The ‘Made Smarter’ review: a road to utopia or dystopia in negotiating the future of skills, apprenticeships and work?

By Maisie Roberts, CERIC Postgraduate Researcher

pandora's box

Junge, A. 2005. Pandora’s Box #1: Found Toolbox with Neon

The future of work: dystopia or utopia?

The recent industry-led independent Made Smarter review chaired by Professor Jurgen Maier, CEO of Siemens, provides a future vision of the UK’s industrial landscape in terms of advancing the remit of digital technology. Training and upskilling are central components of achieving a utopian future vision. However, the future of work seems to hinge on Maier’s warning (2017: 11):

“Get it wrong, and we risk further de-industrialising our economy, and becoming ever more reliant on imports. Get it right, and we will have found the key to rebalancing and strengthening our economy, creating many new, exciting, and well-paid jobs, and leading a renaissance for the UK as a true nation of creators and makers.”

From this perspective, the future of work remains a highly contested point of discussion, centred on two extremes, which either seem to epitomise a utopian land of promise or a scaremongering nightmarish dystopia. Indeed, when we think of the future of work we conjure up rather dystopian images of the superiority of artificial intelligence-driven robots who have the power and skill to take over the whole spectrum of work, leaving us without any hope of meaningful work. Precarious employment contracts, disposable workforces, intensified working hours and minimal employment rights are already a sad reality. Beyond this the underworld of Silicon Valley casts an unsettling shadow over society where our digital footprints are tracked, extradited and sold to feed a dystopian-like machine. Has Pandora’s box been opened with no return? And what’s the alternative?

 Trouble in utopia?  Skills and the fourth industrial revolution

 Currently, technology, innovation and digitalisation are key incentives for national economies and skills and training are viewed as essential in achieving aptitude in this area. Economies are revising their technologies and capabilities in line with this so-called ‘fourth industrial revolution’.

The first revolution used water and steam to power production whilst the second relied on electric power for mass production. The third drew on information technology to create automated production lines. The fourth builds on the foundations of the third, but merges physical, digital and biological realms to create new technologies. Amongst other emerging phenomena this includes the rise of big data and the Internet of Things, where cyber-physical systems communicate and exchange data with each other and with humans in real-time.

The process of creating a commodity has therefore changed from one where manual work would physically create a product from raw materials to one where technological and information-led networks shape new “modes of development” in an increasingly globalised context (Castells, 1996). This presents the question whether the nature of skill is changing under this new guise of capitalism underpinned by the “information age”.

This might mean that new skills are needed to navigate between raw materials and new technology, data and software, changing existing job structures as well as creating new jobs altogether. Here, skill is therefore essential to facilitate technological advancement. Indeed the World Economic Forum (2016) calls for complex problem-solving, creativity, critical thinking and teamwork amongst other skills, which are viewed as essential in navigating us into a utopian future of the fourth industrial revolution.

Conversely, there could be a move to the growing but rather dystopian phenomena of a so-called ‘lights out’ methodology. Under this approach, human labour becomes obsolete as factories become solely operated via automation with the ‘lights out’ to save on production costs, increase profit margins and respond to increased customer demand. Frey and Osbourne’s (2013) infamous paper, which estimates that 47% of all US employment is susceptible to computerisation certainly plays to this analogy.

Uncertainty ahead: The case of Germany and England

The fourth industrial revolution still remains very much a future vision, and one, which is not yet fully realised. How skills strategy integrates into the future vision of work remains uncertain as demonstrated by Germany and England.

Germany

The ‘dual’ German apprenticeship system adopts a corporatist and coordinated approach, in which both firms and vocational schools provide highly structured training (Bosch, 2010). Apprenticeships are protected from market forces in an almost utopian enclave where unions, chambers, employers and the state work collectively and pro-actively together to regulate the future path of the system.

Although Germany seems to epitomise a perfect apprenticeship system, it, too, is facing significant challenges. Previously up to 75% of young people would typically undertake an apprenticeship (Grugulis, 2007) but since 2013 university starts has overtaken apprenticeship starts and this number is rising (BMBF, 2016). Higher education is becoming a more popular option, much like the UK, with the promise of a free university education and higher graduate wages a key incentive for this choice.

Equally, the entire context and character of Germany’s labour market has changed too with the implementation of the Hartz reforms over 10 years ago, which brought in temporary, agency or so-called ‘mini’ jobs as well as cuts in unemployment welfare assistance. The traditional purpose of an apprenticeship was to provide comprehensive training to catapult an individual into a secure and permanent occupation for life. Yet the evolving fragmentation of Germany’s labour market could undermine the stability, time and effort required to develop well- defined routes to employment.

Germany’s pro-active strategy of “re-imagining work” through its “Work 4.0” concept highlighted in its initial green paper (2015), followed up by its white paper (2017) aims to tackle some of these issues. The reports highlight the need for occupational profiles to be adapted to meet changing skill demands, increasing continuing vocational training, more support for SMEs to develop training and a monitoring system to forecast future demand of skilled labour. The decreasing labour supply of young people is mentioned and as such the report calls for the opening up of skilled labour to more migrants, low-skilled workers, women, older people and disabled people. However, the reports do not seem to directly address the growing prevalence of higher education, which many have argued is leading to growing inequality and a reduction of firms participating (Thelen and Busemeyer, 2012). The future of apprenticeships therefore remains somewhat ambiguous in the Work 4.0 agenda.

