Category: Work

Why is the UK suffering from a Labour Shortage?

There are over 1 million job vacancies in the UK in September 2021, but Brexit isn’t the only reason!

There are currently over a million job vacancies in the UK, which is the most since the Office for National Statistics started keeping records!

Vacancies are mainly concentrated in low-skilled, low paid sectors such as:

  • Fruit and Vegetable Harvesting 
  • Care work  
  • Hotel work – cleaning and making beds

The BBC (link above) provide a very handy overview here:

The consequences of Labour Shortages

The Today Programme (R4 Tuesday 14th September) interviewed Ali Capper, the owner of Stocks Farm in Suckley and chair of British Apples and Pears who stated that she had advertised locally for 70 apple and pear pickers, had only 9 applications, of which one had actually followed through by doing the job.

She pointed out that her industry relies mainly on Eastern European seasonal migrant workers from countries such as Poland and Romania, and there are fewer migrants coming to the UK to work – across the fruit picking industry farms are between 10-35% down on their usual labour force.

In some cases, labour shortages are so bad farmers are telling local consumers to come and help themselves, giving away their produce for free as the only other alternative is to let it rot in the fields.

The Today programme also interviewed a guy who runs a business collecting and cleaning laundry from 12 London hotels who says that labour shortages have forced him to reduce the scale of his business – he has had to turn some of his clients down because he can’t get the staff – despite increasing wages from £10 to £15 an hour.

Why are there so many vacancies in these sectors?

Some of the growers themselves blame the government’s immigration policy since Brexit, claiming it is ideological – they refuse to let more people from Eastern Europe and expect companies that traditionally rely on workers from these countries to adapt and recruit locally.  

Analysis from The London School of Economics however suggests that things are a bit more complex. They idenfity the following reasons:

  • Many migrant workers went home during the the Pandemic to be closer to family and now many of them are reluctant to come back, at least partly because of improved opportunities at home – this was a trend BEFORE the pandemic and Brexit!
  • Brexit has made it more difficult for new migrants to come to the UK and it’s reduced the number of people wanting to come here to work because it’s tainted the UK’s image.
  • These jobs are simply too low paid to attract sufficient people to do them!
  • There are still many people on Furlough, reducing the available labour pool though that is set to come to an end shortly.

On further question we might ask is how so many people in Britain can afford NOT to work – the unemployment rate may be historically low, but there are still 3% of the population unemployed, meaning there are sufficient people in the country to do the jobs, but who are presumably able to survive without working.

The New Right might suggest the government needs to make life more difficult for these people shirking work!

Relevance to A-level sociology

These labour shortages illustrate the problems that can happen when globalisation slows down as a result of international migration becoming more difficult (whatever the reasons) and remind us how crucial global flows of labour are for keeping our economy going.

This topic probably isn’t the most relevant to any of the main modules, but it does apply somewhat to the topics of globalisation and migration, the later being relevant to the family module.

It’s also quite a nice one to get students to apply sociological perspectives too, just to get them thinking!

Please click here to return to the homepage – ReviseSociology.com

McDonald’s – Are they really offering their employees a better deal?

McDonald’s is one of Britain’s biggest employers, employing 115 000 workers in over 1300 stores. It is also one of the biggest users of zero hours contracts.

However, following a series of protests over these contracts, the company has recently offered all its workers the choice of staying on ‘zero hours contracts’ or moving onto a fixed contract, with varying hours in length on offer (from 8 to 35 hours a week in line with the average hours they worked). (News article here.)

Based on an initial trial of 23 stores, McDonalds reported that 80% of the workers opted to remain on zero hours contracts, rather than shift to the guaranteed hours contracts.

Personally, I’m suspicious about this. It just doesn’t sound right that 80% of employees would choose to stay precariously employed.

Could it be that the offer of fixed-hours contracts weren’t that appealing – maybe they came with a total lack of flexibility, with workers only being allowed flexibility on zero hours contracts. Maybe the contracts offered some employees the kind of hours that they could not work – early mornings for those with children, for example. Again, a non-starter.

