From a health crisis to a labour crisis? Omicron, Brexit and labour shortages

by Dr Gabriella Alberti, Professor Chris Forde, Dr Gary Graham, Dr Ioulia Bessa, Dr Jo Cutter, Dr Zinovijus Ciupijus, Dr Marketa Dolezalova

The new wave of Covid-19 under Omicron is proving to be another massive challenge for frontline health services.

The Chief Executive of the NHS Confederation, Matthew Taylor, has highlighted a crisis on multiple fronts in the NHS, with a mix of rapidly increasing demand for emergency services, backlogs for operations and huge levels of staff absence creating massive pressures. Even the Prime Minister has admitted that the NHS is in danger of being overwhelmed. The COVID-19 health crisis is once again highlighting and generating a crisis of labour provision.

Staff shortages across the health sector – from hospitals to social care – have been highlighted throughout the pandemic, for example in the 2020 State of Adult social care report. In Autumn 2021, GPs threatened to go on strike over workload challenges during the second vaccination effort.

Now, as Omicron spreads exponentially in the community, NHS providers declare they are at a crisis point not having sufficient staff to care for Covid and non-Covid patients. With the Government estimating that up to  25% of the workforce is expected to have to self-isolate in the next few weeks staffing pressures are likely to get even worse before they get better.

It is important to note, however, that the crisis of labour in health and a number of other sectors has deeper roots beyond the COVID pandemic. As we illustrated in our  August 21 blog, shortages of labour are entrenched in sectors like health, transport and hospitality, due to the end of free movement and a ‘Brexodus’ of workers since 2016. This has been worsened by the COVID crisis, through the non-return of the “missing million”  of EU nationals that left the UK during the first lockdown.

Yet, Brexit barely receives a mention in much of the mainstream media in commentaries on the impacts of the pandemic on work. In a notable exception, a recent FT survey of 100 economists highlighted the “lingering after-effects of Brexit” as a key likely contributor to a slower UK recovery in 2022 compared to other countries.  

These ‘lingering after-effects’ are likely to have profound effects on the UK labour market. Scrambling to deal with the labour crisis, the UK government has made temporary changes to the regulation of migration, announcing a visa scheme in the care sector to allow thousands of additional care workers to be recruited from abroad after it was revealed that more than 40,000 social care staff had left the sector in the second half of 2021.  

The new measures will start in the early months of 2022 with the new visa permits lasting at least 12 months with entailing the possibility of renewal, and for migrants to bring their dependants. In the meantime, the Department for International Trade is proposing visa relaxation for Indian citizens, under the mantra that this will facilitate trade deals with one of the world’s fastest-growing developing nations.

Are these measures an indirect admission that Brexit is not working as the government predicted? And will these measures work as designed? Is it sufficient to introduce new temporary immigration routes to fill gaps opened up by this grave labour shortage crisis?

In the first few months of our new ESRC funded project – LIMITS – led from the Centre for Employment Relations Innovation and Change, at Leeds University Business School, we have mapped all the emerging changes to immigration rules in four key sectors: social care, hospitality, food and drink manufacture and warehousing/transport. Our goal is to look at the multiple and overlapping effects of  Brexit, the Brexodus of workers and Covid-induced disruptions.

Thousands of visas for HGV drivers and poultry workers were quickly introduced in 2021 after intense lobbying by the representatives of the transport and food manufacturing sector but with what results? A December news report highlighted the limited success of such measures in the past months, with immigration Minister David Foster admitting that less than 100 pork butchers applied for the 800 visas available. In transportation, despite a call for up to 5,000 HGV Drivers, only a handful took up available visas. These temporary visa schemes increasingly look like poor sticking plasters, which fail to recognise the deeper structural reasons behind labour shortages.

Our employer survey to be launched in the spring of 2022 across the 4 sectors of Warehousing, Hospitality, Social Care and Food Manufacturing will explore employer workforce strategies, including questions on whether employers are using and benefitting from temporary visa schemes post Brexit. Underlying questions that we consider in our LIMITS research are: will changes in immigration policy – even where dialogue occurs within sectors involving different stakeholders – be sufficient to bring migrant workers to the UK and address the crisis of labour.

As migration and work researchers, we also ask whether the government has taken into account the facts that the high cost of visa application and the increasing costs of living may make migration for work in the UK less appealing to those who have immediate and less burdensome work alternatives in the EU common market? Is a 12-month temporary visa really appealing enough to persuade workers to come to the UK in the post-Brexit environment? And how are current Covid travel restrictions and the overwhelmed NHS further discouraging migrants to move to the UK?

Research has shown that migrant labour mobility cannot be simply reduced to push and pull factors (or imagined as a tap being switched on and off at will according to the needs of the ‘national’ economy) but is embedded in much more complex networks and “migration infrastructures” that have longer and deeper roots in the ways in which migrants and their families evaluate and build their mobility plans and pathways.

These cultural, social and anthropological factors are often missed from policy analysis when migration is reduced to a mere outcome of changing demand and supply dynamics. The qualitative part of our 3-year research project will include interviews with migrant workers themselves who have chosen to stay or move to the UK in these critical times of labour mobility transitions.

The government is committed to a high wage, high skills and productivity economy based on developing the local workforce rather than relying on foreign labour. Critics argue that such a vision is built on “shaky foundations”. We note that this high skills scenario is often predicated on quite simplistic accounts of the ease with which employers might be able to automate key parts of their processes, as well as often rhetorical assumptions about the willingness or capacity of local workforces to join sectors of the economy that in fact remain typically low skilled, low paid and insecure.

Additionally, a highly fragmented training investment scheme, such as the one proposed in the most recent budget, may not allow for such a “high road” utopia to be trusted and adopted by employers. Some have called for a more fundamental overhaul of the skills system.

Policy outcomes and the economy at large may suffer dramatically from a very reductionist approach to labour mobility (as well as to local workforce planning and development). A more nuanced multi-dimensional, multi-scalar and multi-actor approach is needed to understand migration and skills policy. This is what we are pursuing in our research programme, recognising that labour and employment are regulated from both above and below and do not follow a purely functionalist logic.

If you would like to know more about the LIMITS project please contact Dr Gabriella Alberti (g.alberti@leeds.ac.uk)

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UK post-Brexit migration and pandemic effects: how unexpected was the current shortage crisis?

Researchers Alberti, Morganti, Forde, Ciupijus, Cutter, Graham, Bessa and Dolezalova present their new ESRC grant “Labour mobility in transition: a multi-actor study of the re-regulation of migrant work in ‘low-skilled’ sectors” (LIMITS)  while reflecting on the current shortages in hospitality and transport/logistics)

When our team of researchers from across CERIC, LUBS and the Global Food and Environment Institute at the University of Leeds came together in 2020 to design a project on the overlapping effects of post-Brexit migration policy and the Covid-19 pandemic on the UK labour market, we identified some critical sectors for investigation. Warehousing, Food Processing, Hospitality and Social Care were selected as key “low skilled” sectors that had historically relied on migrant labour and where free movement especially from the new Accession countries of the EU, provided the ‘flexible’ workforce sought after by many employers. We anticipated that these were also the sectors where employers might face difficulties in recruiting, since low-skilled migrant workers were being excluded from the new UK ‘Points-Based immigration system’.

