In response to intense criticism, legal threats and extensive campaigning, Uber is introducing limited medical cover, parental leave and sickness pay for its drivers. Many will argue that measures such as this don’t go far enough, and that the “gig” economy and atypical work have become entrenched, defining the modern face of insecurity and exploitation in the UK labour market.
The RSA’s recent research suggests that economic insecurity is deeper and more prevalent than a focus on the gig economy or even atypical work implies. Up to 40 percent of the British workforce has little confidence “that they can maintain a decent quality of life, now and in the future, given their economic and financial circumstances.” While there are many people that are trapped in poverty pay and cycle in and out of insecure work, economic insecurity impacts the middle classes and those with steady jobs, too. In the UK, 6 million adults self-identify as “just about managing” despite having household incomes above the national average.
The economic insecurity we face isn’t just driven by changing market forces and the technological innovations being capitalised on by firms like Uber. It is the result of policy choices and the makeup of our institutions. The state and the market have combined to produce a political economy of insecurity.
Capitalism’s social contract has eroded, creating a deeply unequal economy characterised by short-term profit seeking, one-sided flexibility that disempowers workers, and a low-road economy producing low value, low productivity work instead of investment and innovation. Indeed, economic insecurity sits neatly alongside the UK’s productivity crisis.
The state itself all too often deepens rather than mitigates the insecurity that people face. Welfare to work schemes focus single mindedly on getting people off benefits and into any sort of work, regardless of quality - leading many to cycle in and out of unemployment and low quality, insecure work. This is in contrast to countries such as Denmark that invest heavily in labour market programmes designed to help people avoid bad jobs and move into good quality work.
The increasing use of conditionality (making state support contingent upon meeting certain behavioural requirements, such as looking for work) has also heightened insecurity. Recently published findings from an extensive 5-year study into welfare conditionality found that conditionality is largely ineffective in helping people enter or progress in the labour market. Those unable to find sustained paid work are routinely affected by “recurrent short-term movements between various insecure jobs, interspersed with periods of unemployment.”
The negative experiences of interfacing with the social security system impacts those in work, too. One possible explanation for the UK’s wage stagnation is that many workers may be choosing to remain in their current job instead of taking a risk to switch jobs or pursue further training (key routes into higher pay), for fear of interacting with an increasingly tough welfare system if they become unemployed. In other words, our social security system disincentives the sort of positive risk-taking that promotes a good experience of work and higher quality of life.
Efforts to tackle the problems associated with gig work should therefore be part of a wider and more comprehensive effort to re-examine the social contract between citizens, the state and the market. The RSA has proposed a number of bold experiments and interventions that start to do this. Proposals for universal basic income pilots and a wealth-fund based “basic opportunity fund” are exploring how new models of social security can help people to live fuller and more creative lives. Our inclusive growth work is examining how towns and cities can create new economic models that promote inclusion alongside productivity, for example community savings banks. And the Future Work Centre is testing what a new social contract might look like in practice.
As the pressures of Brexit, automation and technological change ramp up, it is critical that we try to find bold answers to the critical challenges we face.