This May Day, workers face the worst real-terms incomes squeeze in 50 years. As many of the UK’s biggest companies enjoy booming profits, ordinary people are experiencing an unprecedented assault on their economic security and financial well-being as wages and benefits fail to keep pace with the rising cost of living. At the same time, the pandemic has exposed and sharpened the deeply gendered and racialised faultlines along which work – paid and unpaid – is organised. Across the economy, from care sectors to retail and hospitality, the inequalities that the organisation of work generates are clear to see. None of this is natural or inevitable. It is the result of deliberate political choices: choices in how work is organised and on whose terms, choices in how employers and policymakers have responded to rising costs and whose interests to prioritise, choices in terms of the purpose and operation of our economy.
It is time we choose a different future. That means a serious strategy for boosting real incomes, both wages and benefits. And it means challenging rentier power that extracts money, from eye-watering childcare costs to exploding energy bills, from hard-pressed households channelling it to wealthy investors. At the heart of that must be a new Employment Bill – much promised, long-delayed – that rebalances power at work.
The need is urgent. As real incomes are eroded and insecurity grows, we are less free in work, and we have less freedom outside of work. The cost of living crisis is, then, also a crisis of working time: we work more hours to meet rising prices as our time is not properly rewarded, many do not have control over scheduling, forced to accept shifts at short notice or unsuitable hours, and at work, the pace of work is set from above, with digital surveillance of workers becoming increasingly normalised in the wake of the pandemic.
The struggle for a shorter working week, democratic work, gender equal care from ‘“cradle to the grave”, and economic security for all – historic conjoined demands of the labour movement – goes hand in hand with the fight for a transformative response to the living standards squeeze. Boosting incomes, empowering workers, challenging rentier power: these are all part of the same agenda: to ensure our labour is properly valued and that our time is our own, in and beyond work. There is no single lever or policy that can secure this. A remaking of our institutions is needed to guarantee economic security for all, waged and unwaged. But the five steps outlined here – mainstream in much of Europe – can begin to build that future.
[.num-list][.num-list-num]1[.num-list-num][.num-list-text]Restore sectoral collective bargaining to rebalance power and boost wages.[.num-list-text][.num-list]
[.num-list][.num-list-num]2[.num-list-num][.num-list-text]Take back control of time by boosting workers’ rights in the Employment Bill.[.num-list-text][.num-list]
[.num-list][.num-list-num]3[.num-list-num][.num-list-text]Introduce a Living Income social security system to guarantee economic security for all.[.num-list-text][.num-list]
[.num-list][.num-list-num]4[.num-list-num][.num-list-text]Reform the rules of the company to give everyone a stake and a say.[.num-list-text][.num-list]
[.num-list][.num-list-num]5[.num-list-num][.num-list-text]Organise care as a public good free at the point of use to reduce unpaid work and gender inequalities.[.num-list-text][.num-list]
Workers are facing an unprecedented and brutal pay squeeze: real regular pay fell by 1.3 per cent in the year to February, with the fall in real wages projected to endure until late 2023, leaving average wages no higher than in 2007. Nor is this a short-term problem: since the 2007/08 financial crisis almost 40 per cent of employees have seen a decline in incomes and a majority have seen less than two per cent real increase per year over that period to 2020. Work is no longer a guarantee of growing prosperity; labour market institutions are not delivering. To address this, we need to rebalance power in and beyond the workplace to ensure workers can reclaim both their time and the wealth they collectively create. To that end, the crisis should be a trigger to:
Insecure work has become endemic in the UK. According to the TUC, one in nine workers – or 3.6 million people – are in insecure work, including more than one million on zero-hours contracts, the majority of them against their will. What’s more, a third of workers are given less than a week’s notice of their shifts according to The Living Wage Foundation. The lack of control and pressure this puts on people is acute. It can, however, be addressed. Changes to employment law can give people security over their hours and more control over their work. A set of changes can deliver this:
Alongside a rise in the national minimum wage, economic security should be guaranteed for all, both in and out of work. With 23.4 million people unable to afford the cost of living this spring, and nearly half of all children now living in families having to skip basic essentials, the introduction of a Living Income social security is now an imperative.
As NEF, IPPR Scotland, and others have argued, a Living Income system can ensure everyone has enough income to live with dignity, whether in or out of paid work. By guaranteeing a minimum level of income for all, it would help to eliminate market dependence, meaning the compulsion to work is reduced and people would be able to better choose the terms on which they worked.
There is a clear pathway that the Chancellor could take to transition toward a Living Income system:
The company is a collective endeavour. Its success is rooted in common effort. Yet decision-making is undemocratic; the rules and ownership structures that govern the company currently stack power in favour of distant shareholders and senior management. Given people spend much of their lives living under the rule of their company, both democratic justice and aligning interests more effectively demands that ordinary workers have a genuine stake and a say in corporate governance. In the process, reform can help better align the interests of people, planet, and long-term company success. To that end, we propose a series of measures:
The pandemic has shone a light on the serious problems in the current approach to care - from a gendered division of labour, reliant on low and unpaid work, to the higher deaths rates in social care - it is clear that urgent action is required to transform care for care workers and care receivers. We must treat the provision of care (including childcare, adult social care, care for the elderly) as a public good, provided free at the point of use.
The profound deficiencies in our existing system cannot be fixed by increased spending alone, rather, they require a transformation of caring activity and provision. The existing mode of providing care depends on a low or unpaid gendered workforce. The Centre for Progressive Policy recently found nearly half of working-age women are providing an average of 45 hours of unpaid care every week, while 25% of men provide 17 hours, which drives gender-based inequalities in and outside the workplace. Changing this through the provision of high-quality, well-paid, free-at-point-of-use care systems is therefore good for equality and can also ease the pressure on labour, both waged and unwaged.
Decommodifying and democratising care also transform the conditions of care for both care givers and care recipients. There are different models to deliver that future for different forms of care, attendant to whether responsibility is devolved or not. The Women's Budget Group and NEF “National Care Service'' proposal, for example, sets out one model. A similar approach to deliver high quality universal care in other sectors would include:
This May Day, we have a whole new world of work to win.