Have we ever before known such a period of economic oddity? According to the textbooks, the current data on wages and employment in the UK simply don’t add up. We have a high employment rate of more than 75 per cent, unemployment is at its lowest for almost 50 years, and there were 1.3 million active job openings last month – a new high. But wages are falling.

Not just falling, but plummeting at their fastest rate for more than twenty years. Combined with inflation and the spike in the cost of living, Britons have never been so likely to find stable work – yet they’re feeling poorer than they have for decades.

On paper, it doesn’t make any sense. Why are wages so low when demand is so high? Surely this breaks all the rules of how the job market works. It calls into question the idea that economics is a science. No, it’s more of an art, because it depends not only on the movements of money and resources between people, governments and businesses, but also on behaviours, on feelings.

How we feel about work, about rewards for our efforts, matters. Right now, we’re not feeling good.

In these perplexing charts, graphs and statistics, we’re seeing the consequences of the final severing of any meaningful connection between employer and employee. The concept of the “job for life” died long ago, but now we’re entering a new chapter altogether: there are businesses and enterprises, there are jobs to be completed, and there are workers. The connection between them is merely transactional, and increasingly conducted in micro-transactions: zero hours contracts, the gig economy, and the pandemic-fuelled “servant economy”.

That old relationship between staff and employer is finally, terminally, broken

Any emotional connection, any sense of moral responsibility or obligation has long been lost, and with it the link between work and reward, too. The belief that we deserve to be well paid for a job well done is diminishing.

This situation has been brewing for decades, sped up by the continuing decline of unionism and the associated dismantling of collective bargaining power. The percentage of workers who are union members is falling every year. Last year it was just 23 per cent. The drop is also being driven by a decline in public, not private sector, membership.

At first glance that may seem a precipitous conclusion for, as I write, the UK is in the grip of a series of national walkouts from rail staff. Some commentators are touting it as the start of a summer of discontent, a fresh wave of union activism and worker solidarity that will force employers to rethink their roles and responsibilities towards their staff – not only on pay packets, but on conditions of work, work-life balance and so on. I doubt that. Such a reconsideration would require a stepping back to an era now lost, when the good employer took on the burden of securing the stable family lives of staff. As that’s long gone, the action we’re seeing now is unionism’s last gasp, a swansong. That saddens me; privately, I hope I’ve miscalculated, yet the journey towards atomisation of employment seems inexorable.
Some 200 years ago, while most people remained self-employed, large industrial employers began to take their commitments to their workforce and their wider families seriously. The movement for employee rights – and, aligned, for employer responsibilities – was led by philanthropist industrialists such as George Cadbury and Joseph Rowntree, whose ethos was that the community of the employer should meet not only immediate financial needs through a subsistence wage but also contribute to the social and spiritual life of their communities. Many were guided by Christian ideals, particularly Quaker philosophies.

Some of those guiding principles were adopted by larger employers throughout the early part of the twentieth century, in particular the idea that a wage should be sufficient to support a family. Of course, at that time it was expected that men would be the primary or sole earner for a household, with women dedicating themselves to childcare and care of the home as well as domestic work that could be managed around those responsibilities. A wage was expected to cover those familial obligations. Early unionism won great successes in making such a case, and pay increased as workers found strength in numbers and a shared objective.

But over time, the spreading of workplace opportunities meant greater competition within the jobs market and the potential for casualisation of employment. Meanwhile wages relative to the cost of living – including housing, utilities and increasingly the expense of childcare – plummeted.

The second-wave feminists of the 1960s and ’70s won a great victory in equal pay for equal work, but missed an important problem in negotiating that long overdue right: they failed to make a corresponding demand that pay packets should continue to be sufficient to support a family and that childcare should be considered an essential public service. It was a huge failure, and we’re feeling the effects of that now. As a case study, it’s a reminder that workers need to demand from government and employers exactly what they need to thrive, not just the elements they are most likely to succeed in winning.

As a result, unlike in Scandinavian countries, where good quality childcare is subsidised right up to the older school age of seven, many UK women with young children find their wages barely cover the costs of the childcare they need to allow them to work at all. And today, despite more than 50 years of equal pay legislation, there is no expectation that a full-time wage should subsidise anyone beyond the working individual themselves. Most families require two working adults to cover costs, and the fastest rise in benefit claims is among working people. The atomisation of the workplace bears no relevance to how we live.

In the past decade or so, another shift has taken place: the replacement of full-time, permanent contracted employment with a highly casualised workforce that’s increasingly dependent on zero hours agreements. It’s a gig economy in which work has ceased to be a long-term commitment and has become instead an itemised list of tasks, paid individually. That picture is consistent across what were once known as blue- and white-collar jobs. Project work and “portfolio” or “multi-hyphen” careers, in which workers sell their services to a range of clients are becoming as common in professional and managerial employment as the highly visible casual work of Uber drivers, Deliveroo cyclists and zero-hours shelf pickers in Amazon distribution warehouses. It’s also the case across what used to be considered safe, secure, public sector work, since contract outsourcing of needs such as social care shows no sign of ending.

Most families require two working adults to cover costs, and the fastest rise in benefit claims is among working people

For Generation Z, “hustle culture” has been popularised by social media channels such as TikTok, in which a whole new cohort of workers are largely un-unionised – they’re atomised individuals seeking employment that suits them on their own terms.

It’s painted as a form of dynamic entrepreneurship, but the results leave lower-paid workers incredibly vulnerable. Nor is the work ever “on their terms”, of course, but on whatever terms are made available; they’re often unpalatable, offering nothing more than a hand-to-mouth existence subsidised by the state through in-work benefits. Employers no longer accept any responsibility for the overall welfare of their staff.

Though the pandemic furlough scheme was the right thing to do in an unimaginably difficult and (regrettably) largely unplanned-for situation, it has entrenched this view: the state picks up the needs of the individual, while a business owner’s responsibility is only to their organisation and its bottom line.

In many cases, workers accept these less than desirable terms and roles because they simply need the money, but in some industries even that isn’t enough – particularly if the role intrudes on personal lives. The chaos in the European travel industry, where post-pandemic jobs are urgently waiting to be filled, is evidence of this disruption – but workers are refusing to swallow long, multi-time-zone shifts for too little in return.

So back to the conundrum: why are we stuck in this weird position around jobs and wages? The answer is that the old relationship between staff and employer is finally, terminally, broken. Workers are needed to fill a growing number of vacancies in the UK, and yet the demand for their skills is no longer provoking any kind of employer competition. The employment market is now too fluid to support the old rules of supply and demand. Wages are not rising. Strike action, however widespread, is unlikely to materially change that.

Now that two years of pandemic are behind us, the Conservative government might not believe it’s worth meddling in the jobs market. But inaction will be expensive for the public purse. How can the government go on arguing that work pays, when patently it does not? They should remember that the fastest growth in new benefit claims is from people already in work – increasingly, troublingly, in full-time work. If a market, any market, is this broken, it’s very dangerous to just sit back and wait to see what happens.

Hannah Fearn is a journalist and columnist specialising in social affairs. She was comment editor of the Independent for seven years and writes a weekly column for that title. Her journalism also appears in the i Newspaper, Guardian, Financial Times, HuffPost UK and others

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July 2022, Main Features

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