#TUC13 Congress - Fair Pay Fringe with Unions21

"What can unions and policy makers do to make wages fairer?"

Monday lunchtime fringe by Unions21 and Fabians on this key issue.

Meeting was chaired by Chris Weavers (middle) who pointed out in the last 2 years 93% of all British workers have had below inflation pay rises (i.e. pay cuts).

First speaker Liam Byrne MP who wanted us to "batter and punish this government" for what they have been presiding over in last 2 years. The problem is the shortage of work. Big mistake of Tories to cut corporation tax by £6 billion? For what? Nothing invested? Nor more paid out in pay? £480 billion lie doing nothing in company bank accounts. Small business should get this tax cut. Bringing forward capital investment has recently been recommended by those left wing nutters at the IMF.  

Nicola Smith from TUC was next who told us real wages have been falling for the the longest period since the 1870s. She made the important point that wage growth in UK is measured on "mean" pay levels (the average - which includes all very high earners who distort wage growth) rather than using a "medium" measure as other countries. This means that the cuts in wages may be even worse for the low paid than we think.

Ged Nichols, General Secretary of Accord spoke about when he started working in finance the wages were not very good, but you had final salary pensions subsidised mortgages and a career structure. Now you just get the poor pay. He argued that there is no evidence that Performance Related Pay works. Customers have become "commodifed" and this resulted in the mis-selling scandlas. He wondered why no senior managers had been disciplined for PPI scandal? 

Equity General Secretary Christine Payne wanted the law to be changed over minium wage so that the union could take enforcement action on behalf of members. Many actors are too frightened of victimisation if they take make named complaints against employers for failing to pay the minimum wage.

My question was about how a living wage is not enough and we need "fair pay" which included a living pensions and sickness benefits and how we need wage councils to get fair pay in many sectors who can afford more than a living wage rate. Which as you can imagine no-one on this panel disagreed with.

Ford Workers strike to save pension scheme

Check out the Unite web site for details of the strike today by 2500 "white collar “workers to save their Final Salary scheme from being closed down to new entrants. The strikers are naturally worried that if Ford closes the scheme to new workers joining then it will mean that eventually the company will close the whole scheme to future accrual.

This fear is justified. It is unclear from reports why Ford is doing this apart from a claim that it is "unaffordable".  I assume they mean the deficit. Closing to scheme to new blood is one of the worse things you can do. It will do nothing to get rid of the deficit. It will be more expensive and just make things worse.

The deficit will remain and will have to be paid off eventually. But with the scheme becoming more and more "mature" (fewer and older workers) then the fund will have to be invested in low yielding assets such as cash and bonds and less in equities.  So the investment return in the long run will be less and the company will have to put more money into the scheme.

Ford is also planning to cut the pay of new entrants as well. Not good news for East London. 

97% of UNISON members vote to accept pension deal

Just seen copy of the UNISON Press release about the overwhelming majority in favour of accepting the deal on the local government pension scheme negotiated by UNISON and the other local trade unions. Such a massive majority is almost embarrassing. This was also despite (patchy) attempts by some in the ultra left to campaign against acceptance.

However, well done to the negotiators for pulling off a good deal. Not a perfect deal, but at the end of the day in my view a far better result than many expected at the beginning of this dispute. We have an improved and sustainable final salary scheme. The real threat to this deal and to all public sector pensions schemes is from the Tories who continue to promise to “review” (i.e. dismantle and replace with unsafe private schemes) the so-called “gold plated” (as if) public pensions.

Some previous posts on this issue (and here)

The unions need to rethink pensions in the private sector. Pensions need to adapt and change but traditional final salary schemes are not unaffordable, the drive to close such schemes in the private sector has been to cut costs not to do with affordability. Check out Tom’s post on this issue.