Fat cats and poor sods

Editorial note: If you have not yet read our mission statement above, please do so in order that you can put our blogs in context. 

2 September 2014

Where Plenty smiles – alas! she smiles for few,


And those who taste not, yet behold her store,


Are as the slaves that dig the golden ore,


The wealth around them makes them doubly poor.

 

Book 1, line 136 of The Village, a poem by George Crabbe (1754-1832)

It is a well-known economic fact – at least according to the ideology of neoliberalism – that the rich need carrots to get them out of bed in the morning while the poor need sticks.

Thus it is that in the today’s preter-Thatcherite UK economic free-for-all, bonuses for the fat cats are booming, while wages for hardworking families and singletons are plummeting.

According to a report by Julia Kollewe in the London Guardian on 30 August 2014, UK bonuses rose nearly 5% in the year to last April to reach £40.5 billion.

At 6 % of total pay, this is a higher proportion than at any time since the global banking system imploded in 2008.

Categories that benefited include bankers and insurers – no surprise there then – as well as mining and oil, all of them firmly anchored amid the uncaring professions in the privateering sector of the UK economy.

By contrast, public sector bonuses fell by 16.3%. Poor sods working in the caring professions of education, health and social work – predominantly in the public sector – received negligible bonuses.

Earlier figures reported by Phillip Inman in the same newspaper on 13 August 2014, show that wages fell by 0.2 per cent in the between April and June 2014, the first quarterly fall since 2009.

This is despite a pick-up in employment during the same quarter, April to June 2014, when the UK unemployment rate fell to 6.4 % from 6.8 % in the previous quarter.

This is somewhat paradoxical as you would expect wages to rise as more people earned an income through entering the labour market.

The explanation is the exponential growth, for want of employee jobs, in reluctant self-employment.

What has been happening on a large scale is that, because of redundancies and lack of employee posts, workers have been forced into self-employment, where they no longer figure in the unemployment statistics.

Great, you say, at least they have jobs.

Well, let’s not get too excited about that.

The latest official statistics show that workers who move from secure jobs as employees (often in the public sector) to insecure self-employment (by definition in the private sector) generally suffer a drop in wages (as well as a degradation in working conditions).

Writing in the Guardian on 21 August 2014, Angela Monaghan says that “Britain’s deepest postwar recession has led to record numbers of self-employed people, who are earning lower wages and working longer hours than other workers”.

According to recent figures from the Office for National Statistics (ONS), self-employment in the UK is at its highest level since records began almost 40 years ago. The proportion of the total workforce that is self-employed is 15 %, compared with 13 % in 2008 and 8.7 % in 1975.

According to the ONS, self-employed people have on average experienced a whacking 22 % fall in real pay since 2008/2009. They also work longer than employees – on average 40 hours per week as opposed to 38.

Monaghan quotes Frances O’Grady, general secretary of the Trades Union Congress, the national institution representing Britain’s trade unions, as saying: “Self-employment appears to be a key factor in the UK economy’s shift towards low-paid work…The growth in self-employment is reducing people’s pay, job security and retirement income.”

O’Grady points out that while the average earnings of a self-employed person is less than half that of an employee, the self-employed earn no sick or holiday pay and have no employer to contribute to their pension.

Which helps to explain the paradox of why wages and unemployment are falling in tandem.

Clearly, as we suggested above, the poor need pay cuts to motivate them, the rich pay increases.

For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath.

Chapter 25, Verse 29 of the Gospel of St Matthew in the Authorized King James Version of 1611.

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 You might perhaps care to view some of our earlier posts.  For instance:

  1. Why? or How? That is the question (3 Jan 2012)
  2. Partitocracy v. Democracy (20 July 2012)
  3. The shoddiest possible goods at the highest possible prices (2 Feb 2012)
  4. Capitalism in practice (4 July 2012) 
  5. Ladder  (21 June 2012)
  6. A tale of two cities (1) (6 June 2012)
  7. A tale of two cities (2) (7 June 2012)
  8. Where’s the beef? Ontology and tinned meat (31 Jan 2012)

Every so often we shall change this sample of previously published posts.

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