Huge wage squeeze means West Midlands workers have lost more than £32 a week since 2007

In the last five years West Midlands workers have suffered a huge squeeze on their Britain Needs a Pay Rise campaign.

incomes, with average pay falling by 7.2 per cent in real terms – a real terms loss of £32.58 in the pay packets of employees working a 40-hour week, according to research published today (Wednesday) by the TUC as part of its

The TUC analysis of official figures compares hourly pay rates in 2007 (at 2012 prices) with those in 2012, and shows the extent of the pay squeeze being felt by families in the west midlands as incomes fail to keep pace with rising prices.

The wage squeeze in the West Midlands is slightly higher than the national average – across the UK pay has fallen by 6.3 per cent in real terms, a loss of £30.30 in the pay packets of full time employees.

People living in Walsall suffered the biggest squeeze on pay in the region where real hourly pay fell by 12.1 per cent which meant workers found themselves £52.52 a week worse off in real terms.

People living in Wolverhampton suffered the next biggest squeeze on wages in the West Midlands. Hourly pay rates here fell in real terms from £10.57 in 2007 to £9.44 in 2012, a 10.7 per cent cut, and a corresponding £45.30 weekly hit in their wage packets.

Wolverhampton is closely followed by the rural county of Herefordshire and the unitary authority of Sandwell, both of which saw hourly rates drop by 8.3 per cent.

Across the West Midlands men have seen their pay hit harder than women. According to the TUC analysis male workers have seen their hourly real pay rates drop from £12.77 to £11.72, an 8.2 per cent fall which works out at £41.97 less in their weekly pay packets in 2012 compared to 2007. Female employees saw their wages decline by 5.2 per cent in real terms over the five years, a loss of £20.73 for an average full-time worker on a 40-hour week.

Commenting on the figures, Midlands TUC Regional Secretary Rob Johnston said:  “Across the West Midlands families are still really struggling to make their money go far enough – and are often having to go into debt – as they experience a huge squeeze on their household incomes.

“With real wages still falling, most people are being forced to use their credit cards or their dwindling savings if they need to purchase anything beyond the most everyday of items.

“Workers’ real hourly pay rates have taken a hit over the past five years because wages have failed to keep up with inflation. But this fall is also a result of the worrying increase in insecure and short-hours employment.

“And in many cases when people have lost their jobs, and are fortunate enough to find work, they are forced to take jobs with fewer hours and on lower rates of pay. This is not the way to build a strong economy – the UK needs far more better jobs on much better rates of pay.

“Next week at our annual Congress our Britain Needs a Pay Rise campaign will take centre stage as unions continue to push for decent and fair wages across both the private and the public sectors.

“We will also be urging those employers who can afford to pay a living wage to start doing so. If workers have more money in their pockets, they will feel more confident about spending that extra cash and that’s something that families, businesses and UK the economy can all benefit from.”

Postcode divide in state pension entitlement set to grow to £67,000 by 2028

A woman in her late 40s from Corby can expect to receive £67,000 less state pension when she retires, compared to a women of the same age in East Dorset, due to a widening gap in life expectancies and a rising state pension, according to a new report published today (Friday) by the TUC.

The report looks at life expectancy projections by gender, occupation and geographical area, and their effect on the amount of state pension people are set to receive. The state pension age is due to rise to 66 between 2018 and 2020 and to 67 between 2026 and 2028.

The research shows that by 2028 a woman living in East Dorset – the area of the UK with the longest post-65 life expectancy for both men and women – can expect to live nine years longer than a woman in Corby (the area with the shortest life expectancy) when they retire. This state pension divide works out at £67,000 over their lifetime. The state pension divide for men living in East Dorset and Manchester (the area with the shortest male post-65 life expectancy) will be £53,000.

This state pension divide will also grow for different types of workers. A female managerial or professional worker retiring in 2028 can expect to live 3.8 years longer than a female manual worker, compared to 2.4 years today. This state pension divide works out at £29,000. The equivalent gap for male manual and professional workers is £23,000, or 3.1 years.

The TUC report also shows that millions of people will receive less state pension, despite having to work for a further two years, because their life expectancy is not keeping pace with the increasing state pension age. People living in poor areas such as Corby, Manchester, Salford and Hull will receive substantially less state pension over their lifetime. A woman in her late 40s in Corby will have to work for two more years before retiring but will receive £12,000 less state pension during her retirement than those retiring in 2016.  A man of a similar age living in Manchester will receive £7,500 less during his retirement.

