COVID-19 is both a public health crisis and a socioeconomic one, like the 1918 Spanish Flu pandemic. As such, it is distinct from purely economic crises like the Great Depression or the 2008 Global Financial Crisis. This is because work now has to be primarily reduced, not expanded. A notable exception are those fortunate to be able to work from home and the most socially vital ‘real key workers’ who are keeping society functioning and supporting human life. Some jobs suddenly deemed essential were previously wrongly misclassified as lower skilled or unskilled by the UK government and others, as highlighted by Holly Hughes elsewhere in this issue. Many key workers are low-paid, with some experiencing in-work poverty and even dependent on foodbanks.
Socially vital vs bullshit work
When COVID-19 subsides, a fundamental re-evaluation is required of how socially vital jobs are valued and rewarded in comparison with bullshit jobs (see also ‘bullshit about jobs’). Polarisation between what are considered low skill/low pay and high skill/high pay jobs in the UK labour market is systemic, structurally embedded, political, and consolidated by class, gender and race discrimination. Clearly, some are more equal than others.
UK capitalism has deified pursuit of profit maximisation and those who ‘make’ most money, but extractive financialised capitalism offers little or no social value, especially in a pandemic. Indeed, the British corporate welfare state has been associated with widespread state handouts to big business who in turn have evaded social responsibility and tax.
COVID-19 is shining a spotlight on the need to rethink the future politics of work. In so doing, reflecting on the past is important. Not least because countries vary in their institutional pathways which shape the present and futures of work.
In the UK, for example, 40 years of neo-liberalism has deregulated labour markets and greatly increased the precarious jobs most vulnerable to COVID-19. Britain’s collectivist social institutions have severely atrophied. Trade unions have declined, while public services and the welfare state have been eroded by ten years of austerity (2010-2019) imposed by successive Conservative governments.
Responsibility and risk have been displaced onto atomized individual ‘human capitalists’ to compete in a flexible labour market by developing resilience and employability. However, this ‘human capital hoax’ looks suspiciously like deflecting blame for economic mismanagement (e.g. insecurity and debt) onto the victims of neoliberalism.
Karl Polanyi’s brilliant book The Great Transformation (1944) criticised the destructive impacts of self-regulating markets disembedded from society in the nineteenth and twentieth centuries. The destructiveness of market fundamentalism has returned today with acquisitive neoliberalism and the hollowing out of the welfare state.
Neo-liberalism needs to be bulldozed to reverse the cannibalisation of society by market competition. Even the Financial Times has noted how this crisis has illustrated the frailty of the social contract, and that radical reforms reversing the prevailing policy direction of the last four decades are necessary.
Countries like the UK (and US), which are more individualist and favour the free market, are presently less equipped to protect both workers and unemployed people than more collectivist northern European countries that have preserved social institutions and the welfare state. Insecure low-wage work is most pronounced in liberalised market economies like the UK, which has limited employment protection.
Are UK protections sufficient?
The COVID-19 crisis compelled the UK’s Conservative government to belatedly introduce collective interventions (to protect jobs) not normally associated with the Tories. On March 20, UK Chancellor Rishi Sunak announced an “unprecedented” job retention scheme: the state will pay employers a grant of 80% of workers’ wages (maximum of £2,500 per month) if firms retain employees. This was eventually followed by income protection for the self-employed. It shows how important trade unions remain, with European-style wage subsidies advocated by the Trades Union Congress in discussions with government and employer groups.
The chancellor also raised Universal Credit by £1,000 per year and extended statutory sick pay to the self-employed. However, Conservative assaults on the welfare state have left benefits far below other Western European countries. They are insufficient to survive on, given the increased cost of living expenses.
The Labour Party and the Trades Union Congress, among others, had pressured the government to enact bold policies: including wage subsidies, increased statutory sick pay and social security benefits, to ease debts and help with rental costs/bills. Of note were Labour’s proposals for the state to pay up to 90% of wages (but directly to workers), with employers paying the remainder, and an increase in statutory sick pay to real living wage levels.
Various loopholes in the government’s job and income protection scheme have been identified; notably problems with universal coverage. Those on the most precarious ‘atypical’ or agency contracts may be excluded. The UK scheme also precludes short-time working measures, unlike countries including Germany (see below).
