Monthly Archives: May 2018

The productivity crisis and the role of trade unions: partnership, productivity and skills in the UK

Bert Clough CERIC

Bert Clough, Visiting Professor, CERIC

As the Nobel Prize winner, Paul Krugman, has stated “productivity isn’t everything but in the long run it is almost everything”. A nation’s ability to improve its standard of living depends almost entirely on its ability to raise its hourly output per worker. That is why increasing productivity should be as important for trade unions as securing the fairer distribution of economic returns of GDP. But productivity has virtually flatlined since the financial crisis in 2008/9. Even more concerning is that the UK has the widest productivity gap with the G7 countries average since the mid-1990s. The General Secretary of the TUC, Frances O’Grady, has warned that the “productivity headache is a self-inflicted wound” resulting from years of cuts and low public investment. The TUC believes that enhanced productivity can only be achieved in investment and embedded in a culture of positive labour relations; with the workforce and their employers becoming “productivity partners”. This requires unions to adopt strategies based on integrative, not just distributive, bargaining.

Can such rhetoric about such social partnership arrangements over productivity be made reality? In 2000, as part of his Productivity Initiative, Gordon Brown asked the TUC and CBI to join forces to identify key priorities and joint recommendations to the Treasury on how to enhance productivity.  One key driver that was identified was that of skills. In a recent research paper, I have sought to assess the effectiveness of the skills strand of the initiative. As part of the Chancellor’s strategy to close the wide productivity gap with UK major competitors by 2010, the aim was for young people and adults to have knowledge and skills that matched the best in the world.

A fragile social partnership over skills had existed during the era of neo-corporatism in the 1970s. But this was ended by the Thatcher government, which abolished tripartite institutions such as the Manpower Services Commission and most of the industry training boards. New Labour was not however about devolving decisions over skills formation to social partners and restoring neo-corporate institutions. Nor was the “Third Way” about reintroducing training levies or establishing statutory collective bargaining over training. The Productivity Initiative was thus constrained by what has been described as a “social-democratic variant of labour market neo-liberalism”. Another constraint was the divergent approaches of the social partners to workforce development. Whereas the TUC has traditionally had a more expansive, employment-focussed approach that supported state intervention, the CBI has had a restrictive employer-focussed approach that cleaved to voluntarism. As a result, the remit of the skills working group under the Productivity Initiative (which was chaired by the then TUC General Secretary – John Monks) was narrow. The remit confined itself to four priorities which conveniently reflected the Government’s vocational education and training (VET) strategy:

  1. increasing the proportion of the adult workforce qualified to Level 2;
  2. tackling the basic skills problems of individuals;
  3. increasing the take-up of Investors in People by small organisations;
  4. improving VET delivery.

The major deficiencies in the exercise was that it was that it confined itself to the supply side as opposed to the demand side. It did not address the key skills components that help drive productivity – their utilisation and higher levels of training such as management and apprentice training which give high economic returns. These were policy areas that the CBI regarded as being subject to employer prerogative and therefore off a social partnership agenda.

The CBI wanted carrots but no sticks. The TUC wanted sticks but realised that it could only realistically press for individual entitlements to training. The working group did recommend carrots for employers to train. This took the form of employer tax credits to incentivise companies to train up to level 2 and basic skills and for small companies to commit to the Investors in People (IiP) standard. The Treasury however favoured a more targeted approach; introducing state subsidies to employers training workers to recognised qualifications through the Employer Training Pilots (ETP) (later universalised as Train to Gain). Direct subsidies were also given to small companies to prepare for IiP accreditation, through the Small Firms Initiative.

Trade unions (with the enhanced capacity provided by the Union Learning Fund and trained union learning reps) helped ETP to target workers with low or no qualifications. The union view was that helping their members to obtain basic skills and Level 2 qualifications could minimise social exclusion and lead to possible progression to higher levels, with ultimately higher returns.  Although the primary objective of ETP and its successor Train to Gain was to increase employer demand for workforce training, the incidence of deadweight and substitution indicated that such an objective had not been substantially met and provided the Coalition Government with the excuse to end the scheme.

New Labour had adopted a social-democratic variant of a neo-liberalist approach to interventions in the labour market. The weakness of this approach was that it left the vast bulk of skills policy and practice outside the industrial relations system. This approach together with the absence of robust social partnership institutions to oversee VET from the 1980s to the present day has enabled successive governments to adopt a top- down approach. It has resulted in the churning of supply-side policy initiatives, chasing national qualification targets, which have had little effect on stimulating employer demand or engaging with the long tail of SME “productivity laggards”.

A key factor in enhancing productivity is the utilisation of skills, but that was virtually ignored by the Labour Government and subsequent governments.  A recent government Foresight report “The Future of Skills and Lifelong Learning” has found however that the UK is the second lowest nation in the EU in utilising skills. Moving towards the levels of skills utilisation seen in Germany and France could boost productivity by as much as £5.5 bn.