However, the severity of the labour shortages the country is now confronting appears exceptional in scale and nature.

Drawing from a range of expertise across the sociology of work and employment, management, and transport studies, our team has now been awarded a 3 year grant from the ESRC to research labour mobility in transition starting from the first of October 2021. In this blog, we look at the crisis in hospitality and logistics, and draw out some insights about the effects of Brexit and COVID-19 on employers’ use of migrant labour.

Hospitality’s labour crisis

What was difficult to predict was the peak in demand for workers in sectors like hospitality immediately after relaxing the social distancing rules. Two main factors play a major role in current labour shortages:  a reluctant local workforce unwilling to return or take new work in a relatively low pay and demanding industry; as well as the unexpected degree of Brexit and Covid -induced Exodus by the EU nationals that have provided key labour and skills to the sector for decades.

According to the Office for National Statistics,  in Hospitality 27 per cent of workers are foreign born while, among EU workers, 11 per cent are found in this sector. Often employed on temporary contracts via staffing agencies (McDowell et al 2009), migrant hospitality workers may be further exploited by employers interested in easy hiring and firing as they are considered more disposable than locals, and willing to accept lower wages and work longer hours- due in turn to their assumed short term earning needs and vulnerability (Ruhs and Anderson 2010). However research has also found that migrants from both within and outside the EU working in hospitality, despite their insecure migration status, succeed at time at quitting precarious jobs in the sector to improve their livelihoods through labour market mobility and transnational mobility (Alberti 2014; McKay 2009).

The period of Brexit and the pandemic has clearly provided the perfect storm for migrants to use their mobility power as it is believed that more than a million EU nationals, actually 1,293,828, have left the UK throughout 2020 according to an original analysis of the LFS by researchers from the Economic Statistic Centre for Excellence.

According to the recruitment company Indeed since 2019 there has been a decrease by 36% in the number of EU migrants who look for work in the UK. In particular 355,000 people have left the hospitality industry since March 2020, about a tenth of the workforce (the Sunday Times June 12, 2021). There have been reports of bosses turning into barmen and waiters, leading the UK hospitality association to lobby the government for introducing a worker visa.

Whether these shortages will exert pressure to improve terms of working conditions and employment practices, including increasing wages and developing training opportunities to make this work more attractive to the local population, remains to be seen. This will depend on the level of tightness and competition  at the bottom end of the labour market and whether those on furlough will return to work in hospitality or look to move to different and possibly better paying, more socially sustainable employment.

The transport and logistics crisis

In transport and logistics, a shortage of Heavy Goods Vehicles (HGV) drivers is already reducing the supply of food to our supermarket shelves. This is another area of ‘essential work’ celebrated by the governments and popular media around the world at the peak of the pandemic, and nonetheless also absent from the existing immigration routes under the Points Based System. Nor these jobs were considered in the review of the so called Shortage Occupation list that, as discussed in our previous CERIC working paper, allows for exceptions to the rules of the salary and skills thresholds inscribed in the new policy.

In a recent letter urging the Government to take action, the Road Haulage Association laid bare the scale of labour shortages. With the total workforce comprising 600,000 drivers, the RHA estimated shortages of over 100,000, with vacancies rising sharply during 2021. Tens of thousands of those are actually EU nationals who moved away from the UK.

There have been a range of causes for the serious shortages in this sector. Border delays caused by the end of free movement of people, goods and services are one key factor, since driver pay is  indifferent to time spent on the road but rather is measured by distance driven. This has discouraged some lorry drivers from returning to work in the UK. Some employers have sought to substitute EU for UK drivers, but have faced backlogs in conducting HGV driver tests during the pandemic and more fundamental challenges in recruiting workers to what is seen as an unattractive sector in terms of working conditions.  Working hours are long, work is physically demanding, and wages remain low, despite some headline increases to attract workers.  While many are retiring, the youth continue to find these jobs unattractive.

Longer term plans and strategies for retraining and recruiting new drivers is seen by many as the only sustainable solution. And yet for the short term the Road Haulage Association insists that: “we are not going to solve this now by training drivers and as such need access to EU and EEA labour”.

Evaluating the UK labour shortages

These two examples of shortage crisis within and across the hospitality and transport/logistics sectors are particularly enlightening of the cascading effects of the overlapping Brexit/Covid crisis on labour recruitment along the supply chains. This  crisis exposes the fragility of the supply chain and its dependency on migrant labour, alongside some of the dysfunctionalities of the post-Brexit regulation of migration for work.

Many aspects of this crisis were perhaps foreseeable and avoidable. Since the beginning of the negotiation over the new Point based skilled for immigration employer representatives have warned the government about the risks of severe shortages, and have demanded  either the inclusion of groups of workers in the Shortage Occupation List or the introduction of temporary visas. Yet, the UK government has made minimal additions  to the list,  after the Review by the Migration Advisory committee in March 21 concerning only a few occupations in the health care sector.

Our research during the elongated Brexit process has already identified some  tipping points in the ‘crisis of labour mobility’ and has argued that limited dialogue within and among the social partners has contributed to the current situation. The current migration policy creates more borders, new bureaucratic barriers for a larger part of the migrant population now tied to work permits, and is arguably operating  counter to the very interests of the business community that Government claim to be willing to serve. On the other hand the introduction of ‘exceptions’ to the Points-Based System by expanding the range of the SOL to include so called low-skilled but ‘essential’ sectors of the economy, proposed by right-wing think tanks such as Bright Blue, further exposes some of the contradiction and tensions in the new system. As highlighted by the Migration Advisory Committee letting employers circumvent the conditionality of the salary threshold  risks to reproduce rather than solve the problem of shortages in these sectors.  

The ways in which migration policy will shape employer strategies will provide a key focus for our project over the next three years. Will employers look to substitute towards a local workforce? Will they look to automate, and what challenges does this create? Will they seek to train and retain staff, and improve wages and working conditions? Our employer  survey, which will be launched towards the end of 2021, and our qualitative research will explore the evolving dialogue between  industry and community stakeholders; the links between recruiting workforce and re-design supply chains with non EU partners; and the employer interest to commit to a more resilient and fairer employment model.

Beyond employers and government responses, what the unions and workers will do on the ground is also of critical importance: will the shortages act as a leverage for increasing wages and the bargaining power of both migrants and local workers? Or will new informal employment practices be adopted by employers already burdened by the uncertainty of a bumpy recovery?

What seems to emerge from the current challenge is that the problem of shortages as a number crisis, may be overcome only when a discussion about the quality of work in these essential if ‘low skilled’ sectors will finally be addressed by social dialogue on migration informed by solid data, and a clear industrial strategy.

