National Audit Office on public sector pensions

The National Audit Office has published the first of two reports on the cost of public sector pensions. The reports are expressly designed to inform the debate about the affordability of public sector schemes, in particular that of ‘unfunded’ schemes (i.e. those which do not invest in assets but where pensions are funded on a pay-as-you-go basis out of employee, employer and Treasury contributions), the four largest in particular. The second report is due out later this year. Given the political discourse over the future of the public sector based as it is on cuts, the report is clearly timely.

Nigel Stanley over at ToUChstone has already produced some well-cast nuggets from the NAO report, while the TUC has also issued some well-chosen words in a press release, and I don’t want simply to go over the same ground. The NAO report has not been specifically designed to debunk any of the prevailing myths about public sector pensions (the TUC has already done so, as has the GMB) and its views provide an impartial commentary on the state of affairs. I do, however, want specifically to note the contribution of the NAO report in helping to ensure that the continuing debate over public sector pensions is rooted not in misinformed prejudice about so-called ‘gold-plated’ public sector pensions (bearing in mind that the median public sector pension in payment is less than £5,000) but in what is actually happening in the real world.

Recession Report No. 16

The TUC’s last Recession Report was published yesterday and can be accessed via Nicola Smith’s post over at ToUChstone. The topical theme of this issue, in the week that saw International Women’s Day and the TUC’s 2010 Women’s Conference, as well as the launch of a specific TUC report on Women and the Recession, is the impact of the recession on working women. Inevitably, there is a degree of overlap between the two reports.

The headline labour market stats are that 2.457m people are out of work (more or less unchanged on the month and the quarter, but 448,000 up on the year), representing an unemployment rate of 7.8% (again, unchanged on the month and quarter but up by 1.4 percentage points on the year). Some 28.9m people are in work, representing an employment rate of 72.4% (down by 1.7 points on the year). The TUC remains concerned about the numbers of people who are working on a part-time and/or temporary basis involuntarily, and about long-term unemployment, both of which it sees as a sign of a continuing ‘serious weakness’ in the labour market.

Employment rates for both men and women have fallen during the recession but on a far smaller basis than in previous recessions, largely due to involuntary part-time working acting as something of a cushion. The proportion of women who are economically active (not necessarily in employment but looking for work) has also continued to rise in the recession, to a figure of 74.4% (the highest on record) – in contrast to previous recessions. The biggest barrier to female employment remains opportunities to balance work and family life: 41% of women who are inactive but who want a job are looking after a home or family.

The fall in the employment rate has been lesser for women than men, but this is a result of the predominance of women in the public sector, which takes around 40% of women nationally compared to around 15% of male workers. Consequently, large-scale public spending cuts are likely to give good reason to imagine that unemployment may well resume its upwards rise, and may well cause serious hardship to families where a second round of redundancies, this time predominantly amongst women, falls in areas of existing high unemployment.

Given that the public sector is also more likely to provide work-life balance arrangements, spending cuts may well see a reversal of the trend in women’s economic activity rates: representing another aspect of the social, as well as economic, disaster that such cuts would represent.

International Women’s Day

8 March is International Women’s Day (loading very slowly, today) – a day adopted by the United Nations in 1975 to build support for women’s rights and participation in the political and economic arenas. The banner under which events are taking place this year is ‘Equal Rights, Equal Opportunities, Progress For All‘ and they include an event at the TUC tonight promising ‘a night of comedy, music, poetry, politics and campaigning‘. LabourList is also commemorating the event with a day of women-only blogging, under a female guest editor following Rowenna Davis’s turn in the hot seat last year.

Justice for Colombia, to which Prospect is affiliated, is holding a one hour vigil at the Colombian Embassy today at 4pm to mark International Women’s Day and protest against the ongoing detention of human rights defender Liliany Obando, while Prospect members can download an excellent newsletter celebrating the achievements of women in Prospect.

For as long as inequality remains, we need to be reminded of why, so such special days as these continue to be useful. But, as Michael Foot said:

Describe the challenges by all means, but don’t confuse analysis with action. The one must lead to the other if it is to be useful to people. (Hat-tip: Roger Darlington)

Making International Women’s Day useful to women across the globe via practical action will, I suspect, continue to be a source of challenge for the organisers of such events, and policy-makers more generally, for some time to come.

