While all major western capitalist economies have experienced a growth in the proportion of low paid, low skilled work especially within the service sector, these trends have been particularly pronounced in the UK. Accelerated by a decade of austerity they have been the deliberate result of an economic model promoted by Boris Johnson’s predecessors.
As a result, the UK is a labour-intensive economy, with much lower rates of capital investment than similar countries – resulting in the number of robots/levels of automation being way below those in countries like China and Germany. The Low Pay Commission estimates that there were 2 million workers paid at or below the official minimum wage (£8.21 for adults) in April 2019 – but about 6 million people (approaching 20% of the workforce) earn less than what’s considered the ‘real living wage’ of £9 an hour or £10.55 – and millions, just a bit more.
Despite the ‘jobs miracle’ which has seen employment reach record levels, rather than reaching ‘full employment’ – which would result in overall wage rises (since the financial crash pay has barely risen in real terms), the UK appears to have an inexhaustible ‘reserve army of labour’. This is partly because there are more ‘24/7’ rather than ‘9 to 5’ jobs – work that can be done at different times, by different types of people not necessarily drawn from the ranks of the ‘unemployed’ (women with child care responsibilities but who can work at evenings or weekends and students who can fit in shifts around lectures, being just two examples). But studies also show large numbers consider themselves ‘underemployed’ – needing more hours or an additional (‘mini’) job, simply to make ends meet.
In particular, the reserve army has been secured by migrant labour – the result of the ‘free movement’ policies hypocritically pedalled by Neo-liberalism – some of the strongest proponents being David Cameron and George Osborne, but also previous Chancellor, Phillip Hammond.
As a result migrant labour contributes
- I In 5 low skilled factory and construction work
- 13% of ‘food preparation’
- 10% of all ‘care’ staff
- 150 000 of 1.2 million NHS workers
Migration to the UK, especially from the EU has been in decline since the UK’s Brexit intentions became known. But in the future, as a result of this weeks policy announcement, to be eligible to to come to the UK, an overseas citizen will need to secure ‘70 points’ and for that they will require a job offer (20 points), be applying for a skilled job (20 points), be able to speak English (10 points) and – in most cases – be enjoying a salary of £25,600 or above (20 points). It’s already the case that compared with their UK counterparts, many foreign workers – some estimates say as much as 50%, are considerably overqualified for the work they do. Something generally ignored by government and right-wing pundits.
It’s unlikely wages will rise as a response to labour shortages. With many businesses, particularly smaller ones facing tight profit margins and not able to pass on higher prices to customers, it’s more likely that they’ll shut down instead . Neither is there likely to be a significant move to ‘automate’ in the way that some Downing Street advisers fantasise. Home Secretary Priti Patel has made it clear how the reserve army can be replenished though. In a round of television and radio interviews she says the 8 million people between the ages of 16 and 64 that are “economically inactive” can be ‘given the necessary skills’ to fill any vacancies. What she really means is that eligibility for benefits will be tightened further. Watch this space….