This would fit in some recent survey research conducted by McDonalds which revealed that

  • 60% of people wanted to start earlier than 9 a.m.
  • Nearly 60% saw flexibility as an important aspect of their job
  • 50% of employees would rather work longer days 4 days a week and get a longer weekend.

(Based on a sample of 4000 people, 1000 of whom were McDonald’s employees.)

Or it could be that many of these workers were only getting an average of 16 hours a week or less, which is not enough hours for them, so having a guaranteed contract of 4, 8, or 16 hours, with the possibility of no additional hours, was not a viable option.

Of course, McDonalds are now bragging about the fact that they offer their workers the choice of guaranteed hours, or zero-hours contracts, but we don’t know is how viable those guaranteed hours contracts are for the workers offered them.

Personally, I’m suspicious. It’s probable that those fixed hours contracts had a combination of insufficient hours, or the wrong kind of fixed hours, and thus the workers offered them had no realistic choice at all!

Another thing McD’s may have done is deliberately select those stores with high numbers of people who want zero hours – those with a lot of further or higher education students working in them, for example, thus skewing the stats. (That’s what I would have advised them to do, if I was evil enough to work in the business of manipulative market research.)

In any case, this is a great example of some research that probably isn’t value free, and also a great example of biased media reporting.

Related posts

If you like this sort of thing then you might like my summary of Mathew Taylor’s review of modern working practices, which very much focuses on flexibilization.

Why are trades unions in decline? And does it matter?

Trades Unions membership is in decline in the UK, but why is this, and what is the social significance of this seemingly depressing social trend?

The Trades Unions Congress celebrated its 150th anniversary recently, but it seems there is little to celebrate: Frances O’Grady, the TUC’s general secretary has admitted that the union movement needs to ‘change or die’ in the context of declining membership and action.

Membership levels among the under 30s fell to 15.7% last yea, down from 20.1% in 2001, and industrial action is also declining: last year there wre only 79 stoppages, the lowest figure since records began.

decline trades unions UK.png

According to Zoe Williams in the Guardian, the reason for the declining membership among the young is because they are increasingly employed in low-wage sectors where unions are not recognised: and when people are on zero-hours contracts, working in the gig-economy, or trying to get on the first step of the career ladder by doing an unpaid internship, it is difficult to find the support, time or energy to get organised.

As a result, Kenan Malik, writing in the observer, has suggested that unions are increasingly becoming clubs for professionals – as people with degrees are twice as likely to be part of a union than those who have no qualifications.

However, there are also deeper reasons for the decline in industrial action including the following: there are new laws restricting trade union power; technological advances which facilitate more home-working and flexible working hours mean that day strikes and picket lines less effective.

It might also be that working conditions have generally improved: last decade saw the introduction of the minimum wage and then the national living wage, and there have been new laws to tackle discrimination and improved health and safety legislation.
It could just be that unions in general and strikes in particular have had their day

Relevance to A-level sociology

  • Probably the most obvious application is that this is one of the dimensions in the shift towards post-modernity – maybe unions, with their mass membership and place-based day-strikes were more relevant to the modernist era, while in a postmodern age of flexibalised working they are just not the appropriate vehicle to effectively improve the working conditions of the precariat?
  • It also serves as a reminder of the class and age divide around unions – generally older more educated people are in them (the established and technical middle class?) while the younger and less educated are not (the precariat especially)

Sources:

Sociological perspectives on the relationship between education and work

Functionalism

Main post on the functionalist perspective on education.

Education teaches us specialist skills for work – At school, individuals learn the diverse skills necessary for this to take place. For example, we may all start off learning the same subjects, but later on we specialize when we do GCSEs. This allows for a complex division of labour to take place.

Role Allocation and meritocracy – Education allocates people to the most appropriate job for their talents using examinations and qualifications. This ensures that the most talented are allocated to the occupations that are most important for society. This is seen to be fair because there is equality of opportunity – everyone has a chance of success and it is the most able who succeed through their own efforts – this is known as meritocracy

Marxism 

Main post on the marxist perspective on education.

