ONE OF THE HOTTEST TOPICS of the Brexit debate was whether migrant workers from EU countries were responsible for holding down the wages of British workers.
Many people were persuaded that their in-work poverty was due to their wages being undercut by EU migrants. They felt sure that if we left the EU, the number of migrant workers would be reduced and the law of supply and demand meant this would inevitably lead to rising wages.
Since then, over a million EU workers have left the UK. This has contributed to labour shortages, particularly in sectors like food processing, social care and hospitality. And yet – after the worst decade for pay in 200 years, wages are still falling in real terms. with millions facing a cost of living crisis. And it seems that a Government elected on the promise they would ‘Get Brexit Done’ is doing very little to help – in fact quite the opposite. Yes, the minimum wage will rise to £9.50 per hour in April, but with essential costs like food and fuel rising well above the official rate of inflation, and a rise in National Insurance Contributions, this will be swallowed up very quickly. And in other ways, the Government seems to be exerting a downward pressure on wages.
In the public sector, where wages are set by the Government, so could be boosted if the Government chose, median pay actually fell by 2.3 per cent in real terms in November 2021. And now, the Prime Minister is promoting a Brexit Freedoms Bill, aimed at making it easier to amend or remove laws retained from the UK’s membership of the EU.
The fear is that this will be an opportunity to further undermine workers’ rights. As the IPPR says: “Civil society organisations have warned about the risks of the UK diverging from the EU’s economic and social model. Trade unions in particular have expressed concern that the UK could ‘fall behind’ the EU on labour standards and that the newly announced reviews of retained EU law pose a risk to current protections.” Of course it remains to be seen – but does anyone honestly believe that, if lobbied by wealthy business interests and trade unions, this government would choose to side with the unions?
In another move that seems designed to keep some wages down, the DWP has announced that Universal Credit claimants will be given four weeks from the date of their first claim to find a job in their chosen field, appropriate to their skills and abilities. After four weeks (before they even receive their first payment) they will be compelled to apply for any job, and accept any job offer, or face the prospect of having their meagre benefits sanctioned, ie cut.
As Sarah O’Connor of the Financial Times has commented, “This is a bad solution to a problem that doesn’t exist.” Most of the people on Universal Credit are not unemployed, they are either unable to work or working on very low pay, and those that are seeking work are very keen to find it – nobody is living a life of ease on Universal Credit. But some jobseekers will be affected by this policy, which seems aimed at creating a pool of unemployed workers who will, not to put too fine a point on it, be almost starved into accepting any job.
This undermines any incentive for bad employers to offer higher wages or better conditions to attract applicants – they will know that some applicants have no alternative but to accept whatever they are offered. And remember, after housing costs (which may not be fully covered by Universal Credit) a single claimant over 25 gets £324.84 a month. Under 25s get £257.33 a month. Imagine trying to survive on that, knowing it will be cut if you turn down a job. It will put some people at the mercy of the worst employers.
Irrespective of the number of people actually affected by this policy, the negative message it sends may be more significant and insidious. It is a message of disrespect for unemployed people, a message that their hopes and feelings are of no consequence, that in exchange for an income which keeps them in poverty, they can be pushed into whatever occupation the Jobcentre may see fit. It is a policy and a message almost guaranteed to damage mental health. And when unemployment becomes a situation even more to be feared and avoided at all costs, that fear can be used to keep existing employees in line. ‘There are plenty of people who’d be grateful for your job’ is the refrain of bad employers across the globe.
Good employers running decent businesses will not take advantage of this situation. They will prefer to employ people who actually want to do the job they apply for. But we know, from regular reports of modern slavery and terrible exploitation, that there are ruthless people on the peripheries of the economy that will be only too happy to take advantage, particularly of people who are in any way vulnerable. This message from the government, which will empower the worst employers, and disempower people out of work and in work, is not the kind of message that would be sent by a government which sincerely believed in a fair economy or ‘Levelling Up’.
© 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. Her latest book is Illness, Disability and Caring: A Bible study for individuals and groups (DLT, 2020). Her latest articles can be found here. Past columns (up to 2020) are archived here. You can follow Bernadette on Twitter: @BernaMeaden