In-work poverty and decent working standards in the UK: why a focus on wage rises is no longer enough

Calum Carson

• 

2021 marks the twenty-year anniversary of the UK Living Wage campaign, which for the past two decades has campaigned for employers across Britain to voluntarily adopt the “Real Living Wage”: an independently calculated, hourly rate of pay that is argued by the campaign to better reflect the real cost of living than existing legal minimum wage rates, with a separate figure for London to also better reflect the higher cost of life in the capital.

While the campaign initially emerged in 2001 from the concerns of a small group of families and community organisers in the East End of London, stemming from a concern about the impact on children of both sets of parents having to work multiple jobs to get by and avoid the effects of in-work poverty, it now has a national reach and focus across the length and breadth of the UK, with over 7,000 employers from the Orkney Islands to Cornwall officially accredited with the campaign as “Living Wage Employers.” In 2019 the campaign passed the milestone of putting over £1 billion back into the pockets of low-paid workers through their efforts since the beginning of the century.

However, while the existence and success of the UK Living Wage campaign over the past two decades has placed a sole focus on the importance of the raising of wages to higher hourly rates of pay to both counter the effects of in-work poverty and provide individual workers with better working standards, it has become increasingly apparent since 2001 as the employment landscape has evolved that a solitary focus on hourly pay is not enough to successfully tackle either of these issues. As new forms and models of work have emerged during that time, from the misclassification of delivery drivers as self-employed to the thousands of individuals performing “micro-jobs” via online platforms, the parameters of what is financially required for workers to be able to successfully maintain pace with the cost of living, and what is considered “decent work”, have both widened considerably.

In relation to decent work, debate has focused on a number of aspects, notably whether people are entitled to a sufficient number of regular hours per week to maintain income security, to the complexity of establishing systems in which pension contributions and other forms of social protection can follow workers from job to job. A further issue that has generated discussion is whether people should have the financial freedom to save for their future even in the most minor or ways. All need to be considered under the ‘decent work’ banner, and addressing these aspects may determine how effective policy responses will be in protecting low-paid workers.

Over the past few years, the UK Living Wage campaign have noted these changes to the employment landscape and labour market, and have launched a series of new projects that has widened their campaigning focus beyond only higher hourly rates of pay. The two most notable of these are the “Living Hours” project, launched in 2019, which establishes a separate accreditation model overseen by the Living Wage Foundation in which employers take the voluntary decision to commit as employers to providing their workers with a sufficient number of hours of work over a monthly period to ensure financial stability, among other employment protections. Secondly, this month, the Foundation have also announced their plans to campaign for a “Living Pension” for workers, to ensure that a decent standard of living is guaranteed to them beyond their immediate working lives. These changes reflect how discussion and debate surrounding what constitutes decent working standards is no longer focused around solitary measures such as the raising of wages, but with wage rises now increasingly viewed as part and parcel of a wider policy package in helping to support low-paid workers.

Across Britain more widely, the rise of the decent work agenda has seen the launch of a number of independent accreditation schemes aimed at persuading employers to voluntarily decide to raise their working standards, in a number of different regions. Many of these schemes have a clear design overlay with the Living Wage Foundation’s own accreditation model, and in many cases require that organisations become accredited Living Wage Employers as part of their own scheme’s criteria. This can be seen in the 2019 establishment of the Mayor of London’s “Good Work Standard,” and the 2020 launch of the Greater Manchester Combined Authority’s “Greater Manchester Good Employment Charter,” to take just two examples.

These developments reflect the evolution of the dual issues of how best to effectively tackle both in-work poverty and indecent working conditions across the UK, and how the “Decent Work Agenda” is increasingly becoming a central point of discussion and debate within the work and employment relations field. It seems likely that as the labour market becomes ever more fragmented through the establishment of new non-standard forms of employment, seen most prominently in the rise of the gig economy in recent years, these issues will only continue to gain in prominence and importance, as actors across the employment landscape continue to consider how best to support workers at the lower end of the income scale.

Dr Calum Carson is a recently-graduated CERIC research postgraduate student, with research interests in the Real Living Wage, decent work, and wider issues surrounding low pay and the lived experiences of low-paid workers. He is a Labour Market and Policy Research Officer at ERSA, and continues to work on several academic research projects with CERIC colleagues.

Invisible keyworkers: why responding to the crisis in early years education and care during the pandemic must address working conditions for early years workers

Xanthe Whittaker, Kate Hardy, and Jennifer Tomlinson.

In the local newspaper they have a big spread about all the heroes you know, of the pandemic, and there’s not a single one that’s childcare; people doing exercise classes and people doing sewing classes online

• Childcare practitioner, south-west England

When we stood at our front doors and on our balconies every Thursday to clap for carers, how many of us thought to extend our thanks to childcare workers? Throughout April and May, during the height of the first wave of the pandemic, nurseries remained open and childminders and nannies continued to work so that NHS staff and other key workers with pre-school-aged children could perform their own vital labour. Nurseries also played an indispensable role by remaining open to support vulnerable children and their families, ensuring children were healthy, safe and their developmental needs met.

Now coronavirus and lockdown measures have pushed an already fractured and volatile early years care system to the brink of collapse. A drop in demand has left half of providers concerned they will not survive the next year, with many of those closures likely to be concentrated in deprived areas. There is a growing acknowledgement that this is a crisis of care which will place significant pressures on working parents – particularly women – and their ability to work, with knock-on effects for the whole economy. What has received much less attention or consideration is how the crisis of the sector and closures will affect the predominantly female workforce – 92.6% who undertake this vital work are women.

We have consistently heard concerns from early years staff, managers and parents about safety their in early years settings, because social distancing is impossible to implement when the job requires handling and comforting small children.  Childcare practitioners have worked in close proximity to children throughout the pandemic as social distancing is impractical, if not impossible, and PPE often inadequate or inaccessible. While children are seen to be less susceptible to infection, increasingly, the science has made clear they are “vectors of transmission” and the adults who work with them are at high risk of infection. This is particularly the case with the new variant, with studies indicating that as many as 1 in 10 workers in early years settings have tested positive for Covid since December 1.

Childcare practitioners say the stress of working with this risk has had a damaging effect on their mental health and many head teachers and nursery managers are concerned about the wellbeing of their staff. In one maintained nursery school (MNS) in a London borough where infection rates are higher than the national average most staff in the workplace have been infected with COVID-19 as a result of work, with nine staff infected twice and at least one staff member on sick leave for two months suffering with Long Covid and its long-term health implications. Many managers and staff have expressed they feel there is no scientific evidence that early years settings are safe to remain open.  

