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The poverty of recovery

By KD Tait
Six years into the recession women, young people and part-time workers have suffered the biggest drop in living standards since records began in the Victorian era.
Source: www.poverty.org.uk

Source: www.poverty.org.uk

The sharp rise in inequality is the result of a deliberate policy aimed at restoring profitability for the bosses by destroying the social gains of the working class: secure jobs, decent wages and pensions, the National Health Service and the social safety net.

One third of children and 20 per cent of working age adults without children now live in poverty. For the first time, working families living in poverty now outnumber families where no one is in work.

Work doesn’t pay

Millions have had their pay frozen or limited to below-inflation increases. Restrictions on access to various benefits that helped subsidise poverty pay have brought about bumper profits for payday loan sharks and misery for ordinary people.

Over five million people are now classed as “low paid”, meaning they earn less than £13,600 per year, representing 60 per cent of national average income.

Low paid workers in the public sector have doubled to one million, a result of competition with private outsourcing firms, sacrificing workers’ pay to the bottom line. A quarter of local government employees running essential services are paid poverty wages by council bosses who can earn up to £200,000 a year.

But it is the private sector that is the worst offender, with retail workers, cashiers, sales assistants and waiters paid the minimum wage on contracts that provide no job security, pensions or sick pay.

Women and youth hit hard

The destruction of full-time posts and their partial replacement with insecure part-time or zero hours contracts have hit women and youth particularly hard, with 39 per cent of low paid jobs now done by people under 30.

In 2012, 27 per cent of women in work earned less than the living wage, compared with just 15 per cent of men. The loss of hundreds of thousands of public sector jobs has disproportionately affected women, who are also more likely to be sacked, widening the gender pay gap for the first time in five years, to 19.7 per cent.

Instead of investing in training young people to build homes or become teachers and nurses, this millionaire coalition has conscripted tens of thousands into compulsory workfare schemes, which provide free labour for billionaire supermarket bosses.

Cost of living crisis

The wealth of the richest one per cent has increased by 10 per cent in a year. Meanwhile ordinary people are forced to choose between food and fuel, with the Joseph Rowntree Foundation reporting that 350,000 people were forced to use food banks in 2012-13.

The same report shows the cost of electricity, gas and other fuels soaring by 140 per cent in the last decade, while food prices have risen faster than inflation for the last five years. Domestic water charges have risen by 69 per cent in the last decade, while the cost of public transport rose by 87 per cent.

Most painfully of all for many, rents are now rising twice as quickly as earnings are. The government and media demonise housing benefit claimants, but most claimants are in work; and every last penny of the money that they receive lines the pockets of parasite landlords who drive up rents year after year.

Capitalism works for the rich

There is no process that automatically reduces inequality in a market economy.

Although the politics of austerity have impoverished millions, the growth of inequality is the necessary outcome of a system where production is carried out according to what is profitable for capitalists, and not according what is necessary for society as a whole.

As long as society is governed by the anarchy of the market, the working class is compelled to enter a collective struggle to improve its living conditions. The welfare state, pensions and the right to vote were not received as gifts, but the result of struggle. Until we abolish a system run by and for the rich, then we will get only what we take by struggle, in the “recovery” just as much as in recession.

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