The sole justification for the policies of austerity inflicted on most of the peoples of the world has been that there is a structural deficit in the finances of government that must be reduced. That austerity has nearly everywhere increased those deficits came as a surprise to no-one. Indeed, austerity could have had no other consequence.

The policies of austerity – cutting taxes for the rich and public services for everyone else, driving down wages and driving up profits – are a manifestation of the dogma of neo-liberalism, or ‘laissez-faire’ as it was called in the nineteenth century.

WORKING POORLY  Low wages are bad for your health. They erode your ability to make healthy choices over food, living conditions and exercise. They create financial stress. And – crucially - low wages directly influence your health and safety at work, with risks going up as your grade goes down. more

This doctrine teaches that trade unions, collective bargaining and workers’ rights are all illegitimate since they interfere in the operation of a free market in labour which will reduce labour costs to the minimum necessary for workers to survive.

The real driver for the group of policies and actions taken by government in the name of austerity is the desire to increase the share of the national economy consisting of profits and decrease the share consisting of wages. To that end austerity has been a resounding success, particularly in the UK.

Cheap labour

The consequence of driving down the real value of wages is not just a painful cut in the standard of living of most people (so enhancing the wealth of the rich). It has also depressed demand causing the loss of tax revenue, whilst increasing the burden on the State of paying in-work benefits to prop up low wages.  Competition has focused on cheap labour rather than on investment in greater efficiency and productivity. The UK has become one of the worst performing economies in Europe, saved only by a financial sector which is little more than a vast gambling machine.

MORE INSECURE At least 3.8 million people are in insecure work, such as agency work, zero hours contracts and low-paid self-employment. A TUC analysis published on 10 May 2018 found that 3,820,000 UK workers are in insecure forms of employment. This is 11.9 per cent of the workforce, or 1 in 9 workers. Latest official statistics also show that 901,000 people had a zero hours contract as their main employment in the final quarter of 2017, with the TUC calling for an outright ban. more

The British workforce is now marked by the longest period of declining real wages for decades, gross inequalities of income between the few and the many and between men and women, insecure employment, precarious hours and income, exclusion from decision-making about their working lives, too many hours or too few, lack of dignity and respect, lack of facilities for the disabled and those caring for children, lack of opportunity for education and training, and low quality work.

Only one improvement has emerged from the policies of the last 40 years and that is an increase in the number of jobs and hence a decline in unemployment. But that apparent benefit is marred by the appalling quality of the terms and conditions of the new jobs, with successive governments favouring a permanent pool of unemployed to keep labour cheap.

Victorian values

Britain is now as unequal as it was at the end of the nineteenth century with all the repulsive consequences: Unequal life expectancies, differential physical and mental health, lack of social mobility, unemployment, drugs, crime, hopelessness – and so on. The share of the national cake occupied by wages must increase if any way is to be found out of the spiral of decline in Britain.

TARGETED BRUTALITY ‘Austerity’ is not a reasoned economic response to a financial crisis, it an intensely violent and targeted attack on working conditions and on the poor, a deadly phenomenon one Cambridge academic characterised as ‘economic murder’. more

In Reconstruction after the crisis: a manifesto for collective bargaining and in A manifesto for labour law the Institute of Employment Rights made the case for the restoration of sectoral collective bargaining – that is collective bargaining on an industry by industry basis.

Collective bargaining of this kind was the policy of government for 75 years until Mrs Thatcher. It was the principal mechanism adopted in Britain and abroad to increase wages, stimulate demand and reinvigorate the economy to end the depression of the 1930s. The same remedy could be applied to the current crisis.

The reversal of government policy from 1980 onwards has caused collective bargaining coverage in Britain to plummet from protecting 82 per cent of workers in 1980 to 23 per cent today (and falling).  Labour’s introduction of a statutory recognition procedure had negligible effect.

