The rich get richer and the poor get poorer

John Clark writes…

First published: March 2005 – Gazette & Herald

Congratulations! Congratulations to the Labour Government for introducing the minimum wage. That isn’t the approach expected by one politician to another political party. The minimum wage is however a step in the right direction albeit decades overdue. It is a lifeline for many people in Ryedale. An immense pity for the low paid is that the minimum wage is not pitched at a level that provides a living wage. Ah, I hear voices of protest; is not the minimum wage about to be increased by 20p/week to £5.05/hour? This is an increase of 4.1%. Sounds fine until this is compared with the fact that wages are rising by 4.5%. Thus the gap between the low paid and the rest of the earning population continues to grow. ‘The rich get richer and the poor get poorer.’

Pensioners have increases but again their incomes are falling even further behind the average, let alone the well off. To say ‘look at the extra bonus for this’ or ‘look at the allowance for that’ doesn’t justify the fact that the gap is widening between the well off and the pensioners in our society.

The message from the above was brought home to me when I saw some figures comparing 1964 to 2004. In these 40 years the average wage grew over 25 times – approximately in line with a pint of beer which rose from 8p (one and six in proper money) to £2.15. The interesting figures came from fuel and food. Fuel has increased by only 16 times from 5p/litre to 82p/litre. In buying power terms fuel in the car costs two thirds of the price in 1964. Added to this is the increased number of miles per gallon modern cars can do (why don’t the metrophiles work this out in metres/litre!) The result is that fuel is less than half of the 1964 cost. Fuel protesters and the politicians who followed them don’t seem to have grasped this point.

Now I come to the real ‘abuse’. The price of milk and eggs. A pint of milk in 1964 was 4p and eggs 18p/dozen. If these were multiplied by 25 times milk would cost £1 a pint and eggs £4.50/dozen. The cheap food policy is paying farmers for milk at less than the cost of production. (Milk costs over 12p/pint to produce yet farmers are being paid as little as 10p at the farm gate.) This is so that milk can be sold for 30p/pint as opposed to £1. The result of this is that we are driving small farms out of business and creating obesity in the British people.

Farmers are not the only ones to suffer from this abuse of the market by the transnationals and the supermarkets. School dinners are contracted out to companies that spend a maximum of 44p on food per dinner. As a result school dinners have become processed ‘rubbish’. The catering companies have to make a profit. School dinners should provide nourishment for children not a profit for catering companies.

The outcome of all this ‘market’ is low wages for the poor and poor quality food for children at school. All in the name of efficiency and profit. How is this efficiency improved by the senior executives of the supermarkets being paid £2 million plus per year? How does this compare with the increase in the minimum wage?