England

England’s system is voluntarist and employer-led, with employers solely designing, regulating and managing the system. England lacks the collective ethos and stability of the German system. The English system is also prone to continuous political upheaval, particularly since the Thatcher years where participation in apprenticeships drastically declined (Gospel, 1995).

An apprenticeship levy was introduced in April this year with the aim to increase apprenticeship participation to 3 million apprenticeships by 2020. The levy targets employers with a pay bill over £3million, affecting 2% of firms. However, recent reports highlight that since the levy apprenticeship starts have decreased by 59% (BBC, 2017). Equally, only half of the eligible levy firms have actually registered to reclaim levy funds (CIPD, 2017). This suggests that many firms are disregarding the levy as a tax instead of a social responsibility to invest in apprenticeships. Hence, although the levy has good intentions, perhaps the inherently market-led nature of England’s economy deters employers from investing in the costs and time needed to create high quality apprenticeships.

The recent industrial strategy aims to reform the UK’s technical education system to make it more internationally competitive, invest £406m in STEM skills and create a new National Retraining Scheme to allow people reskill in the labour market. Much like the recent Made Smarter review, training and skills exemplify the road to utopia in the policy discourse. However, UK’s intermediate skills ranking is projected to stand at only 28th of 33 OECD countries by 2020 (UKCES, 2015) and its productivity figures were recently downgraded from the predicted 2% growth for this year down to 1.5%, soon to be followed by 1.3% in 2019 (OBR, 2017), the same rate as during financial crisis.

The Made Smarter review focuses in on these challenges. Firstly, it argues that lack of effective national leadership and cross-sector collaboration has failed to achieve a coherent strategy of industrial digitalisation. Secondly, poor productivity, limited business support, cybersecurity threats and significant skills shortages due to the fragmented apprenticeship system leads to poor levels of adoption of the digitalisation agenda, particularly among SMEs. Finally, the UK’s infrastructure does not support the scaling-up of technology to support companies, meaning that innovation is under-leveraged. As such, the need for training is paramount in the report, which calls for the upskilling of a million industrial workers. Yet the current employer-led approach to apprenticeships in England, where the nature of the market dictates its future, contrasts to this utopian image.

Summing up

 Utopia, true to its definition as both a no-place and a good place, is a useful framing device, which helps us consider what we might want for ourselves in our future society. The Made Smarter review offers us two very different future outcomes, one with new, exciting and well-paid jobs, creating a society of creators and makers, or, an alternative route towards a de-industrialised, stagnant and import-reliant society. Juergen Maier clearly acknowledges that the UK faces a number of challenges in creating his future vision of industry and employment, including poor productivity and infrastructure. Lack of coordination, leadership and collaboration amongst businesses, academia and other institutions are also listed as central concerns.  Interestingly, Germany’s “re-imagining work” white paper actively engaged in a public dialogue and called upon workers, businesses, unions and other institutions to help contribute to the future vision of work in partnership together. This helped to ease the mystery behind the notion of digitalisation and its implications on work, whilst providing a voice for all in navigating towards a collective vision of the future world of work.

From this perspective, we need to ask what skills and work we really value in society today. Apprenticeships, training and skills development can clearly provide increased national productivity, innovation and meaningful job creation if implemented correctly (Finegold and Soskice, 1989). Yet apprenticeships are too often considered as a magical tool to swiftly solve all of society’s problems, such as youth unemployment, deepening skills gaps and productivity slumps to name a few (Keep and Mayhew, 2010), without much consideration of what is actually needed to secure these essentially utopian benefits. If we truly admire the inherent value of skills and apprenticeships as a means to meaningful and productive employment for society, more weight, investment, regulation and prestige needs to be placed on them.

References

BBC. 2017. Apprenticeship numbers fall by 59% after levy imposed. [Accessed 1 November 2017]. Available from: http://www.bbc.co.uk/news/business-42092171

BMBF (Bundesministerium für Bildung und Forschung). 2016. Report on Vocational Education and Training 2016. [Online]. [No Place]: Federal Ministry of Education and Research. [Accessed 1 November 2017]. Available from: https://www.bmbf.de/pub/Berufsbildungsbericht_2016_eng.pdf

Castells, M. 1996. The Rise of the Network Society, 2nd ed. Oxford: Blackwell Publishers.

