Isabel Hardman Isabel Hardman

Labour market flexibility and dignity

Two front pages today report what they see as bad news, and both stories are certainly ones politicians need to worry about. The Guardian reveals a leaked letter showing jobseekers will face sanctions if they do not apply for or accept ‘certain zero hours jobs under the new universal credit system’, while the Indy splashes on research by the Resolution Foundation which found that self-employed workers are earning 40 per cent less than a typical employee. The paper says these workers are the ‘hidden victims of the recession struggling by on low pay’.

Saying that either of these stories represent ‘good news’ sounds far too flippant – but they do reflect the flexibility of Britain’s labour market which has enabled many people to remain in employment and off the dole during the downturn. The former, even though the conditions of work concerned are far from what most workers would aspire to, is far better than the latter: leaving the labour market entirely damages a worker’s confidence, their soft skills, and naturally prevents them from progressing to better hours and pay, as those on zero hours contracts or low-paid self-employment have a prospect of doing so.

But behind that academic argument are voters who feel as though their lives are not improving. Labour is much better at expressing concern about the indignity that these workers feel – partly because the party places less emphasis on the importance of labour market flexibility in keeping people in work, although notably Ed Miliband’s big crackdown on zero hours contracts ended up being rather more timid when he actually announced it. Alison McGovern, a thoughtful Labour MP in a marginal seat wrote a pamphlet for the Fabian Society last year in which she examined the importance of dignity.

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