The reproduction of class inequality and the myth of meritocracy – In school, the middle classes use their material and cultural capital to ensure that their children get into the best schools and the top sets. This means that the wealthier pupils tend to get the best education and then go onto to get middle class jobs. Meanwhile working class children are more likely to get a poorer standard of education and end up in working class jobs. In this way class inequality is reproduced

School teaches the skills future capitalist employers need through the ‘Hidden Curriculum (e.g. pupils Learn to accept authority; they learn to accept hierarchy, and motivation by external rewards)

Paul Willis

Willis described the friendship between the 12 boys (or the lads) he studied as a counter-school culture. Their value system was opposed to that of the school. They looked forward to paid manual work after leaving school and identified all non-school activities (smoking, going out) with this adult world, and valued such activities far more than school work. The lads believed that manual work was proper work, and the type of jobs that hard working pupils would get were all the same and generally pointless.

Feminism

Stereotypical views of teachers and careers advisors as well as peer group pressure means that subject choices are still shaped by traditional gender norms – which limits the kind of jobs boys and girls go onto do in later life.

Even though girls do better at school, they still get paid less than men, so qualifications do not necessarily result in more pay!

The New Right

Main post on the new right and education

The mid 1970s was a time of rising unemployment in Britain, particularly among the young.  It was argued that the education system was not producing a skilled enough workforce and that the needs of the economy were not being met. From the mid 1970s both the Conservative and Labour governments agreed that education should be more focussed on improving the state of the economy by providing training courses for young people in different areas of work.

This emphasis on meeting the needs of industry became known as ‘New Vocationalism’ which first took off in the 1980s.

How to Improve Work in the United Kingdom

Below is my summary of chapters 6-11 of the Taylor Review of Modern Working Practices, which deals with what needs to be done to make work better for more people in the UK.

Executive summary: we need to deal with the following areas:

  • Legal issues – we need greater clarity in the law pertaining to employment status and employment rights (dealt with in chapter 5) and we need fairer enforcement when people make claims against their employers (dealt with in chapter 8)
  • Flexible worker arrangements – we need to make sure that flexibility isn’t one sided, we need to make sure it benefits all workers, not just a companies and some workers (dealt with in chapter 6)
  • We need to make sure business is responsible – which includes making sure that workers feel more ‘included’ in work, or that work is less ‘alienating’ (chapter7)
  • Taxation – We need to re-jig the taxation system so it’s fairer for the employed and the self-employed (chapters 9 and 10)
  • Education needs to play a role in getting people ready for the future challenges of employment.
  • Worker progression – employers need to provide more opportunities for workers to progress.

Legal issues/ Improving Clarity in the Law (chapters 5 and 8)

The context for this chapter is that the law surrounding work and workers’ rights is becoming more complex given the diversification of types of work.

There are currently three types of ‘worker’ in the UK (according to UK employment law) – employees, self-employed and ‘workers’.

  • Most people in the UK will be ‘employees’, with the full range of employment protections available. This is because the majority of people still work in traditional, full-time roles.
  • For others who are genuinely self-employed, employment protections do not apply. For those who are neither employees nor self-employed,
  • the status of ‘worker’ provides a relative safety net, ensuring that a group of more casual workers are protected by a set of baseline rights – such as the National Minimum Wage

The report basically argues that there is too much confusion in, for example, gig economy work, over whether workers are genuinely self-employed or not – basically, companies such as Uber have tried to defined their workers as self-employed, while at the same time effectively controlling the hours they work, but recently Uber employees managed to win a court judgement that they were in fact ‘workers’ rather than ‘self-employed’, meaning they are now entitled to more protections than they would have been under the ‘self-employed’ label.

However, there is still a lot of work to be done in setting down guidance over how to determine whether an employee is genuinely self-employed or a ‘worker’ for a company such as Uber.

Chapter 8 deals with the problems workers face if they wish to make a legal challenge against their employer through an employment tribunal – the basic problem seems to be that it costs a few hundred quid to bring an employer to a tribunal and workers need to prove their employer is in the wrong, rather than the other way around.

