By Oliver Crunden
It seems common sense that anyone should be able to sell their labour at a price that affords them an acceptable standard of living. But even with recent increases in the minimum wage, it is still short of providing an income that would guarantee what the public define as the lowest acceptable standard of living. The rate is currently 18% below what it takes to achieve this for a single person working full-time and 37% below for a lone parent working full-time. Common sense appears to be an increasingly rare commodity these days. In fact, I would even wager that brokers are shorting shares of ‘CmnSns’ on the international commodities market as I write this. Ok, so we’re a little way off materialising common sense, but the assertion that workers should be paid for their time, be treated with dignity, respect and be protected from unfair practices is more than common sense. It’s the law. Surely we can rely on the good old British legal system, far above silly ‘common sense’ and extolled worldwide, to provide workers with the legal protections they deserve? Sadly, that is the cheap rhetorical question it appears to be. The answer is no, no we can’t.
Everyone working in the UK is legally entitled to a set of rights: the minimum wage, currently set at £8.70 for those over 25; paid holiday; a meagre and time-limited income provided by the state if you fall ill, £94.25 a week for the first 28 weeks of illness; protections against being unfairly fired; and, protections against discrimination at work because of who you are or what you look like.
But if we are to learn anything from the 1948 Universal Declaration of Human Rights, it’s this: a bunch of powerful people signing a piece of paper does not automatically result in change in the material world. There is a big difference between a rhetorical commitment to something, in our case workers’ rights, and the enforcement activity required on the ground to ensure those words and signatures materialise as fair working conditions. (Read Laurie’s article in this issue for another example of this in the form of human rights abuses currently being committed against the Rohingya people in Myanmar.)
Currently, work on the ground to protect workers’ rights is thinner than the paper on which the signatures are inked. It should be no surprise that in austerity Britain, where business interests have been continually prioritised over concerns for workers, labour market enforcement is woefully under resourced. An employer can expect to be visited by HMRC minimum wage inspectors once every 250 years. And that is the low end of the range of estimates. The 2018/19 annual report by the Director of Labour Market Enforcement, Sir David Metcalf, puts this figure at once every 500 years. The Migration Advisory Committee expressed similar concerns in 2014, calculating that UK firms are prosecuted, on average, once every million years.
To put this into perspective: the Department for Work and Pensions (DWP) are currently enacting a dystopian surveillance campaign on an alarming scale, which, alongside their 4,000 strong team dedicated to dealing with benefit fraud, is costing the public purse a pretty penny. People claiming disability benefits currently fear being investigated for fraud as a result of merely exercising their democratic right to peacefully protest about issues that directly affect their lives. Gym memberships, Sainsbury’s shopping lists, social media posts and CCTV footage are a few of the sources that officials draw on to proactively compile cases against claimants. In contrast, the 412 HMRC inspectors tasked with enforcing employment law merely respond to complaints made by the public, sending out ‘nudge’ letters to employers in the first instance which politely ask them to change their practices and report back once they have done so.
DWP itself estimates that benefit fraud amounted to £2.3bn in 2018/19, 1.2% of the total amount spent on welfare in that tax year. Nick Clark, research fellow at Middlesex University, put unpaid holiday pay alone at £1.8 billion in 2016 and for the financial year 2017/18, HMRC identified £15.6 million in national minimum wage arrears.
Measuring labour market violations is incredibly difficult because, well, it’s illegal and employers are not going to say their doing it. Employer surveys won’t provide reliable answers, and tax returns will only capture cases of non-intentional non-compliance. Relying on official figures is problematic, they are a product of the effectiveness and scale of current enforcement efforts, only those ‘caught’ appear in the £15.6m figure. The Low Pay Commission estimates that official complaints make up just 2% of actual violations, putting the real figure closer to £1bn. And this is merely the tip of the iceberg that threatens to tear apart the ‘work pays’ ship. Thousands more will be denied wages outright or illegally dismissed from work altogether.
Compared to the benefit fraud team at DWP headquarters, there is a measly squad of HMRC enforcement officers just a tenth of their number charged with tackling an issue of a far greater magnitude.
