Category: Economy

1 in 4 trade union members now work in education

thAlmost 1 in 4 of trade union members are employed in education. According to the ONS 1.47 million of a total union membership of 6.2 million are now drawn from this sector. With almost half (47.7%) of all employees belonging to a trade union, the education has probably become the most organised. (In manufacturing, union density is now below 1 in 5 and in construction, only 1 in 8)

The ONS provides interesting –but in many cases, slightly alarming data, about the current state of the UK trade union movement, which is now less than half the size of its 13 million 1979 peak. The level of membership  decreased by 275 000 between 2015/16 alone, the largest overall fall since records begun.

In addition:

  • Just 32.5% of workers are trade union members (13.4% in the private sector ,  52.7% of public)
  • 4 out of 10 trade union members are over 50, but only 1 in 20 are between 18-24
  • 4 out of 10 members can be classified as ‘professional’ workers. 43% have degrees
  • Trade union density amongst female employees is now greater than it is for males
  • Over a third of ‘middle earners’ (£500 – £999 a week) and 1 in 6 of employees earning over £1000 a week are in unions. Only I in 8 of those earning less than £250 a week are TU members

Trade union can’t and won’t ignore these changes, but at the same time they will recognise these are as much the result of longer-term structural trends across labour markets as they are the consequences of draconian anti- trade union legislation or government policies and develop new strategies accordingly.

school-office-staff1That education workers now play a key role in the labour movement, provides both further impetus for greater organisational unity  (despite the NUT/ATL merger at least 10 different unions operate in the sector, often in competition with each other),   but also for creating more effective ways of working with student and parental bodies.

 

 

 

 

 

From a profits squeeze to a wages grab

TUC-demo

Latest figures from the ONS, show the employment rate (the proportion of people aged from 16 to 64 who were in work) at 74.6%, the joint highest since records began in 1971. The unemployment rate has also fallen to 4.7%, down from 5.1% for a year earlier. It has not been lower since June to August 1975. Yet in 1975, it was a very different economy with a very different labour market. The UK was the 5th or 6th biggest manufacturer in terms of total output (it’s now 9th) with 1 in 5 still working in the sector (it’s now less than 10%). Harold Wilson was prime minister and a referendum on EU membership recorded two-thirds support.

Then, some 17 million people (approaching  40% of the workforce) belonged to trade unions compared to around 6 million today. As Andrew Glynn and Bob Sutcliffe described in their influential Workers, Capitalism and the Profits Squeeze – organised labour had been able to use its power to steadily increase its returns at the expense of profits. Capital could only resolve this by attempting to increase prices but could not fully win back what it had lost in wage negotiations because of increased international competition. Nevertheless in 1975, inflation reached a post-war peak of more than 25%

Today the situation could not be more different.  After approaching 65% of national income in the mid-1970s, the proportion of national income returns to labour is down to 55%. Alongside the fall in the wage share, there has been a general rise in the inequality of earnings. The most highly paid have taken an ever larger share.  The average full time person in work would be paid more than £7,000 more than they actually are if wages had kept up with economic growth and if the best paid had not increased their wages at the expense of everyone else.

Even if economic growth may have climbed to 2% per annum, this has been the result of an increase in size of the labour force not increases in productivity, with firms increasingly dependent on constant supplies of foreign labour. As a result per capita (per worker) income has barely increased at all. Meanwhile, the profit share (operating surpluses as a percentage of national income) rose from 24 % in 1980 to 28% in 2011.

The declining fortunes for workers is not simply a reflection of repressive trade union legislation. It’s also the result of significant structural changes within the labour market -the continued decline of traditional manual employment, where trade unions were always strongest, but also the ‘hollowing out’ of many ‘middle’ occupations. These have been replaced by huge increases in low-paid work at the bottom end of the service sector, the growth of casualised labour (‘zero-hours’ employment is approaching 1 million) and of bogus ‘self-employment’ –all areas where it is extremely difficult, though not impossible,  for trade unions to organise.

