The introduction of a statutory Living Wage – at £7.20 an hour a 50p increase on the old minimum wage – should be a cause for celebration, particularly if it is due to be increased to £9 an hour by 2020. Instead it’s received a cautious welcome because of the huge degree of uncertainty about who it will really benefit. Though some estimates show that over 6 million workers are currently paid less it’s possible that only about 1 in 5 of these will probably gain directly.
Many of those who won’t, belong to the ‘cash in hand’ informal economy, some will become converted to ‘self-employed’ status though continuing to be dependent on their previous ‘employer’ for an income. Others will suffer a cut in hours, even lose their jobs completely, while workers under 25 will not benefit at all. It’s also been calculated that 2 million families could lose up to £1,600 anyway as a result of cuts to tax credits.
Some of the most ferocious opposition to the new requirement has come from employers organisations. Though it’s certainly true that many large firms continue to make ‘super profits’ at the expense of their employees, to pay big bonuses to managers and shareholders large dividends, it is also the case that, particularly in the more labour intensive parts of the service sector, there are layers of small scale operators who are dependent on low pay and an endless supply of overseas labour, to run what are basically hand to mouth businesses with low profit margins, with no desire to invest in workforce training; but at the time reminding us they are crucial in ‘providing jobs’.
In the care industry, cash strapped local authorities who are forced to rely on poor quality private sector providers, fear there may be a shortage of places as care firms cut back – it’s estimated that over one in ten care workers should be entitled to an increase in pay. A new government committed to social justice, rather than the current ‘austerity’ would want to invest heavily in social care, put provision under some form of social ownership or even make it part of an expanded NHS – upping workforce skills and establishing a proper career structure.
But this type of intervention is much more difficult in other sectors – hotel and catering and retail are two –where low and irregular pay predominates and where the downside of further regulation could also be increased unemployment. Of course, employers could be subsidised but there would be no guarantee this would lead to higher pay for employees. So, is a greatly expanded tax credit system going well beyond anything attempted by Gordon Brown the only alternative? Rather than depending on employers, this would make the state responsible for mediating the effects of low pay.
A more radical approach, would be to give serious consideration to a basic ‘citizens income’ for everybody in addition to any income received from work –something that has been the subject of considerable discussion by greens, but rarely finds its way into labour movement or trade union circles, even if major issues remain about the level, the funding and particularly about whether there should be any social obligations in exchange for receiving it.
More significantly discussion about alternative sources of income will have to become integral to debate about the long term impact of automation and artificial intelligence on the future of work. Certainly as robots become less and less expensive, low paid and relatively routine jobs across the service sector could quickly be eliminated. But, if as is now being increasingly recognised, many skilled, professional and managerial jobs will also lose out in the ‘race against the machine’ then traditional social democratic political strategies that emphasise the importance of ‘decent jobs and good wages’ as the driver of prosperity will likely die with them.
Following Ofsted Chief Michael Wilshaw’s criticism of ‘one size fits all’ academic learning, Education Secretary Nicky Morgan has criticised state schools for ‘outdated snobbery’ and promised a new law that ensures they promote technical education and apprenticeships as real alternatives to university. Morgan told the Independent:
‘For many young people going to university will be the right choice, and we are committed to continuing to expand access to higher education, but for other young people the technical education provided by apprenticeships will suit them better’.
But the government’s own figures have continued to show only a minority of the 2 million apprenticeships created since 2010 have been for school-leavers – in 2014/15 just 20% of starts were by those under 19. Well over half of new starts have also been ‘low-level’ (being offered at Intermediate level – equivalent to GCSE, a level that most school leavers have already reached) and ‘dead-end’ (not leading to permanent employment, or allowing progression to higher levels of training). Meanwhile, ‘cutting edge’ apprenticeships in engineering and technology for example, are massively oversubscribed.
Even Ofsted has published a damning report about apprenticeship quality:
‘Inspectors, observed for example, apprentices in the food production, retail and care sectors who were simply completing their apprenticeship by having existing low-level skills, such as making coffee, serving sandwiches or cleaning floors, accredited. While these activities are no doubt important to the everyday running of the businesses, as apprenticeships they do not add enough long-term value.’ (Ofsted, 2015: 4)
Morgan, like Wilshaw, is very good at spelling out options for ‘other people’s children’ but with so few alternatives available for young people, then it isn’t surprising that, despite the fees, most of those who are able will try progress to university to improve their chances of any type of reliable employment. Schools can hardly blamed for encouraging this.
Another Great Training Robbery or a Real Alternative Alternative for Young People?
Rewritten and updated January 2016