The report recommends that the onus be on the employer to prove they are employing their employees under decent conditions.

Flexible Working/ Tackling One Sided Flexibility (chapter 6)

This chapter starts off by noting certain advantages of flexibility:

  • It can enable business to respond to changing market conditions and has supported record employment rates.
  • Individuals have the opportunity to work in a range of different ways, on hours that fit around other responsibilities, such as studies or caring responsibilities.
  • The Labour Force Survey published in March 2017 found that almost one fifth of people on zero hours contracts are in full-time education, and 68% of those on zero hours contracts do not want more hours.

There are also certain disadvantages:

  • There is an issue of flexibility not being reciprocated, with a requirement to be available for work at very short notice, without any guarantee that work will actually be available.
  • Flexible work makes it very difficult for a person to manage their financial obligations, or for example secure a mortgage, which can feel unfair, especially when the reality of the working arrangement is that the individual regularly works 40 hours a week.
  • While in theory individuals in these working arrangements have the right to turn down work, many are afraid to do so because of fear of unfair dismissal.

The report notes that ‘too many employers and businesses are relying on zero hours, short-hours or agency contracts, when they could be more forward thinking in their scheduling. Workers need to be able to make informed decisions about the work that they do, to plan around it, and to be compensated if arrangements change at short notice’.

It also notes the following, specific problems and recommendations

  • There are problems with the 26 week period before a lot of ‘workers’ rights kick in.
  • Some agency workers aren’t clear how much of their wages is going to be deducted in tax/ NI – this needs to be made clearer by agencies.
  • It’s unclear how holiday rights can be worked out for casual workers whose hours of work vary from week to week.
  • Workers who have been on temporary/ Zero Hours contracts for 12 months should have the right to request permanent/ guaranteed hours contracts.

The report cites two examples of companies which have got it right with their flexible employment policies – For example the Brewery Adnams and (surprisingly?) McDonalds:

Brewing company Adnams used zero-hour contracts to accommodate the seasonal nature of the business. However, through involvement in the Beyond Pay inquiry, they recognised how this contributed to employees experiencing in-work poverty. They moved all their existing staff onto contracts that guaranteed a minimum number of hours a week. To tackle low pay, they reduced and redistributed bonuses paid to their senior team.”

‘In April 2017, McDonald’s offered 115,000 UK workers on zero-hours contracts the option of moving to fixed contracts with a minimum number of guaranteed hours every week. The fast-food chain offered fixed-hours contracts after staff in its restaurants complained they were struggling to get loans, mortgages and mobile phone contracts because they were not guaranteed employment each week.

The company found that about 80% of workers in the trial chose to remain on flexible contracts and it reported an increase in levels of employee and customer satisfaction after the offer. Staff were offered contracts in line with the average hours per week they worked. This included contracts of four, eight,16, 30 or 35 hours a week

Responsible Work

This chapter is about two things – worker voice and transparency.

Worker Voice

The report recognises that worker voice (having a say in the way the business is run) is an important part of workplace satisfaction.

Those in routine jobs report the lowest levels of satisfaction (57%), while GIG economy workers (maybe surprisingly) report high levels of satisfaction. It’s recognised that worker voice isn’t really a problem in SMEs.

There is legislation in place to make sure that management consult workers over management decisions (especially on restructuring issues) but this only covers large employers with over 50 employees.

Transparency

This simply says companies should report on how many workers on zero hours contracts have requested guaranteed hours, and how many of those on temporary contracts have requested permanent contracts.

The recommendations for this section are pretty wishy-washy – reviewing legislation etc.

Taxation (chapter 9)

Currently, the different rates of National Insurance in particular mean that the UK system of taxing labour is not neutral – a self-employed person doing the same work as an employed person can pay a different amount of tax or National Insurance despite receiving similar contributory benefit entitlements in return.

The self-employed no longer pay any of the employer NICs contribution and their own rate is now lower than the employee rate: an employee pays NICs on their earnings at a rate of 12%, and their employer pays 13.8% on top of this.

