Wage cut is price many workers pay to keep jobs: More employers are targeting salaries in an effort to keep their costs down. Barrie Clement reports

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The Independent Online
AN INCREASING number of employees are presented with a dilemma: to take a drop in wages or lose their jobs. Many are accepting cuts of up to 10 per cent.

The most highly publicised example is at London Bus where employees of the publicly-funded service are being paid up to pounds 60-a-week less. Workers have expressed their anger in two 24-hour strikes.

While bus workers have consistently voted at union meetings to reject the cuts, the company has approached them individually with, according to the Transport and General Workers' Union, threats of dismissal if they do not accept new employment conditions. Management argues that it is simply reducing wages to the level paid by bus contractors with whom it has to compete to run an increasing number of routes.

Wage cuts have also been forced on thousands of ancillary workers at local authorities and hospitals, through 'contractorisation'. This trend is about to extend to workers who are paid even less than support staff in the public sector. The present Employment Bill will abolish wages councils which dictated basic pay for about 2 million workers, 80 per cent of whom are women.

Since the 1986 Wages Act, which removed workers under 21 from wages council protection, unions report reductions in the going rate for jobs. Apprentice hairdressers, for instance, are now paid about pounds 1 an hour, according to Sweatshop Britain a study published today by the shopworkers' union, Usdaw. The Government argues that wages councils constitute an unwarranted interference in the labour market.

But the Bill will also make it more difficult for employers to impose wage reductions. A clause has been inserted that will mean employers will have to give their workers 90 days' notice of new employment conditions. That will bring British law into line with EC legislation.

In previous years cuts have been temporary and cushioned by a reduction in working time or a one-off lump sum. This time round, possibly because of a continuing decline in union power, reductions have been relatively unvarnished.

At the Costain construction group, employing nearly 3,000 workers, a 5 per cent cut is planned for the 12-month period until 1 April next year. The cut applies to all those on more than pounds 11,500 a year.

John Brown Engineering at Portsmouth has implemented a 10 per cent reduction for its 750 employees from 1 February, promising to review it in July.

Leading article, page 19

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