One of the problems that exists within the economy at present is low pay. Far from their being a wage-price spiral, pay is dragging behind inflation in a way that is bound to create stagnation as people have less and less to spend.
What this requires is collective action to address the issue. I wrote about this in my 2011 book The Courageous State, suggesting this:
Industry wages boards
Collective bargaining is powerful: it has almost invariably improved the lot of those workers whose conditions are negotiated in this way, to their own benefit, and although many will only grudgingly admit it, to the long-term benefit of their employers as well.
There are, however, many situations where collective bargaining cannot be applied. This is, for example, the case when the place of employment is small or the workforce is widely dispersed. This happens in retailing, restaurants, agriculture, and many small businesses.
In these cases there has been too prevalent a tendency for business to offer the minimum wage as if it was the de facto basis for employment, whatever the skills a person has to offer and whatever their worth to the enterprise. That is wrong, and was recognised to be wrong in the past when industrial wages boards set minimum pay levels for particular skills in specified sectors to ensure that people would not exploited whatever their particular employment circumstance.
The restoration of these boards with the task of setting minimum standards for pay and conditions of employment seems a basic necessity to ensure that all employees are properly rewarded without the difficulty and embarrassment of complicated negotiation having to take place in situations which inevitably favour the employer.
Of course such boards cannot provide an ideal solution for all employment situations, all skills and all environments but they can offer clear guidelines, empower employees and ensure that people can advance their claim for rightful reward against pre-established benchmarks which should make reaching fair agreement easier for all.
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It was good a good idea then and it’s a good idea now – well said.
Yes.
Off topic but in conjunction with this we need a rent board.
Interesting idea
Richard,
A similar set up to the one you propose exists in Australia.
https://www.fairwork.gov.au/employment-conditions/awards/list-of-awards
If I were to make some suggestions
Firstly that Company Directors need to be both criminally and financially responsible for non compliance similarly I suggest anyone in the payroll process who knowingly breaches the pay rules.
Secondly I suggest that Government needs to start setting targets for both the percentage of GDP that goes to wages and how that money is distributed across the workforce.
Thanks
I think it would be good to combine a wage board with a Job Guarantee program. This would give a value to a hour’s wage, plus all the other benefits that go with it. No one would have to worry about how they are going to afford to buy food, and rent, it would approve people’s self-esteem, reduce mental health issues, reduce benefits, and above all, be productive and grow the economy. It could also tackle “The Global Green New Deal” for a better, greener more sustainable environment, see https://www.taxresearch.org.uk/Blog/2021/07/20/the-global-green-new-deal-declaration/
I can also recommend: The Job Guarantee and MMT (2017).
Online here: https://link.springer.com/content/pdf/bfm:978-3-319-46442-8/1
Thanks
Isn’t this more or less what the Labour Party are proposing?
https://labour.org.uk/press/labour-sets-out-plans-for-fair-pay-agreements-to-deliver-new-deal-for-working-people/
Fair Pay Agreements are central to Labour’s vision of transforming our economy so that it works for working people and the people who create our nation’s wealth are able to get their fair share of it. Labour will empower workers to act collectively through Fair Pay Agreements which will be negotiated through sectoral collective bargaining – starting in the adult social care sector.
This follows the example of the New Zealand Labour government announcing that it will be introducing Fair Pay Agreements, which are already the norm across European economies. Under Fair Pay Agreements, worker representatives and employer representatives will be brought together by the government to establish and agree minimum pay, terms and conditions which will be binding on all employers and workers in the sector. The Fair Pay Agreement would then form a ‘floor’ in a sector, preventing exploitative employers from undercutting the many good employers who already recognise that what is good for their workforce is good for their bottom line and that fair pay and secure work leads to higher productivity.
I hope that is what they deliver.
So do I Richard, it will fundamentally improve the employment rights of every worker in the country.
I have every confidence they will do what they say. Given that Labour have already published their excellent Green Paper on Employment Rights (I suggest that everyone should read it, its contents are going to have an impact on the working lives of every person in the country), have the strong support of the TUC and have repeatedly stated that they will bring their Employment Rights Bill into law within their first 100 days in office then it doesn’t look like they are playing at it. On the contrary Labour appear to be putting forward this whole policy area as something that they want to be judged on.
I suspect that given the complexities around Fair Pay Agreements that these will take a little longer than a 100 days to implement across all sectors of the economy but I think the short extract in my OP (plus many similar quotes) clearly illustrates that the Labour are really serious about enacting this. (for the benefit of the many, as the saying goes).
A lot of interesting ideas here.
If I were to add one, what about what in the days of Friendly Societies were called ‘The Odd Fellows’ ie those not covered by one of these sector agreements, or whose employers say that they are not?
I suggest the need for some sort of ‘backstop’ to cover them
Q. What do you do
A. I am an Oddfellow
Nothing is perfect
I am suggesting a good and not a perfect solution
You just have to hope there is spillover
Reinstate the Whitley Councils!