GLOBAL EROSION

The ITUC’s Global Rights Index 2018, published in June 2018, notes over four in five countries worldwide (81 per cent) deny some or all workers collective bargaining. In Europe, 58 per cent of countries violated collective bargaining rights, and threequarters of countries violated the right to strike. One in five countries in Europe excluded some categories of workers from labour law. On a 1 (best standards) to 5 (worst) global ranking, the UK gets a group 3 rating, as a ‘regular violator of rights’. This puts it alongside countries including Russia, Burkina Faso and Venezuela. In Europe, only Greece, Turkey, Bosnia and Herzegovina, Serbia and Romania have a worse ranking.

In western and northern Europe the average coverage remains at around 80 per cent (though, in the name of austerity, sectoral collective bargaining is being undermined in Europe).

The restoration of collective bargaining goes beyond stimulation of the economy. The loss of its protection has never been felt more keenly than now with a million people on zero hours contracts, permanent full-timers being substituted by temporary and agency workers, and a massive rise in the use of false self-employment.

Better bargain

Collective bargaining is the only way of giving workers an effective voice and power to prevent injustice in the workplace. Furthermore, collective bargaining is the only really effective means of making heard the worker voice. It is the only way by which the fundamental imbalance of power in the workplace may be redressed.

There is also a legal imperative that underpins the economic and social case to rebuild the wasteland of collective bargaining. Whether the government likes it or not, the UK (like other countries) has obligations to promote collective bargaining under international treaties signed by both Labour and Tory ministers since the end of the Second World War. The failure over the last 30 years to comply with its international legal obligations has made the UK a repeated international law breaker, as the international bodies have consistently found.

A fresh start is required and a much more ambitious collective bargaining strategy imposed, based on what we once had – and what successful European economies still have.  We need multi–employer agreements that apply throughout each industrial sector, laying down terms and conditions that will apply as a matter of law to every worker, whether or not their employer recognises a union. 

Enterprise level bargaining will thus also be stimulated to take place on the basic floor established by the sectoral collective agreement. The Labour Party is committed to ‘roll-out sectoral collective bargaining’ as its manifesto for the June 2017 election, For the many, not the few, promises.

The sceptics will say that it is all too difficult.  But we have done it before, in the 1930s when wise minds realised that the crisis of the time could be solved only by raising wages, and that the only way to raise wages was to strengthen the collective bargaining structures first established by Parliament during the First World War to deal with the problems of reconstruction.

To achieve it will require the same commitment to the use of State resources today as it did then, most notably a commitment to create the structures within which collective bargaining takes place, to ensure that employers take part, and that the terms of collective agreements are observed. 

It is a big challenge. But there really is no alternative.

John Hendy QC is chair of the Institute of Employment Rights (IER).

Why better pay is a real safety imperative

Low wages are bad for your health. They erode your ability to make healthy choices over food, living conditions and exercise. They create financial stress. And low wages also directly influence your health and safety at work.

Degraded, a June 2018 Hazards special report, presents “compelling evidence for low wages to be recognised as a genuine occupational hazard.” It warns low wages and low safety standards are frequently “toxic campanions”.

Higher paid, higher status work is relatively immune to work-related health problems – occupational injuries, cancers, nervous system disorders, suicides, reproductive problems, strain injuries and cardiovascular diseases are all concentrated in less well remunerated work. The lower your grade, the higher your risks.

Low wages mean you have to work longer and harder to make ends meet, bringing dangers from fatigue, injuries and stress. These jobs frequently come with a lack of union protection and employment rights, removing effectively your ability to object to unhealthy, unsafe work. If you are victimised for raising or acting on safety concerns, you more than likely lack the resources and support to challenge this illegal abuse.

Outside of the traditional employer-employee relationship, the prospect of obtaining compensation if you are injured, made ill or even killed by your job can be remote. The government’s industrial injuries benefit scheme is for employees only. If you don’t have a union to act for you, then you won’t in many cases have much chance of retaining the legal advice to sue for damages.