The daunting challenge facing unions is how to build their capacity to engage with employers on measures to increase productivity through high involvement work practices and to reap the ensuing benefits through collective bargaining over skills. The lessons learnt from New Labour’s Productivity Initiative was that peak-level social partnership within a voluntary system is unable to deliver such objectives. This has been further limited by a significant decline in union learning capacity, as a result of government austerity measures and the economic downturn since 2010.

So, what is required are robust social partnership institutions with devolved regulatory powers. Their objective should be to raise productivity through assisting employers to adopt high performance and high involvement work practices. This would include promoting high utilisation of skills and ensuring a more equal distribution of training opportunities throughout the workforce. This fundamental change will not come about through yet another central government “quick-fix” initiative from above. It needs to come from below and be owned by both employers and unions.

Developing such a progressive culture could best begin in unionised workplaces. This, however, requires a step change for unions:  moving from conflict to cooperation as their main new source of influence. It does require, however, a rebalancing of power between unions and employers. Ensuring that union reps are full partners requires two measures. Firstly, collective bargaining over training and work organisation must become an integral part of union recognition.  Secondly, there needs to be capacity -building initiatives (at possibly sector or Local Enterprise Partnership level) to provide unions as well as employers with the tools to drive this productivity partnership agenda forward. The long-term objective would be more high- performance and high -involvement workplaces, with employees as well as employers sharing the benefits from the increased productivity.

But does the present government’s industrial strategy address this fundamental challenge? It certainly sets out new initiatives such as a National Retraining Scheme and government /industry partnerships to increase productivity in key sectors. In his November Budget, the Chancellor even confirmed that the government would enter into a formal skills partnership with the TUC and CBI, to develop the scheme. The aim of the partnership is to help set the strategic priorities for the scheme and oversee its implementation, working with new Skills Advisory Panels to ensure that local economies’ needs are reflected. But it must not be just a top-down approach.

The litmus test will be how effective the partnership is in persuading the long tail of productivity laggards to increase the utilisation of the skills of their workforce. This requires recognition of the potential of trade unions at sectoral and company level to form productivity partnerships with employers.  This is the key to develop high-performance and high-involvement workplaces, where employees are rewarded for their increased productivity. The short-comings of the 2001 Productivity Initiative must be avoided. History must not be allowed to repeat itself.

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Diane Reay’s “Miseducation”: a personal reflection (by Jo Ingold)

miseducation picMiseducation Inequality, education and the working classes by Diane Reay brings together threads from a wealth of Reay’s research on working-class experiences of education, as well as her own personal journey from working-classness to Professor at an elite institution. Reading Miseducation was enlightening for me on many levels, as well as being a bit of a sense-making process, both professionally and personally. I’ll admit right from the start that I’ve largely avoided talking about class in my academic work, largely because it has been too personal. So, (much like Miseducation itself) what follows is a reflection of Reay’s Miseducation that combines the academic and the personal.

Reay takes as her starting point Jackson and Marsden’s seminal 1966 book Education and the Working Class. A key difference between when Jackson and Marsden wrote their famous work and now is that back in the 1960s 60% of the population identified as working-class. Now this is only 40%. But Reay finds that a shocking level of class inequality still persists in the English education system. In particular, she highlights the significant increase in testing and the narrowing of the curriculum in schools (aspects of which I am only too aware now as a parent). Secondly, she points to the policy shift towards academies and free schools, which have increased selectivity, largely leaving working-class kids behind. A 2013 OECD report that Reay cites early in the book (p.50) concluded that schools in England are the most socially segregated in the developed world, especially for poor and migrant families.

In secondary school I was one of the working-class kids Reay talks about, who was ‘relegated’ to the bottom set (p.77). My local primary school (incidentally where my father had also gone to school) was what we would probably now call a ‘sink school’. My mother fought successfully to get me into a ‘better’ school in the ‘posher’ part of town. But when I got to high school I was put in the bottom set with not a single kid from my primary school, but with kids from our (poorer) part of town. This isn’t just about me having an overinflated sense of my own capabilities. Years after I left high school, my final year primary teacher told me that she’d tried to get me into a higher set, but didn’t win the argument with the school. At the time, my parents complained to the headteacher that I was finding the school work in the bottom set unchallenging. They were told that nothing could be done until after the end of the first year exams when, if I proved myself, I would be moved up. At the end of the year I was indeed moved up. But by then friendship groups had been established and I had effectively lost a year of secondary schooling.

Another rather strange and revealing example of how class impacts on working-class kids became apparent to me only a few years ago when I got hold of my medical notes. In these, I discovered (from Pre-Data Protection Act) that a clinician who I saw aged 15 had put in my notes that I had ‘aspirations that were likely beyond my academic abilities’. This was a clinician, not even a teacher! The importance of including this is to say that these are the kinds of assumptions and judgements made about working-class kids that Reay talks about, who start off life with the odds firmly stacked against them by many in positions of power.

