fairness by pressing Cornwall Council to adopt the living wage; if not, perhaps Labour could propose an amendment for the living wage. Let fairness means something solid, a living wage.

Note

*Preparatory work: for example, these very recent replies to questions about plans to introduce regional pay
(a) by the Foreign Office minister (Hansard 19 June 2012 column 911W)
“The Foreign and Commonwealth Office (FCO) exits the pay freeze in 2013 and will at that point look to move to more local, market facing pay. We are awaiting further data and guidance from Efficiency and Reform Group in Cabinet Office that will allow my officials to look at how the FCO’s pay structures compare with local market data. Once this is published we will work with Cabinet Office and Her Majesty’s Treasury colleagues to produce a three year pay strategy.”

(b) by the lord chancellor (Hansard 19 June 2012, column 918W)
“Pay for some staff in HM Courts and Tribunal Service is already based on regional market rates.
Plans to move to more local market influced pay structures are being considered as part of proposals for pay reform within the Ministry and its Executive Agencies. The first stages of implementation are scheduled for summer 2013 as the Department exits the pay freeze.”

*The parliamentary record for Labour’s initiation of regional pay is here, Hansard 19 June 2007 column 1708W:
“Mr Illsley: To ask the Minister of State, Ministry of Justice if she will make a statement on the introduction of regional pay rates for court staff.
Ms Harman: Regional pay is a reality in the economy as a whole-pay variations by location are not new. The system we are introducing offers greater coherence, greater transparency and enables us to target public money most effectively on those areas where there is greatest need. It will allow us to offer competitive salaries to attract and retain staff with the skills we need, where we need them.”


The Resolution Foundation and Institute for Public Policy Research (IPPR) have produced an informative study of the likely financial effect of moving to a living wage on various sectors of the economy. This shows that while in some sectors it would be very difficult to move to a living wage in one move, getting there over time is realisable.

I believe that the gradual approach is right for Cornwall to move to a living wage.

I think Cornwall Council should lead here. It should state that its aim is to have all its employees on the living wage, currently £7.20 an hour. By the way, that £7.20 assumes that people claim all the benefits and credits they are entitled to; without those extras I think the wage outside London would be around £9 an hour.

It is time the political parties in Cornwall, well at any rate those who describe themselves as progressives, unequivocably argued for the living wage and began to press Cornwall Council. The national organisations in Cornwall such as banks and supermarkets should be pushed too. Companies here advertising work at less than the living wage should be encouraged to think how they could get to pay it.

As we see the mandatory national minimum wage erode and the cornishing of pay, it is more important than ever to campaign for a decent living wage. It’s a question of social and economic justice. It makes some of the preoccupations of local politics seem small beer.

Earlier posts on the living wage
The pro-Cornish wage 31 August 2010
A living wage for Cornwall 17 May 2011
Progress to a living wage 29 June 2011

And on low pay in 2011
See Working for nothing – the truth about low pay in the UK in the Observer for 2 October 2011
Here’s the research from the Resolution Foundation Low pay Britain September 2011.



CORNISHING PAY

20 March 2012

I noted way back in this post in 2009 that the Conservatives were seriously thinking about localised pay (and benefits) and in several posts I have explored the issue, especially the advantage for public sector workers in Cornwall of national pay rates. I have listed those posts at the foot of this one. Now the Tory Libdem government is preparing to implement localised pay in this week’s budget, firstly in the civil service but soon for other public sector workers currently with national pay agreements like teachers and nurses.

Economic efficiency
Public sector workers will have their pay Cornished, that is cut or frozen until it matches local private pay. The justification for this is economic efficiency, a level playing field in pay between the public and private so that one does not artificially out-recruit and out-retain the other. In most of Britain this will mean public sector pay ultimately falling.

8 percent gap?
The advantage of public over private pay averages about 8 percent in terms of hourly pay. This hides variation. The explanation for 8 percent is set out in this ONS study which reaches the figure after taking into account differences in the two sectors such as age and qualifications. That study does have some significant caveats; for example, the ASHE data relates only to employees not to self-employed people and the data is about April which is a time when bonuses in the private sector are not paid, both of which are likely to reduce the gap.

The regional figures for the public and private hourly pay gap in April 2011 are in Table 25.5a here.

Consequences for Cornwall
If public sector pay in Cornwall is cut or stalls to reflect the lower private sector pay, will Cornwall still attract, for example, the best nurses and teachers and administrators to build a career here? Will the landscape attractions of the county and the way of life outmatch the high cost of buying a house here and the increasing cost of petrol and travel to work in a dispersed county with poor public transport on lower pay? I don’t think so. Will teachers and nurses on Cornish pay be able to afford a suitable house and if they can’t will they come here? I think some people here overestimate the comparative attractiveness of Cornwall; there are other places in England as beautiful and with an attractive way of life – and with lower housing costs. Man cannot live on surf and Ozymandias engine houses alone.

Of course occupational pensions, based on career average pay, will depend on people’s pay too so it is not only now that living standards will be affected but in old age too.

Localised public sector pay could turn out to disastrous for Cornwall, adversely affecting the quality and performance of its public sector.

Taking money out of the Cornwall economy
What the Tory Libdems will be doing is taking money out of the Cornwall economy: those Cornished public sector workers will have less to spend and that will not help our county economy. Cornwall GDP is 72 percent of the EU average so for a third time we shall qualify for EU aid (though the GDP figures do not well reflect individual experience but rather the disproportionate number of retired people and the nature of jobs here). I suppose removing the pay advantage of the public sector here might in theory encourage the private to step up its endeavours and be able to recruit the talented more easily. A decade of EU aid appears to have achieved too little economically that is solid and lasting and does taking money out of such an economy make sense? Isn’t there a lively danger of government localisation trapping the people of Cornwall in a longterm low wage economy?

Party politics
I think I should add that regionalising pay and benefits is not a clear-cut party political issue. Labour between 1997 and 2010 considered regionalised pay and writing in the Daily Telegraph this 28 January Liam Byrne, Labour’s shadow for Works and Pensions, argued for a regionalised benefits cap asking, “How can a ‘one-size-fits-all’ cap be fair to working people in both London and Rotherham?” And see this 2006 report that says that “Since at least 2003, Gordon Brown has been toying with the idea of having different regional pay settlements across the UK.”

Sources

ONS ASHE data about regional pay Table 25 for April 2011 (Table 25.5a shows that male fulltime gross median hourly pay rates in the south west region were £15.15 in the public sector and £11.50 in the private sector. The mean average figures were £17.41 and £14.04)

Growing number of myths about local pay determination Alastair HATCHETT 17 January 2012

Estimating differences in public and private sector pay Andrew DAMANT and Jamie JENKINS July 2011

Public sector pensions and pay Carl EMMERSON and Wanchao JIN February 2012

Regional pay: Can it work this time?Stephen BEVAN 30 November 2011

Earlier posts

Cutting Cornwall 1 December 2011

Localising benefits 31 July 2010

Tory-Libdems to localise NHS pay in Cornwall 19 July 2010

Vote Tory today, cry tomorrow 1 February 2010

Tories eye benefits and wages in Cornwall 6 September 2009

And see this (‘£7,000 pay gap for Westcountry workers’ in Western Morning News 16 December 2011)

ADDENDUM 23 March 2012: This is the NHS employers organisation submission to the NHS pay review body on market facing pay, March 2012