In real terms, both minimum wage and dole money are taking a cut. Executive pay, in the meantime, is up by 10 per cent. By Stan.
Supporters of pay freeze have been getting cockier for a while. A few months ago, while attacking the UK's "onerous employment legislation" (with not an ounce of irony), Luke Johnson in the Telegraph argued that:
"An employer-organisation can go to hell in a hand basket, but God forbid a single employee has to take even a small reduction in salary! Yet in a deflationary environment, the value of constant money is rising – and with unemployment soaring and firms struggling to survive – why shouldn't workers share the pain?"
The Torygraph's target? Well, like the Daily Mail, nurses, teachers and ordinary workers, guilty of asking for a 2 per cent rise during a recession.
And yet, little is said about the fresh news that executive pay has risen by a whopping 10% in the last year. Just to keep into perspective, remember that in the meantime, the National Minimum Wage is going up by 1.1% -below the inflation rate for the second year running.
Also, the new Inflation Report for 2009 indicates that people on lower wages are feeling the inflation disproportionately: essential goods, in fact, have suffered the highest rates of inflation in the last year. As the Left Economics Advisory Panel remarked: "With the Government and private sector employers calling for pay freezes for low paid workers, this should be a wake-up call to trade unions and workers who once again are being forced to pay for a recession not of their making".
But this is not all yet. If you were amongst the 750,000 people who lost their job in the last twelve months, you may have discovered that unemployment benefits in the UK are impossible to live on: they amount to 10 per cent of average earnings, according to a new TUC study.
Not only that: in real terms, benefits have been getting thinner. In 1979, dole handouts were 18% of real earnings. In 1994, the proportion was 14%. Now, 10%.
The Institute of Directors confirmed last month that "almost a million people were working part-time because they could not find a full-time job, meaning the impact of the recession on employment was "even greater" than unemployment figures suggest.
In the words of TUC General Secretary Brendan Barber: "The view that we need low benefits to encourage people into work makes no sense in a recession. The vast majority of the unemployed are desperate for jobs, and need no encouragement."