There’s a line in a song in David Gray’s seminal album White Ladder that goes “What we goin’ do when the money runs out?” and I had cause to be reminded of it when I was reading various articles about the anniversary of the National Minimum Wage in the last number of weeks.
Many commentators focused on the fear-mongering that proliferated at the time, foretelling of the economic disaster that would befall the economy and still in 2024 it is being cited by some as the economic force that fuels wage inflation closing the doors of business.
In recent weeks there have been news items north and south bemoaning the perfect storm of costs with minimum wage costs and the cost-of-living crisis being uttered in the same breath whilst inflation percentages are quoted with abandon.
Roll out the economists! Allied to the multiple commentaries that spoke in harsh generalities there were also economic reports either delivering evidence of, or questioning evidence about the good or evil of the national minimum wage.
All this with a view to influencing policy on both sides of the border and with that I thought of the position of the pay review bodies in the public sector and wondered about their future especially when their role is constrained or compromised (depending on your perspective) by things such as them having to have due regard (whatever that looks like in practice) to the government of the day’s inflation target amongst a few other conditionalities.
Last year we a saw a hint of what trade unions may do when some did not engage with the public sector pay review bodies on the grounds that they acted as de facto marionettes for the government. Was this a one off or part of more things to come?
If trade unions lose total faith in these review bodies what does the future of pay determination look like for around 45% of public sector workers in the UK?
As we enter into a new round of pay talks (yes, already!) it remains to be seen where the wage floor argument goes as everyone is watching to see where the percentage increases are pitched, none more so that the small and micro employer who wants to pay staff more but does not want to pass the cost on to the customer for fear of losing trade.
There is no doubt that altruists will clash with business people just as left leaning economists clash with right leaning economists prompting entrenchment and a focus on the figures and the swings and roundabouts of “fair days wage for a fair day’s work” and “we pay the going rate” do the merry dance, perhaps to David Gray, perhaps on the road to Babylon – who knows?
- Mark McAllister is director of employment relations services at the Labour Relations Agency NI
