The Bottom of The Pile

This is a cross post of my piece from the Young Greens Blog.

A report by the High Pay Commission, launched today, suggests that the gap between Britain’s rich and everyone else is set to widen over the next twenty years. With the chief executives of the FTSE 100 earning an average of £4.2 million per year and take home pay for everyone else falling for the first time in thirty years there is an increasing awareness of the wealth gap between the super rich and the rest of Britain. The report revealed that the top 0.1% of UK earners will see their pay rise from 5% to an estimated 14% of national income by 2030. The ratio between executive pay and the national median income is set to rise to 214:1 by 2020. Behind this figure, and of far less interest to the media than the ‘fat cats’ at the top, are the many people who languish on low wages for the very same companies who pay their executives so well.

With over 3.5 million people over 22 surviving on less than £7 an hour and inflation, currently at 4%, expected to rise, it is Britain’s low paid millions who have been hit hardest in the post economic crash period. It will be of no surprise to readers of this blog that it is women and children who are being hit hardest by the increase in the number of people in working poverty in the UK. Two thirds of Britain’s low paid workers are women. In fact, 25% of female employees in the UK earn less than £7.20 per hour.

Children growing up in families with low paid parents suffer the effects of working poverty for the rest of their lives. Of the 2.8 million children in the UK living in poverty in 2008/9, a shocking 59% of them have one or both parents in work. Children who grow up in poor households are, according to the Marmot Review, more likely to be affected by obesity, heart disease and mental health problems. Children from low income families are also less developed by the time they reach school age.

Children in families with low paid adults are also less likely to spend time with their parents. A cleaner at Marks and Spencers, working for a contractor, described her shifts: “I work 7 days a week and like many other cleaners I have to get up at 3 o’clock in the morning to get to work from Leytonstone where I live. We can’t afford the tube and I spend 2 hours one way to get to work. My morning shift is only 4 hours”

A campaign addressing low pay in Britain’s biggest companies is being run by FairPensions and its union partners. A Living Wage is the minimum hourly wage required for housing, food and other basic needs for an individual and their family. Within London it is currently set at £8.30 and the single rate for the rest of the country is currently £7.20 per hour. The National Minimum Wage, on which many people survive, is £5.93 per hour (rising to £6.08 in October).

There will be those that argue that both extremely high pay and very low pay are unavoidable features of running a business. It is our job to show that companies owe it to their staff, customers and shareholders to pay their workers wages upon which they can support themselves and their families. With the average chief executive of a FTSE 100 earning five times as much in a week as someone on minimum wage earns in a year the report by the High Pay Commission is certainly timely. It is, however, vital that we remain focussed on helping those at the bottom of the pay scale as well as curbing the excesses of those at the top.

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