The Road to Somewhere: The Populist Revolt and the Future of Politics by David Goodhart

Author:David Goodhart [Goodhart, David]
Language: eng
Format: epub
Publisher: Hurst
Published: 2017-01-06T18:30:00+00:00

6

THE KNOWLEDGE ECONOMY AND ECONOMIC DEMORALISATION

It was the early 1990s. I was the employment editor of the Financial Times, recently returned from Bonn and a front row seat reporting on German unification. I had returned full of enthusiasm for German labour practices, both the voice given to workers in larger companies and the vocational training system which gives pride and status to middling and even lower skill jobs such as working in a shop.

My editor was keen for me to write about the German labour market model, then suffering the strains of unification. But what neither he nor I seemed to grasp was that Britain was in the middle of dismantling a large part of its own vocational and technical training system. The traditional industrial apprenticeship was withering in the face of factory closures and in 1992 the thirty-five polytechnics—that had conferred prestige on higher technical qualifications—became ‘new’ universities, with the unavoidable downgrading of such qualifications in the rush to a mass, academic higher education system.

This was also the time when people began to talk about the knowledge economy and the expansion of professional service jobs. In fact almost every week a new report would land on my desk predicting the continued expansion of business service jobs and the virtual disappearance of low-skill employment. This was not just a passing fad, more than a decade later in 2006 in Gordon Brown’s penultimate budget speech he actually predicted there would be just 600,000 low-skill jobs by 2020.

This was an extraordinary piece of wrong-headed conventional wisdom. The demand for low-skilled, and mainly low paid, jobs has in fact been increasing in recent decades, stimulated by a host of factors: Britain’s flexible labour market, privatisation, the contracting out of so many jobs by big companies, the disappearance of a high wage floor in some sectors once sustained by unions and wages councils, the introduction of a more comprehensive tax credit income supplement system in 1999, the high demand for part-time work from working mothers, and, since 2004, the inflow of large numbers of eastern Europeans with a generally high work ethic and low wage expectations.

Estimates of the number of low-skill jobs, depending on the definition of low skill, range from 8 million to 13 million (25 per cent to 40 per cent of all jobs)—including, among others, retail, cleaning, hospitality, care, driving/delivery jobs, assembly line work and routine clerical and call centre work. (Some of these will be subject to automation and the onward march of the robots, even in areas like social care, but many of them will not be. And someone still has to clean the robots.)

This miscalculation was part of a bigger story of the casual way in which Britain, the first industrial nation, drifted into becoming a post-industrial one. The Thatcher revolution was focused on market structure, regulation and incentives, and just took for granted that new industries and decent jobs would spring up to replace the corporate dinosaurs of the past. Even when they did spring up they rarely did so in the places where the old industries had once flourished.

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