The lifetime state pension for men, based on a full ‘single-tier’ state pension award, will fall from £147,000 in 2016 (when the single-tier is introduced) to £146,000 in 2028. Women retiring in 2028 will have to work longer in order to receive the same state pension (£164,000) as those retiring in 2016.

The government’s failure to consider persistent inequalities in life expectancy when accelerating the rise in the state pension age, will leave millions far worse off in retirement, says the TUC.

The TUC believes that the government should reverse its decision to raise the state pension age in light of new evidence on life expectancy projections, and instead set up an independent commission to examine inequalities in life expectancy and their effect on people’s retirement incomes.

Midlands TUC Regional Secretary, Rob Johnston, said: “These figures show that ordinary working people in the Midlands will lose out as a result of the Government’s pension changes. Health inequalities mean that people in areas such as Corby will have to work longer to get less. And what’s more, current trends suggest that inequality is set to increase meaning this divide will widen into a chasm.

Britain is already too divided between the haves and the have-nots. To secure a fair deal for the Midlands, and a fair deal for ordinary families then we need to put a commitment to narrowing inequalities firmly at the centre of the political debate”

TUC General Secretary Frances O’Grady said: “The government’s decision to accelerate the rise in the state pension age will mean millions of people having to work for longer in order to receive less in retirement.

“There is already a shocking divide in life expectancies across England, and if current trends continue that inequality will get worse in the coming decades. The government’s pension reforms will add to the problem, with people in richer areas receiving more from the state, while those in poorer areas receive less.

“It cannot be right that people living in a wealthy area can receive tens of thousands of pounds more in state pension than someone living in a less well off part of the country, particularly as richer people are likely to have earned more during the career and have a bigger private pension too.

“The government should abandon its plan to raise the state pension age in light of the new evidence on projected life expectancies. It should instead set up an independent commission to examine health inequalities and the impact on people’s expected retirement incomes.”

Vietnam construction trade unionists meet UCATT

Vietnam construction trade unionists, Bi and Quang, meeting UCATT to share ideas and experiences of organising. Midlands Regional Secretary, Rob Johnston, was delighted to meet with the delegation to talk about role of the TUC.

Midlands TUC describes IoD's HS2 positon as "the grandest folly of all"

Commenting on the Institute of Director's description of HS2 as a grand folly, Midlands TUC Regional Secretary, Rob Johnston commented:

"It was disheartening to see that the Institute of Directors yesterday dismissed HS2 as a 'grand folly.' However, I can understand why people may be seduced by the seemingly attractive decision to "save" £50bn by scrapping HS2. At a time when cuts dramatically impacting upon public services and the public facing the strongest squeeze on living standards, it is understandable that people can look at the £50bn project and identify an easy way to plaster over the cracks in other areas of public expenditure that are being squeezed. 　

"However, to raid the HS2 budget would be the grandest folly of all. It would be yet another example of short sightedness that has crippled the UK economy for far too long. HS2 represents medium term investment that secures long term, sustainable economic returns. And let us look at some of the projections: 400,000 jobs as a result of HS2, with 20,000 construction jobs for 15 years and a boost to economic performance that means the cost of HS2 would be recovered in just two years.

"The benefits to the Midlands regional economy are clear with the transformational benefits potentially profound. That is why supporters of HS2 must keep banging the drum and pointing out the benefits for our economy and the opportunities HS2 will bring for the people who live here.

"Despite the IoD’s comments, it was great to see that the Birmingham Chamber of Commerce have today come out so strongly in support. What is clear is that there is industrial support for HS2 here in the Midlands - and that speaks volumes. Business and union leaders here in the region know that we need HS2.

"Let us not be distracted. Let us secure jobs and growth and grasp this moment of opportunity, reject short termism and not squander this inheritance and commit, what would be, the truly grandest folly of all."

Extent on NMW non-compliance

The moves to further expose NMW abuses by employers are welcome and very much needed.

 

Of course, we must recognise that the vast majority of employers simply pay the correct NMW at the right time. This applies to about a million employees every year. Whilst it is difficult to be absolutely certain about the exact scope of non-compliance (since it cannot be captured by surveys and the perpetrators have a strong motive to conceal the truth) it is clear that non-compliance is still a major problem. Indeed, the TUC estimates that as many as 250,0000 workers could be paid less than the minimum wage per year. 
In terms of hard facts we know that for 2012/13 there were
- 1,693 complaints to the NMW helpline
- 708 employers received civil penalties. 
- HMRC were able to recover pay for 26,519 workers
- Workers were owed, on average, £300 each

Interns

HMRC hvae also started targeting internships and have made a good start, although we know the vast majority of interns fear complaining in the first place.

