Developing local solutions to the problem of precarious work

Posted on: 21 March 2022 by James Hickson in Blog

In his last blog, James Hickson showed how the rise of precarious working arrangements – such as zero-hours contracts and gig economy work – threatens worker freedom, the wellbeing of communities, and local economic prosperity across the UK. Here he explores how innovative local solutions are now required to help disrupt and dismantle this unjust economic model.

Introduction

The capacity for employers to disrupt livelihoods, at will and with seeming impunity, was starkly exemplified last week. P&O Ferries sacked 800 staff, without notice and without consultation, in order to replace them with cheaper agency staff. Those affected were informed of their redundancy via video message, and there were reports of balaclava-clad security guards being deployed to strongarm workers off of ferry vessels.

This represents just one vivid manifestation of the extreme power imbalance that exists in an increasingly precarious and under-regulated labour market. It will have consequences for the economic security of the ferry staff that have had their careers upended, as well as the exploited agency workers that have now been found to replace them. It will have consequences for the multiple communities that have relied on good employment in the maritime sector, as well as the ferry services that have now been needlessly disrupted. And it will have consequences for the creeping normalisation of insecure, precarious work across the UK economy.

How can this grim trajectory be resisted and reversed?

Neutralising the system of precarious work

As I argued in my previous blog, precarious work involves a distinct combination of jeopardy, uncertainty, and dependence. With employers able to demand, deny or discontinue work with ease– often assisted by the use of novel “algorithmic management” technologies as well as atypical contract arrangements – workers and their communities are left increasingly exposed to extraordinary levels of discretionary power, as well as the tangible risks of poverty, poor heath, and declining living standards that result from insecure employment and unstable incomes.

As I have argued elsewhere, neutralising the system of precarious work, and the relationships of arbitrary power upon which it rests, will require a combination of:

• Regulation: utilising employment law to limit the scale and scope of discretionary power available to employers, by banning certain employment practices altogether and extending enhanced legal rights and protections for workers
• Exit: enabling workers to confidently escape unsatisfactory employment arrangements by reducing and removing the costs of withdrawing or withholding their labour – e.g. through the maintenance of an effective, accessible, and generous welfare state that people can rely upon when needed
• Voice: empowering workers to contest and control their working conditions, disarming the capacity of employers to wield unilateral power at will and with impunity – e.g. through collective bargaining and other forms of workplace democracy.

At the national level, there have been serious attempts to improve the situation for precarious workers in the UK in recent years. Legal victories have secured improved working conditions for some employed in the gig economy, with the Supreme Court ruling last year that Uber drivers should be granted access to rights such as minimum wage and holiday pay as workers rather than self-employed “independent contractors”. There has also been increased union organisation of precarious workers: the GMB union is now officially recognised by Uber, significant strikes have been launched to protest conditions across the UK gig economy (including the long-running strike by food delivery workers in Sheffield), and the TUC and multiple unions are campaigning for an end to zero-hours contracts.

However, at the same time, national legislative action to disrupt and dismantle the system of precarious work has been severely lacking, with even the modest recommendations put forward in 2017 by the Taylor Review of Modern Working Practices still to be fully implemented. The impacts of austerity have also significantly eroded and undermined the UK’s welfare state, intensifying reliance on low quality precarious work for many of the most vulnerable workers. And, all the while, precarious workers up and down the country, including Deliveroo riders, still struggle for legal union recognition and the ability to bargain for improved conditions.

In the absence of necessary, systematic interventions from national government, local solutions to the problem of precarious work – and the threat this poses to the health, wealth, and wellbeing of people and communities – appear increasingly important. But how can we effectively promote the required combination of regulation, exit, and voice at the local level?

Regulation

Last September, recognising the critical role that food delivery workers had played during the pandemic, the New York City Council passed six bills to extend improved labour rights and protections to those employed in this part of the city’s gig economy. These bills sought to limit the discretionary power available to employers, providing gig workers with greater transparency over their pay, greater control over the distances they are required to cover during shifts, and greater access to bathroom facilities. Whilst limited in scope and scale, the introduction of such regulations at the sub-national level exemplifies how city and local governments across the globe are increasingly seeking to challenge the normalisation of precarious work within their local labour markets. 

