Why the North East needs the living wage

During National Living Wage Week (3 -10 November) the Northern TUC is hosting  a ‘living wage summit’ in South Shields on 7 November. The North East of England suffers from the lowest wages in the UK with the average full-time worker paid £51 less per week than their counterparts around the country. As a result people here have most to gain from a rate of pay that people can live off.

According to some estimates from IPPR  1 in 3 workers in our region are paid below a living wage level. This has economic and social consequences too. With such little disposable income it means that there is less to spend on local high streets. This leads to a spiral of decline where independent businesses can struggle and wage remains at rock bottom. It also contributes to child poverty with two thirds of children in poverty having someone in paid work in the household. 

There are growing numbers of people in work whose low wages mean that they now struggle to get from one end of the month to the other and as a result have to borrow to get buy. This can lead to greater debt, borrowing from pay day loan companies or even more dangerous forms of high cost credit such as loan sharks. There’s a reason why this is on the increase. It’s not because people are all of a sudden struggling to manage their finances – their finances are deteriorating.

Analysis by the Northern TUC has shown that the average full-time worker in the North East is now £1196 per year worse off in real terms between 2010 and 2012. This is not just about people’s pay failing to keep up with the cost of living, but about decent jobs being destroyed and being replaced by jobs that pay far worse. In our region we’ve lost over 60,000 public sector jobs as a result of the Coalition government’s spending cuts and many of the new jobs created in the private sector are on far worse terms and conditions. Manufacturing has contracted by 5,000 jobs in the North East since June 2010 while it has been traditionally low-paying sectors that have increased.

There are a wide range of people from all walks of life who recognise the importance of living wage employers in our region. The next Bishop of Durham, the Right Rev. Paul Butler recently told The Journal, “I hope many volunteers in food-banks will start asking deeper questions of why people find themselves needing this support; it might help them think about issues such as the Living Wage.”

This is the backdrop to our regional living wage summit. We will be hearing from a wide range of perspectives across the North East as well as national guest speakers TUC General Secretary Frances O’Grady, Shadow Secretary of State for Work and Pensions Rachel Reeves and Sarah Vero from the Living Wage Foundation. We believe there are organisational benefits from a living wage, a strong economic argument for it and a profoundly ethical case to be made. We hope the event will mark the beginning of efforts to prevent the North East from forever being regarded as a low pay region and improve the standard of living for working people here.

Neil Foster is Policy and Campaigns Officer for the Northern TUC