Nursery staff are reporting an extension to their duties during the pandemic; importantly, their duties specifically increased in terms of vital safeguarding and diagnosis of special educational needs (SEN) and additional learning needs (ALN).  During lockdown, early years staff have been the only face-to-face contact for many children and families as other services and agencies, such as social workers and educational psychologists, moved their work online. This has placed them at the frontline of support and care for vulnerable and SEN children, increasingly identifying cases of vulnerability, including neglect and exposure to domestic violence. They have also been more involved in diagnosing SEND/ALN in children and have provided primary support for parents and carers to understand and cope with diagnoses in the absence of access to other social services.

Nursery staff we have spoken with almost universally expressed that they feel underacknowledged and underappreciated by government and the public generally for the critical role they have played during the pandemic. These experiences are likely to cause a rethink for many workers in the early years sector about whether they want to continue working in a poorly paid and undervalued sector. For those who do stay, it raises questions about whether their wages and conditions will deteriorate further, about what rights and protections they can invoke to stay safe at work and what say they have in the way work is carried out during Covid.

Work and labour force issues in early years education and care

Low pay, long hours and the intensity of work are longstanding issues which make working in early years care financially precarious for many. Despite low pay and poor working conditions, early years care requires a high level of professionalism involving both emotional and communication skills which are rarely recognised or adequately compensated. There is mounting evidence about importance of this work and these workers for early child development both during the pandemic and in general; another recent study involving Catherine Davis, who leads the Leeds Child Development Unit at University of Leeds, shows that nursery closures during lockdown have contributed to a widening of the attainment gap for socially and economically disadvantaged children. Despite this, like so much critical social reproductive work, the societal value of this labour remains largely unacknowledged.

Source: ONS Annual Population Survey 2018 in Social Mobility Commission, 2020, The stability of the early years workforce in England.

Nursery workers earn on average £7.42 an hour, which is below minimum wage and the Real Living Wage (£10.85 in London, £9.50 outside of it) and well below the average age for the female workforce (£11.37). The figure above shows that hourly pay for early years workers is clustered in the lowest bands; lower than comparable sectors such as retail, and well below the average for the workforce as a whole. Declining pay in real terms (5% between 2013 and 2018) and relative to other occupations has left an increasing proportion of early years care workers reliant on government benefits to survive. For nursery workers who were furloughed on 80 percent of pay, it is likely that the pandemic has brought about real hardship.

Possibly unsurprisingly, these factors have led to issues across the sector with recruitment and retention, where low wages are compounded by lack of opportunities for training and career progression. Over time, this has resulted in declining qualification levels among nursery workers — the proportion of early years workers in England with a qualification (9.5%) is lower than in other OECD countries such as Australia (14.3%), Japan (50%), United States (44.4%) and Norway (45%.) In policy discussions, childcare tends to be characterised as an entry-level job for female school leavers with low attainment. Conditions of work are no better outside nursery settings; childminders have the worst paid, most insecure work in the early years sector and the work of nannies is highly unregulated, with few employment or social protections, including limited access to government job and income support schemes during the pandemic.

The recent Spending Review promises £44 million for early years education in the next financial year, with an explicit commitment to increase the hourly rate paid to childcare providers. Additional spending in early years care is to be welcomed (although the chancellor’s announcement does not represent new funding committed to the sector), as is the recognition that workers in the sector need a pay uplift, but the government is playing catch up. For years the early years sector has witnessed pay slipping below the living wage for many of its workers as the gap between the rate paid by the government for its entitlement hours and the cost of provision has widened. If we want sustainable, high-quality early years care, the sector needs more than a cash injection – how the government invests in early years and its workforce needs a fundamental rethink.

The structure of the market for early years provision is heavily determined by policy orientation and how the sector is funded, which are political decisions. Early years care has faced years of underinvestment and underfunding for which childcare workers have absorbed much of the cost through reductions in wages and limited opportunities for development and progression. A consolidation of private interests in more buoyant sections of the market has left those more intractable aspects of early years care, including deprivation and complex social and educational needs, to settings where there are few resources to address them and where year to year government funding is uncertain. Dealing with these issues often adds to the workload and stress for workers in the sector.

The Covid19-induced crisis has exposed longstanding weaknesses and volatility in early years care.  But this could be also an opportunity to reassess the value of early years care for us as a society and for the economy and to value those who work in the sector.  Not only have childcare workers been made invisible in government policy and lacked basic recognition during the pandemic, there is an almost complete absence of academic research on their employment conditions and experiences of work. Getting to grips with who the early years workforce are, what work they do and its positive impact on the wellbeing of young children, their families and the economy and society more widely has the potential to change the way we understand and value this work. We need to know more about their motivations, experiences and plans for the future. Such knowledge will be crucial for building back better and developing more sustainable childcare post-Covid, as a foundation for a care-led recovery and for the long-term: a more caring economy.

Getting used to uncertainty: strategies for dealing with the precarisation of work. A new typology for precarity.

by Dr Vera Trappmann and Dr Adam Mrozowicki

Precarious working has been the subject of much recent interest and debate. Research has focused on the often negative consequences of precarity for those that experience it. Our new study of work experiences, living conditions, political attitudes and participation among young precarious workers in Poland and Germany has revealed a relatively high level of life satisfaction, and an attempt to cope with precarity in every best way possible.

Nevertheless, precarity becomes a biographical problem and our latest publication in Work Employment and Society shows under what conditions precarity becomes a biographical problem, creating potential for its individual or collective contestation and, in what circumstances objective precarity becomes subjectively accepted and “normalised” as an obvious and unavoidable element of modern professional biography.

Based on qualitative analysis of 123 life stories of young Poles and Germans, we have distinguished six types of life strategies engaged in by precarious workers. These types differ in expectations towards paid work, meanings subjectively awarded to the objective experience of precarious work, as well as roles played in these processes by economic, social, cultural and emotional resources.

The Labourers’ type combines relatively limited or devalued educational resources with the desire for stable work which will be well paid and, as put by one of our narrators, “from Monday to Friday, one shift”. This type sees work as a central element of their biography. It is the source of social integration, gives sense to life and constitutes a basis for obtaining economic resources necessary for the completion of non-professional goals.

Hence, precarisation here means not only economic uncertainty but also the erosion of stable reference points in a community. Due to labour migration, seen as a necessity, increasing competition in the labour market and in the workplace, as well as clear status differences, the subjective feeling of symbolic exclusion becomes for them more acute. In response, this strategy assumes self-limitation of needs and life aspirations, as well as seeking support from family which replaces the ineffective state and fragmented community.

The Professional type describes – in the area of work – a strategy combining relatively high cultural capital resources with the search for employment stability, good income and possibility for professional development. Work has an autotelic value as a source not only of income but also of social status confirmed by college diplomas. In this type, strict and clear borders exist between professional life and life outside work and the expected model of normal biography is white collar work (for example, in an office, in public services or a large corporation). Professional aspirations, however, clash with the reality of employment defined by uncertainty and instability, undermining the possibility for biographical planning and completion of institutionalised models of activity in the sphere of work. This situation is often connected with the experience of numerous unpaid or low-paid traineeships or apprenticeships. In this type, the precarisation of work is either temporarily legitimised as an unpleasant but necessary stage on the path towards stable employment, or rejected and criticised, especially among people over 30 years of age, frustrated with the continuing wait for stabilisation.

