Trade unions and economic inequality

• DOI: https://doi.org/10.13169/instemplrighj.4.0.0118
• Pages: 118-141
• Published date: 01 January 2021
• Date: 01 January 2021
• Author: Lydia Hayes,Tonia Novitz,Keith Ewing,John Hendy

Trade unions and economic inequality

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Trade unions and economic inequality

Lydia Hayes and Tonia Novitz

Foreword

Workers are now worse off to the tune of £1,600 annually than they were at

the time of the last election. Pay freezes and below-inflation wage rises have

led to this fall in real wages, the low paid being punished with cuts to benefits.

As well as the problem of low pay, too many workers are subject to the misery

of zero hours contracts while the abuse of agency workers continues. The impact

of the government’s tribunal changes price workers out of justice, and the effect

of austerity on public services has had a serious effect on quality of life.

The deterioration of pay and conditions for workers are of course a symptom

of the great cruelty at the heart of modern society. This is the cruelty of rising

inequality, all the more cruel because it is deliberate and avoidable. There is

no natural law by which inequality is commanded.

But if inequality is cruel, it is irrational in equal measure. It is not only from

the left that we hear calls for the need for a more equitable society, in order

to ensure what has been referred to as the ‘trinity’ of distributive justice,

social equity, and fairness between generations.

Inequality is irrational because ‘relative equality is good for growth’; and ‘ine-

quality is one of the most important determinants of relative happiness and

a sense of community’; while the new holy trinity appeals to a ‘fundamental

sense of justice’. So says Mark Carney, Governor of the Bank of England.1

We are not aware that Carney is a revolutionary, nor that he is out to destroy

capitalism rather than save it. But Carney is not alone, with other rational voices

aware of the grave implications of growing inequality, not only for the workers

affected by it, but also for the economic system in whose name it is promoted.

Many economists appear to be aware that austerity creates problems that

are unsustainable: it exposes the great contradiction that it is both an inevi-

table consequence – and a serious threat – to capitalism. But unlike in the

1930s the economists appear to be unable to offer a sensible way ahead.

This is why this article by Lydia Hayes and Tonia Novitz is so important and so

highly recommended. It provides an excoriating critique of inequality and its

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consequences. But unlike others, the authors provide a blueprint for how to

tackle it.

Writing in clear and accessible terms, Hayes and Novitz explain the central

role of trade unions in closing the inequality gap, and in particular the need to

rebuild collective bargaining arrangements that will give trade unions an

opportunity to speak more loudly on behalf of the dispossessed.

To these ends the authors present valuable proposals designed to change

public policy, so that trade unions are better able to represent their mem-

bers, by (i) simplifying the statutory procedure for trade union recognition,

and (ii) putting in place arrangements for sector-wide collective bargaining.

The last of these proposals is the boldest and most important. It is surely no

coincidence that the decade in which the equality gap in Britain was at its

narrowest was the decade in which trade union penetration was at its great-

est, with more than 80% of British workers covered by a collective agreement.

The challenge now is to get the Hayes-Novitz proposals onto the policy agenda,

and to rebuild collective bargaining along the lines they suggest. There are so

many compelling reasons why this should be done, and why the ideas in this pam-

phlet should be warmly embraced by the trade union movement and beyond.

Everybody talks about Britain needing a wage rise. But how is this to be done?

Everybody talks about ensuring that everyone gets a living wage. But how is

this to be done? And everybody is agreed that we need to stamp out the

abuse of zero hours contracts. But how is this to be done?

The answer is simple. Sector-wide collective agreements provide a solution to

all of these problems and much else besides – the growing gender pay gap,

the abuse of agency workers, and the problem of the two-tier work force and

the contracting out of public services.

These problems will not be wished away. It is the responsibility of politicians

to provide the means by which they can be addressed, if we are to take their

promises of reform seriously, and reward them with our votes. This pamphlet

sets out very clearly what urgently needs to be done. There can be no excuses.

Keith Ewing and John Hendy QC

Note

1 M Carney, ‘Inclusive Capitalism: Creating a Sense of the Systemic’, 27 May 2014: http://www.

bankofengland.co.uk/publications/Documents/speeches/2014/speech731.pdf