Category Archives: Union Organising

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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Injustice in Post Industrial Communities

By Simon John Duffy, Centre for Welfare Reform (@CforWR).

The Centre for Employment Relations Innovation and Change and Hope Not Hate came together to run an exciting cross-disciplinary event: A Future for Post Industrial Communities? The event, organised by CERIC’s Professor Jane Holgate, was lively, stimulating and wove together a vast array of information, helped by the use of the PechaKucha format, which forced all the presenters to concentrate their presentations to an essential minimum.

The central focus of the two days of discussion was the fate of the many towns and villages across the North, the Midlands, Scotland and Wales where heavy industry or mining had once been dominant. Where once the Labour Party was strong now there was growing support for UKIP and a strong vote for Brexit.

Academic research demonstrated that, contrary to the stereotypes, in these places people work hard and took care of each other, but struggled with low pay, job insecurity, benefit sanctions and growing poverty. Today the UK is the most unequal country in Europe, and these communities are on the wrong end of that inequality.

Many also noted that that these communities also lacked power. The UK is the most centralised welfare state in the world and in these places people have minimal democratic control and minimal representation in London. They seem abandoned by mainstream politics. Moreover social structures, the meeting places, the pubs, churches, working men’s clubs and leisure facilities had all declined. People have few opportunities to meet, organise or advocate for themselves. Poverty has been privatised.

These facts are rarely discussed and the assumption is that these places are now client states, dependent on subsidies from London. The truth is very different. For instance, if you calculate public spending in Barnsley it is £0.84 billion less than what you’d expect if you divided all public spending equally by head of population.

Barnsley Public Spending

The negative consequences of these overlapping injustices are severe and include much lower life expectancy. Yet none of this is inevitable; it was encouraging to hear that in other countries, like Germany, industrial change has not led to these kinds of problems. Communities can be supported to develop and to get back on their feet.

A further concern was that racism can feed off these social injustices. Speakers from Hope Not Hate shared their experiences of successfully over-turning prejudice in local communities where racists had exploited people’s fears and anger. But this also raised the question of what comes first: racism or injustice. And if, as most agreed, injustice comes first, how were we to understand and challenge that injustice.

Over the course of these two days I found my head whirling with competing categories and different understandings of social justice. Victims and perpetrators often seem to change places and people were forced to wear or to shed the group identities that mattered to some theory, but possibly not to people themselves:

– White working class men are seen by some as a threat

– White working class men are seen by others as victims

– But do white working class men really exist?

– Whose interests does this identity serve?

– Probably not the people shoehorned into it

Clearly some identities matter because others have chosen to use those identities for the purpose of scapegoating or vile attack. Categories like race, disability or native country become desperately important if others are using these categories hatefully. Yet we may think that these identities shouldn’t be important. It is injustice itself that has made them relevant.

For some these problems are obviously a function of capitalism. For others they are a function of class and elitism. Others stressed the organisation of power and the dominance of London and the big cities. Others looked back to the securities provided by large or nationalised industries; while some looked forward about to new forms of cooperative enterprise or community action.

What is critical here seems to be our sense of what is that actual reform or action that will reduce injustice. Politicians talk about ‘investment’ in these communities; but, reasonable as this seems, the reality is more complex. Often it amounts to no more than selling off our assets, our industries and our people. In Salford increased investment led to new offices and BBC premises, but local people saw no improvements. Increasingly housing policies has disconnected people from their communities: forcing people to move out just as the money comes in. We cannot assume that places and people are connected if people have no right to stay in their home communities.

Some, but not all, were attracted to the idea that power and money must down to community. Only if people can make their own decisions, shape their communities around their own assets and goals, can communities flourish. Others preferred the idea of national industries and even greater central control. Some were understandably suspicious that governments will exploit localism and asset-based approaches in order to disguise the structural injustices created by their own policies.

Perhaps one telling trend was the agreement across a range of speakers that change must begin by listening to and empowering communities. The Labour Party, trade unions, Citizens UK and Hope Not Hate have all made community organising a central plank of their strategies.