Whereas in the 1970s Labour politicians and many trade union bosses tried to sell ‘incomes policies’ as a way of controlling wage increases/inflation, today’s ‘precarious’ the labour market imposes its own discipline and as a result, as well calling for the repeal of anti-trade union laws, campaigners have demanded new types of state policies, for example, an increased minimum or ‘living’ wage and an end to ‘zero hours’. Demands for a Universal Basic or a ‘Citizens’ income to gain ground, which though accepted by Greens, continues to be largely ignored by Labour and union  leaders.

Bringing back manufacturing jobs?

 

The UK is not an industrial economy in the traditional sense, despite what some politicians try and persuade us -remember George Osborne’s ‘march of the makers’. Like other countries, the proportion of the GDP devoted to manufacturing has dwindled as consumers become richer and spend a larger proportion of their income on services.  Though it is also true that the process of ‘deindustrialisation’ has been more acute and taken place more quickly than elsewhere. 50 years ago, around 8 million people were employed in manufacturing and the sector absorbed about a third of school leavers. Even as recently as 1982 the sector continued to employ 22% of the workforce. Today 2.6 million earn a living working in manufacturing – barely 8% of all workers, while the sector contributes 10% of national output –down from 14% in 1997.

The decline of manufacturing has been blamed on specific events, or even specific people – for example, during Mrs Thatcher’s first term of office, almost 1 in 4 jobs in the sector disappeared, while more recently, ‘deindustrialisation’ has been linked to the increased ‘outsourcing’ to countries with lower labour costs –  President Trump has pledged to both reintroduce protectionism and to punish American companies that relocate abroad. Unlike in other countries, UK manufacturing has also been hindered by the lack of any real national Industrial Strategy, or anything resembling a National Investment Bank.

Despite all this and despite representing a declining share of GDP, the UK continues to be the world’s 11th largest manufacturing nation – and ONS figures show UK industry has continued to increase on average by about 1.5% a year since 1948 with the sector still accounting for 44% of all exports. Productivity growth in the manufacturing sector has also been stronger than in most other sectors (3.4% compared to a 0.2% increase for the economy generally). Advanced production techniques, mean that three cars roll off the UK’s production lines every minute and output in 2014 was 25% than in 1990, yet employment has fallen from 502,000 in 1971 to the current total of 142,000.

The main reason for both the increase in productivity and the decline of employment in manufacturing has been the introduction of new technology. According to 2015 survey by the Manufacturer on-line journal,koncir_milan-1024x576 little under half of respondents said that they are in the process of implementing a major project, and 21% said that they last did so in 2014. This means that just under two-thirds of UK manufacturing businesses committed to major automation projects in the past two years. Investment in information and communications technology (ICT) continues an upward trend; 61% said they are spending more that year than last.

Even so, the speed at which automation will be introduced should not be overstated – investment in robotics by British manufacturing companies for example, continues to trail that elsewhere. Governments have continued to complain about a shortage of skills, but the number of apprenticeship vacancies posted by the manufacturing sector in 2015/16, was under 30 000 – the majority of these being at a relatively low (skill) level. 

Capital’s  new ‘reserve army’?

Though UK unemployment continues to fall, more significant has been the much greater increase in the size of the workforce. For example, the most recent monthly Office for National Statistics data shows a fall in unemployment of  just over 200 000 over the year, but  a  400 000 plus rise in those working.

ONS data shows  a   325,000 increase in employment of non-UK nationals during the last year compared with 120 000 UK nationals, with the  latest CIPD labour market survey reporting   a fifth of its sample intending  to recruit migrant labour in the last quarter of 2015 – and reporting  difficulties in recruiting UK born workers for ‘unskilled and semi-skilled’ roles such  as factory workers (33%), kitchen assistants  and  retail assistants. Almost one in five care workers are migrants (Independent 17/11/15)download

Karl Marx used the term ‘reserve army’ to describe the pool of semi-employed or unemployed workers who were the consequence of ‘overproduction’ and also the rising organic composition of capital (the replacement of labour by machines) so while the concept might be a useful one, the nature of this modern reserve is rather different. Rather than being part of Marx’s impoverished ‘lumpen’ workforce, research shows that  migrant workers are likely to be overqualified  (compared with UK nationals,  a greater proportion have degrees) for the jobs they are recruited to  and in many cases, will have given up more highly skilled –though not better paid – employment in their home country.