CIPD. 2017. Half of Eligible businesses register to reclaim apprenticeship levy funds. [Online] [Accessed 1 November 2017]. Available from:  http://www2.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2017/10/09/half-of-eligible-businesses-register-to-reclaim-apprenticeship-levy-funds.aspx

Department for Business, Energy and Industrial Strategy. 2017. Made Smarter. Review 2017. [Online] [Accessed 1 November 2017]. London: Department for Business, Energy and Industrial Strategy. Available from: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/655570/20171027_MadeSmarter_FINAL_DIGITAL.pdf

Department for Business, Energy and Industrial Strategy. 2017. Industrial Strategy: building a Britain fit for the future. [Online] [Accessed 1 November 2017]. London: Department for Business, Energy and Industrial Strategy. Available from: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/664563/industrial-strategy-white-paper-web-ready-version.pdf

Federal Institute for Labour and Social Affairs. 2017. Re-Imagining Work, White paper, Work 4.0. [Online] [Accessed 1 November 2017]. Berlin: Federal Institute for Labour and Social Affairs. Available from: http://www.bmas.de/SharedDocs/Downloads/EN/PDF-Publikationen/a883-white-paper.pdf?__blob=publicationFile&v=3

Federal Institute for Labour and Social Affairs. 2015. Re-Imagining Work, Green paper, Work 4.0. [Online] [Accessed 1 November 2017]. Berlin: Federal Institute for Labour and Social Affairs. Available from: http://www.bmas.de/SharedDocs/Downloads/DE/PDF-Publikationen/arbeiten-4-0-green-paper.pdf;jsessionid=FFFC52E6F5D81905E8B5D4EE90F3E69C?__blob=publicationFile&v=2

Finegold, D. and Soskice, D. 1988. The Failure of Training in Britain: Analysis and Prescription, Oxford Review of Economic Policy, 4(3), pp. 21-53.

Frey, C, B. and Osbourne, M. 2013. The Future of Employment: How Susceptible are Jobs to Computerisation? Technological Forecasting and Social Change, 114, pp. 254-280

Gospel, H. 1995. The Decline of Apprenticeship Training in Britain, Industrial Relations Journal, 26(1), pp. 32-44.

Grugulis, I. 2007. Skills, Training and Human Resource Development: A Critical Text. Basingstoke: Palgrave Macmillan.

Junge, A. 2005. Pandora’s Box #1: Found Toolbox with Neon [Online] [Accessed 1 November 2017]. Available from:  http://www.jungeart.com/assemb/photo_display.php?start=4

Keep, E, and Mayhew, K. 2010. Moving beyond skills as a social and economic panacea, Work, Employment and Society, 24(3), pp. 565-577.

OBR (Office for Budget Responsibility). 2017. Economic Fiscal Outlook. [Accessed 1 November 2017]. Available from: http://cdn.budgetresponsibility.org.uk/Nov2017EFOwebversion-2.pdf

Thelen, K. and Busemeyer, M. 2012. Institutional Change in German Vocational Training: From Collectivism toward Segmentalism. In: Busemeyer, M. and Trampusch, C, eds. The Political Economy of Collective Skill Formation. Oxford: Oxford University Press. Pp. 68-100.

UKCES. 2015. UK Skills Levels and International Competitiveness 2014. [Online] [Accessed 1 November 2017]. Available from:  https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/470017/skill_levels_2014.pdf

World Economic Forum, 2016. The 10 skills you need to thrive in the Fourth Industrial Revolution. [Online] [Accessed 1 November 2017]. Available from: https://www.weforum.org/agenda/2016/01/the-10-skills-you-need-to-thrive-in-the-fourth-industrial-revolution/

 

 

 

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Report launch: how do we engage more employers in employability and skills programmes?

Jo IngoldDr Jo Ingold, Lecturer in Human Resource Management and Public Policy, CERIC, Leeds University Business School.

3 December 2017, at an event in Westminster for policymakers, practitioners and academics, we’ll be launching our final report from a four-year ESRC-funded research project about employer engagement in employability and skills programmes.

Employers are critical to the success of employment activation and employability programmes, yet there’s been surprisingly little research about employers’ perspectives on them. In the first phase of our research, we surveyed over 1,500 employers in the UK and Denmark. In the second phase, we undertook more than 100 in-depth interviews with employers and providers delivering employability and skills programmes in both countries, to provide a ‘two-sided’ perspective on employer engagement.

Employers’ perspectives on employability programmes

Employers were generally positive about employing unemployed candidates, but less so about employability programmes, particularly in the UK. A critical difference between the countries was that, while every Danish employer we interviewed had taken part in at least one programme (and often more), among UK employers participation was more sporadic. UK employers were most familiar with apprenticeships above other provision. A key reason for not engaging in programmes was that employers thought they were inappropriate to their needs. They were put off by the large number of programmes and providers, lacked knowledge about them and about how to access programmes, and were unsure about their value. The most popular reasons for engaging were to access an alternative recruitment channel, to develop talent and to ‘give people a chance’.

Critically, employers felt that the benefit conditionality system and employability programmes themselves could ‘tarnish’ candidates. Employers were particularly dissatisfied about receiving large numbers of job applications as a result of conditionality and entitlement conditions. The lack of a tailored service from providers could also result in employers being sent candidates who were of ‘poor quality’, unsuitable, or ill-prepared.

Employers were generally positive about employing disabled people, although only a small number of UK employers had done so, and not necessarily through employability programmes. In Denmark the Flexjobs scheme for disabled people (offering subsidized jobs under special conditions, in-work support and reduced working hours) was popular with employers. Importantly, in both countries very few employers had made changes to their recruitment and selection processes to encourage candidates from disadvantaged groups, despite recognising the shortcomings of the standard application and interview method.