However this reinforces the need for more thinking about devolution in the UK. If we need to listen more now then that suggests that the current system is badly designed. If local communities are given more power, but the financial settlements are unfair, then this will just increase injustice. If devolution means merging large local authorities into even large areas, under the control of one mayor, then the powerlessness of smaller communities will only increase.

This two day conference did not resolve these issues, but it was certainly one of the richest discussions that I’ve been involved in. Brexit seems an unfortunate backwards step for the UK; but if it forces us to pay more attention to the deep and underlying injustices in the UK today then it will have at least one positive consequence.

No shortcuts, organising for power

 

jane-mcalevey
Jane McAlevey

No shortcuts, organising for power
By Jane Holgate

On Tuesday 14 February 2017, Valentine’s Day, there was a large gathering at Congress House in London––the home of the UK’s Trade Union Congress. Over 150 people had forsaken candlelit dinners, wine and roses, instead choosing to attend a talk by Dr Jane McAlevey, whose new book, ‘No Shortcuts, organising for power in the new Gilded Age’, was being launched in the UK.  Professor Jane Holgate, from the Centre for Employment Relations, Innovation and Change, whose research work is around trade unions and organising strategies, was one of the organisers of this event. The room was filled with young (and old) trade unionists, community organisers, and people just interested in hearing what needs to be done to organise our communities to challenge the unequal power in society that has left many people either without jobs, or in low wage work that barely pays a living wage.

Dr McAlevey, a long-standing organiser in unions, and wider civil society, has recently completed a PhD on what is wrong with much of the ‘organising’ that is taking place today in many organisations­­––and particularly in unions. In conversation with the regional secretary of the South and Eastern TUC, who was hosting the event in conjunction with the charity Hope not Hate, she explained the crux of her argument­­––there is too great a focus on mobilising rather than organising: ‘most unions and social-change groups will say they’re organizing. I’m arguing that most are not—which is part of why we’re losing. The core difference to me is: what’s the role of the workers in the actual effort? Are the workers central to their own liberation? Are they central to the strategy to win a change in their workplace and in their communities? Or are they one teeny piece of a really complicated puzzle in which the workers’ voice and opinions are actually not decisive?’

The process of mobilizing tends to avoid involving rank and file workers, or the wider community––instead, she argues, that it tends to rely on pulling out the same already committed activists to protest, and thus is doing little to build a movement from the bottom up: ‘mobilizing is an activist-driven approach. Activists are the already converted who are not full-time professionals, or it could be full-time professionals in the movement—either one—but it’s people who are already with us. They already agree that Wall Street’s a problem; they already think that climate [change] is a problem; they already think that racism is a problem. They’re already standing with Black Lives Matter.’

Instead what is needed is deep organizing where people are expanding the base, where workers are central in organizing around their own issues that really matter to them, and where they are able to bring people along, either from their workplace, or their lived communities. What is also missing, she explained, is a proper understanding of power and how to challenge this. Dr McAlevey repeated said during the evening conversation that ‘life is a structure test’ by which she meant that there is a need to continually undertake power structure analysis when organizing to understand your opponent’s power and to assess the power there is within the communities in which you are organizing.  Only then, are you able to challenge that power and win concessions.

The problem with many trade unions campaigns today, she argued, is that they are top-down, where workers, if they come in at all, are pulled in at the end: ‘They are used as symbolic actors. They’re the face of the campaign. They’re trotted out to make testimony at the legislature about their bad boss, but they’re not actually central to the strategy. That’s the fundamental difference. The agency for change in the organizing model rests with ordinary people.’

The conversation with Dr McAlevey lasted two hours, but the evening of Valentine’s day wasn’t entirely without some reference to love. At the close, the audience was given paper hearts where they were asked to reflect on how they might organize differently reflecting on what they had heard. These hearts were put in sealed envelopes with the writer’s name and address and will be sent via post in a month’s time as a reminder of what they committed to this Valentine’s day.

‘No Shortcuts. Organising for Power in the new Gilded Age ‘can be bought from the publisher at Oxford University Press:

https://global.oup.com/academic/product/no-shortcuts-9780190624712?cc=gb&lang=en&