It’s now also being  argued  that as the labour market tightens,   employers are increasingly recruiting more young people, the group that have suffered most in the period since the downturn. As a result, there’s optimism about a future increase in the number of apprentices.  The number of 18–24 years that work  is up nearly 80,000 over the year,   but half of these are full-time students (the largest increase in employment for young people has been among 16-17 year old students). Classifying young people as a reserve army is therefore problematic. But on the other hand if education’s  main role is now primarily to delay young people entering the labour and reduce official unemployment figures, the reserve army   analogy fits very well!

Labour and the Fiscal Charter    ( ‘Living within our means’ Part 2)

jeremy-corbyn-john-mcdonnellPredictably, in the run up to the Parliamentary vote on the Fiscal Charter,   media attention focused on the fall-out from John McDonnell’s sudden   ‘U-turn’ and the way Labour MPs opposed to the Corbyn leadership sought to exploit the situation.

Much of the confusion has arisen from the Shadow Chancellor’s attempt to ‘out Osborne, Osborne’ (his own words) arguing  that a balanced budget  applied only to current expenditure and that Labour’s emphasis on capital spending would, in sharp contrast to Osborne’s policies,  enable the economy to grow generate the extra taxation necessary to reduce debt.  But it’s now clear that Osborne’s Charter is intended to apply to all expenditure, forcing   McDonnell to backtrack, citing deteriorating economic prospects as the reason for his change of policy. (Not to mention a little pressure from Scottish activists perhaps?)

McDonnell’s performance   in the Commons   might not have been exactly convincing, but Labour now has the beginnings of  a clearer line on economic management, around which it can begin to reshape other policies –those on employment and education and training for example. The charter only applies to ‘normal’ conditions anyway   and with another economic downturn on the cards, it’s likely that Osborne will also have to ditch his commitment to ‘living within our means’ as the Neo-liberal argument that the economy should be run like a prudent household, becomes increasingly unsustainable.  

The problem’s the jobs, not the people who do them.

Deputy Governor of the Bank of England Ben Broadbent thinks the growth of low-skilled and low paid-employment can be related to the increased availability of low skilled workers from different parts of Europe. (Guardian 24/09/15). Not only has this kept wage levels depressed, Broadbent argues, but it is also a reason why ‘human capital’ –the quality of the workforce and therefore its productivity has been growing more slowly compared to the 1990s.

These arguments can’t really be substantiated. A UCL study (Financial Times 05/11/15) for example, reveals that more than 60% of new migrants from western and southern Europe are now university graduates while the educational levels of east Europeans who come to Britain are also improving, 25% of recent arrivals having completed a degree compared with 24% of the UK-born workforce. Britain is uniquely successful, it argues, even more so than Germany, in attracting the most highly skilled and highly educated migrants in Europe.

In otherwords highly qualified European migrants often ‘trade down’ skills for the highly level of pay they can earn in their adopted country. But it also continues to be the case that many low-skilled jobs are also done by ‘overqualified’ British workers – According to the Office for National Statistics for example, graduates increasingly work as receptionists, sales assistants and many types of factory workers, care workers and home carers.

Broadbent thinks that an improvement in European economies will make the UK less attractive and the reduced supply of labour will help both to push up wages and encourage investment. The labour market is certainly tightening, but there’s not enough evidence so far to show that real wages are rising because of this. Equally significant is the zero rate of inflation. There’s even less sign of any significant increase in investment.

Since the downturn, the proportion of low-paid low-skilled jobs has increased extensively and labour intensive work with low productivity and low pay, continues to predominate. Though more pronounced in the UK, this has been a feature across the developed world as has the mismatch between workers qualifications and the jobs they end of doing.