By 2020 the fruits of growth must be more fairly shared at work, argues David Coats
‘Prediction is always difficult, especially about the future’. This observation, generally attributed to the Danish physicist Niels Bohr, is of particular relevance when we consider the likely state of the world of work in 2020.
For the past 37 years and probably in earlier periods too, commentators have been predicting transformations, upheavals and catastrophic events that have so far failed to materialise. In 1978, for example, Clive Jenkins, the general secretary of ASTMS, Britain’s largest white-collar trade union, was predicting the ‘collapse of work’ leading to a ‘leisure shock’. The pace of technological change, driven by the microelectronics revolution, would render millions of workers redundant. Developed western economies were therefore faced with a painful choice – recognise that work had to be equitably shared or face the social dislocation of mass unemployment. If the work-sharing option was chosen then the task for policymakers was to equip people with the capabilities to fill increasing amounts of leisure time.
Jenkins may have been right about the growing importance of information and communication technologies, but he was fundamentally wrong about the impact on jobs. Here we are today, in a networked world, with 24-hour news, instantaneous video communication, smartphones and computers in every workplace but we also have a high employment rate, a significant minority of people working very long hours and a well-documented phenomenon of work intensification. There is no sign of a leisure shock any time soon.
In 1994 Charles Handy, former corporate executive and management guru, suggested that by 2014 most people would be portfolio workers: self-employed, moving from job to job like independent consultants, footloose, freed from the constraints of office politics and well rewarded, with technology once again the lubricant of this momentous change. Yet today we have stagnant wage growth, growing income inequality and almost four in five workers with a permanent contract. There is little to show that job changes have become more frequent: people spend around 10 years on average in a job today, the same as in 1985.
In too many workplaces people surrender their rights as citizens when they cross their employer’s threshold
The Royal Society of Arts identified the burgeoning of self-employment in Britain as a break with earlier labour market trends, advancing Handyesque arguments about the trajectory of future developments. This work has been taken seriously on the left on the grounds that a structural change of this kind could pose major electoral challenges for Labour. If there are more self-employed people than public sector workers surely that can only be a boost to the Tories? Does this not mean that Labour needs to change its stance on the role of entrepreneurship, the tax treatment of small- and medium-sized enterprises, and the role of regulation?
To begin with, it would be wrong to believe that there has been any break in the historic trend. Hitherto, changes in the level of self-employment have been cyclical – rising in recessions and falling in booms. If people cannot find a job then they may well try their hand at starting their own business. Resolution Foundation research confirms that this may be making a virtue of necessity – almost one in four of the self-employed would prefer a standard employee job if they could find one. Given where Britain finds itself in the economic cycle, it would be unwise to embark on some major new policy departure. We simply do not know whether there has been a break in trend.
The simplest way to think about this is to identify the problems that people at work experience today and extrapolate forwards, making some assumptions about the likely political reaction to events. For example, Britain’s persistent low pay problem is unlikely to disappear unless determined action is taken. This requires a more ambitious approach to the role of the national minimum wage and the Low Pay Commission as well as the development of a strategy to eliminate low pay that is integrated into the government’s approach to industrial policy and employment relations. What recent history proves is that bargaining power matters. Workers have simply proved unable to claim a fair share of the fruits of growth. This trend will continue unless there is a change in policy.
As we think about the possibilities for 2020 social democrats need to remember our fundamental political goals: to ensure that wealth and power are widely dispersed so that all citizens can choose lives that they have reason to value. The principles that we treasure outside work – freedom of association, freedom of speech – are just as relevant inside the workplace. It ought to be an article of faith for those on the left that employers’ decisions must be justified and legitimised with the workforce – not least because this can enhance productivity and boost innovation. Industrial democracy is an essential ingredient in a social democratic economy. It is a big problem that Britain has one of the lowest levels of worker participation in workplace governance in the European Union. In too many workplaces people surrender their rights as citizens when they cross their employer’s threshold.
The choices are stark. Either current trends continue and the country moves towards a new feudalism, where workers must be grateful for their jobs and do as they are told. Or we can revive the notion of citizenship in the workplace, entrench minimum labour standards, establish a proper balance between the interests of workers and the interests of employers and move towards a fairer and sustainable economy, generating the demand on which growth depends. Politics can still have a profound effect on the future of work.
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David Coats is director of WorkMatters Consulting and a research fellow at the Smith Institute
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Read Victoria Groulef and Roy Rickhuss’ responses to David Coats. Articles in the Britain 2020 series are all available to read on the Progress website