Flexing Back to Serfdom

What is it about employers and their demands for a flexible workforce? By ‘flexible’ they appear to mean sackable at will. This view of people as no more than units of production inspired Karl Marx and Friedrich Engels in the 19th century, and subsequent philosophies of communism. For a time, especially in Western Europe and North America post-1945, communism retreated into the archive of failed doctrines. Economic growth made workers into desirable assets, and their incomes rose. The capitalist system seemed to be delivering prosperity for all.

As we look back, we can link our exploitation of fossil energy, especially oil, with economic expansion, but like those supermarket bargains of the day, once it’s gone, it’s gone, and the outcome is economic contraction. Competition is fiercer, employers depersonalise their staff and treat them like widgets. It is a step back towards serfdom.

‘Renting to be ‘way of life’ for young UK families’, read a headline in The Observer on June 10th 2012, above a story by Toby Helm and Tegan Rogers. “Millions of young families are entering an era of insecurity in which renting becomes the nom, according to a report that warns of steep increases in the number of parents unable to buy their own homes”, they said, quoting a Cambridge University study.[1] Over the previous five years, the number of families with children having to rent private accommodation soared 86%, they said. Generally, they are renting because they cannot afford to buy. Many families “are paying half or more of their income in rent and, as a result, have little or nothing left at the end of the month to save for a deposit.”

The Cambridge University report would probably have been even gloomier if it had considered looming issues of resource scarcities, which intensify competition and push costs up and wages down and so are serious albeit underplayed policy priorities.

If your employer makes you redundant, and you cannot get another permanent full-time job, you are not likely to get a mortgage either. Work insecurity also means housing insecurity.

A good 40% of households in the UK do not have the resources to repay a mortgage, and for another   20% it is a dubious proposition. Home buyers are concentrated in the upper third of the income distribution. At the top of the scale, households are doing very nicely, better than at the start of the millennium, but their advance is at the expense of everyone else.

In 2010 the incomes of UK households looked like this:

From Family Spending, 2011 edition, Office for National Statistics, tables 3.2 and A6

The hardest-up 10% of households had average incomes under £8,320 in 2010, and average spending of £9,651 – quite a gap! Spending ran ahead of incomes in the four lowest income deciles, and was barely lagging income in the fifth decile. The most affluent 10% of households, in the top decile, were very comfortable in comparison. However, the picture is complicated by several categories of ‘spending’ that are excluded from the figures: life assurance, pension contributions, net income tax, national insurance, mortgages and outright purchase or alteration of dwellings, repayment of debt consolidation loans, savings and investments –categories of expenditure that are either compulsory, as with income tax and national insurance, or are voluntary payments made with the intention of making households more financially secure, and less dependent on the state, in future. Only the highest-income 30% of households seem to be in a relatively strong position to improve their financial resilience.

For more than two-thirds of households, pressures from their paymasters — whether government welfare, public-sector employers or employers in the private sector — to do more for less will further damage their ability to provide for their own futures. We don’t seem to be following a very secure path.

Shouldn’t we stop holding mammoth employers in awe, and deferring to them as our economic saviours? Their interest in us is purely financial. Instead, shouldn’t we put a lot more effort into not-for-profit and co-operative enterprises, in which worker members have a genuine stake? The futures of work, and of payment for work, are issues that government tries to treat as non-issues, as solely the responsibility of individuals, who can get good jobs if they try hard enough. If only that were true, but it’s not. Nowhere close.

[1] ‘Housing in Transition: understanding the dynamics of tenure change. A report for the Resolution Foundation and Shelter by Christine Whitehead, Peter Williams, Connie Tang and Chihiro Udagawa, Cambridge Centre for Housing and Planning Research, 2012


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