How much is a pay rise worth?

How much is a pay rise worth?

This article started life as a bit of a joke with a good rank and file activist. We were talking about the appalling pay offer from the ECA to the JIB, and how much wages have gone down in the industry over the last couple of years. When he said, half jokingly, that the general rule of thumb was that you used to be paid about 5 pints an hour, then he asked me how much a pint was in London. Now obviously the cost of a pint varies from about £3.50 in Wetherspoons, to £5 if you want to drink somewhere nice that doesn’t smell like sick (if the companies do ever want to measure our wages by pints, they will probably pick the 25p a can Tesco value lager). But even at Wetherspoons rates we’re not getting our 5 pints an hour. What it did get me wondering though is how much exactly our wages have lagged behind the cost of living, so I decided to do a little research.

The first thing I had to decide was when to start the comparison from, I decided to start it from the 2010 pay rise, because that is when wages really started to stagnate as we subsequently never received a pay rise for 3 years.

Secondly I decided to use the Approved Electrician rate as the comparison, as Approved Electricians make up 61% of the workforce. I also decided to use the out of London rate as that covers the biggest area, compared to the inner London or the SJIB rates. Lastly I decided to compare wage rises to the Retail price index (RPI) for that year, as I feel that this gives a truer account to the cost of living compared to the consumer price index (CPI), as it takes into account mortgage payments etc.

I would like to add at this point that this method here is obviously not infallible. For instance it doesn’t take into account that most of us are employed through bogus self employment, through agencies and can only dream of earning the Jib hourly rate, let alone get holiday pay. It also doesn’t take into account that some regions would have seen a much higher rise in the cost of living than others, especially when it comes to property prices and rents. However I feel this gives a very basic outline of where we need to be pushing the wages to, to even get back to pre recession levels, let alone advancing them.

So here are the results in total. If the current ECA offer is accepted by 2016 an Approved Electrician for outer London will be on £15.47 an hour. If wages had/will keep up with inflation since the beginning of 2010 they would be on £17.82. In other words by 2016 Approved Electricians will have seen a real terms pay cut of 13.2% since 2010.

Below is a graph showing the way the cost of living has outstripped our wage. In Blue is the JIB rate, in Red is the rate we would have if we had received a pay rise in line with the rate of inflation.

Now many would argue that this is perfectly understandable with the decline in construction output, since the start of the recession. However this same reason doesn’t seem to apply to the wealthy, the Sunday Times Rich List tells us the top 1000 have doubled their wealth in five years, the UK has more billionaires per head of population than any other country and that London is the world capital of the super rich (http://www.huffingtonpost.co.uk/john-nickson/britain-billionaire-capital-of-the-world_b_5350133.html). And in our industry, the fact is construction output has been expanding and even taking in to account a small blip in July is expected to reach pre recession levels in the next two years (http://www.ft.com/cms/s/0/13579616-3a5a-11e4-8ee4-00144feabdc0.html#axzz3DPreVZyT) And (http://www.cityam.com/1407115483/construction-body-sees-industry-adding-about-11bn-economy)

Whilst I was putting the finishing touches to this article Unite held a shop stewards meeting in Leeds. The ECA have removed the Entrant grade from the deal which is great news, but the poultry offer of 2% for 2015 and 3% for 2016 still stands. At the meeting after lengthy discussion the stewards voted to send the offer out to ballot, with a recommendation to accept. I believe this is a massive mistake.

During my research I looked up the expected RPI rates for 2014 (2.5%) and 2015 (3.4%) (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/345687/201408forecomp.pdf ). The rise in the cost of living for 2014 and 2015 is expected to be 5.9% in total, the ECA have offered us 5% over two years, in other words the stewards recommendation is to accept a 0.9% pay cut in real terms on an already diminishing wage.

I want to make it very clear that I do not believe the stewards are deliberately trying to sell us short in anyway, or are being underhanded. They are all excellent activists who fight for their members, and I will stand and fight along side them over all future battles. I just believe they are wrong on this issue.

There is the argument that we may not have the numbers to fight and should wait till we build our forces. The truth is however that people will only join a union that is willing to fight for and with them. With ever dwindling membership numbers in our sector of Unite, in two years time at the next pay talks when no doubt the employers will try their deskilling agenda again, we will be starting from an even weaker position.

In the run up to the recent public sector strike on July 10th, Unison had its best recruitment week in its history, why? Because they were fighting back, and it's what we need to do if we want to survive as a construction sector within Unite.

As we head into the Autumn we are seeing a wave of workers fighting back against dwindling pay and pensions, health workers, fire fighters, council workers and in schools and colleges will all be taking strike action. The TUC is organising a major demonstration with the slogan ‘Britain needs a pay rise’ on October 18th. We should be linking our fight with theirs, by getting a big construction contingent on to the demonstration.

If construction will be back to pre recession levels in the next two years so should our pay. We should demand as a minimum 7% a year for the next two years, plus of course the end of bogus self employment, the use of agencies as the main form of employment and the banning of Umbrella schemes.

Lastly we should be voting to reject the offer when the ballot paper are through and demanding from our Union a national ballot to join the mounting strike wave as soon as possible just like we did during the BESNA dispute. Because by acting collectively all together, we can finally get the pay we all deserve.


Written by London RnF