A man walks past a job recruitment centre in London, on January 22, 2014. Photograph: Getty Images.
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More jobs aren't enough - we need better jobs too

For the majority of people, fair pay, flexible working patterns and genuine work-life balance remain an illusion.

The latest batch of labour market statistics appear to offer positive news. Unemployment has fallen, the claimant count is down and the gap between earnings and prices has narrowed. But we are not out of the woods yet - far from it. Dig a bit deeper and the statistics show that the Britain’s labour market has been characterised by profound structural problems for some time, all of which have worsened as a result of the global crisis. The UK is a low-wage, low-skills, long-hours economy, with far too many insecure, poor-quality jobs. For the majority of people, fair pay, flexible working patterns and genuine work-life balance remain an illusion. 

While the profitability of UK companies and executive pay has recovered from the recession, average wages still lag behind the cost of living and are around 6 per cent below what they were in 2007. One in five employees now earn less than the Living Wage (£7.65 outside of London); youth unemployment remains stubbornly high; underemployment is a persistent problem, with 1.4m part-time workers saying that they would like to work full time but cannot find a job. Recent falls in national unemployment disguise stark regional differences, with almost half of all the net employment growth taking place in London and the South East. 

These short-term problems have compounded the difficulties that predate the recession. Wages and salaries for most people have been stagnant for nearly a decade, even while top pay has continued to rise. Despite the National Minimum Wage (and the Living Wage campaign) the numbers of people experiencing in-work poverty has increased. Recent employee surveys also show that British workers are feeling more disengaged, less secure and more pressured at work than at any time since the 1990s. The quantity of employment may have increased during the boom but the quality of employment certainly didn't. 

Work (or the lack of it) can have a big impact on health, life expectancy and the wherewithal to fully participate in society. The way in which low pay impacts on inequalities, family relationships, problem debt and social mobility have been extensively documented. What is less well known is that the quality and nature of today’s jobs present challenges for those on decent earnings too. Work can still be pretty awful even if you are paid decently and have a permanent contract. The world of work has changed dramatically since the days of typing pools and assembly lines employing thousands. The decline of skilled and unskilled male manual work, more managers and professionals, and the rise in the number of women at work; all have transformed the labour market. Many people have benefited from these changes, with more satisfying jobs and career prospects. But at the same time there has been an expansion of low-quality, low-paid, insecure employment (especially for women). We have also seen an increase in low wage self-employment as those made redundant make a virtue of necessity and try working for themselves. These trends are often said to be due to the rapid growth of small businesses which need to be free of employment regulations, yet despite the over-enthusiastic rhetoric about the importance of small firms, three in five employees continues to work for an organisation with more than 250 workers.

There has been greater employment flexibility, for both employers and employees, with a wider range of working patterns enabling people to balance work and their family responsibilities. But at the same time there has been a decline in the level of control people experience at work, the extent of their ability to participate (both individually and collectively) in decision making processes and a consequent decline in the level of trust in senior managers. For the majority working life seems to have got tougher. People report that they are working harder and are subject to more intrusive performance management systems. Even though skill levels have been rising many employees report that they rarely use all their skills in the workplace. One third of the workforce report a recent experience of unfair treatment. Barely a third of employees are committed to the success of their employer’s business.

In most workplaces, employees have no mechanism to influence (or even express views) about the critical decisions affecting working life, which probably explains why we now have the second lowest level of employee participation in the whole of the EU (only Lithuania is worse). This woeful performance in employee "engagement" has been exacerbated by the decline in trade union membership – which has nearly halved since the late 1970s (and even more so in the private sector).

Union decline, while welcomed by many employers, is at least partially responsible for the growth of income inequality. Productivity growth drives wage growth and improvements in living standards; there can be no guarantee that employees will receive their fair share if there is a dramatic difference in bargaining power between workers and their employer. Recent experience proves that all the gains have gone to those at the top of the income scale. There is also evidence to show that giving workers voice boosts productivity and trust in the workplace. A sustainable economy is an economy that guarantees a degree of workplace democracy and a fair distribution of rewards.  Rather than stand aside, should the government help extend the coverage of collective agreements and support fair-wages policies or new forms of worker voice, such as works councils?  

