Remember “Labour isn’t working”? It was the election poster that summed up the tail end of the 1970s and helped to sweep Margaret Thatcher into power. It showed a long dole queue snaking out of an unemployment office, it turned Labour politicians puce (“selling politics like soap powder,” harrumphed the then chancellor Denis Healey) and it made the front pages. There was always less to that photo than met the eye – literally. The supposedly ordinary folk pictured were, in fact, members of the Hendon Young Conservatives group in north London, only 20 of whom had bothered to turn up. They had to be photographed again and again to fill out the space.
The jobs market has long shaped our politics, but were that poster to be updated to reflect today’s reality, it would sport a different title. We might call it “Work isn’t working”. Because after four decades of politicians of both main parties promising to “make work pay”, the truth is that it doesn’t – not as much as it once did. A new report from the Institute for Fiscal Studies (IFS) shows that workers born in the 1980s and on the median wage earn no more than those born in the 1960s did at their age. Put bluntly, Thatcher’s children have been diddled. Today’s thirty- and fortysomethings were taught that work was how to get ahead, but they are no better off than their parents. In fact, when you factor in exorbitant house prices, they are far poorer. You could ask for few clearer signs of an economy that has failed its people, and a political class that has let down its voters.
Much of the blame can be laid at Thatcher’s door. It was her government that broke the trade union movement and drafted the legislation which today makes it so hard for workers to organise and mobilise. It also followed scorched-earth economics that devastated the manufacturing industry, a sector that generally paid far better than the services that have replaced it. The Conservatives of the 1980s encouraged Britons to turn into entrepreneurs, and their exhortations have paid off: the UK now has among the highest levels of self-employment in the rich world. But as the IFS report shows, self-employment is increasingly a byword for poverty pay. Meanwhile, at the other end of the scale, chief executives are paid many multiples of what their employees earn and companies are vastly more profitable – profits that get pocketed by shareholders.
Figures out this week show that British employees are entering their third squeeze on real wages in just over a decade, while more workers have dropped out of the post-pandemic labour force. Employers are crying out for staff to drive HGVs, provide care to sick and elderly people, to stack shelves in supermarkets – but economists talk of a “missing million” workers who have either retired early, emigrated or simply stopped looking for a job. You don’t need to study the statistics to realise that work no longer pays – you might simply look at your payslip.
Getting into this mess took decades; getting out of it will not happen overnight. What is unlikely to work is Rishi Sunak’s plan to make social security even meaner – that will just impoverish many already poor households. Better is Labour’s plan to lift some of the restrictions on union organising and collective bargaining. But this needs to be combined with a serious strategy to encourage the growth of good jobs and less exploitative work. The side that can establish its credentials as the party of employment will have – as Thatcher’s example teaches – a crack at winning power.