For example, someone earning an average UK salary (around £28,000) would pay £2,095 in National Insurance if they were employed. But they would pay £159 less if they were self-employed.

In addition, the employed person’s employer would have to pay £2,409 in National Insurance on top of this. But the self-employed person does not face this charge. This means that for both the individual and their employer, they will pay less in tax/NICs if they are self-employed rather than employed.

These differences in tax are even larger for people working through their own company.

The Review considers that this situation is not justified, or sustainable, nor is it conducive to the goal of a good work economy, mainly because self-employed people generally enjoy the same protections as employed people, yet pay less tax.

Chapter 10 deals with the issue of self-employment, making the following recommendations:

  • Making it easier for self-employed people to take up traditional employment alongside their self-employed work.
  • Encourage flexible benefit platforms tied to individuals, not companies.
  • Encourage the self-employed to save more.
  • Move towards non-cash transactions to avoid ‘cash in hand work.

Chapter 11 – the relationship between education, training and work

The government’s main strategy for boosting work related training in the last decade has been increasing the number of apprenticeships – and it is now committed to providing 3 million of them (I assume running concurrently).

Apprenticeships are now partially funded through an ‘apprenticeship levy’ which is now placed on large employers (with a pay bill of over £3 million) in order to encourage them to take on apprenticeships (the arguing being if they’re paying for it, they may as well benefit from it!). However the report argues that a blanket level this isn’t fair as some large organisations simply don’t use apprentices, while some smaller firms (who don’t pay the levy) might.

The report also expresses concerns (almost as if Apprenticeships are a bit of a red-herring) about the radical decline of in-work training – only an extreme minority of those currently in-work have any kind of updating or progression training in recent years.

There is also concern about the growing difference between the type of education/ skills people have and the kind of skills required for work. At the top end, there are too many graduates and not enough graduate jobs, and at the bottom end there are too many very low-skilled people.

Another thread in this chapter is the need to equip workers with the skills that enable them to transition from job to job, because most people will switch job several times in their careers, and so learning how to reskill is crucial. A related point here is that the government needs to commit more to ‘lifelong learning’.

Finally, schools and colleges need to do more to teach ‘soft skills’ through courses and provide work experience, to get pupils ready for the real world of work.

Very finally, the report recommends banning unpaid internships because these are so damaging to social mobility.

Chapter 12: Opportunity to Progress

This chapter firstly deals with atypical workers – those most likely to be in low paid, temporary, part-time or gig work – namely women and younger people, arguing that there are sufficient legal instruments already in place to protect these workers, and the only recommendation it makes is to change the regulation on statuary sick pay to make sure that the very lowest paid workers have a right to it.

In terms of progressing (in one’s career) the report doesn’t really say very much here – other than it is possible to ‘progress’ while doing flexible work, and that self-employment might be an important element here.

Final chapters

The report rounds of with going over its seven recommendations for making work fairer, which I summarised in this post.

Overall summary: how to make work ‘work’ for more people

The overall message seems to be that work is fine for most people, and that in general there’s sufficient regulation in place to protect most people.

Some of the ‘stand out’ specific recommendations the report makes are:

  • To give ‘temporary and flexible workers’ more rights and protections:
    • To reduce the period (currently 26 weeks) of time before ‘temporary workers’ get the same protections as permanent workers
    • To give temporary workers the right to request a permanent contract after a certain period.
  • To clarify the difference between ‘worker’ and ‘self-employed’ so that employers can’t exploit people.
  • To force companies to be more explicit and transparent about their terms of employment for temporary and flexible workers.
  • To make the self-employed pay more tax.
  • To get schools and colleges to better prepare pupils for a life as a ‘portfolio worker’.

 

An Overview of the UK Labour Market (2017)

Adapted from Taylor’s ‘Good Work’ Report (2017). This report reviews the current state of work and makes (some fairly limited and piecemeal) policy recommendations about how to make work fairer for more people.

Characteristics of the UK labour market

The Review coins the term ‘the British way’ to describe the current working landscape in Britain – Full-time, permanent work remains the norm, but other ‘atypical’ arrangements are usually chosen and valued by the individuals concerned. The authors argue that this system works effectively for most people, and hence their recommendation that we should aim to improve the quality of work within this existing framework.