The Creative type is characterised by the rejection of the Fordist model of employment seen as too rigid, bureaucratic and limiting individual fulfilment and autonomy. Desired work should offer sense, evoke new inspirations and make it possible to flexibly form relations between professional and non-professional life. Creativity is associated with a high autotelic value of work which is central to life strategies. Often work in the NGO sector is chosen, within cultural and artistic projects which at least in theory offer liberation from limitations and routine. In practice, this strategy often is connected with significant bio- graphical costs (that is, high uncertainty of employment, low income and a blurring of the line between work and non-work). However, flexibility is seen as a standard and its negative consequences as the necessary costs of doing what you love. Due to sensitivity to social injustice and biographical costs of short-term project work within this type, we can find the symptoms of the most articulated criticism of work precarisation as well as direct identification with the precariat as a group.

The Bricolage or ‘entrepreneurial’ type is characterised by a high level of acceptance for flexibility and instrumental attitude towards work which is seen in the first place as the source of in- come. In the work sphere it is based on the search for new possibilities and experimenting with different forms of employment making it possible to maximise economic benefits. Professional experiences include different, often not related jobs or attempts at starting their own businesses, usually without sufficient economic resources.

Life strategies within the entrepreneurial type combine a strong faith in individual agency with attempts at achieving optimal, from individual’s perspective, adaptation to the existing rules, rather than trying to change them. Despite the declared separation of private and professional life, in practice this line is blurred due to working after hours, making extra money in “free time” or, in the case of small businesses, always being on standby and on call. Despite the encountered difficulties, the opinion that effort and life resourcefulness are rewarded in the end prevails. In this case an important element of individual strategies – especially in Polish conditions – constitutes temporary labour migration.

The Blocked type is characterised by a combination of the feeling of helplessness and deep life disorganisation with limited resources of every kind. Some of our interviewees remained in the state of “suspension” between education and full employment which resulted from the feeling that in light of insecurity in the labour market it is better to withdraw from definite decisions related to professional future. In this type the difficulties in the labour market are often accompanied by serious family problems or psychological disorders. Here, professional problems may be solved only after dealing with personal ones. The interviewees in the blocked type were aware of the inconveniences related to precarious employment and criticised it openly, however they were unable to take effective actions in order to change their situation. Overcoming this impasse often required active institutional support (for example, from the labour market, social or health institutions, and support from significant others). Our research suggests that objective precarity in combination with precarious life situations outside work made it significantly more difficult to leave the impasse and undertake other, more proactive life strategies.

The Withdrawn type describes a life strategy in which paid work has lost – or has never achieved – a significant biographical value. As much as biographical planning occurs in this type, crucial life projects are located outside employment: in the family sphere, to which some of the interviewees withdrew into following early parenthood; in the communities, alternative to the world of regular paid work, including cooperatives and communes; or in the form of informal work, part- time, performed in addition to the main life passions. The withdrawal from the world of work, despite the biographical costs borne by the narrators, is not seen as a problem but as a way of liberation from duties and control.

The omnipresence of precarisation for younger people leads to some kind of arrangement with precarity. Young people try to arrange themselves with insecure labour market conditions and in many cases legitimise why this is acceptable for them for a short period of time. Those who fail to adapt to insecurity in consequence often suffer from mental health problems, but look for individual failure. A structural criticism of the type of labour market or economy that favours insecure employment contracts and risky livelihoods is consequently mainly absent. This new typology helps us better to understand why this is the case.

Acknowledgement: The research was funded by the National Science Centre (NCN) in Poland and the German Research Foundation (DFG), the NCN project number UMO-2014/15/G/HS4/04476, the DFG project number TR1378/1-1.

More results of the research can be found at PREWORK – “Young precarious workers in Poland and Germany: a comparative sociological study on working and living conditions, social consciousness and civic engagement”

Cut hours, not people: no work, furlough, short hours and mental health during COVID-19 pandemic in the UK.

Written by Dr Ioulia Bessa, Centre for Employment Relations Innovation & Change.

Paid work is not only a source for income, it is also essential for good mental health. Apart from its financial benefits employment contributes positively on wellbeing and consistent with previous research even one day of paid work a week can make the difference and can boost mental health and life satisfaction. How has Covid-19 crisis impacted employment and consequently mental health in the UK?  Our recent research project shows that during the pandemic workers who are furloughed or worked reduced hours have better mental health than people who lost their jobs.

The Covid-19 pandemic risked plunging millions of workers into unemployment. To mitigate the damage of both unemployment and low mental health, the government introduced Coronavirus Job Retention Scheme allowing for the furloughing of workers.

Despite the implementation of the CJRS, claimant count reached approximately 3 million while other individuals commenced working shorter hours. In a working paper with Dr Brendan Burchell and Dr Senhu Wang from Cambridge University, Dr Daiga Kamerāde from University of Salford and Professor Jill Rubery from University of Manchester, we illustrate that employers should cut hours not employees and utilise shorter working weeks to limit both unemployment and a rise in mental illness. Our analysis draws on the first and second waves (April and May 2020) of the Covid-19 Understanding Society dataset.

Covid-19 Understanding Society

Our research is based on very timely data. In April 2020 Understanding Society collected data on issues around health, caring responsibilities, employment and job seeking, training, financial situations, the division of domestic labor, life satisfaction, mental health and wellbeing, home schooling and travel to work – areas then extended in the following waves (May and June). In total 17,452 individuals participated in the first wave (April 2020) of the dataset and 14,811 in the second (May 2020).  The dataset offers an early opportunity to examine how far changes in employment status, work hours and involvement furlough job retention scheme are related to the likelihood of having mental health problems.

Who are those individuals whose mental health has been affected the most by the Covid-19 crisis?

Drawing on the April and May 2020 Understanding Society waves, findings reveal that those who were already unemployed, or have become unemployed during the Covid-19 crisis have been affected most.  Results show that leaving paid work is significantly related to poorer mental health. In contrast, having some paid work and/or some continued connection to a job, notably those who remained full- or part-time employed or were furloughed were found to have better mental health.

Results are slightly more pronounced when drawing on the May 2020 wave, as we find that about 27 per cent of those who stayed in full-time employment were in the “at risk” category for mental health.  This is a stark finding. Although there are no significant differences between those in full and part time jobs, those who have reduced from full-time to part-time hours, or those who have been furloughed, the rate increased by 54 per cent the probability of those being at the risk category for those who lost their jobs. There was very little difference for those who reduced hours from full-time to part-time, or stayed part-time, or who were furloughed. Individuals who have continued to work at least part time during the coronavirus lockdown have far fewer mental health problems than those who have lost their jobs, according to the most comprehensive study of workers across Britain during the pandemic.

