Exploited workers, immigration, and the EU

By Bernadette Meaden
June 16, 2016

Millions of workers across the UK rightly feel exploited. Agency work, zero-hours contracts, sham self-employment and miserably low pay mean that many people work hard but find it difficult to maintain even a very basic standard of living. This is why we see employed people who need to use foodbanks.

There is a lot the UK government could do to improve the situation, but it chooses not to. Take the enforcement of the minimum wage, for example.  In May 2016, the National Audit Office reported that there were an estimated 209,000 jobs paying below minimum wage. But there have been only ten prosecutions for this offence in the last seventeen years. Bad employers have little to fear from the British government.

Zero-hours contracts have been banned in New Zealand, and could be banned here, if the British government chose to do so, but politicians who put forward such policies, even timidly, are labelled ‘anti-business’, as Ed Miliband was when he criticised Sports Direct. Evidence has emerged that fully vindicates the position Mr. Miliband took, but meanwhile, workers have carried on being treated appallingly. And the punitive Department for Work and Pensions is a constant factor, telling unemployed workers that if they don’t take a job, no matter how exploitative, they will be sanctioned. This must be a factor in driving down wages.

Low paid workers living in less prosperous areas of the country have also been harder hit by budget cuts, as the Chancellor has chosen to hit poorer areas hardest. This deliberately-created scarcity in resources such as housing and school places leads to the poorest people feeling they have to compete for even their most basic needs with new arrivals, building resentment towards immigrants. Whilst the government pursued its austerity agenda, this was convenient. Don’t blame cuts, blame migrants, it has often subtly implied. Now, this is coming back to bite the Remain campaign. As leading tax lawyer Jolyon Maugham has commented, “If you blame migrants for the consequences of your underinvestment, its victims might be forgiven for believing you”.

The truth is that for decades, since the 1980s, the share of our national income going to wages has fallen steadily, whilst profits grew. As Howard Reed explains, "The gains from a growing economy became increasingly unevenly divided in favour of a small group at the top, leaving significant sections of the rest of the population (roughly the bottom 60 per cent) lagging behind the average rise in prosperity, and at an accelerating rate." Put very simply, the bosses and owners took people’s wages, not immigrants.

Mr Reed is Director of the economics research consultancy Landman Economics, and is not as far I know a militant socialist. But he recommends four steps to a new social contract with workers, which are; raise the wage floor, cap and/or restrain pay at the top, extend the role of collective bargaining, and create more jobs.

 He concludes, ‘More power needs to be shifted from boardrooms to the workforce through the empowering of employees and the spreading of collective bargaining. The strong body of empirical evidence on the effect of de-regulation goes against the grain of orthodox economic thinking. There is evidence that high levels of collective bargaining have a range of economic benefits at the micro and macro level including associations with boosting skills, innovation and productivity, and more successful macroeconomic management, as well as lower inequalities.’

So the solutions for exploited workers lie well within the grasp of a British government, whether inside or outside the European Union. All that is lacking is the political will to make the changes necessary. But if the balance of power remains as it is at present, workers in the UK will continue to be exploited, wherever they were born. And joining trade unions in large numbers might do more to improve their lot than a vote to Leave the EU.

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© Bernadette Meaden has written about political, religious and social issues for some years, and is strongly influenced by Christian Socialism, liberation theology and the Catholic Worker movement. She is an Ekklesia associate and regular contributor. You can follow her on Twitter: @BernaMeaden

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