Britain - The resistible rise of casualisation

Autumn 2017

Out of Britain's total workforce today, as many as 24% are in part-time jobs, 15% are self-employed, 4.8% on short-term, casual or seasonal full-time contracts, 2.8% on zero-hours contracts and 1.6% on apprenticeships. Add it up and this means that almost 1 worker in 2 is in an insecure job or one which doesn't pay a full wage. For those trying to find a job, the only choice is between short-term, precarious work, with or without a contract - or long probation periods without the guarantee of a permanent job down the line.

The government may well boast about employment being "up to a record high", as did Theresa May in her speech to the Tory Party conference, in September. But the 75.3% employment rate her government boasts about includes all these precarious, low-paid jobs, which barely provide workers with enough to live on!

The fact that these jobs have expanded to all sectors of the economy illustrates a rising trend in this capitalist society, a trend that has even been noticed by some bourgeois economists and commentators, like this Financial Times editor who described the growing casualisation as "a conscious choice by investors and entrepreneurs to dodge laws that exist to protect workers." As if this was anything new!

But how have workers' conditions reached such a degree of deterioration - and this, over such a relatively short period of time?

From the "boom" years to the economic slump

Casualisation has not always been that widespread. During the two decades of the modest post-war economic expansion - often referred to among trade-union officials and Labour politicians as some kind of "good old days" - casual jobs were, in fact, the exception.

But although casual jobs were rare, they were disproportionally present in certain industries, like for instance in the building trade. In this industry, where workers went from building site to building site, they often worked on "the lump" - i.e. they were self-employed and were paid a lump sump for a day's or a week's work. While the bosses were given a tax incentive to encourage the use of "the lump", these workers had to pay all taxes and National Insurance contributions out of their own earnings. The "lump", combined with low wages (the national minimum rate for a labourer was £17 for a 40-hour week) and the very high rate of accidents (76,000 incapacity certificates recorded due to construction accidents, in 1971) was in fact, the backdrop against which the first national building workers' strike took place, in 1972.

But overall, during the first 2 decades after WWII, only a small minority of the working class worked in casual jobs. This was a period in which the capitalist class was prepared to buy social peace by allowing working conditions to gradually improve - in so far as the overall cost of this improvement was more than made up by increased profits.

And their profits did increase, thanks to extraordinary circumstances: the enormous destruction caused by the war and, thereafter, the vast state reconstruction programs undertaken, created a favourable situation for productive investment, the expansion of markets and as a result, the expansion of production - and a parallel rapid increase in profits. This bounty, of course, was to come rapidly to an end - and with it, any improvement in working conditions.

Between 1971 and 1974, a crisis of over-production broke out, initially in the form of a currency crisis. In fact, after the interruption created by the war and its destruction, the world crisis of the 1930s was resuming its course.

The post-war, dollar-based monetary system collapsed, world trade and production spiralled down. In their drive to maintain their profits against the backdrop of shrinking markets, the capitalist class went for drastic cuts in labour costs. From this point onwards, every government was to try to help the bosses in their drive against workers' wages and conditions.

Labour and Tory - against the working class

So when in 1974 the Labour government came back to power, after a short interlude under the Tories, it proceeded to try and save a capitalist system which was in serious trouble. PM Harold Wilson started by bailing out failing private companies on state funds - like Chrysler's British subsidiary, which was awarded a £162m subsidy despite sacking 8,300 workers, or one-third of its workforce!

However, while Wilson was bailing out companies with one hand, he was introducing cuts with the other. So for instance in the NHS, staffing levels were frozen, positions were not filled and the ancillary staff were cut by centralising catering, laundry and laboratory facilities.

To pacify public sector workers, a new "Social Contract" was pompously announced as an "historical" agreement aimed to "convince the worker, his family and his trade union, that an 'incomes policy' is not some kind of trick to force him... to bear the brunt of the national burden." However, this "Social Contract" did turn out to be a "trick to force workers to bear the brunt of the national burden": whole sections of workers in the nationalised industries were blackmailed into agreeing to cuts in wages and conditions, allegedly to avoid massive job cuts. And this is when the development of in-house contractors was first initiated in public services! By the late 1970s, in the context of worsening crisis and a growing wave of strikes against a 5% cap on wage rises, the Labour government was seen as less and less capable of containing the anger of workers. The "Winter of Discontent" of 1978-79 - the largest strike wave since the 1926 General Strike - convinced the capitalist class that Labour couldn't do the job.

