Why the government must end the low wage economy

It seems to be an almost universal state of being in Britain today to want – or need – a pay rise. Prices are going up but wages aren’t, meaning millions of workers are becoming poorer by the week.

And they won’t –  can’t –  take it any more. Industrial disputes are at their highest rate in five years and the UK is braced for another wave of strikes over low pay, unprecedented in their size and sector. Nurses are set to stage a national strike, the first called by the Royal College in its 106-year history. 70,000 lecturers across 150 universities will be taking to the picket lines. 

Over 150,000 working days were lost to strike action in June and July alone as workers turned up the heat on their employers to pay a living wage. Other than trying to ensure some trains run when unions like the RMT go on strike, the government has revealed no plan on how to address the root causes of growing industrial unrest. 

While the cumulative impact of ongoing strikes further sets back economic growth, taking strike action means taking a serious hit to your pay packet. No one gets paid to go on strike, so the longer someone strikes, the poorer they become. Here it’s worth remembering that one in four Brits have less than £100 in savings. 

Your support changes lives. Find out how you can help us help more people by signing up for a subscription

The problem of low pay is hitting the public sector hardest. Where pay in the private sector went up on average by 6.2 per cent in the 12 months to June 2022, those working in the public sector – nurses, paramedics, teachers, prison staff – got just a 2.2 per cent rise on average. And many are asking: “is it really worth it?” 

Unsurprisingly, the professions facing strike action over pay are the same ones facing a crisis in recruitment and retention. Nurses are quitting at a rate of 500 each week, while secondary schools are expected to recruit just two thirds of the teachers they need. These professions are rife with burnout, under-resourcing and understaffing, all caused by pay and resources. And without acceptable pay, workers will take their talents elsewhere, or reduce their productivity in line with what they think is fair exchange. 

But it hasn’t always been this way. 

For a decade prior to the 2008 financial crisis, inflation pottered along at roughly 2 per cent each year, while wages increased by an average of 3-3.5 per cent. Each year the average worker received a little more bang for their buck, a few more groceries from their pay cheque each year. This, in a nutshell, is growth. 

Since then, average pay rises have dropped while inflation has grown, then soared.

As Rishi Sunak settles into No.10, and the Autumn budget is readied, The Big Issue is launching a call to look to tomorrow. Our Big Futures call is a request for essential movement now on the biggest issues we face – on housing, on jobs and on energy and the world around us. 

We have written an open letter to the PM demanding that the government create a plan and policies to break the cycle of poverty for good. We have three demands. They are to create decent and affordable homes for all, to end the low-wage economy and invest in young people and to build a greener, sustainable future and create millions of well-paid green jobs.

We can’t do it alone. We need your support to send a message to the government that the low-wage economy is unsustainable and we deserve better, our children deserve better. Join us and make your voice heard. Sign the open letter here.