Thursday, 26 April 2012

How Trade Unionism can defeat recession, deliver social justice and grow the economy

Over 90% of housing benefit recipients are in work. It is a Tory myth that the answer to "making work pay" is something to do with the benefits system.

Multi-billion profit making employers ALL pay poverty wages to a proportion of the workforce. Those workers then get propped up by the state. The scale of the problem varies from company to company, with cleaners, security and catering staff topping the list of most likely to be exploited.  In retail, call-sector and service sectors, the vast majority of the workforce are under-paid.  The fact that hundreds of thousands of full-time workers in the banking and finance sector live in poverty underlines my point.

Who can argue that it is in the best interests of taxpayers that we all pay towards the welfare of poverty-paid full-time workers from Tesco, Vodafone or Barclays Bank?

Unions have been truly battered within the private sector, and membership is about 15%.   Collective bargaining has been systematically attacked both by government and by employers since 1979.   The share of the national wealth given to wages has plummeted as a result, inequality has soared, and the burden upon society has become huge in propping up the poverty pay of the richest companies.    Anyone remember "wage inflation" ?  Economists in the 70's wrongly believed that unions caused inflation, and this was part of the political narrative to justify the destruction of industry wide collective bargaining.

Collective bargaining across the private sector would solve the problem of poverty pay in wealthy organisations. Pay would also improve for millions of other workers. But Unions don't have the resources to achieve this themselves.  Collective bargaining needs to be championed by government as a major instrument of pay policy. I passionately believe that this is a direction of policy that Labour should adopt.

The reason employers resist union organising drives so aggressively is that they understand very well that Unions work.  They know that unions push pay and other conditions up. They also fear - quite legitimately, that this could make them less competitive compared to non-union competitors.

The taxpayer - and the government, have a responsibility not to be neutral in this.   The more people earn, the more tax they pay and the more the government has in revenue.  Less is then needed for welfare.  And the more people have to spend, the more they do spend, thus stimulating recovery, economic growth and job creation.

To give an example, in my "patch" in Burton and Uttoxeter, I have one recognition agreement with a major warehouse for a blue-chip company.  Union pay rates are £9.50 per hour.  In the non-union warehouses in Burton on Trent, hardly anybody is paid more than £6.50 per hour.   Unions work.

My suggestions are not a quick fix - that rate of £9.50 has taken ten years of annual pay negotiations to get to where we are, from a starting point of minimum wage.

If the private sector becomes unionised, over time we will have a happier population....a more equal society.  The pressure on the state will reduce, and over time, tax receipts will rise, probably by something like 25%  from private sector workers.  The intense pressure upon family life will be eased, our children will be happier and there will be a boom in our leisure industry.  So what's not to like?

The Trade Unions, far from being the problem depicted by a hostile media, are the solution

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