PUNY PAY PACKETS MEAN WORKERS ARE NOT SPENDING, SAYS NEWSPAPER EDITOR
Employers who pay their graduates low wages – or even no wages at all – are helping to keep the UK in recession, an expert has said.
Writing in yesterday’s City AM, the freesheet’s respected editor Allistair Heath said:
“The biggest drag on UK demand remains real falling wages. This is still a major problem. Wages rose by 1.5 per cent over the past year; retail price index inflation [the rising cost of living] was 2.9 per cent. People are getting poorer.”
Graduate Fog believes that – despite the money, time and hard work you have invested in your degree – new graduates are among the lowest paid workers at the moment.
In particular, you are the only group who are doing what we all know are proper, full-time, often skilled jobs for free (dressed up as ‘internships’). To make matters worse, in doing these internships you make yourselves ineligible for jobseeker’s allowance, so you cannot even claim benefits as others earning no (or miniscule) salaries do.
It makes sense to us that low (or non-existent) wages are bad for the economy. An obvious point is that the treasury is missing out on the income tax and employers’ tax (that both you an your employer should be paying). But when you’re earning a tiny salary, you also have less money in your pocket to spend on stuff. There is an obvious irony in the fact that many youth brands – including Topshop and Urban Outfitters – have been employing unpaid interns. If they fail to pay their young staff a fair wage, how can they expect them to have the money to buy their products?
*DO YOU SPEND LESS WHEN YOU’RE EARNING LESS?
Are you paid fairly for your work? If you’re on a budget, what luxuries do you say no to? If you were paid more, would you spend more – in shops, restaurants and cinemas?
The people at the top are holding 99% of the wealth. They are what causes recession whilst making themselves richer.
During my last job, which ended in May, lasting only four months, I continued to spend relatively freely, whilst at the same time topping up my savings to a level where I felt relatively secure and kept a chunk in my current account to allow for comfortable living. I have spent substantially more since becoming uneomployed. However, I have been buying books I need for research towards my book I intend to write and have published. I always live within a budget and live within my means, but if I want something I will make savings elsewhere in order to get it.
I was paid relatively well and received Working Tax Credits too. Each time I get a job from now on, I will save most of it for the lean times when I am on the dole again and not fritter it away on an expensive lifestyle.
This is a really basic economic principle, so it’s a pretty sound point. It was also mentioned a few weeks ago by the London Evening Standard’s City editor (I think Tanya covered that article in relation to underemployment) – if workers are earning low wages, that means a really slow recovery. So much of the UK economy depends on selling good and services (that somebody needs to be buying) that if the governments spends less because of austerity, companies spend less to cut expenses and employees have smaller wages to spend, clearly we can’t expect to recover anytime soon.
I thought that if you increase wages with inflation, you have a run away effect, I believe something similar happened in the 1930s in the US.
I think is the part of a bigger problem, if you increase trade, by helping to repair the eurozone, which I think includes the UK largest trading partners that will help increase income and then spending/wages. Infrastructure projects as mentioned by the BBC could help as too trading with other global countries?
http://www.bbc.co.uk/news/business-19767288
I think we’ve gone off-topic – again. The questions we’ve been asked to discuss is:
‘DO YOU SPEND LESS WHEN YOU’RE EARNING LESS? Are you paid fairly for your work? If you’re on a budget, what luxuries do you say no to? If you were paid more, would you spend more — in shops, restaurants and cinemas?’
not “What is your view on the current economic strategy for recovery?”
Think you may have killed the thread, Brian. People are allowed to discuss related topics, there aren’t any rules which say they can’t.
I’m not on too bad of a wage now. Of course I spent less when I earned less, that’s just the way things go. When I worked in retail there was tons of stuff I couldn’t do like go out for dinner or even buy a drink. I couldn’t go and see any friends who lived more than about 30 miles away because I couldn’t afford the train ticket. I couldn’t buy birthday presents for family and sometimes if there was an emergency (unexpected bill, a broken bit of furniture) I would skip meals to save the cash. It was rough.
@Sarah, who knows how these things go? Maybe people have thought this blog post is a bit too basic to comment on, and are waiting for a post with a bit of meat on the bone, something they can sink their teeth into. It certainly seems from the comments so far that some have tried to beef it up a bit. Perhaps the error lies with the blog post author.
I’m not sure if this is allowed here, but does anyone know any reputable companies who write CVs? I’ve redrafted my CV countless times but I’m very unhappy with it and I know it’s not helping.
@Hermit crab, the jobsearch workers at the Opportunity Centre inside your branch library – but not your main library – have been trained to compile professional CVs and will write one with you, free of charge for unemployed people.