What do decent pay and conditions and economic growth have in common?

It goes without saying that the more money people earn the more they spend.

That’s no different for local government workers.

In fact, 1.5m local government workers’ earnings make a huge impact on the economy as a whole and they could make a much bigger one if so many weren’t on poverty pay, Unison believe.

At the recent Local Government Association conference, Unison took a quick poll of councillors, chief executives and officers. 

The question we asked them was did they believe that pay cuts and job losses for council staff are contracting demand in the local economy to the detriment of local business. 

A massive two-thirds (66.4%) of the 247 people who responded agreed or strongly agreed that this was the case.

With that in mind, it seems ridiculous that we are still having to argue for the living wage (in London set at £8.55 an hour and £7.45 outside the capital) to be the basic rate of pay across all local councils. 

You just have to walk along any local high street to see the sorry spectacle of shops boarded up or the proliferation of betting shops, pay-day loan outlets and pawn brokers.

Each boarded up shop represents a business failure, the end of someone’s dream to own his or her own shop; to start up a thriving business. 

It also represents serious lost revenue to councils in the form of business rates, as well as lower VAT and tax receipts for the Treasury.

The problem is so bad that some councils are seeking to turn local shops into housing – much-needed no doubt – but a failure by councils to support their local business community.

So we see a vicious circle of decline. 

Research shows that 53% of local council workers’ pay ends up in the cash tills of local businesses, shops and cafes.

In many areas, the council is the largest employer too.

That money should be the lifeblood for traders but, with pay rates set so low, council workers cannot afford to go out and spend. 

Many are struggling with the rising costs of food and fuel.

With winter approaching, low paid workers will again face the dilemma of heat or eat.

Unison has reported a large increase in the number of members turning to our welfare fund for help with multiple pay-day loans, the cost of school uniforms and for debt advice.

It is clear that the cuts to jobs and services are really taking a heavy toll.

Local councils have a responsibility to their workforce and to the community they serve.

A shocking 500,000 local government workers earn below the living wage.

If they had received pay rises in line with the retail price index over 2010-13 – instead of a three-year pay freeze and a below inflation increase this year - their pay would be 18% higher – and would have reached the living wage rate.

At the TUC next week we will be arguing for a new and fair settlement for local government and no more cuts to council services. 

In doing so, we will also be calling for decent pay and conditions which promote local economic growth. 

Surely a win-win situation.

Heather Wakefield, Unison’s head of local government
She is speaking at an evening fringe on the Living Wage organised by War on Want at the TUC in Bournemouth on Monday 9 September, alongside Rachel Reeves, shadow chief Secretary to the treasury, Paul Mason, Kat Banyard and a representative of the Indian Garment Workers union