What allowed Thatcher's Conservative government to succeed where Wilson and Callaghan's Labour governments had failed, was the economic depression of the early 1980s - with the resulting sharp rise in unemployment: by 1983, the proportion of the unemployed had more than tripled compared to the pre-crisis levels of 1973, reaching 11.3% of the total workforce! And the bosses proceeded to make the best of this situation, with Thatcher's help.

In 1980, Compulsory Competitive Tendering was introduced in public services. This allowed private subcontractors to bid for the delivery of services to the public sector, such as catering, cleaning, security and transport. As a result, the proportion of workers on temporary contracts went up from 5.5% to 7%.

Joblessness among the 16 to 24 year-olds skyrocketed as well, reaching 20% in 1983. This was taken as an excuse for the Tory government to introduce punitive programmes for the unemployed youth, such as the Youth Training Scheme. These targeted school leavers, aged 16 and 17, offering them poorly paid, on-the-job training programs. Employers could, therefore, exploit school leavers for cheap labour, having to provide only 13 weeks of "training" per year. And of course, how much training was provided in those 13 weeks was never closely scrutinised!

Yes, the working class had been weakened by the depression and was disoriented by the failure of the union leadership to build on the militancy of the strikes of the previous period. And this meant that Thatcher, and Major after her, were able to finish the job started by Labour. Large sections of public sector workers were now doing casual jobs, while the number of cowboy subcontracting companies skyrocketed.

But Thatcher had failed to prevent large strikes and didn't dare to go further in her offensive against the working class. It was the turn of Labour, under Blair, to take the lead in the next wave of attacks against workers' conditions.

Blair's "flexible labour market"

Some of the worst attacks so far seen against workers' conditions and the generalisation of casualisation came, in fact, under Blair. He picked up the dirty work where the Tories had left off, making the most of the demoralisation caused by the defeat of the miners' strike and the willingness of the union bureaucracy to go along with his "New Labour" policies.

From the beginning of his term, Blair made it easier for the bosses to dodge NI contributions, a policy that had perverse effects on the number of low-paid jobs. The threshold above which NI contributions had to be paid by the bosses was significantly raised, from £63 to £84/week. This meant that it became quite profitable for employers to hire workers part-time - or full-time paid at lower rates - so that their total pay remained just under this threshold. Of course, this produced a sharp rise in part-time employment and in low-paid jobs!

But Blair considerably expanded the use of low-paid subcontractors in public services as well, by building on Thatcher's Compulsory Competitive Tendering. During the Blair years, 10% of all local government employees were on short-term contracts, 19,700 supply teachers worked via agencies in England and Wales every day, and about 10% of the nursing workforce was already employed by an agency!

In fact, one of the biggest areas for agency work was, and still is, the health sector (private and public). One year after Blair was re-elected, the biggest health employment agency, Nestor, already supplied 92,000 nurses and controlled around 18% of the whole health and care worker labour market!

Unsurprisingly, the number of employment agencies skyrocketed during Blair's years, to 10,000 by the beginning of his second term! Jobcentres were subcontracted to several of these agencies - like Manpower and Reed - which already provided agency work to 700,000 workers!

Subcontracting firms and "temp" agencies, in turn, were to expand their operations to the private sector. So for instance, car manufacturers like BMW, increasingly resorted to agency contracts. By 2002 in the Mini plant in Oxford, at least one third of the BMW workforce consisted of agency "temps" - and this is still the case today!

In fact, it was Labour's drive against the unemployed, which made it possible for companies to find a cheap and flexible workforce - what Blair called a "flexible labour market" - and for the capitalist classes to boost its profits.

Blair first proceeded to soften up the resistance of the jobless against taking low-paid jobs. Already the length of time the jobless could get paid benefits had been significantly reduced by the Tories by replacing the old unemployment benefit with the so-called Job Seekers' Allowance. Blair went one step further, with the introduction of the "New Deal" in 1998, a scheme supposedly designed to "help the unemployed into work".

Following in the footsteps of the previous Tory government's "Project Work", the New Deal forced workers into taking the first job on offer, by threatening to withdraw benefits from those who "refused reasonable employment".

The government also attacked the so-called "economically inactive" workers - workers on incapacity benefits, disabled or with chronic conditions, lone parents and the long-term, older jobless workers, etc. - who were also blackmailed into taking the first casual job or training scheme on offer, under threat of losing their benefits.

This was how Labour forced hundreds of thousands of workers from poverty on the dole to poverty in lousy non-jobs. The era of "high employment" (but what kind of employment!) had began.