Our survey data found two distinct groups of employers in terms of engagement in employability and skills programmes. Firstly, those who were ‘instrumentally engaged’ on an ad hoc basis in specific initiatives but not that ‘committed’ to them. Secondly, those who were ‘relationally engaged’ and were more committed and involved in a broader range of programmes on a repeated and sustained basis. This distinction was supported by the interview data. The survey and interview data showed that relational engagement was higher in Denmark than the UK. Crucially, UK employers did not feel that employability programmes were designed with their needs in mind and, compared with Danish employers, had very low trust in public policies.

Providers’ perspectives

The data from providers in both countries showed striking similarities with the employer data, in terms of barriers to engagement and reasons for engaging, as well as in their perspectives about what relational (or in-depth) employer engagement meant. However, the fact that UK employers had less ‘institutional’ trust in government policy and programmes critically left more ‘gaps’ to be filled by providers. They tended to achieve this through the development of ‘inter-personal’ relationships with employers, based on trust. So these relationships were largely between individuals from provider organisations and from businesses, rather than based on relations between organisations. But, although these relationships were critical to employer engagement, they were also fragile and trust could be easily lost. This wasn’t helped by changes to programmes, regulations and contracts in localities.

UK providers also expressed concern about employers’ fluctuating demands for labour, which were difficult to meet. Additionally, there was a gap between employer demands and the individuals that providers’ held on their caseloads, who were possible candidates for vacancies. Providers felt that this gap could not be filled by programmes in their current form. One way of providing a good ‘offer’ to employers was by being able to provide a ‘spectrum’ of services (ranging from pre-employment training to in-work support and training). But providers could only really do this successfully if they’d won a range of employment and skills contracts (from different government departments), or merged with or acquired organisations that had. Alternatively, providing a range of services to employers required working with other organisations, sometimes competitors (what is often referred to as ‘co-opetition’).

This research reveals the extremely fragmented landscape of employment and skills provision in the UK, as well as the remoteness of employers from them (notably the situation was slightly different in Scotland, where these policies are devolved responsibilities). The current formulation of employment and skills policy assumes that employers will engage and will provide opportunities for unemployed individuals. But this research (and the previous research we conducted about the UK Work Programme) suggest that employers are not beating the door down to take part in these programmes, despite them being a potential avenue for increasing workforce diversity. If the government wants to seriously address labour market disadvantage and in particular to halve the disability employment gap, an urgent re-think is needed about the current direction of policy.

Policy recommendations

  • In their current form, programmes are not working effectively for employers. Employers still lack knowledge about programmes, don’t recognise their potential benefits and consider them inappropriate to their needs.
  • A smaller number of programmes, with more continuity and stability but less complexity and fragmentation would make it easier for employers to engage.
  • Changes need to be urgently made to avoid employers receiving large numbers of job applications from benefit claimants in order to fulfil conditionality requirements, as this is damaging to employers’ views of initiatives. A critical aspect of this is better targeting of applications to employers.
  • Devolution is an important opportunity to improve employer engagement in the design and implementation of initiatives and to devise programmes that are responsive to local needs.
  • Merging different government departmental funding streams for employability and skills provision would be helpful, especially as the government looks to replacement European Social Fund provision.
  • More employers need to be equipped with information about ways to make their recruitment and selection processes more inclusive and effective.
  • To maximise resources and to provide a better service to employers, we need more mechanisms for sharing evidence-based good practice across different providers, programmes, cohorts and areas, which currently the competitive contracting frameworks mitigate against.

This research was funded by the Economic and Social Research Council and followed on from ‘Seedcorn’ research funded by CERIC and Leeds University Business School. More information about the research can be found here.

 

CERIC to host workshop on Universal Basic Income and the Future of Work

JPEG Yellow-BlueKate Hardy, Vera Trappmann and Charles Umney

In the face of widening disparities of wealth, changes in work and employment in which low pay dominates and the ability of work to lift people out of poverty declines, debates about the future of social protection have come to the fore. In contexts from the Global South to the ‘developed’ North wage labour appears decreasingly able to distribute social wealth or protect individuals and households from poverty.

In this context, scholars, activists and policy makers have begun to examine alternatives to existing systems of welfare, including negative income tax, cash transfers and universal basic income and guaranteed minimum income. Basic income has become the most visible and perhaps most contested of these proposals. The notion of a universal basic income – a non-conditional base income for all citizens – has attracted increasing popular purchase within social movements, institutions and governments. Numerous academic pilot experiments from Canada to Namibia and India have been undertaken, while governments are rolling out experiments in Finland, Barcelona and Utrecht. Proponents of basic income have been drawn from across the political spectrum, finding support from Milton Friedman and Bill Gates to Frances Fox Piven and Shadow Chancellor John McDonnell.

On 26th January, CERIC will host a workshop bringing together theorists, practitioners and social movements to this day long workshop will explore these questions, focusing on basic income, wage labour, work and employment, by asking:

• How does basic income relate to changes in the labour market, including the growth of the digital and gig economy?
• How does it impact on work and employment?
• How might it effect women’s rights and gender equality?
• What can we learn from basic income experiments in progress?

