Low pay or no pay

By Bernadette Meaden
December 18, 2014

With growing numbers of working people struggling to survive, immigration is often blamed for suppressing wages. The police raid on a factory in Rochdale where immigrants were allegedly forced to work for £25 per week, reminds us that there are exploitative employers willing to take advantage of immigrants. But it could also be argued that government policy plays a major role in suppressing wages.

It has always been the ideal situation for business to have a pool of desperate unemployed labour to draw upon. The more desperate the better, as a desperate person will accept lower wages and worse conditions, so boosting profits. This is not stated publicly in the UK, but our American cousins are less bashful. As a ‘Business Insider’ headline declared ‘American Companies Are Loving Today’s Massive Pool Of Skilled and Desperate Unemployed’

And when it comes to making unemployed people desperate, the Department for Work and Pensions seems to be constantly honing its skills. A sanctions regime which means that even sick and disabled people can be made penniless for ‘non-compliance’ (missing an appointment) ensures that people will put up with almost anything to keep a job, or take any job that’s offered, no matter how unsuitable.

And a plethora of ‘workfare’ schemes means that many unemployed people have no choice but to work for their benefits, so companies have a supply of free labour available. Why then would they create secure paid jobs or give their existing workers a pay rise?

To see the insidious effect this has on the labour market and on individuals, visit the Boycott Workfare website.

In October Boycott Workfare posted a copy of a letter from Ixion Holdings offering ‘unpaid employees’ from the Community Work Placement programme. These unpaid employees are available to work 30 hours per week for up to six months. Roles that had already been filled by unpaid employees included English language teacher, receptionist, Help Line Operator, and handyman. Ixion added that ‘large numbers’ were available, so whole departments could be staffed for free.

What this could mean for those currently in paid work was vividly illustrated by the plight of John McArthur. This electrical engineer lost his job and was then ordered to return to the same company to work for his Jobseekers Allowance. He refused and was sanctioned, reducing his income to £100 per month.

The government justifies workfare by saying it ends the ‘something for nothing culture’, as people have to work for their benefits. But apparently it is quite acceptable for profitable companies to get something for nothing, in the shape of free labour.

The DWP is creating a large pool of workers who are expected to be grateful to receive any pay at all for working, even if it still leaves them in poverty. So the next time we are told that exploited immigrants are responsible for our low wage economy, perhaps we should bear in mind the part the government has played.


© Bernadette Meaden has written about political, religious and social issues for some years, and is strongly influenced by Christian Socialism, liberation theology and the Catholic Worker movement. She is an Ekklesia associate and regular contributor. You can follow her on Twitter: @BernaMeaden

Keywords:workfare | low pay | dwp | benefits
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