After 2007: the many ways of cutting labour costs

After the return of the crisis in the 1970s, the capitalist economy went on to limp from one crisis to the next. And British capital used each one of these crises as a pretext to turn the screw on the working class by another notch. Following the latest of this long series, the 2007 financial crisis, labour costs were cut, once again, and the on-going replacement of full-time permanent jobs by many more low-paid casual and/or part-time jobs which had started under Blair, continued, only at a faster rate.

So for instance, the number of workers on zero-hours contracts - a non-legal term for forms of employment which offer no guarantee as to the number of hours worked - has been skyrocketing. This category of contracts is, in fact, the formalisation of casual jobs that would have been considered, in the past, to be part of the "black economy" - when workers would get paid cash "off the books". Since 2007, the number of workers on such contracts has increased from 166,000 to 883,000, representing now 2.8% of the workforce.

But as the Office for National Statistics itself admits, "there is no single agreed definition of what zero-hours contracts are." In fact, the Chartered Institute of Personnel and Development, an association of professionals, claims that many workers may not be aware of their employment status and therefore, the number of workers on zero-hours contracts could actually be over 1 million in Britain. And of course, even this estimate doesn't take into account the number of workers who are still part of the "black economy"!

Working conditions for agency workers have further deteriorated. So for instance, one of the examples of temporary contracts is the so-called Swedish Derogation Contract, which was invented by the bosses in response to a European directive aimed at regulating the employment of agency temporary workers by implementing equal pay for equal work. Agencies were quick to find a loophole, discovered by the EU's Swedish delegation, which allowed bosses to by-pass equal pay rules (even though these rules only applied after 12 weeks at work, anyway).

So agencies can sign workers up to a "permanent" contract, which in reality offers temporary placements or "assignments". And if an assignment cannot be found, the agency can get away with paying workers only 1 day per week, usually at the minimum wage! But even this minimal payment can be avoided by the agencies if a worker turns down an assignment or doesn't reply to it (which can easily happen since offers are usually made by e-mail or SMS).

With all these "legal" possibilities available for exploitation, the use of agency workers has steadily increased, despite the EU's Agency Workers Regulations. Today, the number of agency workers has increased to 307,000. However, when adding to these all the short-term, casual and seasonal contracts which are, by definition, non-permanent contracts, the total number of workers concerned swells to 1.5m, or 4.8% of the total workforce!

Another category of employment that doesn't provide much guarantee on anything, including the number of paid hours, is self-employment. The number of those employed under such contracts has increased disproportionately when compared to any other category of jobs: in 2007, 3.8m workers were self-employed, while today there are an estimated 4.8m or 15.2% of the total workforce!

And there are good reasons why employers would rely upon self-employment. Not only does it allow them to avoid having to pay 13.8% of these workers' wages in National Insurance Contributions, but it also allows bosses to deprive them of the sick pay, paid holidays and pension that they would be entitled to if they were normally employed. What's more, unfair dismissal rules do not apply to the self-employed, and neither do health and safety regulations nor minimum wage or National Living Wage rules!

As TUC General Secretary, Francis O'Grady explains: "Self-employment is, after all, behind the biggest change in our labour market since the financial crisis, accounting for nearly half of all employment growth since 2008". It would be naïve to think that all these workers are budding entrepreneurs - as the government likes to suggest!

Then, there are the additional tricks used by the bosses to undermine workers' employment rights. There is the creation of multiple tiers among the workforce. So for instance, in a workplace like Ford Dagenham, in Essex, "2nd tier" new recruits are paid £5/hr less than the existing workforce - the 1st tier - for doing the same work! And then there are the outsourced workers, permanent and casual, paid from £7 to £11/hr less, creating a 3rd, 4th and even 5th tier workforce!

The on-going drive against workers' pensions, is also just another way for the bosses to cut wages. And of course, the majority of non-permanent workers (agency and others) do not get the same access to occupational pension schemes as their permanent counterparts!

Unwanted part-time jobs, hidden overtime and unpaid labour

Another way the bosses have responded to the crisis, at least in the first few years after 2007, has been by cutting working hours, allegedly to "save jobs". But the more some workers have their hours cut, the more others have to work even longer hours: today more than ever before, workers rely on working overtime or on second jobs to compensate for inadequate wages.

Apparently, ONS figures tell a different story, since they show a drop in the average overtime worked, from 1.4hrs/week in 2007 to 1.1hrs/week. However, taking into account undeclared and unpaid overtime, the credit rating agency TotallyMoney estimates that as many as 8.4hrs/week are worked today on overtime and that 1 in 10 workers is working up to 31hrs/week of overtime! Likewise, since the beginning of this latest crisis, the number of workers who rely on a second job in order to make ends meet has increased by 100,000 to 1.13m, or 3.5% of the total workforce!