This will be is a CERIC event to discuss key contemporary issues in work and employment.

The event is sponsored by the Centre for Employment Relations Innovation and Change (CERIC) and Leeds University Business School (LUBS).

 

The Race Audit Report: Much A Do About Nothing (by Meenakshi Sarkar)

Meenashi Sarkar

Meenakshi Sarkar, CERIC Postgraduate Researcher

Britain is a country where we despise prejudice, embrace equality and believe in the fundamental right of the individual to make the most of his or her talents in a free society. Yet all too many of us remain trapped by the accident of our births, our destinies far too likely to be determined by our sex or race; … our deeply held religion or belief make us lesser beings in the eyes of others. And far too many of us are still born into families without the material or social capital to give us the right start in life.
(Trevor Philips, Chief of EHRC, Foreword ‘How fair is Britain?’ 2010)

 

“We believe that how far you go in life should be based on your talent and how hard you work – and nothing else. That was the ambition set out by the Prime Minister on the steps of Downing Street in July 2016, and it remains this Government’s abiding mission to tackle burning injustices.
(Damian Green – First Secretary of State, Foreword, Race audit Report, 2017)

 

Race issues are not new to Britain. In the last 50 years, post-colonial Britain has struggled to keep the promise of equality to its ethnic minorities, many of whom came in the early 1950s from the so-called ‘commonwealth’ countries. These, Noah has quipped, are ironically named ‘as there was nothing common and the wealth was accumulated in one place’ (Noah, 2015).

So when on assuming her role as the Prime Minister of UK in 2016, Theresa May commissioned an ‘audit’ to tackle the ‘burning issues of injustice against ethnic minorities’ in the country, aspirations and eyebrows both were raised. The much hyped race audit report was released on the 10th of October 2017 and is disappointing in many ways.  Firstly, contrary to what was claimed to be a ‘first of its kind’, this is a  collection of the many government initiated and independent studies and the sixth such major report focussed on equality issues (or rather the lack of it) in Britain in five decades and unfortunately it does not tell us anything that we didn’t know.  Some people have called the new portal on which all of these reports have been uploaded ‘a large drop box and ironically the government took 411 days to create the same’ (The Guardian, 2017). Various reports have been brought together under one portal which is a slight help but the data is dated and not customised to the purpose of the audit.

List of 6 major reports on ethnic minorities in last 50 years

1966 W W Daniel- Racial Discrimination in England
1974 David J Smith- Racial Disadvantage in Britain
1982 Colin Brown- Black and White Britain
1994 Tariq Modood et al -Ethnic Minorities in Britain: Diversity and Disadvantage
2010 EHRC: How fair is Britain?
2017 Cabinet office: Race Audit Report

From the titles of the reports mentioned above alone, it is evident that ethnic minorities in Britain are still at a definite disadvantage in the labour market and that Britain is ‘not fair’ after all. Have these reports made any difference in terms of how British policies and labour markets have responded in the last  five decades and what difference will this new report make as Ms May has ‘vowed to tackle the issues of inequality’? Satisfactorily answering this question calls for a detailed analysis which is beyond the scope of this blog, but some relevant questions need to be raised.

In the 1994 PSI report by Modood et al, it was argued that Britain no longer had a Black and White divide, but rather a three way split which cannot be simply explained by racial discrimination:

With Chinese, African Asian and sometimes Indian people in a similar position to whites, Caribbeans some way behind, and Pakistanis and Bangladeshis a long way behind them. Whatever the explanation for that layering of socio-economic positions, it is not simply racial discrimination. A more complex analysis is required (PSI ,1997:10)

The authors of the report further argue that many of the disadvantages and other experiences associated with minority status continue long after ‘naturalisation’ has been completed; and besides, the nationality laws associated with Britain’s former empire are far too complex for this to be a useful criterion. Thus skin colour is considered another option: after all, the majority group is defined as ‘white’, and some (or even all) minorities are often referred to as ‘black’. Colour would also reflect the fact that minority status is likely to follow from generation to generation, whatever changes occur in the cultural behaviour of the people concerned. On the other hand, colour cannot be used to distinguish between minority groups (for example between Caribbeans and Africans, or between Indians, Pakistanis and Bangladeshis). So, colour as a criterion on its own fails to explain the differences within groups of same color and indicates a differential degree of discrimination. So is religion then leading to a double penalty for Pakistanis and Bangladeshis? There are enough studies to indicate the presence of a ‘Muslim penalty’ which affects labour market prospects of followers of Islam or even people with Muslim sounding names (Lindley, 2002; Khattab et al, 2011).

So what has changed in these twenty plus years?

It has been alleged that the groups which do not do well in the labour market must have human capital issues, such as poor English language ability and low qualifications. Thus, many ethnic minority groups including Pakistanis, Bangladeshis and Black Caribbean respond to this by putting their children in Higher Education. As evident from Tables 1 and 2 (below), the proportion of ethnic minorities with low qualifications has gone down considerably and the English language proficiency of all minorities have gone up. However, has that resulted in concomitant progress in the labour market? While the Chinese and Indians have definitely done well (even better than the white British population) and are more likely to be in professional managerial roles, the same cannot be said of Pakistanis, Bangladeshis and Black Caribbean people (Table 3). This questions the assumption of proponents of ‘human capital theory’ that the British labour market is meritocratic and also of politicians who think equal opportunity will ensure equal outcomes.