Though they may have modest powers compared to their international counterparts, local governments in the UK have also attempted to regulate precarious work to varying degrees in recent years. For example, cities such as London and York have previously banned Uber from operating locally, albeit temporarily and on the grounds of passenger safety rather than workers’ rights. Meanwhile, softer approaches to labour market regulation have also been adopted, with Liverpool City Region and Greater Manchester Combined Authorities both introducing employment charters that seek to develop a shared commitment among local businesses to curb the unnecessary and excessive use of insecure contracts. The design and implementation of internal Social Value policies and frameworks could also offer local governments an opportunity to challenge the use of precarious working arrangements, both within their own organisation and throughout their procurement supply chains, with consideration given to the wide socioeconomic disbenefits that insecure employment inflicts upon local communities.

Exit

However, with employment law largely determined at the national level in the UK, it’s unlikely that local approaches to regulation alone will enable cities to unilaterally eliminate all forms of precarious employment from their local labour markets in the near future. Communities therefore need to also consider what new institutional frameworks might help to provide local residents with security from, and a meaningful alternative to, increasingly precarious work.

A number of English cities including London, Leeds, and Hull have recently signalled their desire to pilot Universal Basic Income (UBI) schemes. Paid universally and unconditionally to all citizens on a periodic basis, a local UBI infrastructure could provide workers with the financial headroom to escape any intolerable employment relationships they find themselves in, and alleviate dependence on zero-hours and gig economy employers in particular.

However, with local budgets under pressure after a decade of austerity, it is unclear how, in the immediate term at least, such schemes could be sufficiently funded and delivered at the local level without significant national government support. Indeed, the current lack of UK government support has already been highlighted as a major obstacle impeding the Scottish government’s ambitions to trial basic income schemes in Edinburgh, Fife, Glasgow, and North Ayrshire.

Less reliant on Whitehall largesse, a locally developed renaissance of ‘friendly societies’ and other bottom-up models of mutual aid provision could offer a more immediately achievable mechanism to help empower working people, enable greater security for them and their communities, and neutralise their dependence on low-wage, insecure work. As the historian, Penelope Ismay, notes, in industrial communities throughout the nineteenth-century, well-developed networks of friendly societies “provided significant financial security for millions of working-class households”, establishing local institutional mechanisms for collective self-help during periods of income volatility, unemployment, or the death of a wage-earner. The contemporary Dutch model of ‘Broodfonds’ (literally ‘Bread Funds’) is similarly showing how smaller-scale subscription models of mutual support could also be transformative for precarious workers in the 21^st Century economy, providing sick pay and income insurance to freelance workers.

By rebuilding the local institutional foundations for financial security outside the labour market, workers will be more empowered to challenge exploitative practices inside the labour market. And by minimising the costs of periodic un- or under-employment, the capacity of employers to wield extraordinary discretionary power over workers, at will and with impunity, could be significantly disarmed.  

Voice

Beyond institutionalising a shared foundation of financial security from the increasing precariousness of work, communities should also seek to promote alternative models to precarious employment within the local economy. Such alternatives should contrast starkly with the petty tyranny associated with zero-hours contracts and gig work, empowering workers to meaningfully contest and control their working conditions through the cultivation of workplace democracy and the amplification of worker voice.

The growth of co-operatives, and other forms of worker- or community-owned enterprises (as advocated by Community Wealth Building approaches to local economic development) offers one particularly effective way to challenge the grip of precarious work on a local labour market. Such business models not only enable workers to exercise greater collective control over their conditions, hours, and incomes, but they also help to undermine any idea that increasingly precarious employment is inevitable, necessary, or particularly valuable to local consumers and local economies. Indeed, across the globe a number of platform cooperatives are already helping to openly challenge the exploitative, extractive, and undemocratic business models associated with the gig economy.

Local governments could play a direct role in establishing these more democratic alternatives to precarious work within their local labour markets. For example, in a new book, Platform Socialism, James Muldoon sketches out a model for a municipally-owned and operated ride hail platform to challenge the dominance of gig-economy firms such as Uber within cities. Such a model would enable workers to take greater control over their working conditions, alongside promoting greater efficiency, inclusivity, and sustainability for the local communities that this platform would serve.

Conclusion

With zero-hours contracts and gig-work on the rise, cities and local governments in the UK must now consider how to deliver the legal, political, and institutional frameworks necessary to halt and reverse the pernicious spread of precarious work through their local economies. With workers and their communities increasingly vulnerable to the extraordinary discretionary power of certain employers, as well as the crippling financial insecurity of work that no longer guarantees a secure livelihood, there is both an ethical and economic imperative to act. By promoting fairer employment, more democratic workplaces, and new institutional bases for financial security outside the labour market, communities may be able to begin defusing the system of precarious work at the local level and create stronger foundations for long-term prosperity, sustainability, and resilience.