Belfast Telegraph

Saturday 26 July 2014

DebateNI home of Northern Ireland politics

Steven Agnew: We need to make work pay with decent staff wages - not by cutting benefits

Green Party leader says paying good wages will reduce staff turnover and increase productivity

'We need to make work pay. Not by cutting benefits and hammering the least well off, but by beginning to pay decent wages to the workers on which our economy relies.'
'We need to make work pay. Not by cutting benefits and hammering the least well off, but by beginning to pay decent wages to the workers on which our economy relies.'

I was accused on Twitter of being economically illiterate for my proposal that all workers on public procurement contracts be paid a living wage.

I respect my accuser and think him to be intelligent but he is certainly on the right of the political spectrum. The Green Party isn’t, and our policy was informed by the Chair of the party who is a Senior Economist at a local university, and Ross Brown, a former Assistant Economist at the Treasury.

However it’s a common tactic of the right; accuse anyone offering an alternative economic view as naive, idealist or ignorant of economics. But economics isn’t an exact science. Ask five economists a question and you’ll get five different answers.

Over the past 30 years in-work poverty has been on the rise with approximately a quarter of workers in Northern Ireland deemed to be living in poverty. Between 2009 and 2012 the richest 1% saw their real incomes rise by 31% while it was less than 1% for the bottom 99%, with many of their incomes actually shrinking. These are some of the outcomes of mainstream economics and the dogma should be challenged.

We need to make work pay. Not by cutting benefits and hammering the least well off, but by beginning to pay decent wages to the workers on which our economy relies. Evidence shows that this will reduce staff turnover, increase productivity and as poorer people are more likely to spend their wages in the local economy, lead to a significant multiplier effect.

Contrast this with the proposal to reduce corporation tax to 12.5%. That will take somewhere between £200-400 million (depending on which economist you ask) per year out of our economy, it will take approximately 11 years before we break even (according to economic estimates), and most resultant job losses will be in the public sector where workers are more likely to receive a decent wage.

Evidence would suggest that these jobs will be replaced by low paid private sector employment and continue the growth of in-work poverty. Private sector CEOs who are paid considerably more than their public sector counterparts, will be the big winners.

Right wing economics relies all too heavily on GDP as the sole measurement of societal good ignoring the resultant social ills of growing inequalities, not to mention environmental damage including catastrophic climate change.

Then there is the small matter of the near collapse of the financial system with huge bailouts being required to sustain “business as usual” so we can continue the mistakes of the past. The track record of the right does not read well, so who really are the economic illiterates?

Whether it’s the right of the Conservative Party or the right of Alliance, there is no ‘right’. Just choices. The Green Party will continue to offer alternative choices because business as usual is not the only option.


 

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