Blog_Table1

Blog_Table2

In fact, the Pakistani, Bangladeshi and black Caribbean men’s position in terms of being in professional managerial positions has deteriorated even further since 1994 (Table 3)

Table 3. Job levels of men in professional managerial and employers roles
  1994 2017
White English 30 34
Indian 25 45
Chinese 46 47
Pakistani 19 15
Bangladeshi 18 14
Black Caribbean 14 10

The persistence of gap in the labour market performance of these groups shows that there are factors beyond the control of people which affect the type of jobs and kind of roles they would ‘end up in’ and investment in human capital does not guarantee them the ‘good’ jobs.

Much has been said and debated about white privilege, but I would like to argue that like the ethnic penalty, white privilege does not come with the skin colour alone, but class and gender play a vital role too. Thus white working class men are less likely to be in university, or have adequate numeracy or literacy skills than those from white middle class and are worse off than Indian and Chinese middle class men in terms of being in professional managerial jobs. As far as religion is concerned, while there might not be any direct privilege accorded to Christians, there is definitely a penalty for Muslims which might put non-Muslims at a relative advantage. Additionally, while women in general have improved their human capital status across most ethnic minority groups, they are still less likely to be in senior positions and are still largely limited within elementary professions in care and services. Thus class, affiliations (Religious), gender, and ethnicity form what I call a ‘cage’, factors which one is born into and keep people’s potential imprisoned.

People who have lived with discrimination don’t need a government audit to make them aware of the scale of the challenge. This audit means that for society as a whole – for government, for our public services – there is nowhere to hide.”

(Theresa May, Prime Minister, 2017)

Yet another report, more data, much a do about nothing? Theresa May says ‘UK must act against race inequality’. This much is obvious, but when and how is the question that I am afraid no one seems to be having answers to at the moment, including Ms. May.

Alexandra Seehaus (Visiting Fellow, CERIC) reviews Oliver Nachtwey’s book, currently only available in German.

Alex Seehaus

Alex Seehaus, Visiting Fellow, CERIC

Oliver Nachtwey’s “The descent society. On Rebellion in the Regressive Modern Age”

Running up a downwards escalator

The election results to the German Parliament on Sunday 24th made a far right nationalist party (Alternative für Deutschland “Alternative for Germany” ) the third biggest party in the Lower House of Parliament. While among the electorate there are nationalist, racists, and neo-nazis, a huge number of people declared they voted for them out of protest against the existing government. Many of those engaging in a protest vote were members of the middle classes with middle incomes, who are afraid to lose their status and class position, due to the increase of migrants and refugees and an increased insecurity. To place this in context and understand some of this background to this turn of events, it is worthwhile to read Oliver Nachtwey’s book which explores changed mobility patterns in German society.

Oliver Nachtwey has offered a staggering account of this phenomenon in Germany, which has made it into the top selling lists of the online bookshop Amazon Germany and was recently awarded with the Hans-Matthöfer-prize for heterodox economic and sociological writing.

Nachtwey sees the social promise that has kept the German society together over the last seventy years as lost. There is no longer an ‘ascent society’ in Germany, but it has instead been replaced by one of descent. The divide between rich and poor has increased and the dynamics of social mobility have changed, to the detriment of those at the bottom. Instead of climbing up the ladder to the top, people are now making a constant effort in order not to descend, simply to hold their position. Given the fact that a majority of the public still seems persuaded by the idea of meritocracy and the belief in collective upward mobility, such developments contradict common expectations. As hard work and ongoing growth were supposed to guarantee constant status improvement, it’s mere absence causes disappointment for employees and is perceived as social descent.
Descent is a problem for society as a whole. It affects not only those whose situation is getting worse, but also causes stagnation and widespread fear. According to Nachtwey such situation is characterised by polarisation and precarity, resulting in an erosion of social integration. What he sees arising in its place is a new social question about the emergence of ‘working poor’ and unequal distribution of wealth and chances for social mobility, which threatens democracy and provokes protest.

The book not only offers a precise analysis of social inequality and struggles within democratic capitalism. Its intellectual strength lies in the way in which aspects – which often remain separate – are brought together. This includes observations on post-democracy, findings on underclasses and precarious working conditions, pressure on middle classes, as well as thesis on stagnating capitalism and low growth expectations.
Nachtwey’s analysis builds on the work of sociologist Ulrich Beck, who depicts the upward mobility in the prospering welfare state of post-war Germany as collective elevator effect. According to Nachtwey, this metaphor has become obsolete, as people no longer move up together. The ‘steady ascent’ has ended with the deterioration of standard employment, flexibilisation, and the dismantling of social security, which went hand-in-hand with former life structures, careers and vocational paths. Instead, the collective and individual dimensions of ascent and descent have come apart. In Nachtwey’s metaphor everyone stands by oneself on the escalator stairs. Those on the top are still moving up, but for a big number of people in the middle and the bottom the direction has changed. They instead attempt to run up a descending escalator. While such an image might be considered somewhat bold, since empirical data shows that individual descent has not become a mass phenomenon and ascent is still possible, it captures the increasing distance between top and bottom as well as the important trend of precarisation collectively faced by a growing number of employees in Germany.