To back up this view (that work ‘works’ for most people, numerous evidence is given including the following:

  • In recent years the UK labour market has been characterised by strong performance, with record high levels of employment and the lowest unemployment rates since 1975. The current employment rate of 74.8%8 is the highest since records began. The unemployment rate, at 4.7%, is the lowest since 1975. The inactivity rate9, at 21.5% is the joint lowest since records began.
  • The UK is widely recognised as having one of the most flexible labour markets in the world. The UK is rated as having the 5th most efficient labour market in the World, which is seen as vital for economic productivity.
  • Full-time, permanent work as an employee continues to make up the majority of employment in the UK (63.0%). However, there has been a notable shift towards more flexible forms of working overtime, with changes in levels of self-employment and part-time working in particular.
  • Currently, almost 26.2% of employment is in part-time work, compared to 25% in 1997 and self-employment now accounts for around 15.1% of total employment.

Key trends in the way we work

‘Traditional’ full-time employment continues to dominate the UK labour market and has only declined 1.6 percentage points from 64.6% to 63.0% over the last twenty years; with the most noticeable fall occurring during the most recent recession.

This section outlines some of the trends in ‘atypical work’ of which part-time and self-employed working are the main sub-types.

Employment by type UK
Enter a caption

Part time work

  • Part time work makes up 26.2% of total employment, and has generally been on the rise for the past 20 years.
  • The majority of part-time workers (70.7%) say that they do not want a full-time job.
  • 4% of part-time workers say that they are working part-time because they could not find a full-time job.

Self-employment

  • Self-employment reached a high of 15% of total employment during 2016.
  • Self-employed people are slightly more likely work part-time than those in regular employment.
  • Joinery, plumbing and construction are the largest sectors for self-employment.

Agency work

  • There is a lack of robust data on the number of agency workers in the UK.
  • Estimates range from 800,00 to around 1.2 million.
  • The Recruitment and Employment Confederation (REC) estimate of 1.2 million is generally considered to be more reliable,

Temporary workers

  • Temporary workers, who include temporary agency workers, account for around 1.6 million of the total number of UK employees.
  • Around a quarter of temporary workers (25.5%) state that they do not want a permanent job, while 27.4% say that they are a temporary worker because they could not find a permanent job.

Zero Hours Contract

  • 905,000 people (2.8% of those in employment) are reported to be on a zero hours contract.
  • 65% of people on zero hour contract work part-time (65%).
  • Younger people, those aged 16-24, are also more likely to work on a zero hours contracts and account for one third of total zero hours contracts.
  • 18% of those on a zero hours contract are in full-time education
  • Whilst data suggests that there have been large increases in the number of people on zero hours contracts since 2012, this increase is, at least in part, due to an improved recognition of this type of contract. This means that we cannot know with certainty that zero hour contracts are on the rise and in fact reported numbers have stabilised in recent periods.

Multi-jobs

  • Approximately 1.1 million people, or 3.5% of the total number in employment, have a second job.
  • This proportion has been fairly stable at between 3.5% and 4.0% for the last ten years.
  • This official data probably doesn’t include people earning additional money in a more casual way, through the use of online platforms for example. McKinsey Global estimates that 20-30% of the working age population are engaged in independent work. This includes self-employed people but also accounts for people using sharing or gig economy platforms e.g. individuals renting out rooms on Airbnb, driving for Uber, or selling goods on eBay or Etsy.

Gig economy work

The gig economy tends to refer to people using apps to sell their labour. The most commonly used examples are Uber and Deliveroo but there are many and a growing number of platforms facilitating working in this way.

  • The Chartered Institute of Personnel and Development (CIPD) estimate that there are approximately 1.3 million people working in the gig economy in the UK, equivalent to 4% of the UK workforce.
  • 58% of gig economy workers are permanent employees, which suggests that most gig economy workers use gig work to supplement income from more ‘traditional’ employment,
  • Research suggests that the gig economy will continue to grow.

