The poorest pay the price for austerity economics

Research carried out by the New Economics Foundation for UNISON shows why and how the public sector can lead a shift to progressive employment practices for all public service workers and public sector supply chains. And there is also the prospect not only of benefiting around one million low paid public service employees, but catalysing a wider progressive labour market movement.

Whilst this report has a UK focus it reinforces the arguments we made over the Procurement Reform Bill in the Scottish Parliament last week.

Historically public service employment has played a progressive role, with fairer pay distribution, solidaristic wage bargaining and a track record in progressing gender equality providing an important benchmark for the wider labour market. But now, benchmarking of pay to unregulated norms of wage-cutting in the worst parts of the private sector has embedded a race to the bottom for millions of workers, including in vital public services. As a result nothing less than a counter-cultural response is needed to raise the benchmark to a better standard.

Six key recommendations for public sector action flow from the research:
1. Active support at all levels of government to ensure the living wage is paid by employers across public service supply chains, directly benefiting 1 million public service workers today.
2. Government to lift the pay cap, which has resulted in pay in public services falling by more than £2000 a year on average in real terms since 2010.
3. Policy action by government to establish robust fair wage resolutions determining benchmarks for employment conditions across public service supply chains.
4. Active support by government for collective bargaining of pay and employment standards throughout public service organisations and businesses.
5. Action by policy-makers, commissioners and employers to scrap zero-hours contracts in key sectors such as social care.
6. Implementation of new indicators, such as mandatory reporting of top, middle and bottom pay by employers across public service supply chains.

Austerity economics has resulted in the biggest drop in living standards since Victorian times with low and middle earners suffering an unprecedented squeeze on their incomes. This report shows that there is a better way.