According to Nachtwey, people in Germany have lost trust in the notion of stability. Despite the fact that lower classes, those with less education, older as well as young people, and those with migrant status, struggle in the current labour market situation, middle class people also feel threatened by the potential and actual loss of jobs and social status. The erosion of social integration is therefore not only caused by actual descent, but also collective fear of it, which impedes solidarity. Whether concerning the conflict between employees and unemployed, permanent and temporary staff; residents and migrants; or discrimination between age groups, society has become polarised. And unfortunately this is what we see coming true with the recent elections.

Nachtwey is aware of the potential resentments and reactionary tendencies within the politics and movements addressing the deteriorating situation of the working population, such as those supporting the far right out of ‘protest’. While he points out the dangers of right wing populism, he also has some hope. In identifying the current tendencies as a tension between capitalism and democracy, there is potential for this not only to fuel regressive forms of critique and protest, but also to offer potential to progress towards a more solidaric modern age. It will, however, require progressive forces to engage energetically in efforts to turn the hostile public and political atmosphere around and to channel such tendencies away from right wing populism and towards a more distributory, fair and equitable political landscape.

Building a Better Case for Women on Boards (by Cheryl Hurst, Postgraduate Researcher)

Over the last decade the concern for the underrepresentation of women in corporate boardrooms has steadily increased. The low number of women at the top of organisations has pushed the agenda for determining the circumstances and factors that both promote and impede women’s access to these top levels. In an effort to advocate for increasing the numbers of women on boards, research has tended to focus on the benefits women will bring to the company.

Often referred to as ‘The Business Case’, research in this area focuses on the importance of hiring from the complete talent pool; on the relationship between women and firm value; as well on the unique experiences and talents women characteristically can bring to organisational settings. Yet this ostensibly pragmatic emphasis, on connecting equality with the achievement of value related to organisational goals, is not as straightforward as researchers and policy makers make it seem.

Below, the challenges and concerns for the business case are addressed in the hopes of shifting dialogue to focus on the ideas of justice and fairness.

Changing Traditional Views of ‘Strengths and Experiences’

One of the main arguments delivered to companies is that by expanding their recruitment to include more women (and other minorities), organisations will benefit from the use of the untapped talent pool, bringing in different strengths and experiences (Seierstad, 2016). By pushing this argument it cannot be forgotten that women’s attributes may not fit within traditional ideas of what makes a successful board member.

This gives organisations the ability to argue against hiring from underrepresented groups, making the claim that they do not fit the requirements of the positions that need to be filled. Organisations have yet to widely adopt a view of ‘strengths and experiences’ that does not stem from the traditional model that values traits typically associated with men. This means that even as women accumulate varied experiences they may still not be viewed as appropriately qualified for the upper echelons of corporate leadership.

Previous and Existing Barriers

The focus on recruiting women solely as part of an effort to bring in new talent also ignores previous and existing barriers, including the discriminating tendencies of employers that women have faced throughout their academic and organisational careers.

Barriers may have resulted in women taking different avenues and approaches to the accumulation of ‘experiences.’  These different avenues, once again, do not reflect traditional perceptions of appropriate qualifications.  Without the qualifications traditionally thought of as necessary, there is a decreased chance of women being recruited, even if they have other relevant qualifications.

Those in top positions (predominantly men) who are responsible for a substantial amount of organisational rewards are still not offering equal promotions, pay rises, training, and networking opportunities to women as they are to men, again shaping the ‘strengths and experiences’ women are likely to have.

Performance Rationales

The focus on firm value has gone further, leading to performance related economic rationales for increasing women on boards. Since the early 2000’s research on board diversity and firm value has increased, showing positive relationships between the number of women and minorities on boards and an organisation’s value (Carter, Simkins, and Simpson, 2003).

The performance argument has been increasingly picked up in the media. In January of this year, the New York Times published an article asking: A Trillion-Dollar Question: Why Don’t More Women Run Mutual Funds? Again, the article conveys to readers that a mixed-gender team produces better returns. Similar articles have been published in The Guardian and Forbes, all using the ‘Business Case.’

Empirically, the argument that women increase performance is highly contested. Boards with higher numbers of women are shown to have been better performing boards overall, prior to and after hiring a more diverse range of members. This stresses the possible bias that better performing boards are able to focus more generally on diversity improvement from the start (Seierstad, 2016). While links have been found between increasing women on boards and company performance, the causality is disputed. This in itself demonstrates a need to move towards more concrete justice arguments.

Critics of the business case for increasing women on boards have also demonstrated that diversity management as a whole can actually be financially detrimental to organisations. There is a high cost to ‘diversity management’ techniques that are implemented unsuccessfully or without proper consideration (Noon, 2007). These costs are often related to high-turnover and absenteeism among women who do not feel welcome within the organisation or where proposed options for flexible working hours are not properly executed.