The best solution is to win healthy improvements in wages and working conditions. And there is little prospect of that without the power and the protection of a trade union.

- Rory O’Neill, editor, Hazards

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One-in-nine workers are in insecure jobs, says TUC

At least 3.8 million people are in insecure work, such as agency work, zero hours contracts and low-paid self-employment. A TUC analysis published on 10 May 2018 found that 3,820,000 UK workers are in insecure forms of employment. This is 11.9 per cent of the workforce, or 1 in 9 workers.

TUC general secretary Frances O’Grady said: “Every worker deserves fair pay, decent rights, and a voice at work. But millions are stuck in jobs with bosses who treat them like disposable labour. We need a new deal for working people so that every worker gets respect, and every job is a good job.”

In April, 2018, the TUC called on the government to ban zero hours contracts after latest official figures showed the number of workers affected rose by 100,000 in 2017. The statistics published by the Office for National Statistics show that UK firms used 1.8 million zero hour contacts in the year to November 2017, up from 1.7m in 2016, and that 901,000 people had a zero hours contract as their main employment in the final quarter of 2017.

Union leaders attacked the government for failing to help people in precarious jobs, where employers can cancel shifts at short notice and leave households scrambling for work. The latest figures buck a trend that has seen the use of zero hours contracts fall since they reached a peak of about 2.1m in May 2015.

Tim Roache, the GMB general secretary, said: “The number of zero hours contracts should be falling but they are in fact on the rise. These scandalous figures show Theresa May’s out-of-touch government is completely and utterly failing to tackle insecure work.”

A survey from the TUC found more than half of workers on zero hours contracts have had shifts cancelled less than 24 hours before they were due to begin.

TUC head Frances O’Grady, said: “Most people are not on zero hour contracts by choice. They want the same rights, security and guaranteed hours as other employees. More than half of zero hour contract workers have had jobs cancelled with less than a day’s notice. Zero hour contracts are a licence to treat people like disposable labour and the government should ban them.”

O’Grady praised a ‘Better Than Zero’ campaign, which she said had ‘revitalised’ unions in Scotland. The TUC leader said the campaign, backed by the Scottish Trades Union Congress (STUC), “has brilliantly exposed the insecurity faced by so many young workers in Scotland, namely being at the sharp end of low pay and modern insecure work patterns. Using practical support for young workers, the campaign has engaged many who would otherwise have been isolated in today’s fragmented world of work.”

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Targeted brutality and economic murder

‘Austerity’ is not a reasoned economic response to a financial crisis, it an intensely violent and targeted attack on working conditions and on the poor, a deadly phenomenon one academic characterised as ‘economic murder’.

The violence of austerity, edited by Liverpool University academics Vickie Cooper and David Whyte, argues the cuts were designed to punish already disenfranchised populations, in targeted and violent ways. The book demonstrates that austerity is based upon a series of lies about economic recovery. It charges successive Tory governments with unleashing a socio-economic experiment that makes the poor pay for the global financial crisis, often with their lives. 

A 2017 study published in BMJ Open reported that mortality rates in the UK had declined steadily from 2001 to 2010, but this reversed sharply with the death rate growing again after austerity came in. From this reversal the authors identified that 45,368 extra deaths occurred between 2010 and 2014. They predicted there would an extra 100 deaths a day linked to austerity over the following five years to 2020.

Study co-author Professor Lawrence King of the Applied Health Research Unit at Cambridge University, commented: “It is now very clear that austerity does not promote growth or reduce deficits – it is bad economics, but good class politics.” He added: “This study shows it is also a public health disaster. It is not an exaggeration to call it economic murder.”

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WAGE WAR

Higher paid, higher status work is relatively immune to work-related health problems – occupational injuries, cancers, nervous system disorders, suicides, reproductive problems, strain injuries and cardiovascular diseases are all concentrated in less well remunerated work. The lower your grade, the higher your risks.

- Rory O’Neill, editor, Hazards