Arcadia and eight other firms were ordered to pay a total of 167 unpaid interns after investigation by HMRC.  The companies faced a bill for back-pay and penalties to HMRC of nearly £200,000.

Apprentices

Apprentices represent just 0.5% of the workforce, yet apprentices constitute 25% of NMW non-compliance notices. Evidently, there is a significant minority of employers that dodge the minimum wage for apprentices. Not only is this, forst and foremost appalling for the workers themselves, but also risks ruining the reputation of Apprenticeships at a time when we are campaigning for increased quality provision in apprenticeships.

 

TUC welcomes move to expose the minimum wage cheats

Welcoming the announcement today (Friday) by Employment Relations Minister Jo Swinson that employers who fail to pay the minimum wage are to be publicly named, Midlands TUC Regional Secretary, Rob Johnston, said:

“It is a crime for employers to pay staff below the NMW and it is right that these flagrant NMW crimes be exposed. 

 

For too long dodgy employers have felt that they can abuse workers and not pay NMW and get away with it. This is wrong and must be condemned and tackled with increased NMW enforcement.

But exposing NMW cheats should just be a first step in tackling poverty pay. For we need to encourage more employers to go beyond the statutory minimum and pay living wages in the Midlands. The Midlands economy has suffered heavily over the last decade and wages in the region are already low.

 

So let us expose the cheats and then move on to rebuild our regional economy in a way that secures decent wages for all.”

 

TUC General Secretary Frances O’Grady said:

 

“It is right to name and shame minimum wage rogues, so that other employers who think they can get away with paying illegal poverty wages get the message loud and clear that cheating does not pay.

 

“At the moment all employers who have been found guilty of cheating workers out of a legal wage have to pay a financial penalty, but as this takes place behind closed doors, justice is not seen to be done.

 

“But naming and shaming won’t be enough to deter those employers who think they are above the law. Only a handful of employers have been taken to court since the minimum wage was introduced in 1999, yet over the years thousands of workers have complained to the minimum wage helpline that they are being ripped off.

 

“Employers need to know that there will be no hiding place if they break the law. The government must put more money into enforcement so that there are fewer places for even the most determined minimum wage cheats to hide.

 

“We need to see more prosecutions and much higher fines imposed so that minimum wage crimes become a thing of the past.

 

“If we are to build a strong and sustainable recovery which benefits all working people, our vision must reach far beyond the minimum wage, which after all is just a floor on pay. Ministers should encourage all employers who can afford to pay a living wage to do so, and consider the introduction of new wages councils to press for decent pay rates across the economy.”

TUC Charter will help employers provide high quality traineeships for young people

A new Charter launched today (Thursday) by unionlearn – the learning and skills arm of the TUC – will provide assistance for young people, union reps, employers and training providers to ensure that the government’s new Traineeship programme offers young people the best possible introduction to the world of work.

The Traineeships programme – which will be launched nationwide this August – is targeted at 16-24 year olds who are unemployed and who need to gain additional skills to find an Apprenticeship or employment.

The TUC agrees with ministers that high-quality work experience is an important factor in helping young people into work. However, it is concerned that poor quality schemes could lead to exploitation, with trainees being used as free labour and possibly even displacing existing workers.

Young people can also become disillusioned with schemes if they are not given relevant high-quality training and work experience or any chance of a job at the end of a placement, warns the TUC.

The TUC has therefore launched its Traineeships Charter – designed for union reps, but also useful for employers, training providers and young people looking to start a traineeship – that sets out several key points to ensure that a Traineeship is high quality.

 The Charter says that young people should expect the following from a Traineeship:

•             Where work of value is done by a trainee, employers should pay them. This will also help prevent trainees displacing existing workers.

•             Placements should give young people the skills relevant to their aims and the needs of the local labour market to raise their chances of future employment.

•             Trainees should be offered careers guidance and advice on other work-related issues such as health and safety and employment rights.

•             Qualifications received on a traineeship should count towards an apprenticeship framework.

 

Midlands TUC Regional Secretary, Rob Johnston, said: “With nearly a million young people currently out of work, more needs to be done to help them get their careers back on track.

“Traineeships can provide a vital bridge between education and work or an Apprenticeship – but only if they are of sufficiently high quality.

“Bad schemes can exploit trainees and displace existing workers from paid employment without doing anything to help young people into work.

“For a work placement to be genuinely useful it should offer fair pay when work of value is done, proper careers guidance and a guaranteed job interview at the end.

“While the TUC Traineeships Charter is primarily designed for union reps to negotiate better schemes with employers, it should also be useful for training providers and young people wanting to know what to expect from a good quality work placement.”