The Flowers of Guatemala

Brendan Barber, General Secretary of the TUC, has written to the Guatemalan ambassador in the UK to protest at the murder of Pedro Antonio Garcia, the fifth trade unionist to have been killed in Guatemala since November 2009, and at the attempted murder of Abel Barsilai Giron Roldan.

The letter points out that the murders and attacks are:

The most blatant aspect of a far wider policy which seems designed to destroy any form of independent trade union organisation and meaningful social dialogue in Guatemala

against the background of an escalation of attacks since 2005 documented by the ITUC. Shockingly, the local police commander is reported to have said, in the context of the attempted murder of Mr. Roldan, that ‘firing a weapon is not a crime’ – a phrase which not only gives succour to the murderers and to their sponsors, but which also appears to lend support to their campaign of terror.

The Flowers of Guatemala are blooming again.

Pay: prospects for 2010

In recognition of today’s joint TUC/Incomes Data Services conference on pay bargaining, the TUC has produced a list of ten myths on pay in the context of the recession which you can find both here and on Richard Exell’s post on ToUChstone.

The myths, which are drawn from the different parts of the union movement, are common ones and ones that are likely to appear again and again over the next few months, not least since the spring months are the most significant ones for pay negotiations, with the largest number of pay deals concluded during the January-April period; and there’s also the issue of the forthcoming general election. They’re well worth repeating in these specific contexts, and they do need to be tackled whenever they occur, so here they are in brief:

1. MYTH: above inflation wage increases could set off a damaging wage spiral. REALITY: wages are not driving inflation at the minute and it’s normal in the long-run for wages to increase above the rate of inflation

2. MYTH: further freezes and cuts are needed to make companies profitable again. REALITY: Some companies may be struggling but rates of return remain generous and cuts are likely to be damaging to growth

3. MYTH: Wage freezes have been widespread through the private sector. REALITY: Two-thirds of companies gave rises last year, with a median increase of 2.3%

4. MYTH: Wage freezes will be just as widespread in 2010. REALITY: the economy is growing again and inflation is on the rise. Wage claims, and pay agreements, are likely to follow suit

5. MYTH: Unions have accepted wage freezes because they are too weak to negotiate pay rises. REALITY: Wage freezes have occurred where there are genuine cases of hardship but unions are wise to cases of wage restraint designed to boost company profits

6. MYTH: Public sector pay freezes are an alternative to job losses. REALITY: a false choice, since short-term pay restraint has a limited effect other than on staff morale

7. MYTH: A minimum wage freeze will prevent job losses in the private sector. REALITY: this makes little sense socially, given the background to the recession, or indeed economically since the lowest paid are likely to use more of their wages on spending than on saving

8. MYTH: Raising the minimum wage for young people will make it harder for them to find jobs: REALITY: The recession has hit young people hard, but employment has fared better in low-paying sectors

9. MYTH: Public sector wages rocketed while private sector wages contracted last year. REALITY: data changes caused the discrepancy, not least given the dominance in the average wage figures of the nationalised banks. Since 1999, public sector wages have grown more slowly than those in the private sector.

10. MYTH: Public servants earn more than workers in the private sector. REALITY: this is like comparing apples and pears. Where similar jobs are compared, the differential does not depart strongly from zero.

More myths to the list can always be added: from a purely private-sector perspective, for example, we have the myth (not least in a recession, but not limited to such times) that pay can be meaningfully linked to performance. In the coming weeks and months, this blog will be doing its bit to bust the myths on pay that come our way.

The myths on this list are busted more fully on Richard’s ToUChstone post, while regular readers of ToUChstone will recognise several from individual in-depth postings in recent weeks. As Richard says, the recovery remains fragile and is likely to be threatened by wage restraint. Individual sets of pay negotiations are likely to be dominated more by the circumstances of the organisation concerned, with the economy providing more of a backdrop, but, from a macro perspective, it is clear that a growing economy will be driven by people spending money – and that implies a clear economic need for real wage rises.

