High wages can drive high productivity; but under the Conservative Government, wages in London fell by 1.2% per year in real terms compared to a rise of 0.8% from 2002 to 2010.
Britain needs a pay rise. But under the Tories, workers have suffered a pay cut. Average real wages and productivity have stagnated.
To boost productivity requires investment in skills, infrastructure, R&D, access to finance by firms and a range of other factors.
But there is evidence raising wages helps raise productivity too.
This is because it acts as a spur to firms to invest in new technology and training, boosting productivity and maintaining profitability. It also helps to reduce turnover of workers, motivate staff and foster loyalty to the firm, again helping raise productivity.
While wages increased consistently under the last Labour government, they have stagnated under the Tories and the evidence shows no sign of recovery. Here in Tower Hamlets, under a Labour government, wages grew by 0.8%, in real terms, between 2002 and 2010. But since the Conservatives came to power in 2010, fell 1.2%, in real terms.
Labour would act to boost the wages of workers, including the introduction of a £10 Real Living Wage by 2020. To boost productivity and help the economy, we must boost workers’ wages.
Rebecca Long-Bailey, Shadow Secretary of State for Business, Energy and Industrial Strategy, said:
“It is a sign of the Government’s complete economic failure that productivity and real wages are lower now, than 2007.
“Raising productivity is a complex issue and will involve measures which include increasing private and public investment in skills, capital and R&D, access to finance for firms. But boosting wages is key too. Higher wages act as a spur for firms to invest in new technology and skills so as to become more productive and maintain profitability.
“Labour plans to take measures to boost wages, including the £10 an hour minimum wage by 2020.”
Jack Dromey, Shadow Minister for Labour, said:
“Britain needs a pay rise. Our economy and our country cannot succeed on low wages and low productivity.
“The Tories have let Britain and British workers down. Under the last Labour government, wages went up year-on-year. However under the Tories, wages have declined in real terms.
“The evidence is clear – Britain will only succeed in the global marketplace as a high-wage, high-productivity, high-quality country, with Labour in government.”
Jim Fitzpatrick, MP for Poplar and Limehouse, said:
“Labour introduced the minimum wage in 1999- the Tories voted against it. They said it would cost jobs and damage the economy but unemployment fell and the economy grew stronger.
“Low pay for working families means more children grow up in poverty, which affects their mental and physical health and limits their chances at school. This in turn has huge negative impact on the economy and one of the many reasons why I fully support a £10 Real Living Wage.”