20 SEPT

Mike Theodoulou’s Blog

ECONOMOIC RECOVERY MUST LEAD TO BETTER PAY

There was a headline in the Western Mail recently which claimed that Wales is leading the way in new jobs and has created more job opportunities than any other part of the UK. Not totally convinced I read the piece very carefully and found that all these opportunities exist in and around Cardiff and are limited largely to the financial and call centre sectors.

Not much use to our unemployed local people then.

The experts tell us that there are signs of an economic recovery and I believe this but it will be patchy, it will be slower in places and it will be fragile. For me a sure sign of recovery is the pronounced movement in the price of gold. It has dropped significantly in the last few weeks as people leave the relative safety of the gold market and return to the stock market.

So if indeed we are at the beginning of economic recovery what have we learned? What should we do differently?

There is a long list of things but I am more concerned about what is needed in my community, my town and my county. Now not many people will know this but the County in Wales with the highest levels of minimum wage earners, according to the Low Pay Commission for last year, is Carmarthenshire. It is so bad that it is actually one of the worst in the whole of the UK.

Local people should also realise that our own County Council has almost 3,000 council jobs paid less than the living wage.

We also have a high percentage of zero hour contracts, part time work and temporary employment. There is therefore without doubt a low pay culture in Carmarthenshire and to varying degrees the rest of Wales.

It is perhaps one of the most difficult things to convince small businesses about - that low pay is actually not that good for business. A low pay culture is a negative economic dynamic. It is a cancer to ambition, it destroys confidence, it breeds low expectations, discourages investment and cuts off growth.

There are two other very important reasons why our local businesses (and let us not forget our County Council) should offer better pay to local workers as the recovery takes shape.

Firstly if we all did this to some extent then there will be an increased level of money circulating in the local economy which means more spending power and that is very good for business and very good for our communities.

Secondly, in this harsh competitive world, small local businesses may not be able to compete with the giants of commerce on price but they can on service, care and perhaps more importantly by being responsible businesses and seen to pay a fair wage to local workers.

There is no doubt that when a local business is seen to put something back into their community then that community is far more likely to support that business.

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