Poverty in Wales — Mike Hedges AM

The state of the Welsh economy, poverty and low pay are all interrelated. A successful Welsh economy should drive up wages and reduce poverty. Too many of the people living in Wales are employed on “flexible” (exploitative) contracts with no guarantee of weekly income based on variable hours and the government set minimum wage.

Whilst much of the recent debate has been on zero hours contracts unfortunately this is not the only “flexible” employment practice used by employers. Other “flexible” employment practices include short guaranteed hours, split shifts, annualised hours and using agency staff. As well as the traditional short term and temporary contracts there has been a growth in the number of these “new employment” practices.

Increasing numbers of companies are taking on staff on ‘zero-hours’ contracts. Zero-hours contracts provides employers with a pool of people who are ‘on-call ‘and thus puts the all the financial risk on to the employee whose income is not guaranteed.

A variation on zero-hour contracts is where there is a guarantee of as little as one hour a day and when people arrive at work they then discover how long the shift is going to be. Starting at 8:00 am you may finish at 9:00 am or have to work until late in the evening depending on workload and the number of people who are available that day. This is a highly disruptive work pattern because you are unable to make plans for any part of the day until the day itself and also wages vary from week to week. One concern is that if zero-hour contracts get banned this will be their replacement.

With both zero hour and short weekly or daily guaranteed hours means that there is no certainty of income on a weekly or monthly basis. This leads to severe financial problems when few or no hours are worked in any week(s).

Using staff employed via an agency means most employment responsibilities are then with the agency. After twelve weeks in the same role working for the same employer, agency workers are entitled to the same employment and working conditions as permanent staff. Crucially however agency workers are not entitled to benefits, such as occupational sick pay, redundancy pay and health insurance, the right to claim for unfair dismissal, and minimum notice of redundancy where they are working. This means that agency staff are much easier to dismiss than directly employed staff.

I believe that the case for everyone to be paid at least the real living wage as defined by the living wage foundation is overwhelming. I don’t believe that it makes sense that the government enforces a minimum wage that is not considered enough to live on and renaming it the living wage can only lead to confusion with the “real living wage”, which is why I believe the living wage as defined by the living wage foundation is desperately needed.

One of the biggest problems facing us in Wales today is in work poverty which is something the living wage would help address and one of the Westminster government’s biggest problems is paying in work benefits which again paying a living wage would help address. I believe that the government has a moral duty to ensure a decent standard of living for all.

There are also benefits for employers, the living wage foundation report says “A Living Wage Employer ensures that all employees are paid at least the Living Wage, this includes individuals who work on a regular basis at your premises for a subcontractor, such as cleaners or security staff. Living Wage employers report improved morale, lower turn-over of staff, reduced absenteeism, increased productivity and improved customer service. “

Our ambition for Wales must be to create a high wage and high skilled economy and becoming a living wage country would be one further step along that road. We cannot afford it, and it will cost jobs has been the argument used against all progressive change from the abolition of slavery to the minimum wage.

I believe that would make Wales a fairer country and this is a policy that all of us living in Wales could be proud and one we as socialists should be campaigning for.

Actions the Welsh Government can take

1) Ensure all public sector workers employed by bodies directly funded by the Welsh Government are paid the real living wage

2) Make paying the real living wage be a pre-condition for contracting with public sector bodies funded via the Welsh Government either directly or indirectly

3) Make paying the real living wage a pre-condition of grants and loans to private companies.

4) Banning exploitative contract by Welsh Government funded bodies and their contractors and sub-contractors

5) Making financial support for companies both grants and loans dependent on non-exploitative contracts

This only gets us so far

What we need is more high paid employment

The Welsh economy is significantly weak in many of the high paid high skill sectors of the economy

What we need are policies that work to support the growth of Welsh companies and establish new ones.

We in Wales are no less skilled, entrepreneurial and capable than anywhere else in the World.

Mike Hedges is the Assembly Member for Swansea East.

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