The self-employed need a union

Economics

IT WAS a good week for anyone interested in understanding the transformation of our job market, with a lot of figures, a lot of news from companies, and a lot of talk at the TUC.

Among the figures were of course the monthly unemployment statistics, which showed an 18,000 fall in August. That was mildly encouraging, following a modest rise the month before. Perhaps more cheering, though, was the evidence that the total workforce in employment continued to rise in the second quarter of the year, with employment in service industries up 74,000 in June compared with March, and employment in manufacturing down only 4,000.

So this is not a jobless recovery. The unemployment numbers are not falling because of a fall in the labour force, fiddles with the figures or special make-work schemes. Real employment is rising.

There was, however, a more disturbing note from several companies, not so much here but across the Continent. Thus Morgan Crucible, a British company, announced that it planned to move output from plants in the Netherlands, France and Belgium to plants in the Czech Republic, Hungary, China and Vietnam. Daimler-Benz, Germany's largest industrial company, announced its worst-ever loss, and it is expected that next month it will announce up to 15,000 job losses. And Olivetti, the Italian computer group, already shrinking fast, said it was cutting another 5,000 jobs. Those cuts happen to be across the Channel, but the week before it was the turn of Glaxo here to announce job losses. The plain fact remains that all large companies everywhere are seeking ways to cut their workforces.

It was also the week of the TUC annual conference. The GMB leader John Edmonds' keynote speech there hit the headlines because of his warning about increased militancy of workers. But his remarks in the same speech about the spreading of the climate of insecurity were perhaps more telling - even if his solution, for Britain to bring in continental-style job- protection legislation, chimed oddly with the news from the likes of Daimler- Benz and Olivetti.

The deeper story here is shown in the graphs, taken from the new Labour Force Survey. They chart the 10-year development of our job market. Three points stand out. One is that full-time employment for men is still well below the level of a decade ago. The second is that part-time employment for both men and women has climbed steadily through both boom and slump. The third is that self-employment, though bumpy, has tended to climb for both men and women.

A further nugget of information, not shown in the graphs, but consistent with the rise both of part-time work and of self-employment, is that the number of people with multiple employment is also climbing at the moment. No less than 1,280,000 of us now have at least two jobs.

A flexible, increasingly self-employed, increasingly mobile (either by choice or by compulsion) workforce needs different social responses, different services and different forms of representation from one where the normal pattern is to spend long periods with a single corporate or state employer. To take one current example: last week's debate over a statutory minimum wage is completely irrelevant to the growing army of self-employed. At the moment, the self-employed account for only 13 per cent of the workforce, but it is perfectly possible that it could be 30 per cent in another 15 years. Among the 3.2 million craft-workers, self-employment is already almost at that level.

What then are these needs? Social responses first: there is really one core response to growing job insecurity, which is to save more. There are powerful national arguments for seeking to encourage a higher level of savings. These include the fact that, other things being equal, higher savings ought to encourage higher investment and higher growth, and that an ageing society needs to save for its old age. These arguments apply equally to individuals, but in addition there is the practical argument that families with savings have scope for taking career decisions denied to those that do not. One member can, for example, take time out of work to retrain for a skill in greater demand. By the same token, a family with several sources of income - from more than one job, from self-employment, from savings - can withstand the loss of any one source.

This may sound self-evident; it is certainly commonplace in the family finance pages of the newspapers. But it is not a response that politicians have sought to encourage. We still penalise many forms of saving by our tax system; we still load regulation on to the self-employed.

The new flexible workforce will also need services that have up to now been provided through employers: legal, financial, technical. There are enormous attractions to the employee in the cosy umbrella of the large firm, and it is the cost of providing that umbrella that is forcing the large firms to cut their labour force. Buying those services individually is expensive, because most providers have chased the business market and geared their costs and marketing efforts to that end. There are small signs of companies putting together packages of services for individuals - a good example is the growth of car-leasing schemes, which enable a private driver to obtain a car on similar terms to a company fleet - but there are still great gaps in the market.

Finally individuals need representation. Companies can lobby through the CBI or their trade association. Professionals can go to their professional body. But the self-employed and part-time workers have a much more muted public voice. This is surely an important potential market for the trade unions.

As employers are increasingly able to shift their jobs around the world, the power of trade unions is correspondingly reduced. Of course, they can seek to get legislation passed through their national parliaments that will protect those already in jobs. But if this merely shifts the burden of adjustment to those without jobs or, worse, shifts the jobs abroad, this is a pointless activity.

The paradox, surely, is that just at the moment when union power is weakest, there is the greatest need for central representation. The new mobile but insecure workforce needs collective representation much more than the secure workers of a giant company or state.

There are models - like the National Farmers' Union - for unions for the self-employed. There is no reason why the whole movement should not redirect itself towards the needs of the new labour force, rather than the old one. Seen in this light, it would almost certainly be to the advantage of the union movement to disassociate itself from conventional politics - however odd this might seem to people accustomed to think of unions largely in political terms.

Now it may be that representation will have to take a new form: more like Greenpeace than the National Union of Miners. But if there is a need, as I think there is, some mechanism will inevitably emerge to meet it. The mechanics of the computer and communications industries have helped transform the comparative advantage of small firms (and the self-employed) vis-a-vis the large. But their potential to link the new army of mobile and part-time workers has yet to be exploited. The revolution in the job market is taking place before our eyes, but we can still only glimpse its likely social consequences.