What Is Work in Contemporary Britain Like?
More people in Britain are in work than ever before and the majority of workers report finding meaning in their work. While the British economy has proved effective at generating employment, this has often come at the cost of security, quality and pay.
Many workers have very little say over how and how much they work. Workers are less likely to be covered by a collective bargaining agreement than in recent decades, and with lower union density and less union power, workers lose out when it comes to pay and conditions. There are concerns too, about the intensification of work — the TUC found that three out of five workers feel exhausted by the end of each day.
And above all, the enormous wealth and productive capacity of labour — the direction and use of the economic surplus they generate — remains beyond their control.
Compensation for work is often bad; British wages are low and stagnant, despite the UK being the sixth largest national economy globally. Moreover, the rise of bogus self-employment (when workers are compelled to be self-employed when they are entitled to employee status) has left many self-employed workers lacking basic workplace rights, like sick pay and parental leave, and 1.88 million self-employed workers (of the 4.3 million total self-employed population) earn less than 2/3 of the median wage.
Insecure work is a persistent problem, with 3.9 million workers on zero-hours contracts, outsourced, casual, or agency workers and the low-paid self-employed. Conversely, if many now have insecure and volatile employment, worker job mobility has also slowed down, a job “stickiness” that is associated with a less dynamic labour market.
Even in secure work, workers often have little say over the conditions of their work. The pace of work is one indicator of this. In the most recent Skills and Employment Survey (which has recorded the views of workers about their work since the mid 1980s), found that almost half of workers surveyed strongly agreed that their job requires them to work very hard compared to just a third of workers in 1992.
Health problems associated with work, once in decline, plateaued in the 1990s, and have now risen, post-pandemic. In 2023, 1.8 million workers reported suffering from a work-related illness.
Given these problems, the political question is how can the reality of contemporary work generate a politics capable of its transformation? By better understanding work, we are better equipped to transform it.
In this new data dashboard, Common Wealth’s Centre for Democratising Work assesses the state of contemporary work through three ongoing data focuses: the relative power of labour and capital, working time, and work quality.
The Relative Power of Labour and Capital
Britain has some of the most restrictive trade union legislation in Europe. Already beleaguered, trade union rights are once again under attack in the form of the new Strike (Minimum Service Levels) Act 2023. Organised labour flexed its muscles during the recent strike wave, but, in most sectors, its power remains much diminished.
Workers and capital struggle over the value produced in a workplace or company and the conditions of work. Work itself is shaped by these dual battles. In the present moment, new forms of digital surveillance and monitoring represent a key front of this struggle.
This section explores union density over time, wage growth and dividend payments over time and collective bargaining agreements by industry.
Wages vs payouts
Dividends are paid to shareholders out of post-tax profits. Since investment is often risky, the most reliable way to increase shareholder value is to boost those profits by suppressing workers’ pay. In this way, the balance of wages to payouts might be said to represent the balance of power between workers and capital; it is an index of distributional struggle. Given this, it is perhaps not surprising that dividend payments have particularly taken off since the “shareholder revolution” of the 1980s, which empowered investors and management at the expense of ordinary workers, reshaping the corporate form into an engine of wealth extraction.
This chart compares employee compensation (across all corporations, including the public sector) to dividend payments by private non-financial corporations, relative to their respective 1988 levels, the earliest year available. From 1988 to 2019, the eve of the pandemic, dividend payments by UK private non-financial companies grew 2.5x faster than employee compensation (including pension contributions) each year on average. During 2000-19 it grew 5.5x faster. If worker compensation and dividend payments had grown at an equal pace over 1988-2019 (i.e. at 1.9 per cent per year each, instead of the 4.2 per cent for dividends vs 1.6 per cent for pay that actually transpired), then hourly labour compensation would have been 8.9 per cent greater going into the pandemic. Only since the onset of the gas crisis of 2022 has pay fared better than dividends.
Trade union density and income inequality
The long downward trend of trade union membership is well known. In 2022, numbers were the lowest they have been since they were recorded in their present form (since 1995). Not since before the First World War — that is, before women and working-class men could vote — has the UK had such low unionisation. A lower percentage of workers in unions (referred to as union density) is both symptom and cause of a decline in workers’ power. Trade unions and collective bargaining have been shown to reduce income inequality.
