Devaluing the labour of 'hardworking taxpayers'

By Bernadette Meaden
April 1, 2015

For the past five years, the UK business sector and the Department for Work and Pensions have behaved like a sort of tag team, working in concert to erode the pay and conditions of workers.

The DWP’s punitive sanctions regime (set to be extended to the working poor under Universal Credit) means that being late for a Jobcentre appointment can attract a harsher punishment than committing a crime. This ensures that people will take any job just to escape such misery.

No doubt many ‘hardworking taxpayers’ will say that this is as it should be. People should be prepared to take any job rather than claim benefits funded by their hard work.

However, what those hardworking taxpayers may not appreciate is that this will eventually affect them, if it hasn’t already. Because if employers know that unemployed people are prepared to work for almost nothing (or literally nothing on workfare) then why would they ever offer their current employees a pay rise? And why would they not, if they felt like it, get rid of their current workers and get new ones fresh from the Jobcentre, at lower rates or on zero hours? It’s only business, and their first duty is to their shareholders after all.

This is why, despite Mr. Cameron’s ‘jobs miracle’ most people don’t feel better off, and his government has the weakest productivity record of any government since the second world war

Here’s how The Economist magazine explains the paradox:

"Britain’s workers are a bargain ..because their pay is so pitiful. Of the 15 initial members of the EU, only Greece and Portugal now have lower hourly wages. A British employee produces a fifth less than a French one, but he or she is more than a third cheaper to hire.

"For firms, this is wonderful. Unlike real wages, which remain eight per cent below their 2007 peak, company profits are almost back at their pre-crisis level (and for service companies they have never been higher). The coalition has cut corporation tax, a levy on profits, to boot….When people are cheap, firms would rather hire than invest in machines or technology. So productivity is held down."

So as we contemplate a further £12 billion of welfare cuts, hardworking taxpayers need to think about the impact this could have on them. The harder the government makes life for those who are out of work, the less incentive employers have to treat workers decently.

Keeping the unemployed on the brink of destitution, and the working poor in fear of unemployment simply devalues labour. And when all is said and done, that is all hardworking taxpayers are doing: selling their labour. They should think twice about supporting measures which devalue it.


© 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

Although the views expressed in this article do not necessarily represent the views of Ekklesia, the article may reflect Ekklesia's values. If you use Ekklesia's news briefings please consider making a donation to sponsor Ekklesia's work here.