I
will write some thoughts, next
week when I have had a chance to collect them, following
an excellent PEF book
launch two
days ago,
with great discussion from Ann
Pettifor, Aeron Davis and
Maya Goodfellow and a packed audience. In the meantime, as spring
turns to summer, I wanted to write about something else.
In a recent post I
ask why we were governed by incompetents, and I related that to
ideology, which in recent times means neoliberalism. But I think it
is a little more than working in a neoliberal context, because I say
that the Labour government often did try and do evidence based
policy. Not always. I mentioned Iraq but there are other examples,
but in comparison to Conservative governments they did evidence based
policy a lot. The difference is while the Conservatives had
neoliberal zeal, Labour were prepared to intervene in the market,
particularly to help the poor. A good example was the minimum wage,
which was set by a specific body who aimed to keep it at a level that
did not cause significant employment loss.
The Coalition
government of 2010-5 contained Liberal Democrats who did often check
the neoliberal zeal of Conservative ministers. But they often failed
to do so, and one example was abolishing the Agricultural Wages Board
(AWB) in England. (The rest of the UK kept them.). It was part of their programme to
abolish red tape. The argument was that although Thatcher had spared
the AWB in her bonfire of wages boards, the minimum wage made it
redundant.
I have spent a lot
of my life on or near farms. When we moved from London to rural
Sussex some 36 years ago I still remember vividly two conversations.
One was with a farm worker. I had already noticed the unsocial hours
they regularly worked, and I asked him about it. He told me how when
his son was born he worked so much that he hardly saw her during the
first three months. It was just a bad time of year from the farm's
point of view. I guess I remember that conversation so well because
we had quite recently had our first child.
What the AWB did and
what the minimum wage doesn’t is regulate pay for anti-social of
excessive hours. But what about market pressure from labour scarcity?
The other conversation I remember was with the owner of the same
farm. He was complaining about how hard it was to get additional
labour when he needed it. He told me how far he had advertised but it
was still difficult. I suggested he try raising his hourly wage. He
laughed and said he couldn’t possibly. Those in his local farmers
group would stop speaking to him if he did that.
Farming is a classic
monopsony, where firms can fix wages well below the market clearing
level. The ability of farm workers to find work elsewhere is limited,
particularly when employers operate a cartel on wages. The farm I
lived on back then was typical: I have watched farm workers working
late at night and weekends everywhere I have lived near farms.
Abolishing the AWB
allowed farm owners not to increase in nominal terms payments for
anti-social or overtime hours on existing contracts, such that they
gradually wither away in real terms. It allows farmers not to offer
any of these type of payments on new contracts. Some farmers may even
have tried
to abolish these payments on existing contracts. The governments
impact assessment calculated that AWB abolition would lead to a
substantial transfer of income from farm workers to farm owners.
I wrote
about the abolishing the AWB in 2014. I later had a conversation with
a SPAD about their decision. He told me the level of analysis in my
post was well above anything he had seen in government when the
decision was made. You might think the policy was not surprising from
Conservatives, who have a close relationship with the National
Farmers Union (a farm owner’s club), but there was no attempt to
get even the simplest of evidence, and a very short consultation
period for this decision.
This illustrates a
neoliberal zeal to abolish regulations, with the inevitable transfer
of income from the poor to the rich, without even thinking about
making a serious attempt to look at evidence on this issue. In the
absence of evidence the LibDem Coalition partners chose not to fight
a battle on this issue. Scotland, Wales and Northern Ireland have retained their AWBs.
The Labour party opposition have pledged to reintroduce them in
England.