UK union density hovered above 40 per cent through the postwar decades, and jumped during the militant 1970s. Its peak in 1979, above 50 per cent, coincided with the lowest income inequality in British history. (Almost every single available measure of inequality reaches its lowest point between 1977 and 1980.) This chart plots union density against the income share of the top one per cent, over 120 years. As union density has collapsed since 1979, income inequality has skyrocketed, even if still short of Victorian levels. This upward trend was interrupted by the financial crisis, which hit the incomes of those high earners at the heart of the UK’s finance-centric economic model.
Collective bargaining agreements
A collective bargaining agreement allows negotiations between unions and employers of pay and terms and conditions. Coverage remains high in the public sector, but in most sectors, the majority of workers are not covered by a collective agreement.
Workers covered by a collective bargaining agreement varies by industry. The industry with the largest per cent of employees covered by a collective bargaining agreement is “Public administration and defence; compulsory social security”, with 56 per cent of employees covered. The “Accommodation and food service activities” industry has the lowest coverage, with only five per cent of employees covered by collective bargaining. Only two industries, Education and Public Administration, have more than half of their employees covered by a collective bargaining agreement.
Working Time
Two seemingly paradoxical problems characterise work in Britain: workers in Britain work some of the longest hours in western Europe, and many workers want more hours than they presently are offered. When viewed as symptoms of workers’ powerlessness, particularly in the context of a squeeze on incomes, however, this situation does not seem so paradoxical; if wages grew more quickly, workers would not need to work so much.
People need to take on longer hours to get more income because of the squeeze on living standards and wage stagnation. Beyond this, workers are confronted by other temporal stresses. Many workers do not have a say over when they will be working. 37 per cent of all UK workers are given less than a week’s notice of shift patterns and eight per cent of working adults are told less than 24 hours in advance.
This section explores underemployment, overemployment and total hours worked.
Average hours worked
Technological advances and associated productivity improvements have the great virtue of being able to deliver us in aggregate from being hostage to the necessities of survival. This underpinned J.M. Keynes’ prediction in 1928 that by 2028, citizens in rich countries would work only about fifteen hours a week. But the extent to which this freedom from necessity can be widely enjoyed is also influenced by the strength of labour to demand it — hence the carving out of the weekend thanks to labour militancy. Four years out from its centenary, we are far from realising this prediction, but advanced economies have nonetheless enjoyed a long-term downtrend in working hours. (Note, importantly, that time away from paid work includes not just leisure but unpaid domestic work, disproportionately performed by women.)
This chart shows the seasonally adjusted, weekly hours worked per worker between January 1995 and December 2023. Between 1995 and 2010, there was a relatively steady rate of decline in average weekly hours, from 33.3 hours to 31.3 hours in Apr-Jun 2011. This long-term pattern is observed in most advanced economies as a result of productivity improvement and labour-saving technologies. From 2011 until the Covid-19 pandemic, however, with labour’s bargaining power battered by austerity and anti-union reforms, the average weekly hours worked increased to 32.3 hours. In the latest quarter, October to December 2023 the average weekly hours worked was 31.5 hours.
Under/overemployment
While headline measures of unemployment address the ability of labour market participants to find work or not, this leaves out the question of whether they can find work offering the hours they desire. If someone is in work but working fewer hours than they would like, then this is still a failure of the labour market to provide work for people who want it, but is not counted in the unemployment statistics. Similarly, if people are willing to work fewer hours (and take the corresponding pay hit), e.g. in order to better accommodate their caring responsibilities, but cannot, then this too is a failure of the labour market to package work in a manner suitable to workers’ needs and preferences. In this case it confronts them with a dilemma between not working at all or working too much. Those who choose the former count as unemployed, while those choosing the latter count as over-employed.
The ONS defines underemployment as the proportion of employed people who want to work more hours and are available to start within two weeks in either their current job, a different job or an additional job. Between 2007 and 2009 there was a sharp increase in the underemployment rate from ~7 per cent to ~10 per cent. The underemployment rate remained at this level until 2013 when it started to decline. Since the Covid-19 pandemic, underemployment rates have varied but remains on a downward trajectory.