It is thus no surprise that the numbers of those in part-time jobs has increased as well. Women have always disproportionally taken up these jobs since they have to wear two hats in this society: one at a badly-paid job to earn a living, the other unpaid, at home. But the number of men in part-time jobs has increased as well. From 2007 to today, the proportion of employed men in part-time jobs has gone up from 9.7% to 11.6%. Overall, there are 7.5m workers, women and men, on part-time jobs - or 23.8% of the total workforce.

So for instance, Royal Mail, which employs 140,000 postal workers, claims that 25% of its workforce is on part-time contracts. But, besides the fact that this is already a huge proportion of its workforce, the real number of "part-timers" is very likely higher than what the company claims. In its biggest mail centre, Mount Pleasant, the number of part-time workers is around 50% of the workforce, with most of these part-timers saying they would prefer a full-time job. Of course, to make up a full-time wage, these workers have no choice but to work overtime, which might or might not be provided, according to Royal Mail's needs, of course!

Tesco, Britain's largest private employer with 260,000 workers, has introduced an app for workers to directly apply for overtime. The company says that, "the new technology will enable workers to select overtime across a number of stores and departments, giving them more opportunities to work additional hours at a time and location that suits them." In other words, not only do workers have to search for overtime themselves, but they can be sent to work anywhere! This is what a "flexible labour market" really means!

But for these companies, there are still not enough workers to exploit and underpay. Adecco, the world's largest employment agency, cynically stated that, "as an economy, we currently miss out on the skills, flexibility and willingness to work of carers, retirees and people with disabilities. Tapping into this talent pool would benefit companies and the wider economy as much"! Yes, for these sharks, anyone can be exploited, even those on crutches!

The unemployed are not spared either. Since Blair's "New Deal", there has been a mushrooming of workfare schemes to coerce the jobless (including the disabled) into low-paid work under the threat of cutting their benefits. The campaign "Boycott Workfare" lists eight different schemes, some of which have been discontinued, but quickly replaced by similar schemes. So for instance, the Work Programme was the main workfare scheme used under Cameron, despite a court ruling against its introduction, back in 2013! The Work Programme was only discontinued in April 2017, and replaced by the Work and Health Programme! Whose "Health" this is, is not difficult to work out - not the workers' health, of course, but that of the bosses' profits!

The Taylor Review, to institutionalise casualisation

Lately, with the rise of online businesses, another type of casual job has been added to the many existing ones - the jobs which constitute the so-called "gig" economy. Workers on short-term contracts or "free-lance" get paid for the "gigs" they do, from delivering packets to driving cabs. It is, in reality, the return of the "good" old days of piece-rate work!

Many of the practices in this gig economy are, in fact, illegal. But despite Britain's "light touch" employment legislation, casual workers have managed to catch out employers and get them to improve their employment conditions.

So for instance, Royal Mail's subsidiary eCourier, specialising in same-day deliveries, came under the spotlight after one of its couriers filed a court case against being given "self-employed" status instead of "worker" status - which meant, among other things, that he had no holiday or sick pay. The company settled the case by paying him £545. But in the meantime, it was found that eCourier's 350 couriers were all denied holiday and sick pay!

Last year, Deliveroo, which employs 15,000 "self-employed" riders in Britain, tried to impose a pay-per-delivery system. Deliveroo riders responded with a six-day strike and forced the company to back down. Of course, Deliveroo continues to hire riders on self-employment contracts, denying them the basic right of sick pay or paid leave. But these workers did at least show that despite their precarious working conditions, they could fight back!

In fact, if similar cases of successful fightbacks can be counted on the fingers of one hand, it is only due to the lack of self-confidence among the workers concerned and to the passivity of the union machineries. These few cases alone, however, have increased the bosses anxiety over their "right" to exploit workers as much as they like.

Confronted with the legislative grey area surrounding the rights of casual workers, Theresa May promised to regulate "new forms of employment practices", which finally resulted in the publication of yet another report, the "Taylor Review of Modern Working Practices". But rather than curbing casual employment in all its different varieties, this "Taylor Review" recommends a way to entrench them in law - for instance, renaming some of these workers "dependent contractors", thereby giving a legal grounding to some of these casual contracts, which are otherwise illegal under current legislation and existing court decisions!

