Tonight I’ve been looking at productivity levels in Scotland, and a truism jumps to the forefront of my mind. Often, the best way to protect workers is to destroy someone’s job. The job someone has could be contributing to nasty effect in the economy that damage all workers. It is better for that someone to retrain to something better than to continue in that job.
The British way (and thus the Scottish way) of industrial policy is to throw jobs at a problem. You see this in the debates that erupt over specific industries like the Clyde Shipyards. The focus is relentlessly on “saving those jobs”.
I make no argument about whether those jobs are worth saving or not, but it is an illustrative point about how the debate is mostly conducted. What the focus should be, in my opinion, is that the key to make those jobs high quality and non-exploitative is to drive up productivity.
Productivity in Scotland (and the wider UK) has been stagnant for many years. Since 2008 the UK productivity has stagnated so that it is 17% lower in the UK than in the EU. This means that to make more of a successful widget, the instinct is to throw more people at that. But throwing more people at making more widgets means that wages must shrink to maintain competitiveness. Or that prices of each widget must go up to accommodate the increased wage cost for merely keeping the same wage as before.
This process has in some cases led to a de-automation of workplaces. Proliferation of hand-washed car services is such a case. In the UK half of professional car washing is now done by hand, rather than by machines. It’s a completely illogical development for an advancing economy, until you start to look at the productivity development. For an individual, this might be a good thing, but for workers it is a very bad development.
It is a symptom of something very wrong. It is the growth of an informal economy where VAT receipts, national insurance contributions, duties are removed. Cash payments outside of any regulation and tax authority means a shrinking public sphere as well as an increasing share of the workforce employed in sectors with few or no employment rights. It also locks people into jobs that should be weeded out of an economy by automation.
Those people could be retrained to produce higher quality, better earning products or services that generate both more tax revenue and better wages for themselves, and unions in both Scotland and the rest of the UK should have made this a priority. But the unions in the whole of the UK are weak, and struggle to reach an understanding with the population. Strikes are now generally seen in a poor light.
If unions in Scotland had been stronger, they could have stopped this, as well as stopped the proliferation of zero hour contracts outside of highly specialised situations by targeting companies that wanted to employ them. In the worst cases, the unions would have shut the company down, leading to the destruction of the jobs there, but also protecting workers from zero hour contract abuse. The unions could also have created a stronger basis for sectoral work contracts across industries that all workers benefit from, and not just union workers. Any company that didn’t want to enter into these sectoral contracts would have been put out of business by the unions. Thus protecting workers while destroying the jobs in that business.