This is where our priorities currently lie, creating a hostile environment for the most vulnerable in society, while allowing (through concerted inaction) the most powerful to take huge sums out of their pockets, denying society tax revenue in the process. Orwell said in 1934 that colonialism amounted to officials holding down the native while the businessman went through their pockets. Today, the poor experience a similar fate. Given that people from BAME communities are disproportionately represented amongst those denied their rights at work, we might be bold enough to ask how much things have changed.
So why is this happening? The short answer is this: because workers are perceived to be vulnerable and in modern capitalism, the pursuit of profit is ultimate. Holiday pay accounts for around 12% of a business’ wage bill and in low capital industries where employers are merely creaming a percentage of workers’ wages – security, cleaning, temporary labour agencies – this is where target-driven managers are going to look to maximize returns to shareholders.
The longer answer is more complex. Four main issues have functioned to swing the balance of power away from employees and towards employers, making workers vulnerable to exploitation. Firstly, the decline in unions. Trade union membership now averages at 22% across England, having steadily decreased year on year to 2016 from a record high in 1979. This is the intended result of the ‘reforms’ passed under Thatcher.
Secondly, a lack of awareness and lowering of expectations. Where do you hear about employment rights, or wage theft these days? Well, one place is through union representatives that fewer and fewer have access to. School leavers are getting packed off from school into insecure work that offers them little in the way of wages and where society affords them even less in the way of dignity and respect. They are told, through ‘employability’ lessons in school and the normalisation of unpaid internships, that their labour is almost worthless and to graciously accept whatever working conditions they find themselves in. That’s how it is in the ‘real world’.
Thirdly, rapid changes in the world of work. The rise of zero hours contracts and ‘one-sided flexibility’ means many are locked in to working arrangements that give managers the ability to demand the world of their employees while providing little in return. This equips employers with an arsenal of tools to discipline those who do not tow the increasingly weighty company line, slung onerously around the necks of vulnerable workers. Speak out or stand up for yourself and you get ‘zeroed-down’, your hours given to a colleague who sat down when told – and who could blame them? This is not the kind of environment in which collective solutions organically grow, it’s the kind of environment where potential allies are pitted against each other to the detriment of everyone working for the minimum wage, and to the benefit of anyone underpaying it.
Marx spoke about the concept of a reserve army of labour, the undifferentiated mass of the ‘unemployed’, used to break the spirit of rebellious workers demanding more. “If you won’t work for this wage, there is a long line of hungry people who will, so make your choice”. Nowadays, with employment at record highs, it seems the concept no longer needs a physical embodiment to be effective.
And fourthly, an almost absent national enforcement system and inaccessible legal support. Employers know they can get away with it and those who experience violations are increasingly barred from accessing legal advice. Legal reforms passed in 2012, ostensibly to prevent frivolous litigation, mean that even those living below the official poverty line do not qualify for legal aid.
With a seemingly bottomless well of injustice, it’s incredibly easy to be defeatist. But there are shafts of light penetrating the cave of despair that we’ve built, they just don’t make it to the front page. The IWGB union are a deep source of hope; UNISON won a court case in 2016 that led to the abolition of employment tribunal fees (yes, workers denied wages were for a time required to pay to bring their case to court); and the ‘workers centre’ model, flourishing in the US, provides inspiration on how collectivist solutions can be forged in the context of an absent state.
And some progress is being made by the government, albeit in a mostly rhetorical sense, through the newly published Good Work Plan. The latest spending review announced £28 million for HMRC to delivery enforcement activities which, after accounting for inflation, is around a 4% increase on last year’s budget. We could be up to 500 inspectors by next year. But there is an incredible amount still to be done. Real, sustained improvements will require lower barriers to accessing legal support, increasing union membership, changing workplace culture, and raising awareness of rights issues across the board. You need to be aware that something is not right in the first place before you can do anything about it.
And just as signs of movement in the right direction are starting to appear, it could all be taken away with one blonde blur of movement, leaving a residual “phwaooar!” hanging in the air. One of the biggest fears about Brexit, and Johnson seemingly behind the wheel – whether it is actually attached to a working rudder or just a toy imitation is another story – is the likely erosion of an already fragile employment rights framework.