The report also notes that limitations with current survey data means that we do not know for certain how many people are undertaking gig economy work and whether they are doing so to supplement other work, or substituting employment totally with this type of work.

Why the Labour Market Doesn’t work for everyone

The key factor is an imbalance of power between individuals and employers. Where employers hold more power than employees, this can lead to poorer working conditions and lower wage levels. The relative amounts of power are linked to geographical mobility.

There are also problems pertaining to self-employment….where companies might redefine a worker as self-employed, thus denying them holiday pay and other benefits and there are many examples of increasing media and public concern in relation to worker exploitation.

Two previous recent government reviews looking at this issue are:

  • The Business, Energy and Industrial Strategy Committee’s ‘future world of work and rights of workers inquiry’, prompted by the Sports Direct scandal; and
  • The Work and Pensions Committee’s ‘self-employment and the gig economy inquiry’, focusing on bogus self-employment.

Challenges to future work:

The report lists a number of challenges to future work – including:

  • Poor real wage growth
  • Poor productivity
  • Getting the skills to match the jobs (the proportion of graduates working in low-skilled jobs increased from 5.3% in 2008 to 8.1% in 2016.)
  • New business models and platforms for working
  • Automation

At the end of this chapter the report restates its belief that the UK labour market needs to maintain its flexibility and dynamism in the light of Brexit, it also recommends that we don’t need to do anything about automation yet, and that all we need to do is to maintain a ‘value commitment’ to ‘good work’.

Good Work – The Taylor Review of Modern Working Practices

My Summary of this recent report on Modern Working Practices fronted by Mathew Taylor of the RSA – I’ve had be selective and modified some of the chapter headings so they reflect more clearly the content of each chapter – IMO this is a pretty accurate, much briefer and more readable summary of the report…

Personally I’d label this as part of a neoliberal policy agenda (well it certainly isn’t left wing!)  – I say this because it identifies ‘flexible working’ as a strength of the UK economy and recommends that ‘responsible corporate governance’ rather than regulation is the best way to improve working conditions for the lower paid in the UK.

Chapter 2 – The Scope of the Report  

The authors of the report believe that ‘all work in the UK economy should be fair and decent with realistic scope for development and fulfilment’, and the aim of the report is to suggest some policy changes which can make work ‘work’ better for more people.

‘Good work’ (defined in the next chapter) matters for several reasons: it is crucial to ensure a decent income, opportunities for individual progress, health, productivity, trust and responsibility and enabling us to adapt to change.

The report points out more than once that work for most people is not actually that bad – most people are in full-time employment and once we factor in benefits, take home pay for households with a member in full-time employment is higher than the other G7 countries.

Where more ‘precarious jobs’ are concerned, the report actually identifies flexible working as a distinct strength of the UK labour market and does not advocate increased regulation of employers, suggesting that the problems associated with the so called gig-economy are best dealt with within the existing regulatory framework.

‘We advocate change but in doing so we seek to build on the distinctive strengths of our existing labour market and framework of regulation’.

There are three broad challenges which need to be met in order to make work ‘good’ for more people:

  1. Tackling exploitation and the potential for exploitation at work;
  2. Increasing clarity in the law and helping people know and exercise their rights; and
  3. Over the longer term, aligning the incentives driving the nature of our labour market with our modern industrial strategy and broader national objectives.

The study recommends seven steps towards fair and decent work with realistic scope for development and fulfilment

  1. We need a national strategy to create ‘good work for all’ which balances rights and responsibilities: Good work basically means
  • Everyone has a baseline of protection and there should be routes to enable progression at work (rights)
  • Taxation of labour needs to be more consistent across employment (responsibilities)
  • Work and workers need to be able to adapt to new opportunities, technology is crucial to this.
  1. Platform based working is good because it’s more flexible, but we should be clearer about how to distinguish workers from those who are legitimately self-employed.
  2. We shouldn’t increase the amount it costs employees to hire people, we also need to give ‘dependent contractors’ more protections to make sure employees don’t shaft them.
  3. The best way to achieve better work is not national regulation but responsible corporate governance.
  4. There needs to be more on the job training opportunities so people can progress in work, workers need more control over this.
  5. We need to develop a more proactive approach to workplace health.
  6. We need to maintain the national living wage and provide opportunities to help people progress out of low-paid, minimum wage work so they are not stuck there forever.

