Labour: the long and the short.

Jeremy Corbyn’s speech at this week’s TUC conference, reaffirms Labour’s commitment to changing the balance of power within the labour market. Alongside the repeal of anti-union laws, Corbyn promised to introduce sectional collective bargaining, something that still exists in many European countries despite the decline of traditional industries. There’ll be a ministry for employment rights (the equivalent of the post- war Minister of Labour) and a workers protection agency.  Labour has already promised to introduce a £10 per hour minimum wage, to end zero-hours contracts and introduce other safeguards to protect workers in the gig economy and other forms of insecure work – the beginnings of a New Labour State (!)

Meanwhile John McDonnell has also commissioned research on whether some form of  Basic Income can be used to supplement and give people more protection from being completely dependent on low and unreliable wages – a contentious and unexplored issue for many and some  way from becoming Party policy.

All of these should be seen in the context of the Party’s plans for rebuilding  economy and society  through increased public spending and infrastructure investment. For example, Labour highlights an urgent need to invest in technical and further education so as to exploit developments in new technologies like robotics and AI to create ‘new, high-skilled, high paid work across the country’ (2017 manifesto).

These proposals reflect traditional labour thinking and a response to over a decade of austerity.   But as the economy and role of work change, in the longer term, there’s a need for challenges elsewhere. Low wages are often blamed on the UK’s low productivity, but raising productivity through using new technology only translates into higher wages (as neo-classical economics like to tell us) if firms are forced to pay them, rather than ‘marking up’ their profits instead. In addition, some economists now focus on the ‘zero-marginal costs’ (or the real value) of many new information-based products not being reflected in pricing strategies.

In other words the issues go much deeper than current and justified concerns about whether companies are paying proper taxes on their profits, to an examination of the basis of these profits. There are also major doubts about whether there could ever be enough economic growth (green or otherwise)  to generate the amount of jobs necessary to absorb increased skill levels ( and thus create ‘an economy that works for all of us’ ) or whether a few would continue to benefit at the expense of the many).  This leads to questions about work sharing or a reduction in the working week. At a time when UK workers put in more hours than almost anywhere else in the EU, research also commissioned by McDonnell on reducing working hours rejects moving to a 4-day week– at least for the moment.

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