If we are to create better jobs in Scotland we need to recognise and take action on job security, worker control, appropriate demand, fair pay and opportunities for training and development.
I was giving evidence yesterday to the Scottish Parliament's Energy and Economy Committee's inquiry into work, wages and wellbeing. The evidence to the committee is well summarised in the Spice briefing.
While the impact of low wages and poor quality jobs on individuals and the economy are becoming better understood, it also has an impact on health. Professor Bambra's evidence to the committee argues that low quality work combines low levels of control with high psychological demand which can lead to increased levels of chronic stress, muscoskeletal conditions, heart disease, hypertension, obesity and mental illness.
There is also a strong economic case for better jobs. Well made by Professor Chris Warhurst at today's committee. The outcome of the current race to the bottom is the precariat. In some countries this can constitute as much of 25% of the workforce, whose contracts are either temporary or informal, or who arrive via employment agencies. In Scotland the numbers on zero hours contracts, particularly in the care sector, are understated because they largely ignore workers on nominal hour contracts.
This approach isn't even efficient. A study by economists at Delft University has concluded that a flexible workforce needs an expanded management bureaucracy to oversee it. Because precarity damages trust, loyalty and commitment, it demands more management and control. An entire generation of free-market workers has begun to act according to the factory adage of the old Soviet Union: “We pretend to work, they pretend to pay us.” The researchers conclude: “Easy hire and fire is at the cost of organisational learning, knowledge accumulation and knowledge sharing, thus damaging innovation and labour productivity growth.”
In its evidence to the Low Pay Commission, UNISON has highlighted that the conditions of the economy meet all the key criteria set out by the Low Pay Commission in its 2014 report as necessary for significantly faster increases in the minimum wage. These include; rising real wages in the economy generally, stable employment and an expectation of sustained economic growth.
Other factors supporting an increase in wages are the upward trend in the scale of low pay in the economy. This will be exacerbated by Government cuts to tax credits and other benefits, particularly for workers with families. The value of the National Minimum Wage has been eroded in comparison to the Living Wage and young workers have been penalised through the lower rates and their exclusion from the new so called National 'Living Wage'. At the other end of the scale there is the growth in the income of high earnings groups that has entrenched the UK’s position as one of the most unequal countries among comparable nations that are members of both the EU and OECD.
The committee asked us for specific evidence on the care sector that constitutes nearly 8% of the Scottish workforce and is a sector largely funded by the Scottish Government. The size of the Scottish care workforce has increased to 199,670, an increase of 5.3%. 77% of these work in home care and 85% are women.
There are some very poor employers in this sector and they have been encouraged by poor procurement practice. The Procurement Act and new statutory guidance should enable us to tackle this by evaluating future bids on their workforce policies including the payment of the living wage. However, the better employers rightly say that this must be funded properly. Given the leverage of government money there is an opportunity to develop the sort of sectoral bargaining that has been so successful in raising standards and productivity in other parts of Europe.
The care sector is a good example of where the race to the bottom in job quality and wages takes us. Staff who are desperate to exit the sector, creating high turnover, losing the continuity of care that is so important.
This inquiry is a welcome look at an important and complex issue and I look forward to their conclusions. However, there are practical actions the Scottish Government could take to develop the ideas in the Working Together report and Fair Work Convention. The care sector would be a good place to start.