Income Inequality

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2012 National Delegate Conference
1 January 2012

Conference notes

1) that the National Equality Panel report in 2010 noted that the gap between rich and poor in this country is the greatest it has been since the Second World War that the report of the High Pay Commission in 2011 predicts that if current trends continue, then by the year 2030 Britain will be witnessing levels of inequality not seen since the beginning of the 20th century;

2) Conference recognises that the gap has increased at a greater rate in the last 30 years under all governments of all political persuasions.

3) a 2011 report by the Organisation for Economic Co-operation and Development (OECD) identified that income inequality among working-age people has risen faster in Britain than in any other rich nation since the mid- 1970s;

4) the share of the top 1% of income earners increased from 7.1% in 1970 to 14.3% in 2005;

5) in 2010 bosses of the UK’s 100 biggest firms had, on average a 62% pay increase;

6) even wealthy city workers think the wealth gap is too big: a report by The St. Paul’s Institute (who are linked to St Paul’s Cathedral) in November 2011 surveyed financial workers in the City of London and 75% of respondents thought the wealth divide was too big;

7) in November 2011 the Institute of Fiscal Studies (IFS) concluded that as a result of the Chancellor’s Autumn Statement the overall effect of his new plans will be to reduce the incomes of those in the bottom 30 per cent of earners and to benefit those in the top 60 per cent. The IFS also concluded that the Chancellor’s decision will also push more children into poverty;

8) the Sunday Times Rich List has revealed the best-off 1,000 people in Britain saw their wealth rise by 25% during the first year of coalition government, each receiving, on average, an income of £60 million on their ‘investments’;

9) research has shown that 50% of the UK population owns just 1% of the wealth. While the richest 10 per cent of the UK has more than 100 times the wealth of the bottom 10 per cent;

10) the gross inequality in pay at many public service and voluntary organisations. For example trade magazine “Inside Housing” reports that 58 Housing Association Chief Executives earn more than the Prime Minster, while the highest earner, Jane Ashcroft of Anchor (established in 1968 by “Help the Aged”) received £331,250 – up 14 per cent on last year.

The book “The Spirit Level” by research scientists Professors Richard Wilkinson and Kate Pickett demonstrate that excessive income inequality in society results in premature death, greater levels of mental illness, drug abuse, poor education attainment, imprisonment, violence and obesity. Societies that are more equal such as Sweden and Japan are more successful for everyone in all measureable ways. Both the rich and the poor benefit.

At the same time many workers in the sector existed on the minimum wage rate of just £5.93 per hour. This means that the most highly paid Executive got £26,605 per month while many of the lowest paid got just £949. This is nearly 30 times more. This pattern of gross inequality is repeated in local authorities and the NHS.

Conference deplores the government enforced pay freeze which is a severe restriction on the independence of the pay review bodies. Conference believes that autonomous, free and independent collective bargaining is a key principle that must be protected in the public, private and voluntary sectors. Collective bargaining is vital to pushing up wage levels; central to reducing pay multiples and closing the pay gap between the highest and lowest earners. Statutory regulation of pay multiples is not a panacea but one of a range of measures necessary to reduce pay multiples of top earners and requires a robust regulatory and inspection framework for enforcement.

Conference believes:

a) The above facts point clearly to the fact that the “richer are getting richer” while working class communities pay the price. This unfair distribution of wealth in our society is nothing more than an attack on working class people who work both in the public and private sector;

b) that all public service and voluntary organisations should recognise that internal income inequality is as bad for its workers and service users as it is for the wider society. It is corrosive, divisive and destructive. Profiteering for the few threatens the raison d’être for the entire sector. It results in poor staff morale and industrial relations, mistrust from residents and a reputational political risk to the whole sector;

c) all public sector and voluntary organisations should establish strategies to reduce the pay gap between the highest and the lowest earners;

d) if public service and voluntary organisations believe that they need to reduce their cost base to compete for contracts or due to funding reduction they should firstly look to cut the costs of their senior management team;

e) the recommendations of the Hutton report on Fair Pay that “every public body should annually publish the multiple of top to median pay in a clear and presentable way” and that employee representatives should be on the Executive Remuneration Committees;

f) every single worker whether directly employed or subcontracted should receive living wage rate.

Conference calls on the National Executive Council to:

i) pull together research on wealth equalities and produce simple easy to understand material that branches can use with members and the public. This should include simple and clear pictures and graphs;

ii) work with relevant research and policy organisations to develop case studies of the wealth inequalities using UNISON members as examples, particularly where they work in privatised parts of the public sector;

iii) ensure that wealth inequality arguments are an integral part of our Million Voices, anti-cuts campaigning, pay and pensions campaigning;

iv) requests that regions include briefings on these issues during 2012/13 at the relevant regional meetings;

v) ensure these issues are raised in relevant UNISON publications.

vi) seek to raise this inequality up the political agenda and work with other unions through the TUC to do so;

vii) continue to campaign for greater income equality, using the press and media, working with voluntary groups, councils and health authorities if possible, and lobbying government;

viii) explore affiliating to the Equality Trust;

ix) to work with the Labour Link to:

A) campaign for statutory regulation of pay multiples in public service and voluntary organisations increased public spending to combat poverty and fair progressive levels of income taxation;

B) seek to assist the Labour party in building an opposition policy of narrowing the gap between rich and poor as a central tenet of any future manifesto and encourage it to adopt targets for improvement.