A provocative opinion piece by Paul Mason in The Guardian titled The young, skint and self-employed need a radical new labour market. It highlights the struggle for the low paid and involuntary “self-employed” in Britain, how precarious their lives have become and how for many the global market and immigration has not opened opportunities in their field but merely suppressed wages.
….400,000 – the number of self-employed jobs added to the British workforce in the past year. Add tens of thousands of low-paid regular jobs and you get the headline the government does not want to talk about: a five-year collapse in real wages, especially among the young.
The Institute for Fiscal Studies calculates that, after inflation, the real hourly pay of workers under the age of 30 has collapsed by 11% since the financial crisis of 2008; their household incomes are down 15% as large numbers live in shared housing, even shared rooms.
These figures are not hard to summarise: we’re creating jobs hand over fist by allowing the young to work for peanuts. Conventional economic models say: “Don’t worry, all the slaving, starving and powerlessness you’re going through now will end at some point as wages rise.” However, conventional models might be wrong. They are based on a world in which there are national labour markets and wage-bargaining power – either because of unions or a shortage of professional skills. But the post-crash British economy is creating the kind of jobs where the labour market is international and bargaining power weak.
Plus, you can only understand the labour market if you look beyond it. In the 20th-century economy, a decent job and a permanent home were the most important things: now it’s any job, a bedroom on a one year lease and a credit card. You can’t be in the modern, heavily financialised economy unless you have a credit card, a bank account and a mobile….
The new psychology of unskilled work is that people will accept rock-bottom pay, irregular hours and poor conditions just to remain in the workforce. Or form a co-op like Charlotte and Samara, and pay themselves next to nothing.
The situation would be similar in New Zealand with many young and older people moving from contract to contract with regular gaps, reliant on a partner with a more secure income or their credit card. For every hyperbolic example of IT success such as Xero (we’ll look past whether or not its business model actually survives another business cycle and recession to deliver a profit) there must be hundreds of self-employed IT contractors competing over short term contracts, scraping by with no regular income to secure a mortgage or a business loan. The conspiracy theorist might argue this is a deliberate and desirable state of affairs for ruthless capitalists who gain both compliant low paid workers and a growing supply of tenants for their rental properties. From a purely dispassionate (and unempathetic) “market” point of view it makes perfect sense.
I thought some of the comments below were illuminating and again as applicable in New Zealand as Britain, for politics seems to be homogenising internationally as well as locally – as one person put it;
….party politics is completely irrelevant in this day and age and the fortunes of the economy are purely a result of the whims of the market. The narrative of left and right only serves to distract us and divide us, while allowing a corporate dictatorship to grow unchallenged.
“Thank you Paul. Excellent article. I have a construction company and we have seen a race to the bottom on wages over the last ten years. It’s like a neo-con’s wet dream. If it wasn’t for IPads and Xboxes we would be having a revolution now. I don’t hold out much hope for Ed, TB. Is already whispering in his shell like to ‘cling to the middle ground’ as if just getting into power is the most important thing. Well it isn’t. Changing the system of power is.”
“Yes. Some people forget that there are businesses out there who would like to be able pay their staff a decent wage. But when you’re tendering for work against companies who pay peanuts, what choice do you have?”
“I work for a City Council- they very rarely hand out any permanent contracts now, 6 month temporary at most, so that no expensive rights or benefits are accrued. This is detrimental to the service (adult social care) as it means anyone who speaks out against neglectful working practices is simply not offered work or doesn’t have their contract renewed.
Furthermore it creates an environment where the lowly paid have to compete for scraps- there is absolutely no solidarity amongst these people. In this sense neo-liberalism has truly won- atomisation is the ultimate victory of big business.”
“Ultimately young people have to do something political for themselves. From the many I know, they are being kept quiet by cheap electronics and clothes, which is a whole other issue. It’s probably because neo-liberalism has ground on now for 35 years or so, and a lot of people know no other system.”
“A very timely article – this ugly state of affairs is exactly what the Tory “economic miracle” (read Rock Star economy) is based on. Ultimately the only people who benefit are the ruthless exploiters among us, who of course tend to be big supporters of the Tories. What a beautiful society this coalition is creating – the real question is does Labour have the cojones to do something about it?”
“Where is the so-called ‘Labour’ Party. Dead in the water, since a lot of this crap was brought in by Thatcher and multiplied by BLiar. Miliband (read Cunliffe) and his crew are completely hopeless.”