Belfast Telegraph

Thursday 25 December 2014

DebateNI home of Northern Ireland politics

Higher wages can reduce the feeling of social exclusion

Arlene Foster, the Enterprise Minister
Arlene Foster, the Enterprise Minister

It is good news, in the run-up to Christmas, that 700 fewer people here are on jobseeker's allowance than in October. The fact that wages continue to lag stubbornly behind the UK average is less welcome.

Median weekly earnings here in the year up to April – the latest figures available – were £367 compared with £417 in Britain.

Not only that, but the gap is widening – our wages went up by 1.7% compared with 2.6% elsewhere.

The failure of the local private sector to provide well-paid jobs lies behind a fair chunk of the differential between private and public sector wages here.

In fact, it is public sector wages, inflated by the comparatively high number of people working for the Police Service and higher-grade public sector employees, that keeps our average wages within the same ballpark as Britain.

Private sector workers here earned on average 82.1% of the wages paid in the UK private sector as a whole.

The wage gap with the rest of the UK, and the high number of people who are economically inactive, is a major drag on the economy, even as the number in work rises.

Judging by court appearances, loyalist protest movements and republican dissident groups recruit in areas of economic deprivation.

There are more statistics, but the message is clear – as the Executive strives to increase employment opportunities, it needs to focus on the quality as well as the quantity of jobs.

As the recovery gets under way, people need to start feeling the benefit in their wage packets, otherwise the brightest and best of our young people will leave after being educated here.

Private sector employers, especially in the service industries, need encouragement to pay more than the minimum wage, which ranges from £6.31 an hour for those over 21 to a low of £3.72 for those under 18.

Low wages can help attract inward investment, but Invest Northern Ireland has rightly set itself a target of attracting higher paid jobs to drive up wages, not just any jobs.

As Arlene Foster, the Enterprise Minister, said: "The path to full recovery in the Northern Ireland labour market can be uneven at times."

She and other politicians need to do all they can to drive up wages, which will be spent locally, and to help create a feelgood factor and reduce social exclusion, which can fuel instability.

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