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You can find the current article at its original source at https://www.theguardian.com/commentisfree/2017/oct/29/the-guardian-view-on-the-productivity-puzzle-blame-low-pay
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| The Guardian view on the productivity puzzle: blame low pay | The Guardian view on the productivity puzzle: blame low pay |
| (3 months later) | |
| Sun 29 Oct 2017 19.28 GMT | |
| Last modified on Mon 27 Nov 2017 14.41 GMT | |
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| Theresa May originally wanted her purpose in power to be defined by improving the wellbeing of the less well-off. Despite all that has happened since, she has not, apparently, given up: with the gender pay gap in mind, at the weekend she pressed even those smaller firms not legally required to publish the difference between their male and female employees’ earnings to survey their workforce. This is typical of her style: imprecation rather than action. Within weeks of that Downing Street pledge, she was backtracking on some of the measures, such as workers and consumers on boards, that she had proposed as a way of showing she would be the voice of the just-getting-by. | Theresa May originally wanted her purpose in power to be defined by improving the wellbeing of the less well-off. Despite all that has happened since, she has not, apparently, given up: with the gender pay gap in mind, at the weekend she pressed even those smaller firms not legally required to publish the difference between their male and female employees’ earnings to survey their workforce. This is typical of her style: imprecation rather than action. Within weeks of that Downing Street pledge, she was backtracking on some of the measures, such as workers and consumers on boards, that she had proposed as a way of showing she would be the voice of the just-getting-by. |
| Yet there is no doubt she got one thing right: she identified the issue that is likely to do most damage to her government, whatever the upshot of the Brexit negotiations. A decade after the crash, many voters are still not better off; the roll-out of universal credit is going to leave some even poorer. And many of those who have had real income growth don’t feel the difference. | Yet there is no doubt she got one thing right: she identified the issue that is likely to do most damage to her government, whatever the upshot of the Brexit negotiations. A decade after the crash, many voters are still not better off; the roll-out of universal credit is going to leave some even poorer. And many of those who have had real income growth don’t feel the difference. |
| A whole batch of figures in the last couple of weeks has confirmed the bleakness of the picture: beneath the impressive level of employment, real wages fell for the sixth month in a row, average real pay was back below pre-crash levels, and the state of the high street, as illustrated by the retail sales, figures suggests it is lurching into renewed crisis. | A whole batch of figures in the last couple of weeks has confirmed the bleakness of the picture: beneath the impressive level of employment, real wages fell for the sixth month in a row, average real pay was back below pre-crash levels, and the state of the high street, as illustrated by the retail sales, figures suggests it is lurching into renewed crisis. |
| After the June election, the obituary notices for austerity were drafted. Yet so far, they look premature. On Thursday, it’s likely that an interest rate rise will be at last be announced, a blow for many households who have maxed out their credit. There are a few signs of easing up: the introduction of the cap on housing allowance has been delayed; and the cap on public sector pay, after seven years of virtual freeze, is due to go too. A new paper from the thinktank the IPPR points out that if the chancellor, Philip Hammond, used his first autumn budget on 22 November to advance the cash so that the NHS could link pay to inflation for the next three years, nearly half the £1.8bn cost would come back to the Treasury in the form of lower welfare bills and higher tax receipts. | After the June election, the obituary notices for austerity were drafted. Yet so far, they look premature. On Thursday, it’s likely that an interest rate rise will be at last be announced, a blow for many households who have maxed out their credit. There are a few signs of easing up: the introduction of the cap on housing allowance has been delayed; and the cap on public sector pay, after seven years of virtual freeze, is due to go too. A new paper from the thinktank the IPPR points out that if the chancellor, Philip Hammond, used his first autumn budget on 22 November to advance the cash so that the NHS could link pay to inflation for the next three years, nearly half the £1.8bn cost would come back to the Treasury in the form of lower welfare bills and higher tax receipts. |
| The best news for the low paid has been the living wage. It has increased legal minimum pay from £6.70 to £7.20 an hour, a 7.5% rise; the pay of the lowest-earning tenth of the population has grown faster than at any time since the peak of UK pay equality in 1977. Yet even by 2020 there will still be 6 million people earning less than the so-called national living wage, measured by what is needed to reach an acceptable standard of living. Meanwhile the gender pay gap, which has halved over the past 20 years, is narrowing at a slower rate again; the gap for part-time workers, who are mainly women, is nearly double that for full-time employees. And, even if the waiting time is reduced from six to four weeks, the impending cuts to universal credit undermine its fundamental justification of making work pay. | The best news for the low paid has been the living wage. It has increased legal minimum pay from £6.70 to £7.20 an hour, a 7.5% rise; the pay of the lowest-earning tenth of the population has grown faster than at any time since the peak of UK pay equality in 1977. Yet even by 2020 there will still be 6 million people earning less than the so-called national living wage, measured by what is needed to reach an acceptable standard of living. Meanwhile the gender pay gap, which has halved over the past 20 years, is narrowing at a slower rate again; the gap for part-time workers, who are mainly women, is nearly double that for full-time employees. And, even if the waiting time is reduced from six to four weeks, the impending cuts to universal credit undermine its fundamental justification of making work pay. |
| The chancellor is said to spend more time puzzling over Britain’s productivity problem (worsening again) than anything else. So he might be interested in the results of a Resolution Foundation study into the impact of the living wage, on the women who have been its major beneficiaries. Focus group surveys found that far from feeling like progress, it had merely made employers more demanding without also making them more willing to offer the training that would make them more productive. Britain’s low-paid sectors – hospitality and food processing – are notoriously described as an investment wasteland. The consequences of Brexit may change that but, for now, the government’s hopes for improving productivity are pinned on its new apprenticeship levy, where employers rather than the taxpayer pay for training. Yet the first results show not more, but dramatically fewer young people taking up apprenticeships. Back to the drawing board, chancellor. | The chancellor is said to spend more time puzzling over Britain’s productivity problem (worsening again) than anything else. So he might be interested in the results of a Resolution Foundation study into the impact of the living wage, on the women who have been its major beneficiaries. Focus group surveys found that far from feeling like progress, it had merely made employers more demanding without also making them more willing to offer the training that would make them more productive. Britain’s low-paid sectors – hospitality and food processing – are notoriously described as an investment wasteland. The consequences of Brexit may change that but, for now, the government’s hopes for improving productivity are pinned on its new apprenticeship levy, where employers rather than the taxpayer pay for training. Yet the first results show not more, but dramatically fewer young people taking up apprenticeships. Back to the drawing board, chancellor. |
| Economics | |
| Opinion | |
| Economic policy | |
| Universal credit | |
| Brexit | |
| Benefits | |
| Article 50 | |
| editorials | |
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