Gender differences also prevailed. Although men’s mental health and wellbeing scores worsened between Wave 9 (2017-2019) and Covid-19 waves, for women the deterioration in mental health was twice that of men, shedding light on the pressures women have been experiencing to accommodate work, life and potentially caring responsibilities during the pandemic, or due to higher unemployment levels that have hit women more severely

Conclusions: Groups “at risk”, a gendered crisis and mental health levels  

The evidence is entirely consistent with our expectations based on earlier research: reducing hours does not have an appreciable effect on wellbeing, but redundancies has a very large effect — almost exactly doubling the probability of being in the highest risk group. It is also important to note that an overall deterioration in mental health compared to pre-pandemic levels had been much greater for women than for men.

The survey mirrors past reports on the stress caused by unemployment. It also highlights options for international policymakers seeking to mitigate the economic impact of Covid-19, including rising treatment costs for the NHS and still more fragile mental health services in lower-income countries.

Both short working hours and furlough job retention schemes can thus be seen to be effective protective factors against worsening mental health. However, the key issue is how to move beyond the furlough scheme. A v-shaped bounce back is not on the horizon and many sectors will, at best, move into partial activity. So, the need to avoid a huge increase in unemployment is just as vital with all the risk to mental health that that would entail. These findings point to the need to move towards sharing work more equitably, including introducing a shorter working week for all (except in those sectors under extreme pressure) in order to minimize the risk to mental health and well-being if those on furlough are now pushed into unemployment.

The working paper appeared in the Financial Times and in the Telegraph.

All in this together? How a decade of austerity cleared the way for Covid-19 in deprived urban areas

Tom Gillespie, Hallsworth Research Fellow, Global Development Institute and Kate Hardy, Associate Professor, University of Leeds

Addressing world leaders on Monday, UK Prime Minister Boris Johnson claimed that ‘it is humanity against the virus – we are in this together’. Sound familiar? ‘All in this together’ was the oft-repeated mantra used to justify cuts to public spending and welfare services during the Cameron-Osbourne austerity years.

Yet, much like austerity, we are clearly not all in this pandemic together. In England and Wales, people are dying from Covid-19 at twice the rate in deprived areas than in affluent areas. The UK government’s strategy during the critical period of early March was to allow coronavirus to spread through the population with a view to achieving ‘herd immunity’, an approach described by Johnson as taking the virus ‘on the chin’. Clearly, some people in some places have had to ‘take it on the chin’ a lot harder than others.

But why are Covid-19’s effects so geographically uneven? It’s austerity, stupid. Cuts since 2010 have had a disproportionately large impact on deprived urban areas. Quite simply, the areas with the highest death rate are also those that have been ravaged by a decade of austerity policies, creating poverty and vulnerability that is now combining with and amplifying the effects of the virus. As a result, having already borne the brunt of a decade of austerity, it is the poorest in society who are now disproportionately paying the price of the government’s disastrous Covid-19 strategy.

Take the London Borough of Newham: the worst affected by Covid-19 of all local authorities in England and Wales. Why might this be? To start with, Newham has experienced deeper than average cuts in funding from central government and has cut spending on public services by a third. In the area of housing, austerity has had particularly devastating consequences. Budget cuts combined with privatisation policies have led to a shrinking of the boroughs social housing stock and a growing number of people living in insecure, unregulated private rental housing (in 2016, the Conservative government voted against rules to ensure that rental accommodation is ‘fit for human habitation’, citing ‘unnecessary regulation and cost to landlords’).

This housing insecurity has combined with punitive policies such as the ‘bedroom tax’ and cuts to housing benefit to force low-income households into rent arrears, contributing to growing evictions and homelessness. In addition, Newham Council sought to capitalise on the 2012 Olympic games to gentrify the borough by redeveloping council estates, leading to the displacement of social housing tenants. As a result of this poisonous cocktail of local and national policies, Newham now has the highest rate of both evictions and households living in temporary accommodation in London.

Behind these depersonalised processes, first hand accounts of life in deprived areas can help us put the pieces together. Our research with people experiencing homelessness in Newham has shown that the living conditions in temporary accommodation, often in the private rented sector, exacerbates existing, and created new, health problems. Toni, a 22 year old, was living in temporary accommodation, sharing a single bedroom with her sister and 4 month-old baby. The poor quality accommodation was creating respiratory problems for her and her child: “The house [is] damp, I’m allergic to damp, it can affect my breathing, it’s not good for a newborn to be around damp”.

Rachel has been living in temporary accommodation for over two years with her young child, who had developed asthma during this time. She said, “I’ve got letters from doctors in Newham Hospital saying this house is not good for the family. We’ve both got bad asthma. It’s damp, the colour is changing – if you leave it for five days, it becomes green… Every winter my little one has to go to the hospital three or five times a month to stabilise her asthma’.

Angela, who had worked as a care worker for over 20 years had to stop work due to her health problem. Her asthma had developed into chronic obstructive pulmonary disease and the first stages of emphysema while she was living in temporary accommodation run by Newham Council: ‘when that mould came up, my breathing just went right down here. Then I put a complaint in about it and said I was going round the environmental health, next thing I know there’s someone up hoovering it all. And that’s what they’ve done ever since. Every day, someone comes up to hoover that. They’ve never treated it or nothing. And it’s black and white mould’.

It is clear from these accounts that living in poor quality temporary accommodation has a detrimental impact on the health of homeless people in Newham. The health problems described by Toni, Rachel and Angela constitute the frequently mentioned ‘underlying conditions’ which make people more vulnerable to dying from Covid-19, such as asthma, emphysema and bronchitis. This reveals that austerity is at least in part responsible for creating the social conditions in which these health problems multiply. This illustrates how ‘underlying health conditions’ (often implicitly used to diminish the importance of coronavirus deaths) are actively produced by policies that offload the cost of public spending cuts onto specific bodies.

A slow response to the coronavirus pandemic is part of the explanation for why the UK has one of the highest death tolls from COVID19 in the world. But 40 years of public housing privatisation, a decade of austerity, a culture of landlordism and a lack of protections for renters also have a lot to answer for. Just as overcrowding and a lack of access to sanitation and water in informal settlements are conditions that will enable Covid-19 to spread rapidly in the global South, housing poverty, exacerbated by 10 years of punitive austerity policies, is also shaping the uneven impacts of coronavirus in the UK.

Health funding should of course be diverted to deprived areas, but preventative social policy will also be necessary to address the underlying inequalities that make some people more vulnerable to dying of Covid-19 than others. Reversing austerity, investing in social housing and regulating the private rental sector will all be essential to avoid unnecessary deaths in the future. In the short-term, rents should be suspended to prevent a new wave of evictions and homelessness due to the economic crisis. In the longer term, a political movement that challenges the commodification of housing and prioritises public health over private property will be essential to stop the impacts of this -and future- pandemics falling most heavily on the shoulders of the most vulnerable.