Chapter 3: What is Quality Work?

This section examines what is meant by ‘quality work’ – and identifies a number of problems in identifying what ‘quality work’ means.

  1. People are driven by different motivations at different points in their career and so what represents quality to them now may not represent quality ten years later;
  2. People have very different subjective interpretations of what counts as ‘quality work’ – the report came across examples of people doing the same job who reported that it was the ‘best’ and ‘worse’ job they had ever had.
  3. Pay is only one aspect in determining quality work; A recent British Social Attitude Survey revealed that for more than 50% of the UK workforce, a job means far more than just wages – for many people fulfilment, personal development, work life balance or flexibility are just as important to many people – and so we need to measure all of these aspects to find out what quality work is!

The Review takes the ‘QuInnE’ model of job quality, developed by the Institute of Employment Research and others, which outlines six high level indicators of quality:

  • Wages – pay is an important indicator of quality of work, which includes not just wages but also other in work benefits including pensions. The amount someone earns relative to their peers can also affect one’s satisfaction with one’s wages; and there are potential problems with wage insecurity where flexible working is concerned – higher wages may be undermined by insecurity of working hours.
  • Employment quality – covers such things as job security and whether there is a culture of unpaid overtime.
  • Education and training – upskilling is a crucial way in which people can be supported to develop their skills at work in a meaningful way, and yet the amount of people receiving in-work training decreased from 10% to just 6% of the workforce between 2010 and 2016.
  • Working conditions – this covers the amount of control workers have over their work, and the amount of autonomy at work – the increasing shift to self-employment and platform based working suggests that there is increasing demand for more autonomy at work.
  • Work life balance – 75% of workers report that they are satisfied with their ability to set their own working hours, while 68% report that they are satisfied with their work-life balance. Certain groups believe flexible working is more important – almost twice as many women as men report that flexible working is ‘very important.
  • Consultative participation & collective representation – having a greater say in the organisational decisions which shape work can result in greater well-being at work.

Quality work as a series of trade-offs

This section rounds off by seeming to suggest that workers can’t have it all – if they want greater flexibility, they are probably going to have to settle for lower wages for example – but that it’s important to give people the freedom of opportunity to decide what trade-offs they want to make.

The rest of the report outlines the ‘state of the UK labour market’ before going on to outline more specific details of how we can make work better for more people’.

‘Good Work – A Summary, Part 2 – An overview of the UK Labour Market and Challenges to Future Work.

‘Good Work – A Summary, Part 3 – How to make work better for more people.

 

Why workers aren’t benefiting from the automation of jobs…

The increasing automation of jobs could (should?) result in us all working less – but instead, most of us seem to working just as longer hours as ever, why is this – a little dose of Marxism actually goes a long way to explaining this…

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The automation of jobs – no longer limited to the manufacturing sector

What’s below is taken from the LSE blog (Jan 2015), written by David Spencer….

Technological progress has advanced continuously over the past century, pushing up productivity. But not all the gains in productivity have fed through to shorter work hours. At least in modern times, these gains have been used to increase the returns of the owners of capital, often at the cost of flatlining pay for workers.

The lack of progress in reducing time spent at work in modern capitalist economies reflects instead the influence of ideology as well as of power….

David Graeber makes the provocative claim that technology has advanced at the same time as what he calls “bullshit” or pointless jobs have multiplied. This is why we have not realised Keynes’ prediction that we’d all be working 15-hour weeks in the 21st century, as a result of technological progress.

Instead, we are living in a society where work gets created that is of no social value. The reason for this, according to Graeber, is the need of the ruling class to keep workers in work. While technology with the potential to reduce work time exists, the political challenge of a working population with time on its hands makes the ruling class unwilling to realise this potential. Working less, while feasible and desirable, is blocked by political factors.

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