The business case also ignores how organisations benefit from the discrimination of women and minorities by exploiting their skillset and paying them lower wages than their white male counterparts (Noon, 2007). In even further divergence from the business case, research has highlighted that some countries and organisations have actually experienced negative consequences both in organisational performance and within capital markets after changing their existing board to include a more diverse range of people, with the potential of other attributing factors being overlooked (Bohren and Staubo, 2014).

Ideas of Justice and Fairness

While business case arguments have the overall goal of increasing women on boards, the presentation and ultimate message often becomes somewhat distorted when put into practice.  Instead, a focus on notions of justice and fairness in the advancement of diversity management will offer organisations and policy makers fewer avenues to refute the implementation of diversity strategies. The social justice rationale for increasing the representation of women is based on the principle that women represent half of the population and should therefore represent half of the boards in power (Seierstad, 2016; Dahlerup, 2005).

The social justice rationale does not disregard the potential economic benefits completely, but promotes/advocates a genuine commitment to equality and justice. Changing the argument is not positioned here as a complete solution, but reflects a necessary step in the pursuit of gender parity on corporate boards.  It is argued here that a sole (and contingent) focus on diversity for economic benefits negates the importance of changing views towards women in organisations because it is ethically just.

References

Bøhren, Ø. and Staubo, S., 2014. Does mandatory gender balance work? Changing organizational form to avoid board upheaval. Journal of Corporate Finance28, pp.152-168.

Carter, D.A., Simkins, B.J. and Simpson, W.G., 2003. Corporate governance, board diversity, and firm value. Financial review38(1), pp.33-53.

Dahlerup*, D. and Freidenvall*, L., 2005. Quotas as a ‘fast track’to equal representation for women: Why Scandinavia is no longer the model. International Feminist Journal of Politics7(1), pp.26-48.

Noon, M., 2007. The fatal flaws of diversity and the business case for ethnic minorities. Work, employment and society21(4), pp.773-784.

Seierstad, C., 2015. Beyond the business case: The need for both utility and justice
rationales for increasing the share of women on boards. Corporate Governance: An International Review.

AuthorCheryl Hurst, University of Leeds

 

BBC interview with Dr Liz Oliver on Uber driver row

Dr Liz Oliver was invited to BBC Breakfast to talk about Uber’s appeal to the Employment Tribunal decision that a group of current and former Uber drivers should have been classed as workers rather than self-employed contractors.

Liz took part in an interview alongside Mr Farrar who was one of the claimants to the employment tribunal claim. She explained that the key issue was the identification and classification of a contract between Uber and the drivers. She pointed out that three contract forms are important to employment law: a contract DSC_4741of employment where the individual is an employee and has access to the full body of employment protection, a ‘worker’ contract which places the individual within the scope of some but not all employment protection (a kind of “employee-lite”) or self-employment where the service provider is in business on their own and falls outside of the scope of employment protection. At Employment Tribunal the claimants successfully showed that they were workers and that placed them within the scope of The National Minimum Wage provisions and the Working Time Regulations 1998 (which includes limits to working time and access to paid holiday). The key question was whether the way that the working relationship has been characterised by Uber companies within the written terms of their agreements with drivers and with passengers matched up to the ‘true relationship between the parties’. Uber describes the relationships in terms of agency. Rather than contracting with drivers to provide services to passengers, Uber describe their role is as an agent or broker; they simply bring drivers and passengers together. Ultimately the contract to take and provide a ride is between the driver and the passenger. The structure of these contractual relationships is at the heart of the Uber business model and the company has shown keen to defend its position. They were given leave to appeal to the Employment Appeal Tribunal and the hearing begins today.

A number of similar claims have been made by people who provide services through platforms so this decision will be watched closely by those who ‘participate in the platform economy’.  In Liz’s view the argument that Uber drivers are workers is a valid and strong one. However a favourable outcome for drivers would by no means end they story. An important question for examples is when drivers be considered to be workers, throughout the whole time that they are logged onto the App and ready to receive rides or only for the duration of the ride itself. Bottoming out questions such as these will test the how the architecture of existing regimes such as the framework of the national minimum wage accommodates the opportunities that platforms provide for flexible ways of working. Another question is how platforms would respond to further pressure to contract with service providers as workers. Would they seek to place more risk onto service providers to emulate self-employment more closely or would they assert more control over service providers in a manner more akin to employment? The growing body of litigation in the area of contract form is clearly playing a catalytic role in finding an appropriate way to combine flexibility and fairness. Here it seems that service providers themselves are pursuing a more ambitious set of outcomes than those proposed in the recent Taylor review of modern working practices.  Nevertheless litigation is a blunt tool when it comes to finding imaginative solutions. Could the key actors in the world of platform service provision find a space outside of this high stakes context to grapple with these issues? Innovation is, after all, at the heart of the development of the platform economy.

You can watch the interview through BBC iplayer although the programme is only available for 24 hours. BBC One (from 1h11m) 27th September – Broadcast