Please feel free to use this post under the following Creative Commons license: Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0). Full information is available here.

New insights into platform work: Leeds Index of Platform Labour Protest

Written by Dr Ioulia Bessa & Dr Charles Umney,
Centre for Employment Relations Innovation & Change

A new tool for understanding global platform work: Leeds Index of Platform Labour Protest

The nature of work in the platform economy is a vital question which has attracted the interest of many researchers, particularly in a pandemic context where remote working and delivery services have become increasingly vital. Platform work is often controversial and contested, associated with exploitative or casualised working conditions, and as such there have also been numerous studies of platform labour protest. However, to date, these tend to be single or small-n comparative case studies.

While such research is informative, and points to various instances where platform workers have successfully mobilised and built solidarity, they cannot tell us about wider global trends in platform labour protest. There is therefore a pressing need for macro-level analyses of platform worker protest on a global scale.

A team of researchers Dr Ioulia Bessa, Dr Simon Joyce, Denis Neumann, Dr Vera Trappmann, Dr Charles Umney and Professor Mark Stuart from Digit- The Digital Futures at Work Research Centre and  Centre for Employment Relations Innovation and Change (CERIC) has created a database- The Leeds Index of Platform Labour Protest (Leeds Index) – which catalogues reported instances of protest by platform workers across the world. Our aim is to develop a comprehensive reference point and an online interactive map to record and analyse instances of labour protest in the platform economy on a global scale. The Leeds Index intends to reveal regional patterns of protest and situate lessons of these disputes in a wider global perspective.

Data collection

We use data from the Global Database of Events, Language and Tone (GDELT) which accesses worldwide news reports in 65 languages with real-time translation. The database records the outcomes of disputes, eventually enabling us to examine which strategies are more likely to lead to success for platform workers in contesting their working conditions. For each instance of reported platform labour unrest (i.e. each “protest event”), we identify the date and location, the cause of the dispute (be it pay, employment status, working conditions, or other issue), and the kind of dispute (for instance strikes, demonstrations, and legal actions). We also categorise the type of actor leading the dispute (differentiating between a mainstream trade union, independent trade unions, self-organized groups of workers, and coalitions).

Initial findings and outputs

The Leeds Index has attracted attention from different sources, and is particularly relevant to trade unions who are concerned about platform working conditions and representing platform workers.

In February 2020 we released a policy briefing for the European Trade Union Institute, which was the first stage in reporting lessons from the database. An initial set of 300 incidents of platform worker protest was analysed. These protest events were drawn from around the world from the time spanning January 2015-January 2020. The highest number of incidents emerged in three industries: food delivery, courier work and transportation. Findings revealed that the main cause globally for labour protest was pay, with considerable geographical variation when it comes to other causes for dispute. Mainstream unions play a vital role in defending platform workers’ interests and rely more frequently on legal challenges, especially in Western Europe, while in the global South, protests are much more likely to be led by grassroots unions and make fewer appeals to institutional or legal processes.

As the dataset extends we are working in collaboration with different institutions, which are supporting our effort to collect and analyse more data. This gives us the opportunity to work with specific sectors or regions, examine particular characteristics or isolate specific cases.

For instance, we are currently working on a report for Friedrich Ebert Stiftung (FES) to be published in autumn, which focuses specifically on companies in the cooked meal delivery sector. The report includes data from 18 cooked meal delivery companies covering their operations in 95 countries around the world. 527 protest incidents have been identified for the period between January 1^st 2017 and May 20th 2020. The company with most incidents was Deliveroo, which accounted for more than a quarter of all protest events (28.5 per cent) and most events were centred in Europe. The most frequent type of action was strikes and log offs, (40.4%), followed by demonstrations (34.2%) and two-thirds of disputes (63.4%) related to pay. It was interesting to see that groups of workers were involved in the vast majority of events (85.1 %). This time, the report will also look into different coalitions between actors, illustrating that the most frequent type of coalition is mainly between groups of workers and established unions, followed by coalitions between groups of workers and independent unions.

Alongside these funded projects our overarching target is to keep extending the database. Cases increase and current inputs have now exceeded 1000 incidents. Our next project includes work funded by the International Labour Organisation (ILO) for a forthcoming edited publication on platform work. Our project will be the basis for one chapter, providing readers an overview of labour protest in the platform economy on a global scale based on twenty eight companies from different sectors with a particular focus on understanding developments in the global South.

Our future steps involve automating the data mining process. One of the most important challenges that we encounter is the time consuming process that the data collection entails. Automation of the data collection will not only speed up the process of data collection, but will also allow a consistent and holistic collection of incidents.

Eventually, an interactive map will be developed which will render the findings available to all in an accessible and eye-catching way and is intended to serve as a shared resource for activists, unions, researchers, and policy-makers. The interactive map will be searchable and enable us to visualise the spread of platform labour protest across time and space. As the Index develops, it will become a unique resource for all those seeking to understand global patterns in the industrial relations of the platform economy.

In time, we hope that the Leeds Index becomes a comprehensive and valuable resource for researchers seeking to better understand patterns in platform labour unrest; as well as for activists and organisations trying to improve the conditions of platform work.

Do unions make us unhappy? Probably not.

By Professor Andy Charlwood,
Centre for Employment Relations Innovation and Change,

It is a well-established research finding that union members in a number of countries, including Britain, the USA and France, tend to be more dissatisfied with their jobs than non-members. The American economists who originally observed this phenomenon thought that it was because unions induce their members to complain about aspects of the employment relationship and this union-induced complaining reduces job satisfaction.

If this is true it suggests a problem because employers collectively spend hundreds of millions of pounds a year on surveys and initiatives to try to manage the satisfaction of their workers. They do this because job satisfaction tends to be associated with more engaged and productive workers. If unions cause job dissatisfaction perhaps they undermine these considerable investments?

The theory that unions cause job dissatisfaction has been challenged by two alternative explanations. First, that perhaps working conditions tend to be worse in the union sector and it is this difference in working conditions that explains lower job satisfaction. Second, it has also been suggested that perhaps workers who are temperamentally more inclined towards job dissatisfaction because of their values and priorities are also more likely to join unions.

I first became interested in this question twenty years ago when working for the TUC. I presented the finding that union members have lower job satisfaction to a group of union reps. Some thought this was a bad thing because unions should make work better for their members. Others were pleased because they thought that dissatisfied members were more willing to take action against employers to try to improve working conditions. What wasn’t clear to any of us then was whether or not unions were actually causing job dissatisfaction.

Since then, a number of articles have been published that show that union members are more dissatisfied even after we account for the fact that they might be temperamentally inclined towards job dissatisfaction, but it has proved difficult to convincingly address the issue of whether unions cause dissatisfaction or not.

To study the question of causality, we need to be able to observe an event that we might expect to cause a change in job satisfaction, we can then study whether this event makes union members more dissatisfied than their non-union counterparts. If it does, we can reasonably infer that it is unions that cause the additional dissatisfaction.

