A Striking Study
Civitas, 13 September 2010
Last week saw the first of four planned Tube strikes by the RMT and TSSA unions, writes Stephen Clarke. In a similar vein the TUC’s annual gathering, which began today, saw the TUC’s Chief Brendan Barber call for ‘a broad solidarity of unions and communities under threat’, the threat being the Government’s austerity plan and budget cuts. Many have been quick to dub these developments another ‘winter of discontent’, with unions facing off against the Government, and neither backing down.
As the groundwork for this conflict was being laid, both in reality and in the media, The Economist reported on an interesting socio-economic development with important implications for the current industrial feud. Under the headline: ‘Automatic Reaction’ the newspaper drew attention to a number of recent studies which have examined the increasing polarisation of employment in developed countries. The authors of these studies note that since 1990 the developed economies of the world have witnessed a ‘hollowing out’ of the labour market, with employment in middle-skilled, middle-income occupations (sales people, clerks, machine operators etc) decreasing in relation to high and low-income occupations. In Britain the percentage share of total hours worked for middle-income occupations has decreased by over 10% between 1993 and 2006, in contrast the percentage share of total hours worked for low and high-income occupations has increased, for both groups, by about 5%.
This trend is explained by the hypothesis that automation and the development of information technology (IT) has meant that fewer middle-skilled employees are needed, as their jobs are increasingly carried out by machines. Evidence does support such a theory, in 11 countries data suggests that industries that adopted IT at faster rates also saw the sharpest declines in demand for people with intermediate levels of education. Assuming that there is a relationship between automation and decreasing employment opportunities for middle-skilled, middle-income employees, this has important implications for the current conflict between British unions and the Government.
The Coalition Government’s austerity plans involve cutting spending, but they also attempt to save money by improving efficiency. This facet of the plan is particularly evident in the current dispute between the RMT and TSSA union and the Government over planned reforms to the Tube system. The Government’s plans to reduce the number of ticket office staff is a move aimed at improving efficiency, and indeed saving money, through increased automation. It is no longer efficient to have ticket office staff doing the job that machines can do. This may provide a specific example of the argument that there is less employment opportunities for middle-skilled, middle-income employees because of improved IT and automated systems. The problem with this however is that people may lose their jobs (although it must be stressed that Transport for London promised that there would be no redundancies as a result of the changes).
This is where the unions step in. Unions have a mandate to defend jobs and delegates at the recent TUC conference debated a motion calling for the TUC’s general council to oppose ‘attacks on jobs‘. The problem however may be that in some cases job losses are necessary and, if other employment opportunities are created, beneficial. The ‘polarisation’ of the employment market in developed countries does suggest that some employees may no longer have the appropriate skills for the needs of the economy. Getting people out of unproductive areas of employment into other productive areas is the only solution in the long-run. The problem with the current conflict is that both the unions and the Government need to be honest about the possibilities of job losses, but the goal of both should be to ensure that those who lose their jobs find other employment opportunities. The unions should not automatically oppose job cuts in the public sector as a knee-jerk reaction but should work with the Government to create public services that do an efficient and effective job. If Britain had public services operating in this manner they may employ less people, but this may not necessarily be a bad thing, provided that jobs are made available elsewhere. This should be the goal of the Coalition’s austerity plan, not job cuts but productive job redistribution, a goal the unions should support.