Dont Solve this Labour Crisis, Stoke It!
Britain has an economic growth problem. It also has an R&D and investment problem. And it has growing social problems driven by rising poverty and inequality.
According to the CBI and the Treasury Orthodoxy, solving these problems requires growth, and in particular, unrestrained growth in the number of workers.
Unfortunately, a thousand years of history suggests the solution is completely the opposite.
To understand why, consider the aftermath of the Bubonic Plague. The ‘Black Death’ wiped out roughly half of Europe’s peasant population. This created an enormous shortage of peasant labour. As wages and bargaining power rocketed, the rich and powerful wanted to invest in technology as a labour-saving device. This caused a wave of mechanisation that led to the scientific revolution.
Furthermore, with higher wages and higher labour productivity, inequality narrowed and social mobility rocketed. As peasants enjoyed their newfound disposable incomes, there was a surge in consumerism, the emergence of new leisure activities, a flourishing of culture, and a wave of new social, political and religious movements. It was the plague and labour shortages that set Europe on its path to global dominance. In short, labour constrictions were good for everyone - especially the poor and the innovative. Everyone that is, except for feudalist lords.
This was not a one-off: the same phenomenon occurred in Russia and the Middle East after similar plagues. More recently we have seen it with post-war booms; such as those after the American Civil War and the World Wars. War invariably wipes out an economy’s most productive labourers (young healthy men), forcing it to embrace productivity-enhancing innovation and entrepreneurism.
Further, social revolutions - including the suffragette movement, female and minority workers rights, and the NHS - are a direct consequence of post-war labour shortages. If there is a shortage of labour, government and business has no option but to look after its workers better.
This Way to Utopia: How Labour Shortages lead to Peace, Prosperity and Progress:
Now contrast this with the past two decades. Wealthy Employers (today’s feudalist lords) have enjoyed a bottomless supply of migrant workers, seduced with an all-you-can-eat buffet of taxpayer-funded public services. Thanks to this supply there has been no investment in productivity, leading to a stagnant economy and stagnant wages. Low wage workers are treated as disposable commodities. Those who experience problems are simply thrown onto the benefits scrapheap (5.3m and counting) rather than helped. Those who do work have seen the purchasing power of their incomes steadily eroded. Rising taxes and housing costs have exacerbated the fall in disposable incomes. Without disposable incomes, the working class cannot afford culture, leisure or pleasure. Hence sport, music, unions and clubs have given way to addiction, anger, dependency and toxic politics.
Of all employers, the most culpable by far has been the NHS. In spite of demand, the number of doctors in the UK has been falling for six consecutive years. The quit rate for nurses is at a record high. Rather than looking after its staff or training more, the NHS is simply working its way down the global development ladder. Like one of those industrial fishing fleets, it is scooping millions of healthcare workers from poorer and poorer countries, while throwing its existing staff overboard. It is no coincidence that Jeremy Hunt - who as Health Secretary took a sadistic pleasure in abusing NHS staff - has been reincarnated as a Chancellor obsessed with low-value mass migration.
There is a growing realisation now that this loss of social capital is in itself bad for our economy, triggering a vicious cycle. Trust, strong communities and national identity are essential to drive investment and entrepreneurism. However, we can only rebuild social capitalism if our working population enjoys a sense of self-esteem, meaningful work and rising disposable incomes. It takes money, confidence and optimism to get off the sofa and start a business, charity or cub-scout gang.
The time has come to stop listening to the vested interests at the Treasury, the CBI and the Bank of England.
It is time that employers raised their game in terms of investment and care for their staff.
It is time to reward hard work, innovation and investment.
It is time for a productivity revolution and rising wages after twenty years of stagnation.
It is time for a renaissance in community and social capitalism.
For the good of the country, it is time workers used their right to strike, to quit and to demand wages that keep up with inflation and keep them out of poverty.
Don’t let a good labour crisis go to waste. Instead of solving this one, we should stoke it.
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