My paper, written with CERIC colleagues Danat Valizade and Ioulia Bessa and recently published by the British Journal of Industrial Relations is the first study of the relationship between unions and job dissatisfaction to examine the causal nature of the relationship in this way. We looked at what happened to the job satisfaction of union members and their non-union counterparts in the wake of changes to public sector pensions in the UK, which resulted in public sector workers have to pay more for smaller pensions. We found that this change and the associated industrial dispute did appear to reduce job satisfaction of those affected but there was no difference in the size of the change in job satisfaction between union members and non-members. Therefore there was no evidence that union opposition to the changes made union members more dissatisfied with their jobs than their non-union co-workers.

In the light of this finding we conclude that unions probably don’t cause job dissatisfaction among their members. We think it more likely that union members tend to be more dissatisfied because they experience more changes at work that cause job dissatisfaction.

For me, conducting this study increased my job satisfaction because I have been thinking about whether unions cause job dissatisfaction or not for over twenty years. It feels good to have an answer. Some trade unionists will welcome the findings because they are uncomfortable with the idea that union membership might make their members unhappy at work. As one Irish trade union official Tweeted in response when I shared the article on Twitter “Are we the baddies? Spoiler: No”. However I suspect some union activists may be disappointed, because for them a successful union campaign gets members dissatisfied so that they are fired up to take industrial action. If unions aren’t making their members dissatisfied perhaps they will not be able to accumulate the industrial muscle to bring about change. This divergence of opinion speaks to a wider point. Just because unions did not cause job dissatisfaction in the UK pensions dispute of 2011 does not mean that they never cause job dissatisfaction. More research drawing on our approach is needed to investigate the effects of unions on job satisfaction in other contexts.

Protecting the Industrial Commons: Redundancies at Roll’s Royce and the wider impact on UK industry

By Dr Ian Greenwood,
Centre for Employment Relations Innovation and Change

The announcement by Rolls Royce that in response to the impact of the COVID crisis, worldwide, 9000 jobs are to be cut -most at its aerospace centre in Derby- will reverberate beyond the confines of the aerospace industry.

That the company has been in financial difficulties for a while is no secret. In December 2019 the company announced that it was to reduce its intake of apprentices and graduate trainees by almost a third. This continued a five-year trend and takes place within an ongoing programme of contracting its management head count by 5000. The company has also disclosed that it will experience a £2.4bn cash fall between 2017 and 2023. The crisis in profitability that has beset the company has been exacerbated by serious problems involved in resolving quality issues with its Boeing bound Trent 1000 engines. The aircraft industry is suggesting that 2019 levels of output will take five years to attain.

Further job losses are, therefore, not unlikely and the company has declared there will be a retrenchment in its R&D expenditure. The history of Rolls Royce is one peppered with crises and restructuring (involving nationalisation) and although its share price has dropped 2/3 since mid-February of this year, the demise of the company is not imminent.

The wider impact on the UK’s Industrial Commons

The survival of Rolls Royce is vital to the industrial sectors in which it operates, as well as to the broader UK economy. Clearly one company does not make an economy. Nevertheless, the nature of the jobs that will be lost at Rolls Royce, the contraction of trainees and diminution of R&D effort have significance beyond their headline metrics. Engineering UK, the sector employers organisation, estimates that leading up to 2024, there will be a shortfall in satisfying demand of between 37,000 and 59,000 core engineering roles requiring level 3+ skills. Reducing the demand for engineering graduates and trainees through the contraction of engineering firms might be one solution to the problem of excess demand across the wider occupational labour market. This though, is surely a recipe for a general downward spiral in skills, R&D and innovation and culture for a low skill equilibrium.

Taken together, the R&D, engineering, manufacturing capabilities and supplier infrastructure of an economy has been referred to by Pisano and Shih, as a nation’s ‘Industrial Commons’. Crucially, the health of the Commons depends on a strong and vibrant manufacturing sector, particularly the component of this sector that is associated with high skill, high value output. That is, firms such as Rolls Royce. Pisano and Shih (2012) use the example of the declining international competitiveness of the USA to argue that if this Commons is allowed to wither on the vine, the ability of an economy to innovate and create high tech, high value added products will decline, ultimately depressing wage growth and undermining the health of the wider economy. Furthermore, the ability of innovation to ‘spawn new industries’, will be undermined.

Industrial Commons are often connected to sources of high-level knowledge such as universities, which ensures a vital, symbiotic generation of basic, applied and commercial research.  Commons are also often geographically defined. For example, a feature of the aerospace industry in the UK is that 90% of aerospace jobs are outside the South East, providing a valuable dynamic for a balanced economy. The economic and social multipliers of the aerospace industry are significant. The industry has an annual turnover of £31B. It supports 12800 direct and 14000 indirect jobs with average earnings of £43000, 45% higher than the UK average. Through its supply chain programmes, 330 companies have been helped to ‘boost their competitiveness to world-class levels’.

The focus of concern here is that the retrenchment of a firm such as Rolls Royce rarefies the Industrial Commons that it supports and by which it is -in turn- supported. Pisano and Shih argue that manufacturing is essential for the development of new products: it connects product and process innovation. In contrast, the decline of manufacturing invokes a negative ‘chain reaction’ in which the infrastructure for advanced process engineering and the attendant expertise and jobs are diminished. The high-value up and down stream supply chains that network around firms such as Rolls Royce will be lost or offshored.

Whither the future?

It is not possible for governments to support every company. Governments can, though, act to shape the nature of their economies. UK high-value manufacturing and the Foundation Industries that underpin it, must, however, be supported. UK manufacturing accounts for around 10% of GDP value added. This is an ever-diminishing proportion of the economy and well behind Japan and Germany’s 20% of GDP value added. It should not be allowed to fall further. In 2017 the UK spent around 1.7% of its GDP on R&D. The ambition of the UK government is for this to reach 2.4% by 2027. Assuming other countries do not also raise their games, this will raise the UK from 21^st to 12^th in the international league table of R&D spending. The government needs to be more ambitious.

Through its Industrial Strategy, (explicitly connected to addressing investment in R&D), the UK government appears to have understood the challenges faced by UK Inc. and specifically, through the Aerospace Sector Deal, companies such as Rolls Royce. This strategy though, must be implemented with great determination, emphasise the local dimension and crucially, it must endure.

In the here and now, the COVID crisis poses a clear and present danger to the economies of all industrialised nations. Through its announcement of, ‘Project Birch’ (26.5.20) to rescue industries badly affected by the COVID crisis, whose demise might ‘disproportionately’ affect the economy, the UK government appears to has recognised this. The call by some in the UK trade union movement for a National Council for Recovery, that would represent a range of stakeholders, seems a sensible, indeed essential, step that must ultimately reflect a broader engagement with manufacturing, hence the future of the UK economy.