Pay - public sector falls further behind

This week's 5th Annual IDS/TUC Pay seminar highlighted how the pay in the public sector has fallen further behind pay awards in other industries.

Average pay increase in 2011 was 2.5%. This was still well below the headline inflation rate of 5% but with most public sector workers in the middle of a 2 year pay freeze it demonstrates further erosion in living standards for workers delivering essential services. The indicators are that average settlements for 2012 will be around the 3% mark. This means that Osborne’s announcement of two more years of pay restraint will exacerbate the situation for public sector workers. Even top banker Mervyn King acknowledged that for ordinary working families wages have been squeezed by 12% in recent years.

The government’s imposed incomes policy does not affect the rich though. The statistics for 2011 show that £35 billion was paid to the very top earners in bonuses alone.

One staggering fact revealed in the mountain of statics given to delegates was that the massive increase in inequality in the UK has propelled us to the 4th most unequal country among the 25 richest nations in the world. It is likely that by the end of 2012, over 400,000 children in Britain will be living below the official poverty line.

The seminar didn’t produce many answers but it challenged the unions to reconsider its strategy in dealing with pay, benefits and inequality. It is only the trade union movement that can lead the alternative.