Most workers take pay cuts

From today's Morning Star, by John Millington

Most workers have taken a pay cut over the past year, with the average deals lagging well behind inflation at 2 per cent, the Labour Research Department revealed today.

One in six pay settlements involved a wage freeze, with many workers not getting a pay rise for the second successive year.

Only a minority of deals kept pace with RPI inflation, which peaked at 5.3 per cent in April, and these mainly involved long-term agreements with a built-in inflation link.

Pay rises in private firms - such as inflation-beating deals at Jaguar Land Rover (5 per cent) and South West Trains (5.2 per cent) - remained exceptions to the rule due to high-density unionisation.

The report also revealed that public-sector workers faced pay freezes and there were plans to "undermine" wage bargaining in sectors including agriculture, schools and health.

The findings come just over a week after a study by Incomes Data Services, which said that over 80 per cent of pay settlements were actually real-terms cuts to workers' wages.

Labour Research Department pay and conditions researcher Lewis Emery said the research showed that disparities in pay could widen between "those able to push for a pay deal at least close to the level of inflation and the rest where job security and minimum standards become the over-riding priorities."

Leap co-ordinator Andrew Fisher said the evidence had to be put into the context of the overall cuts agenda.

"With utility bills, rail fares, food prices and housing rents all set to rise there will be a real squeeze on household income, especially as job losses increase too," he said.

"Wages as a percentage of GDP are already at a post-war low, while corporate profits are at a high.

"There is no economic reason why workers should accept pay freezes."

Communist Party of Britain general secretary Rob Griffiths said workers were being made to pay for the economic crisis and faced a "clear choice" on how to deal with it.

"With big increases to come in VAT, public transport and energy prices workers are faced with a clear choice - either defend their living standards and our public services or to let the corporate fat cats get away with crime of the century," he said.

"Workers, pensioners, the unemployed, students and benefit claimants are being called upon to pay the bill for bailing out the banks, boosting corporate profits and funding massive increases in directors' salaries and bonuses."