While listing the long series of abuses of casual employment by the bosses, the Taylor review recommends merely that such workers should have a right to request more stable conditions. But the bosses are put under no obligation to agree. It says the government should "do more" to enforce already-existing legislation. As if a government which, for years, has been impairing law enforcement by cutting inspection jobs and making it unaffordable for workers to seek redress through employment tribunals, is likely to do something for the working class! As if it would take the risk of undermining the bosses' profits!

Of course, the shortcomings of the Taylor Review were predictable. Even TUC general secretary Frances O'Grady said that it was "no secret that we wanted this review to be bolder." But how could it have been "bolder"? Wasn't Matthew Taylor, the author of this report, an employment adviser to Tony Blair? As such, he was behind the huge explosion of non-jobs under Blair's "flexible labour market". No wonder Taylor fits in so well with the current government's plans, which are to squeeze even more value out of workers' labour to boost British capital!

Casualisation, another symptom of a sick society!

A big part of the problem for the working class during all these years, and a major factor in the degradation of its conditions, has been the overall refusal of the union leaders to organise any fight back against casualisation. In fact, union leaderships have proved incapable of organising casual workers full stop - let alone getting them incorporated into the permanent workforce!

So for instance, the Communication Workers Union, which organises over 100,000 postal workers at Royal Mail, complains about "RM's race to the bottom" regarding working conditions. But instead of clearly opposing all of RM's cuts in labour costs (including the routine use of temps), the CWU points to the "unfair competition" with other delivery companies, and their use of "cheaper" labour. Yes, DPD, Yodel, UKMail, Amazon, etc., use and abuse casual workers. And of course it should be a priority for CWU union leaders to organise workers in all these delivery companies, so that alongside Royal Mail workers, they can fight the bosses "race to the bottom" together.

According to most union leaders today, the only way to fight casualisation is to get a Labour government elected, which will pass laws guaranteeing workers' rights. And what if it doesn't? Or what if it does, but fails to enforce them - as is the case of much of the existing employment legislation, including the various forms of minimum wage?

The Labour manifesto reads: "the majority of businesses play by the rules: they pay their taxes and their workers reasonably and on time, and they operate with respect for the environment and local communities." Isn't this showing the willingness of Labour and Corbyn to be "friendly to business" and, therefore - with the exception of zero-hours contracts, which they single out for opposiion - to all its other dubious employment practices? Will the TUC leadership fight a Corbyn government over the casualisation of workers? Of course not, not any more than they fought Blair's outright attacks! And not any more than they are planning to fight Taylor's proposals today.

Does it mean that the working class is disarmed? No it doesn't. In fact, the working class movement as we know it today, was originally built by casual workers who had no legal protection of any kind.

In 1889, after the strikes of the unskilled gas workers, Eleanor Marx summed up their experience: "The first successful attempt of the so-called "unskilled" workers to do for themselves that which the "skilled" Unions had never seriously tried to do for them, was in the March of 1889 when the Gas workers of London determined to organise and to demand what no other body of men had yet, as a body, demanded - an 8-hours working day. (..) Three months after the formation of their Union, they were able to hold a 'monster meeting' to celebrate on July 27th a victory greater than any achieved by older and richer unions - i.e., the granting by the Gas companies of an 8-hour day, without any reduction and in many cases with an actual increase of wage."

As it happened, the impetus given by the East London gas workers sparked off a much larger movement "among the poorest, the most despised, the hopeless portion of the proletariat" - the dockers. Getting the bosses to recognise their rights was always a question of balance of forces, and ultimately of workers' organisation. But they did find the ways and means to organise themselves and to win.

The workers of those days rose to use their collective strength against the bosses, just as much as the working class today can do - provided it organises itself by joining ranks across its many sections. Public and private, skilled and non-skilled, full-timer and part-timer, permanent and temp, employed and self-employed, British and foreigner - there are so many artificial divisions created by the capitalist exploiters. But in reality, there is only one working class! And for that matter, a working class that produces all the value in society. Despite the fairy tales that the politicians and their mouthpieces in the media keep peddling ad nauseam, no wealth has ever been created by "world class" executives or "entrepreneurs", let alone by the financial markets' bingo machine. Only the labour of the working class can - and does - create wealth. And no obstacle would be able to stand up against the collective strength of this class, if it decided to use it.

But the degradation of workers' conditions is not just the result of bad laws, bad government, nor even bad union leadership. It is the result of the crisis of a system, which is rotting on its feet. So the fight against the damage caused by this system in crisis, cannot be dissociated from the fight to change this system outright!