Len Shackleton: There are multiple possible futures for the UK’s dynamic labour market

I’m pleased to be working with the FREER-IPSE Work Futures Group to push forward understanding of the changes in the UK’s dynamic labour market and the opportunities these offer.

Today’s workforce is better educated than ever before, and more diverse in relation to a whole range of characteristics including gender, age, ethnicity, and social background.

What this diverse workforce wants and expects from work is changing. Many people are seeking greater flexibility around hours of work, more interesting and rewarding jobs, and often a greater sense of social purpose.

We are seeing increasing demands for greater equality and fairness in the traditional world of work in large organisations — whether related to pay comparisons, promotion opportunities, representation at board level, commitment to decarbonisation and other environmental concerns, and so on.

Many however want to work on their own account, independent of fixed hours, commuting, and the tedious meetings about strategy, HR policy, and so on, which you get in large organisation.  IPSE members are an important part of this zeitgeist.

But still others simply want a convenient and regular source of income to support aspects of their life which they regard as more important — building families, supporting relatives, travelling, pursuing hobbies, or creative ideas.

They want basic fairness and decent pay and conditions, but are not interested in turning jobs into career plans on the one hand, or political empowerment projects on the other.

Some of them may only want to work irregularly, working around other commitments such as school, college, or family, or perhaps augmenting pensions. Such people may be quite cool about ‘gig’ work or zero-hours contracts.

Then again there are also temporary migrants from relatively poor European countries such as Poland, Bulgaria, and Romania, who are seeking to work long hours to accumulate funds to support families at home.

The labour market needs to accommodate all these differences of perspective and recognise that different people — and indeed the same people at different stages of their life — want different things from work. One size cannot be made to fit all.

If the workforce is changing, shifts in patterns of trade, technology, and consumer tastes have also changed the jobs which employers want workers to do — and the jobs which people like IPSE members increasingly create for themselves.

Assumptions made by politicians also reflect this. When Jeremy Corbyn and John McDonnell were young dudes, they believed it was vital that we kept coal mines open until all the seams were exhausted, in order to preserve miners’ jobs — despite the damage done to their health, and, as we now see, to the environment.

Around the same time, politicians of left and right were hailing the advent of North Sea oil, which promised a bright future and new sources of employment.

But this week our Shadow Chancellor has promised to delist companies dealing in fossil fuels. Apparent certainties, then, can evaporate quite quickly.

Old jobs disappear, and new jobs — or smaller tasks, which new technology enables us to spin off — are being created all the time.

This is partly down to much-hyped automation and artificial intelligence, but it is also simply down to the enhanced possibilities of mutually beneficial exchanges opened up by instant internet accessibility and the development of apps.

As Uber and Deliveroo have disruptively demonstrated, it is much easier now to put people who want a service in touch with people who can supply it, whether that service be high-skill like technical translation or low-skill like dog-walking.

The possibilities for the division of labour which Adam Smith saw as the root of all economic advance are greatly enhanced.

Such new types of exchanges may not come in terms which suit our conventional ideas about minimum wage rates, income tax categories, or hours of work.

Some may indeed not involve much conventional work at all, but be part of the ‘sharing economy’, where people hire out assets including their homes (through Airbnb and similar arrangements), cars, and tools such as electric drills or lawnmowers. This may involve some effort and time to facilitate the exchanges but no time-consuming job as we normally think about it. There is an elision between work and small-scale capitalism.

Old institutions — trade unions, occupational licensors, regulators of all shapes and sizes — try to impose their version of order on the kaleidoscopic changes taking place. Scarcely a day passes without politicians, lobbyists, and general busybodies demanding more regulation, whether it be interfering with the pattern of wages, imposing new types of taxes, forcing new obligations on employers, or banning things.

But the creative destruction of the market is constantly undermining this with innovation and entrepreneurship, ensuring that the future will not be what our planners and controllers think it will be or want it to be.

Our enquiry aims, then, to examine recent changes in the world of work and assess whether appropriate government policy can be designed to boost productivity, real incomes, and widened choices about an appropriate work-life balance.

In doing so, though, we have to recognise that there is no determinate future we can ‘plan’ for, but a range of possible ‘futures’, some of which may be more attractive than others.

We must also recognise that in many areas the answer may be for government to do less, and better, rather than try to hold back change with ever-growing intervention — which, for instance, will soon have around a third of all pay rates set by the government as employer or as arbiter of minimum wages.

I hope our enquiry will not be dogmatic about either trying to predict the future or to attempt to control it.

We hope that people will come forward with ideas which we can toss around and evaluate in a friendly way, outside the increasingly poisonous world of partisan politics.

Well, I live in hope….

 

Len Shackleton gave this speech at the launch of the FREER-IPSE Work Futures Group, which he is chairing. He is an Editorial and Research Fellow at the Institute of Economic Affairs, and Professor of Economics at the University of Buckingham.

More information will be released soon about the FREER-IPSE Work Futures Group, alongside a call for evidence. Please contact info@freeruk.com if you’d like to be involved. 

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