Rich benefit more from 'social wage' than the poor

The First Minister's speech outlining his five-year vision for the new Scottish Government was, as usual, shrewdly constructed and brilliantly executed. There was much to admire and the STUC looks forward to working with this government to help deliver key shared objectives.

"For the sacrifices we must all make, there is a reward in the form of a society geared to our values," argued Alex Salmond in describing the "social wage" which underpins his vision for Scotland. Significant real-terms wage cuts might be the order of the day, but the impact will be offset by the council tax freeze, free prescriptions, free higher education and so on.

The problem is that this approach offers more to a rich individual than an unemployed person on benefits who receives nothing from a council tax freeze while confronting rising inflation, cuts in public services and a scarcity of decent job opportunities. The social wage does not begin to address the lack of decent work and living wages in the private sector.

The proposed public sector pay freeze means thousands of workers who earn less than the average wage will lose up to 1000 in real terms next year - 20 times as much as they will save through the council tax freeze. Unions will oppose a continuing pay freeze because, if implemented, the situation will worsen with a real-terms loss of more than 2000 by 2015.

For three decades and more, the Scottish economy has failed to generate sufficient good jobs to underpin a thriving society. Public money subsidises vulnerable, minimum-wage employment and outsourcing continues to threaten living standards. If the social wage is to mean anything, the government must address the factors working to reduce economic security in these troubled times. Maximising quality, sustainable job opportunities is a good place to start.

• Grahame Smith is general secretary of the Scottish Trades Union Congress