Tobin, updated

The Tobin Tax was first proposed by Nobel Laureate economist James Tobin in 1972 as a levy designed to deter currency speculation (although he was building on the wider financial transactions tax proposed by Keynes back in 1936). Some sort of financial transactions tax has been back on the political and economic agenda in recent times as a way of dealing with one aspect of the conditions which have led to this last economic crisis (and, frankly, as a means of getting the bankers to pay (back) their share). The wiki entry on the Tobin Tax is good on the background and the recent history.)

An updated Tobin Tax, updated for the modern times and renamed the Robin Hood tax has now been proposed by a coalition of around 50 organisations dealing with poverty, including the TUC, as a way of raising funds from banking activities towards dealing with poverty and climate change, both in the UK and abroad. The campaign features a video produced by Richard Curtis and starring Bill Nighy – and, of course, you can sign up for updates and vote (more than 4:1 in favour, so far, now that stacks of multiple ‘no’ votes have been discounted), too. ToUChstone, the TUC’s blog, has produced several posts on the initiative today as, from a capital markets perspective, has labour and capital.

[Edit 15 February: now a margin of 10:1 in favour – while the multiple ‘no’ votes appeared to have come from two IP addresses, one of which is registered to Goldman Sachs, that Great American bubble machine. Doing God’s work again, Lloyd?]

The Connect Sector of Prospect has a policy of raising awareness of and support for the Tobin Tax dating back to 2001 and this blog supports also the updated initiative: it’s another aspect of a welcome return to Keynesian economic views; in deterring short-termism, it may well have a role to play in improving (long-term) corporate governance; the activities the target of the tax are those which fit well within the definition of being, in Adair Turner’s neat turn of phrase, ‘socially useless’; and the funds it will raise ought clearly to help with the worthwhile central mission of the coalition.

Without going into all the arguments of the naysayers, some of which are less worthy than others, it seems to me that, to be successful, the initiative needs to recognise the following:

1. this is not a cheap way of raising finance to meet long-term UN goals of all countries providing 0.7% of GDP for international assistance – it has to be extra

2. this is not a way of providing bankers with a route back to social acceptability, and neither does it deal with the behaviours which caused the crisis and the need to inject huge amounts of capital to bailing out the banks – both of which are issues which need to be properly tackled. Nevertheless, we do need to understand what role (very) short-term trading plays and why those engaged in it do it, given the tiny margins being quoted; at the same time, the tax needs to target what is demonstrably ‘socially useless’ activity undertaken within the financial services sector – and this itself needs to be cut off. The City needs to recognise this, too, much more than it does.

3. the potential for City creativity needs to be recognised and the issue of accountability to pay the tax properly covered

4. the monies need to be properly ring-fenced and used for specific goals. What can’t be allowed to happen is that money raised and sent overseas then finds its way back to this (or any other western) country in carbon trading schemes.

Overall, however, an initiative well worth supporting.

Haiti event at the TUC

Just time for a short welcome for tonight’s event, supported by Prospect, and to express the hopes that all going have a great time. Don’t forget to take your folding stuff!

Tickets for the event are as rare as hens’ teeth – so well done if you’ve got one! – but, even if you can’t attend the event, you can still buy the t-shirt…

The TUC has also published news of how trade union assistance is arriving in Haiti and being used for the good of the people there (and see also Owen Tudor’s post over at Stronger Unions) – so you know your donations are reaching their destination.

TUC Recession Report No. 15

The TUC has just produced its latest Recession Report, accessible here at Nicola Smith’s ToUChstone blog posting. This is the penultimate in the series given that data shows the economy no longer to be contracting – so an official, if somewhat marginal, end to the recession has been achieved. (On this point, see also Adam Lent’s post on why the recovery has been so anaemic in the UK).

The headline data are that: 2.458m are unemployed (down on the month and on the quarter, but up by more than half a million on the year) – at a rate of 7.8% (a slight drop on the month and unchanged on the quarter, but up by 1.6 percentage points on the year). The employment rate of the working age population now stands at 72.4%, down by 0.1 percentage points on the quarter and by 1.7 points on the year. The headline figures are, once again, more positive than expected but evidence of a sustained recovery on the employment market is not yet here and long-term unemployment also continues to demonstrate cause for concern.

