Home Page Menu
View from the Chairman
Equality vs Austerity = Pain
At a time when police officers pay, conditions and pensions are under attack as never before, a paper written by Prem N Sikka, Professor of Accounting at the Centre for Global Accountability at the University of Essex, made me reflect on the financial dire straits that some of my younger in service police colleagues must be in, as this prolonged period of austerity is really starting to bite and hit home.
For Professor Sikka equitable distribution of income and wealth is a necessary condition for building a sustainable economy. Without this people cannot buy necessary goods and services and recessions become inevitable.
In 1976, the wages and salaries paid to employees expressed as a percentage of gross domestic product (GDP) came to 65.1%. This period coincided with high trade union membership and low unemployment. By 1996, after the 'Thatcherite privatisations', attacks on trade unions and the comparative demise of the manufacturing sector the wages and salaries paid to employees added up to 52.6% of GDP. Ever since then the wages and salaries going to employees have hovered around 53% OF GDP, a post-war low.
The ordinary employees' share of GDP is likely to be much lower because the above statistics include the amounts paid to company executives. A 2011 study by the High Pay Commission reported in the previous decade the remuneration of FTSE 350 directors went up by 187% whilst ordinary workers barely gained in real terms.
With wage freezes and dilution of pension rights, the amount of paid employees is likely to decline to well below 50% of GDP before the end of this decade. Faced with the erosion of their purchasing power ordinary people rely on debt to survive. The outstanding personal debt is about £1.412 trillion, the highest per capita in Europe.
Inequitable distribution of income and wealth is a key reason for the economic crisis. Sadly, it is hard to think of any government policy which might correct the position.
So much for, we're all in this together! Go tell that to the young constable working mornings, afternoons and nights in keeping us all safe, struggling to get by with a mortgage to pay and a family to support. Debt is the cloud hovering over their heads that is getting darker with each passing day.
John Giblin MA, BScEcon (Hons), CMgr, FCMI, PGCE, PGCC
Chairman Sergeants' Central Committee
Police Federation of England and Wales
Click Here For Previous Chairmans Views