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Labour Market Realities 2018: Workers on the Brink

Every month there is a seeming avalanche of good news about the economy. Delivering the Autumn Budget, Chancellor of the Exchequer Phillip Hammond boasted of an economy that “continues to create more jobs than ever before and continues to confound those who seek to talk it down.” But dig a little deeper and the reality of the UK labour market paints a very different picture.

CLASS’s new report, released today, shows that workers across the UK are struggling to make ends meet. As little as one in four of the working population think the economy is working well for them and almost 80% expect to become poorer over the coming year. Our representative sample of 2,000 workers found that:

On Stress: Over half of workers’ noticed an increase in stress and workload over the past 12 months.
On Long Hours: Around one quarter of the working population are working longer than their contracted hours, with the majority not receiving extra pay.
On Basic Costs: Over a third of all workers are not making enough to keep up with the basic cost of living.
On Second Jobs: 20% of households have taken on a second job to boost incomes and a further 20% have tried or contemplated it.

Interviewing officials from across the trade union movement, the interrelated crisis of privatisation and austerity were identified as driving many of these trends. While workers are struggling to make ends meet, shareholder dividends continue to increase. This was the case for Carillion, where shareholder pay-outs were even greater than total cash inflow in years preceding its collapse, but this case is also emblematic of wider problems in the labour market.

As one trade union official told CLASS: “Underpinning all of these issues is the basic mechanisms through which these sectors are financed. [The companies] pile on debt for quick expansion, it is not sustainable… the profits are maintained via cuts and jobs…”  

While these trends have long been present in the UK, the ongoing years of austerity have exacerbated the situation. Unsurprisingly, this is particularly manifest in the public sector. Over two thirds of the workforce deems government cuts a threat to their future employment. The outlook in the public sector is particularly bleak across the board. Workers here show greater concerns for stress, recruitment, redundancies, employee voice and pay.

One case study outlined in the report is the perfect manifestation of this. Not only have workers in the health sector suffered some of the biggest real terms pay losses since the financial crisis, government funding is falling and the inevitable outcome is increased worker stress. We are at the stage where half of psychological professional themselves feel like failures and a similar number suffer from depression. These are the metrics of failure that mainstream debates on the economy often sideline.

Looking forward, Brexit is set to be a huge challenge for workers. We have already heard instances of so-called ‘Brexit opportunism’. By this we mean employers using Brexit as an opportunity to hold down wages and/or the terms and conditions of workers. While when it comes to regulations on workers’ rights, the amount of public investment and the direction of public investment, the working population are largely of the opinion that the impact will be negative.

Unravelling these pressures on workers requires a fundamental rethink in how we run our economy and in whose interests it should run. There are small steps that can be implemented but addressing the imbalance between workers and employers requires much more transformative action. Repealing the trade union act and transitioning to a system of sectoral collective bargaining are bold steps that need to be taken for workers and the wider economy. 

You can read a full version of the the report here.

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