The second part to the Report continues the social theme of the previous edition’s specific area of focus, which looked at the effects of unemployment on physical and mental health, by looking at the other social effects of recession, including on poverty, happiness, family life, crime, drug and alcohol use and on the prospects for the children of unemployed people. Nicola had blogged previously on the question of how a ‘social recession’ could be measured and had suggested that the view was, on the whole, satisfactory despite some areas of concern. Here, too, the report argues that, while the UK is weathering this recession rather better than those of the 1980s and 1990s, the negative social effects of rising unemployment will continue to cause damage for some years to come. An important lesson for those advocating harsh cuts to expenditure: cuts are not only economically regressive, they leave the social scars festering, too.

TUC Recession Report No. 14

The TUC has published its most recent Recession Report, which can be accessed via Nicola Smith’s blog posting on ToUChstone here.

The headline facts are that 2.491m people are unemployed, at an unemployment rate of 7.9%. Unemployment has increased by 30,000 on the month and 608,000 on the year, while the rate is unchanged on the quarter but up by 1.9 percentage points on the year. The employment rate is currently 72.5%, with no change on last month or on the quarter, but down by 1.7 percentage points on the year.

So, the figures on unemployment continue to show a slowing trend but that recovery remains a good way off, with unemployment unlikely to fall for some time after the economy emerges from recession. Part-time working shows a sharp increase, partly as a result of involuntary part-time working; the number of discouraged workers  (those becoming economically inactive because they cannot find work, but who don’t as a result show up in the unemployment figures) is on the increase; and long-term unemployment is on the rise.

This month’s special focus of the report is the links between unemployment and physical and mental health, with a lengthy review of the literature on the issue (to which a commentator on the blog has usefully added further references). Evidently, unemployment adds insecurity and stress to everyone, including those out of work faced with increased money, security and relationship worries, while those in employment are faced with higher workloads and the fear of the dole. Individuals’ mental health can be fragile enough and the pressures caused by recession are often sufficient to deepen, as well as to widen, the worries which affect mental health. Reason enough, as the report argues, to require proper policy attention to unemployment and for a clear strategy to deal proactively with it.

Colombia: lobbying continues against the proposed FTA

The TUC has written to Baroness Ashton, the EU’s new High Representative for Foreign and Security Policy, calling on her to abandon talks on a free trade agreement with Colombia on the grounds of the country’s appalling human rights record, not least with regard to the continued killings of trade unionists.

A free trade agreement with the EU would be a propaganda coup for the Colombian government and would essentially reward it in the trade and international arenas, while acting as an endorsement of its continued inaction on its human rights record. Colombian civil society and trade union organisations have called for a rejection of any attempt to reach such an agreement; the US government has rejected doing so and the EU should suspend its own negotiations. Worryingly, as the TUC’s toughly-worded letter points out, the promised engagement with the Colombian government on its domestic record via the existing Generalised System of Preferences (GSP+) procedures appears not to have happened.

Connect is continuing its own lobbying activities, in line with its support for the Justice for Colombia campaign on the proposed agreement and in support of a special meeting on the issue taking place at the European Parliament on 9 December.

The TUC was also a signatory to the letter to the Editor of The Guardian last week which called for tougher actions against June’s coup in Honduras and asking governments not to recognise the fake elections which took place the previous Sunday.

As tough as conditions are at home for trade unionists, they are never as worse as they are for trade unionists in Latin America. Internationalism has the power both to bring greater unity to trade unions worldwide and also increases the number of reasons to belong to a trade union: solidarity needs to be more than just a watchword.

TUC publishes thirteenth Recession Report

The latest in the TUC’s series of reports on the recession – Moving towards a fragile recovery – is now up on ToUChstone.

Nicola Smith’s blog post is so titled given that falls in employment are showing signs of pausing while there may be some sign of a recovery in employment levels. Nevertheless, the labour market remains fragile:

– employment levels are still falling for young people under 24

– long-term unemployment is still rising

– there is a rising number of people in employment who are in more insecure forms of it – in temporary or part-time work. A proportion of this will be involuntary based on an inability to find fixed, full-time work. Earlier this year, the TUC suggested that one in nine part-time workers were involuntary, although current figures quoted in this report indicate a level rising to over 13%, while the proportion of involuntary temporary workers has risen to nearly one-third. This would be a natural development in a recession (while the proportion of involuntary temporary workers will be rising at this time of year anyway) and the increasing rates would seem to show that the recession (at least, in the labour market) has some course yet to run. The rise in part-time employment in the UK is also higher than the EU average.

