Fair pay is more than a moral matter

24th February 2006 at 00:00
What we are willing to pay people reflects society's values. There are always principles and an ideology behind the pay structures, levels and ranges which are in place.

In the 1980s it was reckoned that to attract managerial talent to run public services, inflated salaries would have to be paid. Since then, hierarchies in the public-sector workforce have become exaggerated and pay gaps have widened - a legacy of Thatcherism.

Deregulation, local management and "marketisation" came with a business ethos which justified parallel rewards for captains of industry and captains of public welfare.

Meanwhile, "unskilled" jobs were seen as ripe for outsourcing. What did it matter if pay and conditions fell for this invisible, expendable part of the workforce? The UK economy was characterised by its part-time, casualised, almost entirely female (often black and ethnic minority), low-wage sector. Department for Trade and Industry prospectuses - courting inward investment - boasted about UK low wages and lack of employment protection.

The polarisation of rich and poor in our society is well documented.

Markets pitch their prices at the affluent, new gadgets are developed or gimmicks, like trips to the moon, to soak up the money that people do not need. There are record numbers of second-home owners and record numbers of people raising children in temporary accommodation. While work should be the route out of poverty, pay polarisation ensures that it is not.

We quibble over pennies at the bottom of pay scales while others at the top of the tree negotiate their rewards in tens of thousands. The majority of working-class women are stuck on low pay for their entire working life with subsistence wages and no pension at the end of it.

The national minimum wage is a good thing since we know there is no level to which unscrupulous employers will not drop their wages.

Despite the Confederation of British Industry's squeals, the Low Pay Commission estimates that the minimum wage has added less than 1 per cent to the aggregate wage bill. It has also acted as a benchmark with some employers setting their own lowest pay rates above this.

This was the case in further education last year, when the differential between the bottom point of the national scale (now pound;6.17) and the national minimum wage was agreed at 22 per cent.

The modernising agenda for pay in FE included a commitment to deal with low pay and there was a pound;6-an-hour minimum wage in the final agreement.

According to the Association of Colleges report, Modernising Pay: the Way Forward (2005), all but two of the colleges surveyed had implemented the Pounds 6 minimum. There were caveats, like the continuation of trainee pay and the introduction of new contracts - giving with one hand and taking with the other. The report also made the point that the majority of colleges surveyed contract out many of the services employing the lowest-paid workers. Someone else does the low-pay dirty work. Introducing a sector minimum wage 22 per cent above the national rate has not brought colleges to their financial knees. In this year's pay claim, support staff will again ask for a higher rate to coincide with the new national minimum scheduled for October.

The logic is overwhelming. The Low Pay Commission receives evidence from both sides of industry, takes into account economic indicators, and its recommendation is a conservative one. Unless we peg the sector minimum to the national rate, it will fall behind because of the nature of percentage rises, which is, the less you earn, the smaller the gain.

The lowest pay rates are not the only issue, but the most glaringly unacceptable aspect of unfair wage systems. There are also questions of equity and relativity to other sectors. My union, Unison, was keen to see job evaluation introduced in colleges as the only reasonable means of trying to address unequal pay. We know that most colleges have yet to undertake the exercise and we would urge them to do so. We are also concerned by the way in which some colleges are modelling pay spines, without progression for support staff and reward concentrated at the top.

I believe the moral case for fair pay is unassailable, especially in organisations funded by the public purse. But there is also a solid business case which suggests that the most volatile resource in the workplace is its staff. The range of performance possibilities is vast, and inspiring employees to fulfil their potential should be a priority. Pay is not just about having a sufficient income. It is also about respect and dignity. It is about being valued as part of a team with a common purpose.

It is a wise employer who understands that everyone's contribution, no matter how far from the boardroom, makes the difference between success and failure.

Christine Lewis is a Unison official and secretary of the Joint Trade Union Side for pay and conditions

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