Choice is such a good idea - workers should have it too
Last week, a government minister said something very interesting highlighting the fact that even low paid workers have a choice when it comes to getting a job.
At the start of the week, the outgoing boss of Domino’s Pizza, Lance Batchelor, had called on the government to relax entry requirements for Bulgarian and Romanian immigrants so as to help him fill his vacancies. He told London’s Evening Standard: “People who would have worked here a few years ago now don't want these jobs. We could fill 1,000 jobs across the UK tomorrow if we could get candidates to apply for them.”
In response, Minister for immigration, Mark Harper told a House of Commons Committee that if he had so many vacancies, perhaps he needed to look at the pay he was offering. “He runs a profitable business. He should pay what the market demands.”
From the point of market economics, this is elementary. If demand exceeds supply, the price must go up. If the number of people needed to zip around the streets delivering pizza exceeds the number who want to do it, the wages on offer need to rise.
The reason why this interesting is that it points to the role of ‘choice’. The employer certainly has it. By no means everybody who might want to deliver pizza is would necessarily be suitable. The pizza chain boss would have to be able to choose who to hire else his business would likely collapse. The same goes for almost every employer. An employer’s right to choose is taken for granted.
But Harper’s remark goes further than this by reminding us that under market capitalism, workers too have a certain degree of choice. The big question though, is whether they have enough. If the choice is between taking whatever job is available, however hard and poorly paid it may be, and having nothing, the formal right to choose isn’t worth a thing.
If workers are really to have a choice, they have to be able to say no yet still survive. A strong labour market, with plenty of jobs on offer is the best guarantee of this for most people. But it has been many decades since we have had anything approaching such a healthy state of affairs, at least other than at the very top of the economic boom. Although today’s employment figures are the first to show more than 30 million people in employment in the UK, the number who are low paid has been rising steadily and is also now at a record high.
So in the times we live in, the key to a worker being able to say no is a social security system that provides him or her with a minimum decent standard of living while they look for a job that suits them well enough to be worth taking. From where we are now, this would need a welfare reform that travelled in a very different direction from what we have long been used to: instead of ever less money, more; fewer regulations that are all too easy to break inadvertently; less pressure on those who are sick or disabled or are lone parents with still young children to be ‘actively seeking’ work.
Even if you agree with the sentiment, you may well still think this wholly unrealistic. The reason I disagree ismy sense that more than 20 years of welfare reform has created an institution that now produces not only great poverty but also huge economic inefficiency. ‘Choice’ is seen as the driver of greater efficiency and higher quality throughout public services – think of free schools, or competing hospital trusts. So why not here, with jobs themselves, too?