Britain now has a flexible labour market and as far as workers are concerned is virtually indistinguishable from the US. Increasingly, though, the transition to the 51st state looks like a hollow victory. As the International Monetary Fund noted in its annual health check on the US economy last week, the American labour market is characterised by falling participation rates, high levels of long-term unemployment, stagnant wages and 50 million people living below the poverty line. US-style flexibility has also been marked by a relentless squeeze on wages and the capture of the proceeds of growth by those at the top. A recent article by David Blanchflower and Stephen Machin says that in 2013, median real weekly wages (pay adjusted for inflation for someone smack in the middle of the income distribution) were about the same in 2013 as they were in 1979. More hereClaus Kretzschmar
UK needs its unions to avoid joining US in stagnating real wages mire
UK needs its unions to avoid joining US in stagnating real wages mire
Little evidence that benefits of high productivity are shared with workers as well-off reap most of the fruits
Alec Guinness as George Smiley in the BBC version of of Smiley’s People. If the spy met Herr Kretzschmar in 2014 the German’s message would be slightly different. ‘You English are poor these days. Not enough trade unions.’ Photograph: BBC/Reuters
John Le Carré’s Smiley’s People was published in 1979, straight after the Winter of Discontent, and there’s a scene where spymaster George Smiley travels to Hamburg to make contact with Claus Kretzschmar, the owner of a sleazy nightclub, the Blue Diamond. Smiley has to pay 200 marks for entry and obligatory drink – a considerable sum in the late 1970s – but it is later refunded after he and Kretzschmar do business together. “You English are poor these days. Too many trade unions,” Kretzschmar says. This was the accepted wisdom at the time. Britain was the sick man of Europe and over-mighty labour was to blame. Germany had rebuilt its economy in the 1950s and 1960s; Britain had slipped further and further behind. The solution, or at least one part of it, was to make labour markets more “flexible”. There were two possible ways of achieving this. There was the consensual German way, with trade unions seen by management as partners rather than adversaries, or there was the American model, which saw labour as an enemy. Britain went down the American route. New laws made it harder for unions to recruit, organise and operate. De-industrialisation destroyed the old strongholds of union power. The full force of the state was used to win two big industrial struggles – the miners’ strike and the Wapping dispute. Welfare changes were introduced to make it more attractive for the unemployed to take low-paid jobs. Globalisation has further strengthened the bargaining power of employers. Britain now has a flexible labour market and as far as workers are concerned is virtually indistinguishable from the US. Increasingly, though, the transition to the 51st state looks like a hollow victory. As the International Monetary Fund noted in its annual health check on the US economy last week, the American labour market is characterised by falling participation rates, high levels of long-term unemployment, stagnant wages and 50 million people living below the poverty line. US-style flexibility has also been marked by a relentless squeeze on wages and the capture of the proceeds of growth by those at the top. A recent article by David Blanchflower and Stephen Machin says that in 2013, median real weekly wages (pay adjusted for inflation for someone smack in the middle of the income distribution) were about the same in 2013 as they were in 1979. More here
Britain now has a flexible labour market and as far as workers are concerned is virtually indistinguishable from the US. Increasingly, though, the transition to the 51st state looks like a hollow victory. As the International Monetary Fund noted in its annual health check on the US economy last week, the American labour market is characterised by falling participation rates, high levels of long-term unemployment, stagnant wages and 50 million people living below the poverty line. US-style flexibility has also been marked by a relentless squeeze on wages and the capture of the proceeds of growth by those at the top. A recent article by David Blanchflower and Stephen Machin says that in 2013, median real weekly wages (pay adjusted for inflation for someone smack in the middle of the income distribution) were about the same in 2013 as they were in 1979. More here
Derby People's Assembly 