Such loopholes are one reason underpinning exhortations for a universal basic income (or a minimum income guarantee) to pay every adult a flat, unconditional sum of money while the crisis persists. Advocates see this as a vital way to compensate people who need to stay home in a pandemic and to give low-paid people security to not have to work. It is noteworthy that the Spanish government is planning to roll-out a universal basic income.
More generally, on the ground there are wide variations in UK employers’ responses to COVID-19 – notably between responsible compassionate employers who consult workers, and exploitative ones who breach health and safety and silence worker concerns. Charlotte Villiers highlights a number of these employers in her blog for this issue.
European collective bargaining
Capitalism is a global economic system, but substantial variations persist between different countries and their institutions. Those European states that are most unionised, collectivist and have the most developed welfare states offer greatest protection to workers.
In part, they achieve this through tripartite bargaining with unions and employer associations. It is noteworthy that the UK chancellor also held discussions about COVID-19 with unions and employer groups, resulting in the new employee protection measures, and subsequent meetings have occurred. It is unclear if this tripartite ‘social partnership’ will gain traction in the longer term. Other European countries have been doing tripartite bargaining for decades, an approach continued in their response to COVID-19.
In Denmark, the government and social partners agreed national short-time working protections: the state will pay 75% of wages for three months if employers do not lay off employees. Employers will cover 25% of the wages and workers will cover 5% by taking five days fewer holiday. In Sweden, laid off workers are guaranteed 90% of wages: half paid by government, half by employers. In Norway, workers are entitled to 100% wages for 20 days (18 days paid by government and two by the employer), then 80% onwards; the self-employed are also protected. Germany has expanded access to its famous short-time working scheme (Kurzarbeit), and the government will subsidize (Kurzarbeitergeld) 60% of net wages, or 67% for working parents. In Austria, a short-time working package guarantees a net replacement wage of 80-90%. Other EU countries are providing similar protections through collective bargaining.
What is to be done?
The pandemic is already having devastating effects on the world of work, both in the UK and globally. Policymakers, while understandably pre-occupied with dealing with COVID-19 in the present, will need to turn their attentions to the future politics of work.
Rather than a utopian post-work society, the reality is that most working people have no alternative to the wage-effort bargain to survive in the world of work. Indeed, under market fundamentalism, people feel compelled to compete to be exploited, as noted by sociologist Michael Burawoy. However, this does not mean that we cannot pursue more emancipatory new futures of work, and champion public sociology.
A sharp U-turn away from neoliberalism is vital. But, to do so, pressure needs to be applied through collective struggle and counter-movements against unfettered market commodification and to hold power to account.
The state should play a much more progressive and redistributive role in the economy. Policies considered taboo, even socialist, by the Conservatives in particular, now need to be on the agenda to radically reform the post-crisis world of work.
The EU needs to focus on strengthening its employment and social rights dimension to stave off the threat of racist populist nationalism.
In the UK context, when the pandemic recedes, there are no political excuses for not rebuilding the welfare state (a new social contract) and improving employment rights for all workers. Consideration could be given to redistributing working hours, a shorter working week, and reducing underemployment.
Moreover, a new jobs strategy is urgently needed that places job quality centre stage, and repairs socially damaged communities. COVID-19 demonstrates the importance of key workers in the foundational economy. State job strategy, both nationally and locally, should focus on depressed regions – often Brexit-voting – to guarantee better jobs grounded in ‘foundational economy’ local community necessities, such as health and social care, housing, transport, food production and distribution, and green projects. The latter relates to proposals for a Green New Deal.
Focus on the foundational economy would ideally be combined with a ‘job guarantee’ scheme. To begin, a ‘job guarantee’ could be targeted and piloted in the most disadvantaged places. In so doing, the state could facilitate new human-centred social contracts to stop extreme cases of profit/shareholder maximisation and labour exploitation. Responsible employers trading in local communities would comply with procurement rules embedding social responsibilities like good quality secure jobs guaranteeing a real living wage, living hours, good training, and, ideally, trade union rights to boost workers’ bargaining power.
One thing is clear on both sides of the Atlantic: socialists, Democrats and other progressive allies need to advance big practical ideas like the ‘foundational economy’ and a ‘job guarantee’, to counter-mobilise against their regressive right-wing opponents. Timidity does not work in an era of neo-liberalism, Trump, Brexit, corporate plutocracy, financialisation, austerity, and now COVID-19.
Tony Dobbins is a Professor of Employment Relations & HR Management Director of MSc HRM Programmes.