THE squeeze on Britain’s 10 million low paid workers is at risk of intensifying over the coming decade said a report on ‘The State of the Nation’, from the Centre for Social Justice (CSJ). The intensified squeeze comes from the impact of mounting global economic competition, automation and new technology, the shift to the gig economy, a widening regional divide and a chronic national failure to boost skills and education, according to the major new report.
The report highlights the plight of the low paid, pointing out that their wages of £10,000 to £15,000 a year have stalled for two decades, long before the financial crash of 2008. Nor is there much evidence that more than a handful ever escape a life on low pay. Constant policy interventions have not solved the problem.
The report finds that around 20% of the 33 million workers in Britain earn £15,000 a year or less and that 50% earn no more than £23,200 a year. By contrast, only 10% of employees (about 3 million) earn above £53,000 a year. The report declares: ‘The wider macroeconomic environment has driven some of these changes. Globalisation has added to intense competition, suppressing costs and wage growth.’
The challenge is that the UK is an imbalanced economy. While the EU referendum result caused a political shockwave, in many respects some of the key themes were brought to attention at the time of the 2008 global financial crisis, and have been reinforced since.
The report cites a number of imbalances in the economy that need to be addressed, including: • The size of the financial sector in relation to the economy. • Macro-economic imbalances, including the twin deficits of the budget and current account. • Regional imbalances between London and the rest; between urban and rural, coastal and inland, and between clusters that have seen success versus those that have suffered from previous deindustrialisation and decline. • The imbalance of social mobility and the importance of ‘place’ and how where you are born and grow up may impact your life chances. The UK economy has been stuck in the mud for decades and needs a socialist revolution to shift it.
