More people now do low-skilled work—why aren't the trade unions doing more to represent them?by David Goodhart / June 19, 2013 / Leave a comment
A strawberry picker at work in Northumberland: “three-quarters of British strawberries are now home-grown” © Chris Laurens
If you are lucky enough to be invited to Wimbledon this year, the strawberries you eat will probably have been grown in this country; about three-quarters of British strawberries are now home-grown. Back in 1990, most of our strawberries were imported.
Import substitution is generally to be welcomed, especially in a country with a huge trade deficit. But the Wimbledon strawberries are not a sign of economic success. On the contrary, they are a sign of what economists call a low skill/low productivity equilibrium. Thanks to Britain’s flexible labour market, and its low wages, all sorts of basic economic activity is profitable here that is not profitable in, say, Denmark or Germany.
That helps to create jobs—though in the case of the strawberries, most of the workforce is imported from abroad on temporary contracts. But it also reduces the incentive to automate or even to organise the workplace more efficiently and so to move up the chain to higher productivity and better paid work.
The low level of trade union organisation at the bottom end of the labour market is one reason for the long tail of poorly paid “bad jobs.” And the unexpected small upward blip in union membership in 2012—the first increase in private sector membership since the 1970s—is unlikely to change that.
In any case, the low level of unionisation among the working poor where, one might think, unions are needed most, is a symptom of something bigger that has happened to the British economy and labour market in the past two decades. For those home-grown strawberries are a fruity rebuke to the dominant economic narrative of an emergent “knowledge economy” driven by an expanding army of highly-skilled graduates. That story is not completely wrong but, according to Cambridge economist Robert Rowthorn, it misses the bigger picture: the entrenchment of “a kind of dual economy, sometimes called an hourglass-shaped economy, with about 35 per cent of people working in high productivity sectors—from cars to finance—and another 35 per cent working in a low productivity sector, mainly private sector services like retail, cleaning, care and hospitality.” Since 2009 almost all new jobs have come in the low productivity sector.
One of the biggest public policy errors of the past generation in Britain…