This month’s special focus is on international comparisons and shows two main developments:

– the UK employment rate (69.6%) remains around five percentage points higher than the average rate across the EU, although the decline in the rate is, at two percentage points, also 0.1 points higher than the average. (The drop in the UK employment rate is actually the fifth largest, behind Ireland, Spain, Finland and Portugal.)

– schemes for short-time working remain more prevalent in other OECD economies and the UK spending on active labour market measures remains both small and well below the OECD average.

The report concludes that the UK performance during the downturn has been ‘average’. Certainly, it is close to the average figure on key labour market measures – a sign of the integration of the UK labour market with that of the rest of the EU and also an achievement given that the downturn in the UK has been sharper, and has lasted longer, than in many other countries. Thus it is likely that the government has indeed got some things right in all this. As the TUC warned earlier this week, the danger now lies in premature action to close the deficit and in stopping the stimulus package, thus choking off what fragile signs of recovery there already are.

Post-‘Beyond Crisis’

A warm welcome to the selection of videos and blog posts from yesterday’s TUC-organised ‘Beyond Crisis’ conference which have been posted up on ToUChstone, accessible via the link on the right of this page or else directly here.

Good to see the TUC take the initiative here in terms of the debate about what the UK economy should look like in the future – greener, more fair and more equal – if not to prevent crisis happening again, then at least to ensure that we have learned from the mistakes which have come together both to inspire this one and to see it have such deep effects on the economy.

The recession and middle Britain’s shrinking wages

The TUC has published a ToUChstone pamphlet – the first in a new series – exploring the role of the declining share of wages in national wealth and the much less well-known role this has played in the recession (see TUC press release).

The author on behalf of ToUChstone – Stewart Lansley – also wrote the earlier work on middle income Britain (blogged here) which documented the rise of an onion-shaped distribution of wealth in the UK and the rising divide between an affluent 40% and the bottom 60%. In this new report, he focuses in more detail on why middle- and lower-income Britain has been left ‘in the slow-lane of rising prosperity’ (a theme also picked up in The Guardian‘s Comment is Free pages today, although seemingly rather obliviously to Lansley’s work).

In his blog post for ToUChstone introducing the pamphlet, Lansley highlights that wages held steady at around 60% of national output for much of the twenty five years after 1945, before rising to 65% in 1975. Now, however, they account for 53% – a fall mirrored elsewhere: more steeply in the US, more shallowly in continental Europe – as a result of the erosion of employment rights [here Lansley is kind to his hosts: trade union weakness in general terms is also a factor], as well as reduced demand for unskilled labour and the transfer of jobs triggered by globalisation. All of this has contributed to boosting the bargaining power of employers which has had the effect of wages falling behind productivity growth – the wage squeeze.

The effect is that families borrow more to maintain living standards – staggeringly, households borrowed an average of 45% of their income in 1980 but 157% in 2007.  Of course, individual choice is an aspect here, but the wage squeeze implies that, formerly, such a level of living standards were financeable from wages whereas this is currently not the case. At the same time, rising company profitability – the counterpart to wages falling behind productivity – flowed into justifying record dividend payments and an explosion in executive remuneration, while higher rates of return in financial engineering led to the replacement of funding for long-term success with money being moved around specifically to chase the quickest return. This, in turn, lays behind the other, more well-known, factors in the current crisis.

The policy conclusions are not only that cuts would end a recovery before it has properly begun – since wages fuel spending – but that, in the long-term, the share of wages in national output needs to rise again.

