What would an economy truly built on solidarity look like?
What do low paid workers in Britain and Greece have in common? On the surface, not a great deal.
Whatever our thoughts as on-lookers to the latest episode of the on-going Greek tragedy, we might be forgiven for breathing a big sigh of relief ‘at least not us.’ But that might be cold comfort, if you are one of the million working families who are still struggling to make ends meet.
The growth of working poverty
As it was revealed this week, almost two thirds of children living in poverty in the UK are now doing so in a family where someone is in work. A poll last year by the UK’s leading union Unite, found that one in three workers on the minimum wage cannot afford to shop where they work, and one in five young workers on a minimum wage admitted to have resorted to a food bank over the past year.
Hence the growing support in the Church and more widely for the Living Wage campaign. As John Sentamu, Archbishop of York said at the launch of the Living Wage Commission report last year, “Working, and still living in poverty, is a national scandal. If the Government now commits to making this hope a reality, we can take a major step towards ending the strain on all of our consciences.”
Living Wage: Beware false imitations
But beware false imitations. George Osborne’s announcement in the Budget of a substantial increase in the National Minimum Wage is undoubtedly good news – but as the Living Wage Foundation has made clear, Living Wage it is not. An increase from £6.50 to £7.20 is clearly welcome, but a real Living Wage would be at least £7.85 an hour – and £9.15 in London.
But whilst the Chancellor claims he wants to “put hard-working people first”, he is offering increased wages with one hand – and taking it away far greater sums with the other. Even the Daily Mail reported that Tax Credits had been ‘slashed’ in the budget – precisely the bit of the benefits system specifically targeted at supplementing the wages for low paid families who struggle most to ‘make work pay.’
According to the independent Institute for Fiscal Studies, three million of the lowest paid families will be on average £1,000 a year worse off. Yet again, it is the poorest who have been asked to pay the highest price for tackling the deficit.
Excluding a small number of the very wealthiest, the richest half of households have yet again escaped largely scot free. In fact, anyone rich enough to be able to pass on a £1 million home to their children will pay no tax whatsoever. Cutting inheritance tax will mean happy days for the top 10 per cent.
The Grecian tragedy: Unpayable debt, untold poverty
And this brings me to Greece. As with the UK and the wider global economic crash, the essence of the Greek tragedy is that the banks lent too much. Greece is now suffering under a burden of unpayable debt. The International Monetary Fund (IMF), not known for its sympathy, has reported that Greece would face an unsustainable level of debt by 2030 even if it signs up to the full package of tax and spending reforms demanded of it.
It is now generally agreed that Greece has experienced an economic crisis on the scale of the US Great Depression of the 1930s.
But who is being asked to pay the price? Not the banks or institutional investors, who have lent untold billions. And certainly not the relatively wealthy Germans and other northern Europeans, who have shown remarkable disinterest in the plight of their struggling Greek counter-parts.
How bad are things for the people of Greece?
In the five years from 2008 to 2013, Greeks became on average 40% poorer. Jobs are increasingly difficult to come by in Greece – especially for the young. While a quarter of the population are out of work, youth unemployment is running much higher. Half of those under 25 are out of work. In some regions of western Greece, the youth unemployment rate is well above 60%.
George Katrougalos, the Greek deputy interior minister is reported as saying that austerity had “practically destroyed Greece: We have lost one-fourth of our GDP, practically one in three people are unemployed, half the population is around or below the threshold of poverty.”
As in the UK, so also in Europe: It is the poorest and most vulnerable who are forced to pay the price of wider economic failure. As the Old Testament prophets understood, unchecked debt gives undue power to the lender and ineluctable results in the poor getting poorer.
Solidarity: The basis of the Good Society
Christian faith – and the founding fathers of the European Union – hold a much bolder vision: That of a Good Society: A society in which, rather than simply extracting ever greater wealth from the poor, the rich exercise solidarity with their fellow citizens and human beings.
As Pope Francis has said “No one can remain insensitive to the inequalities that persist in the world … I would like to make an appeal to those in possession of greater resources, to public authorities and to all people of good will who are working for social justice: never tire of working for a more just world, marked by greater solidarity”
Seven years on from the global economic crash of 2008, is it not time for those on above average incomes in the UK, Germany and across Europe to show a little bit more solidarity to those suffering the most from the consequences of an economic crisis not of their making?