Some of the country’s employment problems are rooted in the structural weakness of UK PLC: our poor labour productivity record (UK output per worker is a long way behind the US and most of the EU), ever-worsening regional divides, a culture of short-termism, and weak corporate governance. Others are a symptom of labour market deregulation and the declining  bargaining power of workers and clout of shareholders. What is important, as we emerge from the depths of recession, is to understand where the world of work is heading and how we can make tomorrow’s workplace better than today’s.    

Over the coming months, I will be leading an independent inquiry for the Smith Institute into working life in Britain. We will be looking at all these issues and taking evidence from workplaces and boardrooms from across the country. We aim to challenge government, employers and unions, to show how they can work in social partnership to create more productive, more inclusive, more secure, and fairer workplaces.

We are now at a crossroads. We can continue with a race to the bottom, reducing labour costs, denying employees a voice and ignoring the rising inequality and insecurity at work. Or we can try and forge a new deal which places a premium on co-operation for excellence, fair pay and higher standards of employment where the best employers are copied by the rest.  

Ed Sweeney is the former chair of Acas and is leading the ‘Making Work Better’ Inquiry for The Smith Institute

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Metro mayors can help Labour return to government

Labour champions in the new city regions can help their party at the national level too.

2017 will mark the inaugural elections of directly-elected metro mayors across England. In all cases, these mayor and cabinet combined authorities are situated in Labour heartlands, and as such Labour should look confidently at winning the whole slate.

Beyond the good press winning again will generate, these offices provide an avenue for Labour to showcase good governance, and imperatively, provide vocal opposition to the constraints of local government by Tory cuts.

The introduction of the Mayor of London in 2000 has provided a blueprint for how the media can provide a platform for media-friendly leadership. It has also demonstrated the ease that the office allows for attribution of successes to that individual and party – or misappropriated in context of Boris Bikes and to a lesser extent the London Olympics.

While without the same extent of the powers of the sui generis mayor of the capital, the prospect of additional metro-mayors provide an opportunity for replicating these successes while providing experience for Labour big-hitters to develop themselves in government. This opportunity hasn’t gone unnoticed, and after Sadiq Khan’s victory in London has shown that the role can grow beyond the limitations – perceived or otherwise - of the Corbyn shadow cabinet while strengthening team Labour’s credibility by actually being in power.

Shadow Health Secretary and former leadership candidate Andy Burnham’s announcement last week for Greater Manchester was the first big hitter to make his intention known. The rising star of Luciana Berger, another member of Labour’s health team, is known to be considering a run in the Liverpool City Region. Could we also see them joined by the juggernaut of Liam Byrne in the West Midlands, or next-generation Catherine McKinnell in the North East?

If we can get a pantheon of champions elected across these city regions, to what extent can this have an influence on national elections? These new metro areas represent around 11.5 million people, rising to over 20 million if you include Sadiq’s Greater London. While no doubt that is an impressive audience that our Labour pantheon are able to demonstrate leadership to, there are limitations. 80 of the 94 existing Westminster seats who are covered under the jurisdiction of the new metro-mayors are already Labour seats. While imperative to solidify our current base for any potential further electoral decline, in order to maximise the impact that this team can have on Labour’s resurgence there needs to be visibility beyond residents.

The impact of business is one example where such influence can be extended. Andy Burnham for example has outlined his case to make Greater Manchester the creative capital of the UK. According to the ONS about 150,000 people commute into Greater Manchester, which is two constituency’s worth of people that can be directly influenced by the Mayor of Greater Manchester.

Despite these calculations and similar ones that can be made in other city-regions, the real opportunity with selecting the right Labour candidates is the media impact these champion mayors can make on the national debate. This projects the influence from the relatively-safe Labour regions across the country. This is particularly important to press the blame of any tightening of belts in local fiscal policy on the national Tory government’s cuts. We need individuals who have characteristics of cabinet-level experience, inspiring leadership, high profile campaigning experience and tough talking opposition credentials to support the national party leadership put the Tory’s on the narrative back foot.

That is not to say there are not fine local council leaders and technocrats who’s experience and governance experience at vital to Labour producing local successes. But the media don’t really care who number two is, and these individuals are best serving the national agenda for the party if they support A-listers who can shine a bright spotlight on our successes and Tory mismanagement.

If Jeremy Corbyn and the party are able to topple the Conservatives come next election, then all the better that we have a diverse team playing their part both on the front bench and in the pantheon of metro-mayors. If despite our best efforts Jeremy’s leadership falls short, then we will have experienced leaders in waiting who have been able to afford some distance from the front-bench, untainted and able to take the party’s plan B forward.