“ The fight for Labour is not only to bring unemployment down by making full employment the overriding priority, but to address the culture of the labour market & end wage exploitation by making work pay.”
Jon Trickett MP
Making work pay is one of the fundamental rights of a fair society.
Yet in the name of austerity the Tories have, by stealth, been dismantling the ability of workers to be protected from exploitation through poor pay in the workplace.
Previously we have seen a time of growing security in the workplace due to many of the labour market and welfare reforms introduced by the last Labour government. The first ever minimum wage, support in work, increased parental leave rights, working hours regulations – just to mention a few.
But now, as a result of the Tories’ ideological belief in the free market, workers now face the conditions of uncertainty and insecurity. Insecure work is increasing rapidly due to the growing “fire and rehire” culture, wages being pushed down, and the unrestrained pursuit for material gain by the wealthy and rich through deregulation.
The development of the gig economy has further eroded the hard-won rights that workers in our country used to have.
The fight for Labour is not only to bring unemployment down by making full employment the overriding priority, but to address the culture of the labour market and end wage exploitation by making work pay.
Put simply: we need to eliminate in-work poverty. Not by the state subsidising bad employers by topping up pay packets. Instead we need a realignment of the relationship between workers and employers through an equitable distribution of profits and growth across the whole of the workforce.
Unemployment stands at a 9 year high, encompassing 1.9 million people. Prior to the pandemic about 8% of workers were underemployed and looking for more hours. According to the ONS Labour Force survey, back in 2012 zero-hours contracts made up 0.8% of our workforce. This figure had climbed to 3% by the end of 2020 and will no doubt continue rising.
Increasingly, work can no longer be seen as a route out of poverty. Approximately 14 million people are in poverty. 56% of them live in a household where at least one person has a job, compared to 39% twenty years ago.
As with many other aspects of society, the Covid-19 Pandemic has laid bare the precariousness of work in this country. More than 3 million people classed as self-employed have been locked out of financial help in the form of the Coronavirus Job Retention Scheme and the Self-employment Income Support Scheme. Millions more have been on furlough for some, if not all, of the past 12 months.
As we transition to a period of recovering from this Pandemic, what will the world of work look like?
If recent projections and forecasts are anything to go by, then the immediate outlook looks bleak.
The young have suffered greatly from austerity. They are the ‘austerity generation’. Priced out of being able to own a home, it is the young who make up a large proportion of those in insecure working conditions.
It is also the young who have been the first casualties of post Covid unemployment. Data released last week shows that 693,000 payrolled jobs have been lost over the past Pandemic year. Of these, a staggering 88% of jobs were held by under 35 year olds.
This is something I have seen unfold first hand in my own patch. In the Wakefield District, where my Hemsworth constituency is situated, there were 1,425 unemployed 18-24 year olds in January 2020. Fast forward 12 months and this figure has almost doubled to 2,835 young individuals.
And this is just the start. As of 28th February, there were still 4.7 million jobs furloughed. The cliff edge of mass unemployment has not been navigated. It has merely been deferred. But sadly, furlough will end and unemployment will follow if the government does not act.
So, what can be done to avert an unemployment crisis?
The solution should be obvious.
We are one of the richest nations on Earth. We can easily create full employment if we choose.
We have millions of people in this country who want a job that pays a decent wage but can’t get one. Millions who have a job but want more hours. A consequence of this is that these people are then subsidised by the state. A staggering 5.2 million working households are in receipt of either Universal Credit, Housing Benefit or Working Tax Credits.
The failure of the capitalist system is proven by the enormous amounts of taxpayer money spent on subsidising employers who pay their staff low wages. £31.1 billion is spent on in work related benefits. £8.3 billion is spent on unemployment benefits.
Through full employment, we could create a huge amount of wealth in the country on a year by year basis.
Currently, the overall cost to the economy of a reduction in output due to the number of unemployed is £48 billion.
Huge areas of the country have been unproductive due to lack of investment. Take my county of Yorkshire as an example. Yorkshire & the Humber has an average output per person of £21,426. The UK average is £27,555 per head. If we invested in Yorkshire to bring it in line with the UK average, output to the tune of £33.4 billion in the region would be created.
This is the cost of a lack of investment in our economy. The cost of keeping people out of work or on low wages.
Let me give you a flavour of how transformative full employment could be for our country.
If we could get 1 million people back to work, £27 billion would be added in the economy. Of course, this multiplier effect of more people in well paid employment would result in more money being spent in local economies.
At this point you may think this all sounds great, but then find yourself asking the question – how can we afford this?
As a start, in the bank accounts of the largest companies in Britain, there is almost £1 trillion sitting idle as unused cash.
The London Stock Exchange over the past 6 months has seen its value increase by £607 billion. Dividend payments from these companies to shareholders in 2020 alone totalled £60 billion.
We can choose to mobilise our unused capacity in labour to deliver a world free of need. To begin to liberate ourselves from the drudgery of so much work. To liberate ourselves from worrying about how to heat the house and feed the kids.
Do not be fooled by Tory rhetoric of ‘putting an arm round every worker’. Try telling that to those who a year into this crisis have no place of work to return to.
We must break fundamentally with any idea of post-covid austerity. Unsurprisingly the Tories show no sign of adopting this approach.
The whole government response to the economic effects of Covid-19 has been characterised by multi-billion-pound bungs to private companies.
Everywhere you look, Tories have handed out money to their mates like confetti at a wedding. £253 million to Ayanda Capital. £347 million to Randox, employer of Owen Paterson MP. £37 billion for the ineffectual Serco Test & Trace. 1,000 consultants at Deloitte working on Test & Trace at rates of up to £2,360 per day. I could go on.
The Tories do not want a society of workers occupying a position of strength. Emboldened by their dignified and secure terms of employment, protected through rights and provisions. Maintaining a hegemonic society whereby the elite rule in the interests of their class requires a mass workforce that can be exploited.
The challenge therefore falls to Labour.
Labour’s central response to this crisis must be to develop a strategy which puts the interests of working people first. A strategy with a flat-out drive towards full employment, with decent jobs on good incomes.
As I have outlined, full employment is not a pie in the sky aspiration. It is an eminently achievable aim.
The Labour Party must challenge the established order and show that as we embark on rebuilding our country in the wake of this crisis, there is an alternative. A better way.
Only Labour can drive forward this economic policy which is long overdue and befitting of our times. Full, secure, decent, dignified employment throughout the UK.
