The industrial revolution, starting in the 19th century, transformed our economy and our country for good and for bad. But some of the most important lessons to learn from centuries of advancing technology changing how we work is that if we, the left, can embrace change and shape it for the benefit of workers, this change can be a blessing, rather than a curse.
History tells us that in the long run, technology can be a net creator of jobs. The introduction of machines into industrial production brought skilled jobs and better pay over time. With the help of government action and a reform of how our economy works, the growth of Artificial Intelligence (AI) and automation can do the same for many of today’s workers.
In the last few decades, we have seen a fundamental shift in the nature of work in the British economy. Through the decline in manufacturing and the growth in insecure jobs, the traditional working class has seen huge changes. The decline of Trade Union power has been a major contributory factor in the growth of inequality. That decline in organisation of workers has seen an increase to exploitation in parts of our economy, for example in non-unionised warehouse operations or in some parts of the gig economy. Trade unions played a crucial part in delivering greater prosperity alongside vital improvements in working conditions and safety at work. Unions are as relevant today as ever as technological change puts workers at risk in an unequal power relationship with some employers.
The example of Hermes and their deal with the GMB which gives better pay and conditions to self-employed couriers shows what is possible for workers. Hermes’ management recognised the value of their workers and the importance of looking after their people. The concept of treating staff well if you want good service for your customers is pretty obvious to many responsible business people. Hermes and the GMB have demonstrated how it can work in practice. The deal also demonstrates the potential for responsible employers to partner with unions and to show leadership to other businesses who see workers as a cost to their bottom line, rather than an investment in the success of their business and as real people, who are helping management to deliver success for the enterprise.
Christine Lagarde, Chair of the International Monetary Fund, in 2013 said that she believes “the economics profession and policy community have downplayed inequality for too long. Now all of us have a better understanding that a more equal distribution of income allows for more economic stability, more sustained economic growth, and healthier societies.” Legarde’s point is that tackling inequality isn’t just to the benefit of the lowest-paid in society, it would benefit the wider economy as a whole.
We are going to see growing levels of automation in the workforce as technology advances and massive corporations look for more ways to decrease costs and increase profits. However, as a labour movement, we must fight for a future where work matters, not a future where work becomes a luxury with an army not at work. We must fight for a future where work is shared, including a reduced working week. Work defines and workers define themselves by the job they do. If you get talking to someone on the train or bus, it is likely that one of the first questions that will be asked is “so, what do you do?”. It comes down to the ‘dignity of work’ and its importance to people’s sense of self.
We then have to define why good work matters. How workers are treated by their employer matters. Employees being able to see clear paths for progression and wage growth matters. Workers being given a voice in how their employer is managed matters. Being paid a real living wage which means that workers don’t have to pick up other jobs to make ends meet and can feel comfortable financially matters. These are all factors which contribute to a ‘good job’ and we should be striving to ensure that not only do we reach full employment but that every worker can have a ‘good job’ where they are valued and they feel comfortable. That is how companies and countries can best succeed. All the more important now because ‘good work’ is fundamental to tackling the politics of discontent, the millions of people who believe that the world of work and the country they live in no longer works for them.
As automation spreads further across industry, work is going to change and workers are going to need the skills to change with it. It has long been recognised that a major effort is necessary to improve the skills of many British workers and college leavers. Skills and decent jobs need to be located as a central part of an intelligent industrial strategy that works to Britain’s strengths and adapts as industry changes. The basic elements of a system already exist in the form of industrial councils and industry skills partnerships; and this consensus needs to be built on. There is a need to increase investment in training and there is a case to use tax relief to help achieve this. Employers who do not train and rely on poaching should support financially those who do.
The whole skills agenda needs a boost to make it more attractive, more glamorous and more central to the life of the country. At present vocational education and training is too often regarded as inferior to academic education and yet it is crucial to personal, corporate and national success.
Through a period of fundamental change in our economy, Trade Unions and representation at work is going to be more important than ever before. But there are now just 6.5 million people who are members of trade unions in the UK. This is down from 7 million at the start of this decade, and from a peak of 13 million in 1979. Strong Trade Unions are essential for better conditions for workers, as well as a successful, fully-functioning economy. Studies have shown that where levels of collective bargaining are lower, inequality tends to be higher. Labour must, therefore, as a matter of public policy, seek to strengthen Trade Union power after the withering away we have seen under the Tories.
For 20 years or so, the UK economy has seen a steady shift away from wages and salaries, in favour of profits. Most of the resulting fall in the wage share has been borne by the lowest paid and the weakening bargaining power of labour has played a prominent role in this. Trade Unions need a changed framework of power if they are to become more effective and change the dynamic in favour of the worker.
A Labour Government should therefore seek to put in place measures to encourage collective bargaining at sector levels and to secure fair pay across the UK. The objective could be to establish Joint Councils or Living Wage Councils of employers and unions, on a sectoral basis, which are given incentives and encouragement to agree decent minimum rates (including overtime rates), hours, holidays and pensions, together with procedures for union recognition; and also for the handling of disputes and grievances. It is in the clear interest of better employers to spread their good practices and decent pay rates to competitors who may be undercutting them. Fair treatment of workers, therefore, and fair competition, not driven by a race to the bottom, are complimentary, not conradictory. That’s why employers like Hermes need support and encouragement from government so that their attempts to deliver a fair settlement are not undermined by competitors who would rather cut corners and pay less to undercut them.
There are already sector skills councils, such as in the automotive and construction sectors, and it has been Labour Party policy to encourage employers and unions to build on these in the direction of collective bargaining, for example in the care and hospitability sectors.
New autonomous and AI technologies present challenges to the labour movement and the progressive left across the Western world. But the technology being developed, alongside the economic opportunities available should be presented as exciting optimistic signs of the benefits of new technology. The Intergovernmental Panel on Climate Change estimates the economic benefits of decarbonising the global economy are $26 trillion. Such potential should be presented to give hope to those facing the challenge of change at work.
Since the financial crash a decade ago, we have seen falling living standards, stagnating wages and an increase in insecure work. It is vital that through action by a Labour Government and collaboration with Trade Unions, the world of work of the future is one which provides good work for all through higher wages, strong workers’ rights, natural paths of progression, high levels of available retraining and increasing Trade Union density. Such an analysis sits alongside the potential for business to benefit from economic opportunities which follow from environmental and other societal necessities. The potential risks from technological change are significant. The impact on workers must be addressed. But the potential for an economy which delivers for businesses and for workers has in fact never been higher either. We should seize the opportunity with both hands.