Secretary of State for Work and Pensions misses key point on low pay

May 27th 2010

Responding to the speech delivered today (27th May) – ‘Welfare for the 21st Century’, Dave Moxham, Scottish Trades Union Congress (STUC) Deputy General Secretary said:

“It is astonishing that in a major speech on Welfare, Ian Duncan Smith failed to once mention that low pay is a key contributor to poverty and a drain on the welfare budget.”

On the day that a Scottish Living Wage Conference launched research on low pay in Scotland, showing that around 20 per cent of women and 15 per cent of men earned less than £7.00 per hour, the STUC pointed to the enormous extent of the public subsidy to low wage employers.

“Up and down the country people in work are forced to claim benefits paid for by the ordinary tax payer in what amounts to a public subsidy for poor employment practices.

“Ian Duncan Smith’s plans to simplify the welfare system and make it more transparent may indeed help some people to get back into work. But if that work is low paid little will have been done to alleviate poverty and inequality”.

At its conference today, the Scottish Living Wage campaign also announced the annual up rating of its Living Wage figure – an increase of 2% to £7.15.

ENDS

For further details: Dave Moxham 0141 337 8100

Notes

The key findings from the low pay report written by Dr Kendra Strauss of Glasgow University are:

• More than 20 percent of women, and almost 15 percent of men, earned less than £7 per hour in Scotland 2009.

• Between 2005/2006 and 2007/2008 nearly half of adults and children living in families with low incomes were in working rather than workless households.

• The four local authorities (LAs) with the highest proportion of low paid workers between 2007 and 2009 were Clackmannshire, the Highlands and Islands, Dumfries and Galloway, and Moray: all are rural.

• Dundee and Glasgow were the urban LAs with the highest proportion of low paid workers.

• Women in Scotland are more likely to be in low-paid jobs than men: in 2009, 43 percent of workers earning less than £7 per hour were women in part-time jobs.

• Young men who work full-time are more likely to be in a low paid job than young full-time women workers, but this tendency is reversed as men and women age.

• The industrial sectors with the lowest rates of pay are food, beverage and accommodation, retail, administrative and support services and arts, entertainment and recreation.

• In 2009, 70 percent of jobs in food and beverage service activities paid less than £6.61 per hour

• Directly employed public sector workers account for around a fifth of all those in low pay: nearly all are women and just about all of them work in either education or health (including social work).

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