On the irony of being in London to campaign against the Trade Union Bill during Living Wage week

The new Living Wage rate was announced on Monday and Living Wage week has involved a range of campaigning activities, including events rightly recognising the progress made by some employers in paying the wage, which provides ‘a low cost but acceptable standard of Living’. 

The phrase ‘low cost but acceptable’ makes me uncomfortable, though I am required  to use it often.  People could certainly be forgiven for failing to get very excited about the fact that between 300 and 400 employers in Scotland should be lauded for reaching those dizzy heights in the payment of their staff.  However, whilst 1 in 5 of the working population are still being paid a wage which by this definition allows for a ‘lower cost and unacceptable standard of living’ (i.e. poverty) – needs must.

The irony is that reliance on Minimum Wages and campaigns for a decent Living Wage are mainly necessary because successive governments have legislated away or failed to support meaningful trade union power.  I use the words ‘trade union power’ advisedly, knowing that for some this conjures up images of all powerful trade union bosses and ‘one out-all out’ 1970s memes.  The media has done an effective job over decades of caricaturing trade union activity so that simple phrases throw up negative connotations. However, trade union power matters.

People will disagree about when exactly trade union power was at its height.  Union membership peaked in the late 1970s and many would argue that the 1974-1979 was the pinnacle of trade union strength.  Here is the graph of income equality in the UK since 1961.  Fairly clearly, inequality is at its lowest when trade union strength is at its greatest.

 

There is another way of looking at the figures and trend, which describes union membership as a proportion of the working population and sees it peaking earlier.  This graph correlates trade union membership with the share of income of the top 10%.  It is a different way of looking at the same phenomenon.

 

Now it is not suggested, by me at least, that trade union strength is the only factor which relates to income inequality.  For sure, the attacks on the social security system, which began with Thatcher and have been continued, are a fundamental driver of poverty and inequality as was the destruction through the 1980s of a range of industries which previously provided decent ‘middle’ wages for working class people.

But union power matters and the primary reason it matters is probably less to do with union membership levels per se (though that’s important) and more to do with the incidence of collective bargaining in the economy.  This graph gives a Europe-wide picture of the correlation between income inequality and collective bargaining.  With France and Belgium which have vastly different levels of trade union membership (Belgium relatively high, France very low) both performing far better than the UK on the gini coefficient, but both sharing similar levels of collective bargaining.

It is therefore important to understand the Government’s current attack on trade unions to be aimed at further undermining our collective bargaining power.  The Government calculates that it can achieve this by attacking union capacity through reducing time off for reps and wrapping unions in red-tape meanwhile undermining the potential for, and the effectiveness of industrial action.

However hard we campaign (and we will) for a decent statutory minimum wages and however persuasive we are about the advantages to employers of setting a positive example (and we will be).  There is no more important factor than maintaining and enhancing trade union power.  Opposing the Trade Union Bill is the first step.

Dave Moxham