Clearly, this latter is much easier said than done. Essentially, we need to confront and overturn a thirty-year orthodoxy which, albeit incorrect, has led to a major weakening of, and support for, the institutions capable of delivering that level of confrontation. It means essentially that people need to adopt a much greater degree of solidarity with and for each other, and reducing the importance of self (and self-interest) in doing so. Twelve years of Labour government, despite some important initiatives and an awful lot of warm words, has done little to change the increasing individualisation which lays behind the policy initiatives of the previous twenty. Challenging that orthodoxy clearly needs to take its place in a proper consideration of economic alternatives and Lansley’s pamphlet certainly helps to inform the debate here. Nevertheless, we should recognise not only that this sets out a specific challenge for trade unions (and, indeed, their members) but also that the scale of that challenge is significant.

Trade union statement to G20 finance ministers

The International Trade Union Confederation and the Trade Union Advisory Committee to the OECD have produced a joint statement to the meeting of G20 finance ministers taking place in St Andrews this weekend.

The statement calls for action on the following issues:

– jobs, with fiscal stimulus measures to have a stronger focus on job protection and creation

– a commitment to ‘substantial financial commitments’ for climate change action

– an expeditious timetable for far-reaching reform of the international financial regulatory system

– the building of a new model balanced economy encompassing democratic institutions and open to dialogue with trade unions.

The TUC has also endorsed the statement and written to Chancellor Alistair Darling to encourage him to play a ‘leading role’ in persuading other G20 nations to support the aims of the international trade union movement.

The STUC is running buses to the event from Glasgow, Edinburgh and Aberdeen – no online details are available at the STUC’s website but can be accessed via the link to travel arrangements on the specific G20 St. Andrews website. A counter-conference event is also taking place in parallel in London and is being organised by Put People First.

Make your voice heard!

TUC Recession Report No. 12

The TUC has published its most recent commentary in this insightful and well-researched series today – you can access it via Nicola Smith’s posting for the TUC’s Touchstone blog here.

The headline figures are that unemployment in the June-August period is, at 2.47m, static on the previous month’s figures (for May-July), but higher than the same period in 2008 by 677,000. The unemployment rate is 7.9%, an increase of 2.1 percentage points on 2008, while the employment rate was 72.6% – 1.8 percentage points down on the same point in 2008 but an increase of 0.1 points on the figures for the previous month.

The TUC comments that unemployment is likely to continue rising into 2010 – small falls in unemployment, or rises in the employment rate, may be more of a blip than a sign of the corner being turned – but the rate at which it is increasing may be beginning to slow. Certainly this recession, despite its length and the sharpness of the drop in GDP, has had a lesser impact on employment than we could have expected on the basis of previous recessions – perhaps a testament to the policy decisions taken at an early stage in the recession.

This month’s special analysis focuses on child poverty not least in the light of the potential impact of the recession on the government’s 1998 commitment to end child poverty by 2020 – to which all the major parties are now committed. Recent progress has been poor and it looks likely that the 2010 milestone of halving the 1998-99 level of child poverty will be be met. However, taxes and benefits do substantially reduce poverty levels and are also a powerful force to reducing levels of inequality – it is unlikely that as much progress as had been made during the 1990s would have been achieved under a government less concerned with harnessing the tax and benefit system towards such aims.

Protecting the real value of benefits, to say nothing of ensuring that they are not reduced in absolute terms, has a key role to play in ensuring that the amount of relative poverty, as well as income inequality, does not become worse during a recession or in the subsequent recovery period.

World Day for Decent Work

… is today. Trade union organisations around the world are organising events and initiatives publicising the themes of the day. Tonight, at Congress House, Linton Kwesi Johnson and Jean ‘Binta’ Breeze are joining TUC Deputy General Secretary Frances O’Grady for a night of rhyme, rhythm and reason (and food)

WDDW is an initiative of the International Trade Union Confederation, the global confederation of trade union organisations. Decent work issues encompass, amongst others at the global level, migration; discrimination; equality; forced labour; human trafficking; child labour; other core labour standards such as the right to bargain collectively and the freedom to organise; freedom of expression; laws and agreements; the informal economy; climate issues (green jobs); health and safety; social protection; poverty and food crisis; and social dialogue.

More broadly, the context for WDDW is the threat to the jobs and futures of people everywhere as a result of the economic and employment crisis, and their background in decades of deregulation and in the greed and excess of a tiny minority which have pushed the world into the deepest recession since the 1930s. Decent work must be at the centre of government actions to bring back economic growth and fundamentally to reform the global economy so that it puts people first.

