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Growing gulf in jobs and wages

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NEW RESEARCH shows the widening gap between the incomes of people at the top and those at the bottom. It also exposes how 'average' figures hide the truth. 'If Mr Brown's aim was to create a more equal society, he has failed,' said the Financial Times.
Issue 1863

NEW RESEARCH shows the widening gap between the incomes of people at the top and those at the bottom. It also exposes how ‘average’ figures hide the truth. ‘If Mr Brown’s aim was to create a more equal society, he has failed,’ said the Financial Times.

The gap between rich and poor is now greater than under Margaret Thatcher’s and John Major’s Tory governments. New Labour’s policy changes have handed out small amounts of cash to people who can navigate through the maze of benefit regulations. At the same time the government has encouraged business to shovel money into the hands of the rich.

The average disposable income of the top 10 percent of earners has risen by 25 percent since Labour came to power. The disposable income of the bottom 10 percent has risen by just 8 percent. Alan Manning, an academic at the London School of Economics, says there is a polarisation between high paid executive jobs and the new, low paid, jobs that are being created.

‘There are more good jobs around in managerial and professional occupations, but also more bad jobs in shops, bars, restaurants and caring,’ he says. ‘The middling jobs of craft and clerical work are disappearing. Unchecked, this trend will lead to widening inequality in our society.’

Some 66 percent of full-time workers are on less than the average wage. For part-time workers it is even worse. This trend has undermined the impact of the minimum wage. Paul Gregg, an economist at the University of Bristol, says, ‘The latest research suggests that the minimum wage legislation is not really biting.’

Terry Leahy – Tesco Boss

£916,000 salary, up 8.8 percent £8,000 profit sharing £1,002,000 short term bonuses £847,000 long term bonuses £2,422,000 gain on 1.4 million share options

Rich break record

TOP COMPANY directors are still awarding themselves massive bonuses and pay rises. The bonanza in boardroom pay that has been running since the mid-1990s shows no signs of slowing. This was exposed in Labour Research’s annual survey of top directors’ remuneration.

Pay rises for the highest paid stock exchange company directors averaged 12.4 percent over the past year. That is three, four or five times as much as workers have received. There is a record number of directors in the over-£500,000 category (568) and also in the £1 million plus category (152).

It is the ninth year in succession now that the average pay rise for these executives has been in double percentage figures. Tax the rich!

New warning of a recession?


THE NEWS and financial information provider is planning to move much of its operation to India to cut costs and boost profits. Hundreds of jobs will go. Among those affected are 350 staff based in Tiverton in south west England and 65 in Edinburgh.

When Reuters was floated on the stockmarket in 1984 executives in the media companies which previously owned it grabbed huge handouts. Now jobs are being sacrificed to boost profits. Reuters is in the middle of a 3,000-staff redundancy and cost-cutting programme dubbed Fast Forward.


THE PAINTS and chemicals group announced 1,400 job cuts on top of 700 job losses announced in May. On the same day the cuts were announced, bosses collected £50 million from the government to ‘help secure jobs’ at a chemical factory partly owned by ICI. The money is supposed to make the Ineos Chlor plant at Runcorn on Merseyside more environmentally friendly.

Trinity Mirror

THE NEWSPAPER publisher also plans to cut 550 jobs following a review of the business by chief executive Sly Bailey. The company publishes national titles including the Daily Mirror and has a portfolio of about 260 regional newspapers.

It said it was looking to achieve annual cost savings of £25 million by 2005. These job losses show what is going on beneath the surface of the British economy. Gordon Brown may like to claim Britain is avoiding ‘boom and bust’. But the Scottish economy may already be in recession, according to official Scottish Executive data released last week.

Blair’s Britain

Deepcut victim: father speaks

AN INDEPENDENT inquiry into the deaths of four soldiers at the Deepcut barracks in Surrey has forced the police to delay their own report into the deaths. The police report was expected to slam the culture of bullying at the barracks and the way the army had handled the investigation, but conclude that the recruits were not murdered.

However an independent inquiry by ballistics expert Frank Swann found that it was ‘highly unlikely’ in three of the cases that they had taken their own lives. Geoff Gray, the father of Private Gray, told Socialist Worker, ‘When the Surrey police say that there was no third party involvement, it’s complete rubbish. ‘We’re still pushing for a public inquiry. We have 173 MPs and Amnesty International supporting us. How long can the government ignore us?’

38 more to join NHS scheme

THE GOVERNMENT has invited an additional 38 hospitals to apply for foundation trust status, to join the 25 already being considered. Legislation to bring in foundation trusts has yet to go through the House of Lords and faces growing opposition from MPs, trade unions and health service bodies.

The Bill creating foundation hospitals only had a majority of 35 in the Commons last month. The foundation scheme is targeted at hospitals with the three-star rating. But evidence this week showed that patients did not think three-star hospitals were any different to those rated as zero stars. Foundation hospitals would create a ‘two-tier’ health system.

Leaked plan to scrap schools

PLANS TO turn all comprehensives into an education equivalent of ‘foundation hospitals’ have come to light in a leaked letter from Charles Clarke, the education secretary.

The plan would see the comprehensive system scrapped and replaced with ‘selective specialist schools’. These already make up over half the 3,000 secondary schools in England. New Labour offers schools £100,000 to convert to the new system, plus £123 for each pupil for the first four years.

Police action led to injury

POLICE DELAYED treatment to a critically ill man which later resulted in brain damage because they thought he was drunk. Yorkshire police have paid £310,000 in damages. They assumed David Powell was drunk and had collapsed.

They arrested him and he was found slumped in a police cell 90 minutes later. After he was rushed to Leeds general infirmary doctors discovered he had a blood clot. But it was too late to treat much of the damage to his brain.

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