The coalition’s ‘flexible’ economic model relies on cripplingly low pay and rising job insecurity

John Harris | Comment is free | The Guardian.

A choice passage from the coalition agreement, to which not nearly enough attention has been paid: “We will review employment and workplace laws, for employers and employees, to ensure they maximise flexibility for both parties while protecting fairness and providing the competitive environment required for enterprise to thrive.” The warmer words in that sentence now seem flimsy, to say the least. If you want a more precise flavour of where things are headed, consider one of David Cameron’s recent prescriptions for economic success, lacking any such cuddliness, and echoed in an answer at yesterday’s prime minister’s questions: the righteous path, he reckons, is all about “reducing regulation and maintaining a flexible and dynamic labour market”.

What that means is obvious enough: for millions, the same deepening insecurity they experienced under the last government, and then some.

Vince Cable’s business department has plans to make access to employment tribunals more difficult, cheered on by such friends of the worker as Boris Johnson, lately heard decrying their “barminess”. The CBI howls, as ever, about other red tape. Meanwhile the pushing of more and more work from the public to private sector shreds plenty of protection, the growth of temporary and agency work continues apace, and rising unemployment pushes wages and conditions further downward.

The essential reality of our times is captured in a socio-economic term coined by the academic Guy Standing, and used for the title of his imminent new book, The Precariat: The New Dangerous Class. No wonder this week’s inflation figures showed prices rising twice as fast as average pay.

If the near-silent, gap-toothed street that leads from the station to the centre of town is anything to go by, Swansea is as threadbare an embodiment of hard times as you could imagine. Heavily reliant on the public sector, it faces a three-way knot of problems: the axe falling on government jobs, poor prospects for local business and the key consequence of the “flexibility” gospel – that any new jobs will be uncertain and insecure.

And the average local hourly rate? “Just above the minimum wage – not great at all,” one man tells me. “I’m sure there are jobs that pay higher,” offers a NHS staffer on £7 an hour, “but I can’t seem to find any.” A young woman who’s an office receptionist on around £6 an hour tells me her outgoings have lately increased by £100 a month, and her weekly budget leaves only £40 for anything more than travel to work, rent and bills – including food. To everyone I speak to, the combination of stagnating pay and rising cost of living seems cruel and increasingly unmanageable.

At the council refuse depot I meet Ian Alexander and his two colleagues. As litter pickers they get £6.30 an hour, with a £54 a week bonus. The latter may soon go, thanks to the council’s belated embrace of equal pay: as in many places, it looks like resulting in a levelling down for men rather than appreciable improvements for women. Meanwhile the workforce is made anxious by ever-increasing numbers of agency workers, employed on inferior terms, who come and go at speed. In rubbish collection, one man tells me, they may number 70% of employees. Among those on fixed contracts the impression is of privatisation by stealth. “There’s so much uncertainty – I dread to think where we’re going to be in three years’ time,” says Alexander, a former steelworker.

And this picture is not restricted to unskilled work, or the more blighted parts of the country. When we appealed for information and testimony about low pay, worsening conditions and ever-tightening budgets from readers of Comment is free, responses came back by the score, seemingly covering all corners of Britain, both public and private sectors, and most parts of the economy.

“I’ve not received a pay rise in nearly three years,” wrote one poster. “I earn a little above the minimum wage. On this I have to support myself and my chronically ill partner.” Another said: “We had our salaries reduced by 10% 18 months ago after two rounds of redundancies at my firm. I am lucky to have very little responsibility outside of looking after myself and my partner … a child or even a larger house would completely cripple us. Following rent, tax, bills and basic living costs, I am left with practically nothing to actually live life on. I have to claim housing benefit just to afford living in my one-bedroom flat.”

A set of telling numbers from another contributor, who has children, ran as follows: “My partner is facing a 5% pay cut, and for less money they are going to ask him to work an extra 15 hours a week so they can make redundancies. He already works 45, so he has to choose between 10 hours a day, six days a week, or eight-ish hour days, seven days a week.” And what about this: “My son is working fulltime as a painter on the Olympics site. He is paid £42 per day plus £5 daily “bonus” if he is on time. He loses the whole week’s bonus (£25) if he is late on one day.

“He has not received any pay rise since completing his apprenticeship, though he has repeatedly asked about his situation. He is expected to buy all his own painting equipment.

“To arrive at his place of work by 8am he leaves home every day at 6.30am. He has to take three different forms of transport to get to work, and I have to subsidise his living costs because he is so low-paid. I hardly need point out that this company is non-unionised.”

Such are the wonders of all that dynamism and flexibility, and an economic model with a rotten promise at its core. Work for less, with even fewer protections than before, but fear not – because that way lies recovery, and prosperity. For whom, exactly?

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