It’s time to tackle low pay

paul blomfield
paul blomfield
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Over the last year I’ve been campaigning to stop payday lenders ripping people off.

Working with organisations like Citizens Advice, we’ve got rules that make it harder for them to trap people in spirals of debt.

It’s good news, but the growth of payday loans is the symptom of a much bigger problem. Too many people in low-paid jobs just can’t make it from one payday to the next.

The economic model created by Margaret Thatcher, reinforced by weakening the bargaining power of working people, has reversed a century-long drive to fairer wages.

Over the last generation, 5-7 per cent of the wealth produced by the people of this country has moved from wages to profits.

Billions that used to pay wages now goes to shareholders, driving wealth inequality to levels not seen since Victorian times. Hard work isn’t being rewarded and it doesn’t stop with low wages. For too many people, part-time jobs have replaced full-time jobs, the uncertainty of zero-hours contracts has replaced regular wages, and the Minimum Wage has become the norm, not the safety net intended when Labour introduced it.

Low pay isn’t just a problem for those forced to turn to payday lenders or food banks. We’re all paying the price. Public funds are increasingly diverted to prop up our low-wage economy and support rewards for those at the top.

Under this Government, while public services have been cut, housing benefit paid to working people has increased by 60 per cent, with landlords profiting from increasing rents fuelled by the lack of house building. Tax credits prop up employers paying low wages and contribute to their profits.

So what’s to be done? Here’s a start. Let’s increase the Minimum Wage so it’s closer to average earnings and campaign for employers to take up this week’s call by the Archbishop of York to pay the Living Wage.

More people joining their trade union would strengthen their voice in the workplace.

Let’s crack down on employers who don’t pay the minimum wage. We need to stop employers who undercut wages by recruiting exclusively from Eastern Europe, and we should end the abuse of zero-hours contracts.