Another key driver of inequalities for working class kids that Reay highlights are the class divisions in university education. In particular, she points to the exacerbation of a two-tier system of ‘elite’ and ‘inferior’ institutions largely as a result of recent funding changes. She argues that ‘Elitist processes masquerading as meritocracy are just as evident in the English education system as they were 50 years ago in the 1960s; but the primary engines of this pseudo meritocracy are no longer the grammar schools but the elite universities’ (p.178). Another, more pernicious, factor that Reay identifies is that failure is now seen as the fault of the working-class individual, rather than anything more systemic (p.180).

In relation to universities, Reay also powerfully talks about the cultural and social capital that you lack as an individual when you’re working-class and trying to gain entry to a university. No one in my family was familiar with the university environment. But I was lucky: I was helped by a few professionals for whom my mum cleaned. I was also awarded an assisted government place to attend an independent 6th Form. Without these, I don’t think I would have felt confident enough to apply to a Russell group university. Back in high school my mother paid for extra maths tutoring for me outside of school. But when (on the tutor’s advice) I told my head of maths that I’d like to do the higher paper to try to get an A grade (rather than the maximum C I could get by doing the lower paper) she told me that I could, but qualified it with: ‘you can always resit next year’. This stands out for me as a good example of the lowered expectations and constrained ambition that I felt during my compulsory education.

One of the most powerful aspects of the book for me was where Reay talks about how the working-classes find themselves having left one class (working) and yet not feeling like a true member of another (the ‘bolting on of middle classness’) (p.104). Reay suggests that social mobility for the working classes represents ‘a fragile balance between realising potential and maintaining a sense of authenticity’, resulting in individuals being uncomfortably ‘caught between two worlds’ (p.108). Lynsey Hanley also talks powerfully about this from her own experience in Respectable. This process of social mobility can be wounding, resulting in a ‘disconnect’ for individuals and a feeling of being ‘adrift’ from social and family ties. The political discourse of social mobility as an unquestionable good, Reay argues, doesn’t really get to grips with this aspect.

My own personal experience of social mobility is of a huge gulf between myself and my wider family and community that came about because I went to university and that will likely never be resolved. ‘Why would you want to go to University?’ they asked. The fact that I went to University and moved away underscored another aspect of this fracture highlighted by Reay: what social mobility says about those who are left behind. Reay rightly asks what the point is in striving for equality with more-privileged others if the process creates inequalities between you and the people you love’? (pp 114-5). In the epilogue she cites the powerful words of Bourdieu: ‘to be able to live in a world that is not mine I must try to understand both things: what it means to have an academic mind…and at the same time what was lost in acquiring it’ (pp 197-8).

Finally, a further critical aspect for me that Reay talks about is how as academics we can become ensnared in ‘dominant representations’ of the working classes and that it is important not to ‘romanticise’ the experience of working-classness (p.198). Instead, she highlights the diversity of ‘working-classness’. This helped me to make sense of my own class background. My experience of growing up working class was largely about being fearful and ashamed. Constant stress about having enough money to live on, of having utilities cut off and having to lie about this to friends to save face. My mum was shocked when I asked to have free school meals as she didn’t want me to look ‘outwardly poor’ to others. My parents didn’t claim Family Credit for largely the same reason (although this left us even poorer). My parents were not part of the politically enlightened, ‘radical’ working class that was Reay’s background, but were more the ‘aspirant’ working-class talked about in Jackson and Marsden’s classic work. However, their aspirations were really for me, rather than for themselves. For them, education was the gateway to a much better life for me than the one they experienced. My dad was a time-served joiner, but could only find work on building sites throughout his life. He wasn’t a member of a union (except when there was a closed shop) and, in common with his family and peers, he voted Conservative. My mum largely worked in shops and as a cleaner and waitress. Both struggled from one low-paying insecure job to another (my mum regularly had at least two jobs), with poor health as a result.

The ‘classedness’ of my education was largely a part of my life that, for good or ill, I didn’t really notice at the time: what Reay refers to as ‘the living out of class on both conscious and unconscious levels’ (p.155). Reay says she’s still upset that, for the majority of people that both she and Jackson and Marsden interviewed, their working-class backgrounds were something they wanted to forget (p.8). This resonated deeply with me. But it is critical not to forget. In Miseducation Reay strikes exactly the right chord, successfully managing to achieve her aim of ‘cutting across the grain’ of what she has become professionally (p.198) to be reflexive about her own experiences. Reay’s Miseducation is a timely exposė of how current government policies, the education ‘system’ but, critically, social values and attitudes to ‘inequality, welfare and difference’ (p.174) are still failing, and as a result limiting the potential of so many.

Dr Jo Ingold is a Lecturer in Human Resource Management and Public Policy and is a member of CERIC.

Miseducation by Diane Reay is published by Policy Press’ 21st Century Standpoints series, in association with the British Sociological Association