The ONS defines overemployment as the share of workers who want fewer hours, with less pay in either their current job or a different job. (Note that this definition excludes people who work unpaid overtime.) This phenomenon is more common than underemployment, hovering around 9 per cent-11 per cent. It also varies less over the business cycle but does so in the opposite direction: it was at its highest before the financial crisis, and at its lowest in the early 2010s.
Work Quality
What makes one job better than another? Pay is one of the most notable factors; the amount of money in your pocket, in a market society, determines overwhelmingly the quality of your life. But there are other important goods of work tooi and the distribution of these – with fewer going to low-paid workers, women, racialised workers, and workers in certain regions of the UK – are troubling. Among these unfairly distributed goods, we might list, autonomy (control over the tasks you have at work), job security (a contract that you want, how likely you are to keep your job), a say over decisions in your workplace, progression, and workplace training.
This section explores low pay, disparities in pay and career progression opportunities.
The ethnicity pay gap
For a variety of reasons, people of different ethnic backgrounds are often likely to face different work prospects. This relationship is mediated by factors such as where they are located, what education opportunities they are afforded, and what opportunities the labour market offers them in light of that. The upshot of all of is the dispersal of wage levels along ethnic lines, which can serve to perpetuate the cycle.
This chart shows the median hourly wage for each of the remaining 18 detailed ethnicity categories expressed relative to white British employees. (Statistical 95 per cent confidence intervals are also displayed, and in the case of ethnicities with small samples, can be very wide. "White gypsy or Irish traveller" is excluded for this reason.)
Note that these are not adjusted to control for personal and work characteristics, such as their occupation or location. This is because, as noted above, such characteristics are themselves vectors through which labour market outcomes are determined, so unless one wishes to restrict one’s analysis strictly to intra-occupational pay differentials, then for most purposes it is more appropriate not to make such adjustments.
The median Chinese or Indian worker is paid at least 20 per cent more per hour than the median white British worker. By contrast the median Pakistani and black British workers earn 13 per cent less, while the pay shortfall for the median Bangladeshi worker is 18 per cent. (The massive positive 40 per cent pay gap for white Irish workers reflects the fact that immigrants to the UK are primarily drawn from the top end of Ireland’s skill distribution.)
Career progression opportunities and low pay
The possibility of earning more money, of progressing in a career, rather than being stuck in one, typically low-paid job, for life, is one clear good of work. It is consistently denied to workers in some sectors, especially accommodation and food services. As the chart below shows the proportion of employees who believe their industry has good career progression and the proportion of employees on low pay is strongly correlated.
The accommodation and food service industry has the highest proportion of employees on low pay (35.3 per cent) by a margin — the next highest low pay industry, arts, entertainment and recreation, is 15.2 percentage points lower — and 42.7 per cent of employees feel there are opportunities for career progression. Financial and insurance activities is the industry with the best outcomes where 63.6 per cent of employees agree or strongly agree that their job offers good opportunities for career progression.
Pay
People work for money. This might seem a truism, but for many, jobs in the UK are structurally unable to deliver on its promise: if you work, you’ll earn enough to get by.
The majority of people in poverty are in working households (57 per cent). A central cause of the growth of in-work poverty, is the collapse of wage growth. Before 2008, real wages typically grew by two per cent per year. Since then, growth has flatlined. If wages had continued to grow at their pre-crash rate, they would have been £230 higher per week in 2023 than in 2008.
The prevalence of low pay varies by region and sex. Women are more likely to be on low pay than men, and workers in the North East are twice as likely to receive low pay than workers in London.
The proportion of workers on low pay varies by region and nation in the UK, with the highest level of workers on low pay in the North East and the lowest level of workers on low pay in London. In London, eight per cent of workers had low pay, in the North East, 19 per cent of workers had low pay. This measure is the UK measure for low pay where each workers’ wage, in whatever region or nation, is compared to the UK average. This measure is distinct from an alternative measure for low which measure the proportion of low wage workers relative to the average pay in each region.