TUC’s 11th Recession Report

This was published today and can also be accessed over the usual route via the TUC’s excellent Touchstone blog.

The headline figures from the brief are that ILO unemployment now stands at 2.47m (7.9%) and has risen for 14 successive months. It now stands 743,000 people higher than at the same quarter one year ago. Some 560,000 people have now been out of work for over one year. Meanwhile, the population in work stands at 28.9m – representing an employment rate of 72.5%, a decrease of 2.1 points on the figure one year ago.

The Report also includes some very interesting data on out of work benefits with which to respond to right wing commentators, as well as on lower-paid workers which is the group hit hardest by the recession.

The special commentary this month is on the adequacy of benefit rates for unemployed people. Starting from the perspective that Jobseeker’s Allowance is lower today relative to average earnings (it’s just 10%) than was the case for unemployment benefits in the 1980s (c. 17%) and 1990s (c. 15%) recessions, the TUC is renewing its call for an increase in JSA to at least £75 per week (a £10 increase). This is where JSA would now be if the incoming Labour government in 1997 had re-introduced the informal link between unemployment benefit and movements in average earnings abandoned by – yes, you guessed it – in 1980. The link existed for a very valid reason – it ensures that people out of work over a period of time do not lose relative ground on those remaining in work, thus holding back the growth of inequality given the obvious links between existence on benefits and families in poverty.

TUC joins lobby for a jobs G20

TUC General Secretary Brendan Barber is joining a fifty-strong lobby by union general secretaries from around the world of world leaders in Pittsburgh. The aim of the lobby, which will involve several meetings with heads of government and global institutions, will be to argue the point that Friday’s G20 summit should be a summit for jobs, aimed at helping people survive the recession and overcome poverty by facilitating a return to decent work offering good wages.

The ITUC argues as part of the research for its Pittsburgh Declaration that the global crisis will have cost 59m jobs by the end of the year – equivalent to the whole population of the UK – and that unemployment across OECD countries could reach 10% in 2010, and rise still further into 2011. Furthermore, it could lead to 200m more people falling into poverty. In this context, it is unarguable that the G20 must address the need to create work if economic recovery is not to stall as a result of a lack of demand.

The union lobby is a useful reminder of two things:

– that, whatever the technical, economic definitions of recession related to GDP, a recession continues while people are losing jobs – and that this is likely to be for some time after the recession has technically ended

– that an ending to the crisis does not mean an end to discussions about what caused it, from the perspective of preventing it from happening again. In contrary to any quick return to ‘business as usual’, economic policy remains very much a contestable area of public policy. As Barber argues:

Governments need to be talking to employers and to unions – not just when there’s a crisis, but to stop the next crisis from happening. We need millions more green jobs, tougher rules on top bankers’ bonuses, and a fairer global economy – and millions of people around the globe will be looking to Pittsburgh this week for just that.

Leslie Manasseh re-elected to TUC General Council

The results of this year’s election to the TUC’s General Council have been declared and Leslie Manasseh, Deputy General Secretary of Connect, has been re-elected in Section F.

Congratulations Leslie and best wishes for the next twelve months on the Council.

DC not making up for DB

It’s often assumed that the declining private sector provision of defined benefit schemes is compensated for – at least, in terms of coverage – by defined contribution schemes. Research published today show that even this limited scenario is not the case, with the falling percentage of the private sector workforce covered by DB schemes meeting with a percentage of the population covered by DC schemes which is, at best stagnant. More than three in five private sector workers have no pension at all.

At the same time, the percentage of the private sector in DC schemes which have an employer contribution rate in excess of 8% – i.e. which operate at the sorts of levels which might deliver a comparable pension to DB schemes – is a little over 7%. So, only around one in three members of DC schemes are earning a pension which might be assessed as adequate.

The TUC Press Release announcing the figures carried some useful statistics, which I have graphically presented here:

The action that Congress will be calling for this week on quality pensions is timely; indeed, it is overdue. As the motion says, defending quality pensions isn’t about attacking the pensions of public sector workers; it is instead about trying to do something that will ensure that workers in the private sector gain access to pensions better than they currently receive – ones which will do little more for them in retirement than leave them relying on the state.