Employers are bracing themselves for a crucial battle on wages after trade unions signalled their intention to secure higher pay.
In an exclusive interview with Personnel Today, Tony Woodley, general secretary of the Transport and General Workers’ Union (T&G), said he had written to 250 of his negotiating officers instructing them to “raise their sights” on pay settlements. He is targeting above-inflation rises across the UK.
“My big push for 2007 is to get all our people fighting to bridge the wealth gap that is growing to get people a fair reward for the wealth they are creating,” he said.
Private sector union Amicus confirmed it would also be fighting for higher wages. “This is important, and is an issue for all our negotiators in forthcoming pay rounds,” said a spokesman.
Philip Whyte, senior economist at analysts the Economist Intelligence Unit, acknowledged employers faced a “very difficult” pay round in both the public and private sectors. “There is evidence that living standards have been eroded by inflation, and people are getting restless,” he said. Inflation hit 3% last month – its highest level for 11 years – while interest rates rose to 5.25%.
Whyte urged the unions to show restraint in their tactics. He said: “The best advice would be for unions to show a bit of discipline on wages, allowing the Bank of England to keep interest rates down. This will allow inflation to fall back down, increasing employees’ purchasing power.”
David Frost, director-general of the British Chambers of Commerce, insisted jobs would be cut if wages rose. “Everyone would like to see more money, but if we increase wages above current levels, there will be job losses,” he said. “The businesses we represent are working under intense competition from across the globe.”
Manufacturers’ organisation the EEF also said the pressures of inflation needed to be balanced against the need to safeguard jobs.
Union calls for higher minimum wage
The national minimum wage should be increased from £5.35 per hour to £7.50 per hour, according to Tony Woodley, general secretary of the T&G union. “That is the least people can live on,” he said. “The minimum wage has become a maximum wage, and it is a poverty wage.”
But David Frost, director-general of the British Chambers of Commerce, said “tens of thousands of jobs would go” if the wage was raised to that level.
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