Tuesday, June 13, 2017

Being hung out to dry

The pay squeeze is set to worsen as inflation rises and wage growth remains around 2 per cent. Rising prices coupled with lacklustre earnings growth means our wages aren’t keeping up with the rising cost living. Our real income is being squeezed.

TUC General Secretary Frances O’Grady says the government must respond to the wage squeeze by ending the 1% cap on public sector pay rises:
Working people are still £20 a week off worse, on average, than they were before the crash – and now rising prices are hammering their pay packets again... it’s time to lift the artificial pay restrictions in the public sector. Our hard-working nurses and teachers are long overdue a pay rise.”
It is particularly bad news for poorer families, as essential purchases like food and clothes keep climbing while benefits remain capped. The Child Poverty Action Group is urging the government to help struggling families cope with the ravages of inflation.
Chief executive Alison Garnham says:
Unless there’s an urgent re-think of the current freeze on benefits, the living standards of ordinary families will slip and slide downwards with serious consequences, particularly for children. Families are saying they can’t manage. They need some leeway. Now is the time to ensure that benefits for working and non-working families once again reflect their needs and so rise with inflation. The failure to uprate benefits in line with inflation is the single biggest driver behind child poverty rising to 4 million and why it’s set to rise to over 5 million by the end of the new parliament.”
Britain’s real pay crisis is a sign that austerity has failed, argues the GMB Union. Tim RoacheGMB general secretary, says Theresa May must take the opportunity to ditch polities such as the public sector pay freeze:
Yet again, we are seeing the cost of living rise faster than wages. Inflation has risen to almost ten times its rate 12 months ago. In the real world, that increase means that no matter how hard people work, increasingly they are struggling to pay their bills. Too often there is more month than money left after pay day. This is further proof, if any was needed, that austerity has failed and that it’s working people paying the price.If the Prime Minister is to take anything away from her election embarrassment, it should be that people are fed up. They’re fed up with working hard to stand still and with a system set up to benefit those who already have more than enough.

 Wages (red) vs inflation (blue). Already the biggest real wage squeeze in two centuries. Now intensifying again. Britons are getting poorer…

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