It's not just a balancing act: work must work for workers

The British economy is unbalanced regionally and by sector, but at core, it must fix a deeper problem: work doesn't work for workers.

Alex Wood
26 August 2014

Many workers are in a precarious position...

Both the economy and living standards are clearly being held back by both sectoral and geographic imbalances in the economy. However, it would be wrong to envision an alternative to the current economic mess purely around these imbalances. Doing so constitutes an overly economistic outlook which ignores the real nature of the problem whilst obscuring the real alternatives. In this article I hope to demonstrate that the real problem is the nature of paid work, and a real alternative, therefore, involves not only quantitative increases in paid work but also qualitative shifts in the nature of that work. This is necessary so as to make work work for workers not capital.

Making work work for workers can be understood in two senses and both are important. For the second will be argued as providing a pathway towards the achievement of the first. Firstly, this phrase aims to highlight that work should be beneficial for workers, not only materially but also psychologically. However, it also conveys the idea that workers, not capital, should control the nature of their work. In order to demonstrate that worker control is necessary (from the perspective of increasing the material and psychological wellbeing of workers); it is first necessary to outline the major problems which exist with paid work as it is presently constituted. Only once we have grasped these major issues can we turn to the institutional fixes which could alleviate them.

Work isn't working for workers

The 2012 Skills and Employment Survey found that 25% of workers were experiencing job insecurity. This figure is shocking as it's nearly 5% higher than in 1986, even though unemployment was around 25% higher at that time. The same survey also found that 52% of workers suffer anxiety about loss of job status. Moreover, zero-hour contracts have captured the public imagination, with there now being more than 1.3 million of these contracts in existence. However, the focus on ‘zero-hours’ actually hides the much wider problem of generalised schedule insecurity. Although no estimates of schedule insecurity exist, it is probably extremely high, across Europe 35% of workers indicate that they have changes in their work schedule. Moreover, empirical research has consistently found job related insecurity to be associated with anxiety, stress and depression.

Growth in real wages, according to the ONS, has been declining since the 1970s from 2.9% in the 1970s and 1980s to 1.5% in the 1990s and 1.2% in the 2000s, and there has been, on average, negative growth since the beginning of the crisis. Ominously this evidence suggests that the 1.2% growth of the 2000s is unlikely to be returned to. Moreover the compositional decline of manufacturing does not account for this reduction. However, averages hide a key fact, that there has also been a growing polarisation of wages and arguably of job quality too. For a century growing unionisation and collective bargaining raised the quality and wages of many low skilled jobs. However, the industries in which unions were strongest have declined dramatically since the 1980s, being replaced by employment in non-unionised service sector jobs. This has led to a hollowing out of the middle of the occupational structure. There are many high skilled, good quality and well-paying jobs on one side of the divide but there are also many low skilled, low quality and poorly-paying jobs on the other.

Many workers are over-worked and their scheduling is rigid, making it hard for them to balance work with their family and social life. Yet, simultaneously many other workers are plagued by insecure hours and insufficient work. Currently 1.4 million workers are involuntarily in part-time jobs, whilst 2.2 million workers are officially unemployed (not employed and looking for work), with many more having given up on finding reemployment and being classed as economically inactive or having been forced into precarious self-employment – problems exacerbated by the workfare policies of New Labour and the Tories. Unemployment has also been consistently found to be associated with anxiety, stress and depression. Even six years after the crisis there can be no doubt that there remains a chronic problem of underemployment in the UK.

Supporting unions and worker co-ops

The contemporary UK labour market then can be summed up, as being marked by declining real wage growth, insecurity, polarisation of wages and job quality and chronic over-work for some workers and simultaneous devastating underemployment for others. A deficit of worker control connects all these issues together, as greater worker control tends to lead to: higher pay for less skilled jobs - thus making pay more equal, greater job security, transforms negative schedule insecurity into positive worker controlled flexibility - which can help the achievement of work/life balance and enables workers to improve the quality of their jobs. Less inequality and greater income security also boosts consumption creating demand and creating more employment and reducing underemployment.

Worker control can be exercised via two main avenues, firstly through workplace collective associations, traditionally unions, but as Walmart and Fast Food Workers are proving in the United States, less hierarchical network forms of organisation may now be viable. Since the 1980s the number of UK union members has halved, whilst less than a third of workers are now covered by collective bargaining. Even where bargaining exists it is often limited to pay, rather than the wider conditions of work. Reversing this decline in organised labour is paramount to increasing worker control over work, doing so requires unions to adopt innovative network forms of organising. But cross national research also highlights the importance of state based institutional supports such as the legal requirement for businesses to have works councils and democratic worker representation on company boards, frameworks for national collective bargaining and a legal system which doesn’t curb workers human right to engage in union activity – as so frequently it does in the UK.

A fuller and more direct route for achieving of worker control is provided by worker co-ops. However, this path has proven, in the past, more difficult and thus less well trodden by the left. Worker co-ops are a form of business which is democratically run and owned by their workers. The balance of the evidence suggests that worker co-ops are just as efficient, if not more so, than conventional firms. But due to the biases of conventional financiers, worker co-ops have regularly struggled to raise the necessary funds in order to constitute an effective alternative to conventional firms.

Again research shows that state based institutional supports are required for workers co-ops to be viable. Such supports include the setting up of co-op development banks, the creation ‘cooperative bonds’ - so co-ops can access capital markets without workers losing control and tax supports. For example, the growth in Venezuela from 800 co-ops in 1998 to over 30,000 by 2007 is argued to be largely down to lower tax rates for co-ops and greater access to cheap credit. More radically, workers should have the legal right to buy out their firm and employers should be mandated to create ‘employee funds’, funded by a percentage of a firms profits, and controlled by the workforce in order to buy shares in that firm - similar to those which existed in Sweden in the 1980s. For more detail on possibilities provided by worker co-ops and how they can be realised see Tom Malleson’s recent book ‘After Occupy: Economic Democracy for the 21st Century.’

An alternative to the current misery of the labour market cannot be built on nostalgia and romanticism for the industrial manufacturing of the past. Let us not forget that much manufacturing work was highly alienating and mind numbing. We need ‘real utopian’ solutions which must analyse the world as it is today, and then seek to transform it. Attempting to rebalance post-industrial capitalism into a new equilibrium, so as to enable business as usual is no alternative. Overcoming declining real wage growth, insecurity, wage and occupational polarisation, over-work and underemployment means making work and the economy work for workers not capital and that means that work must be democratically controlled by workers. In the short term through workplace associations such as unions and in the long term through the transition to an economy based largely upon worker co-ops.

This article is part of the Modernise: de-privatise series.

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