Neoliberalism and the employment form



This piece was originally published last month in the RS21 Bulletin 1, but since the bulletin doesn’t seem to be available anywhere on the web, I thought I would repost it here. The attempt to analyse the trend towards much higher rates of self-employment has been made more timely by a number of reports since then also noting this trend. According to a piece in yesterday’s Independent, about 4/10 of all jobs created under the coalition have been self-employed, with a median salary of just £12,000 p/a, or about half the national wage…

A large part of the reason why Marxism matters is the coherence with which Marxists argue that all the things which make capitalism unbearable are also capable of a direct solution. If only the people who build, feed, clothe, produce and service capital (the workers) would see the identity of their interests and rise up against their employers, the system would be doomed.  What is obvious to those who want to overthrow capitalism is also obvious to those who seek to maintain it. In particular, in an epoch where the bosses have been winning (“neo-liberalism”) their supporters have tried to convert a temporary ascendancy into permanent, structural, advantages.

Some of the ways in which these changes are introduced is through the law, for example (a century ago) in the creation of the company, as a device to exclude workers’ ability to sue the employer personally; or (more recently) in the formal splintering of large companies into smaller units, limiting employer’s vulnerability to being sued to tiny fractions of a business which can be closed down when they are challenged. I can think of a large private business providing care services to vulnerable adults. Recently it divided its business into 200 legally separate “companies”, each employing an average of fewer than 10 people. When a worker says that “X” company is their employer, a personnel manager will respond by insisting that they are in error, it is in fact “X 1520 Ltd”, “X 2010 Ltd”, etc. This is a manoeuvre aimed at limiting workers’ ability to resist collectively, especially in the context of anti-union laws which limit workers’ rights to strike together against different employers.

Employers are also increasingly re-labelling their workers as “independent contractors” rather than employees and trying to move whole groups of workers from formal employment into self-employment. Formal self-employment makes it harder for the unions to organise in industries such as construction in which each small group of workers engaged through a particular sub-contractor is legally separate, does different tasks, works different hours, wears different uniforms, and every individual worker is responsible for their own taxation, is treated legally as their own business, etc. And it is not just construction. I can think of a high street bank which recently reclassified tens of thousands of its employees, overnight, as self-employed contractors.

Other jobs which would once have been done by employed staff are now typically done by independent contractors: for example, in book production, you would expect copy-editing, proof-reading, indexing, even marketing, all to be done by contractors these days. There are US cities where tens of thousands of workers are engaged on a piece by piece basis, doing forms of semi-skilled white collar labour on their PCs, with people voluntarily spending much of their days in chain coffee stores, as much as anything in an attempt to recreate the physical congruity and fraternity of an old fashioned workplace.

The relabelling of employment as self-employment in the UK overlaps with the use of agency contracts, the vast majority of which relabel the agency worker as an independent contractor. This practice is encouraged by agency Regulations which require agencies to set out the employment status of their workers, and by the decisions of Judges, who for reasons embedded in our “deep” legal culture (i.e. the common law) accept employers’ arguments that in a tripartite relationship the worker can probably sue neither the agency nor the end-user when their employment rights are breached.

The state has also contributed to the shift from employment to self-employment. For some years, it appears to have been the discrete policy of those in charge of taxation to reward workers crossing from employment to self-employment. Self-employed workers, by treating themselves as a businesses can offset their “business costs” (eg telephones, travel) against the cost of their business and as a result pay lower taxation, which is calculated on their “profit” (ie the amount they declare after deductions), not their “turnover” (ie what used to be considered their wages).

In the final years of New Labour and continuing under the present Coalition, there was a trend for benefits advisers to encourage the unemployed to declare themselves as self-employed, with promises that certain benefits (eg family tax credits) would be protected. Unemployment numbers were reduced, but hundreds of thousands of people ended up working as very small businesses, with turnovers in the dozens of pounds or less per week.

Presently, there are estimated to be almost exactly 5 million businesses in the UK, the large majority of which will be small companies “employing” no-one other than their single “owner”.

Over the same time, the number of people declaring themselves employed or self-employed has also risen. In June 2012, there were an estimated 4.2 million self-employed workers in the UK – with the numbers having increased by around 9% (370,000 people) since the recession had begun in 2008 ( And there are in addition the millions of workers who are simply unemployed (

The total picture then is that while a majority of people who are working are still in “classic” full-time employment, this majority is shrinking, and it is no longer possible to see it as a large majority.

None of this is to suggest that the working class has been successfully divided into distinct groups of employed or self-employed people, nor still is to suggest that the class has been permanently defeated. As well as breaking people apart, capitalism is always also bringing them together in new combinations.

One hundred years ago, the British working class had to learn to overcome other divisions, eg the deep distinction between Protestant and Catholic workers (which took its form in Orange marches, anti-Catholic riots, etc) and which was overcome by mass strikes in Liverpool, Glasgow and Belfast. The most notorious instance of casualised work in British history – the docks – had been completely de-casualised by the end of the 1960s.

To overcome the problem caused by the trend towards self-employment new forms of organising have to be found which are tailored to people’s experience of the work they actually do.

It is already common, for example, where groups of workers have come to the UK as migrants, and do not speak English as a first language, for unions to actively recruit bi-lingual organisers. Or to give an example of self-employed workers: the fact that London taxi drivers are self-employed does not prevent RMT and Unite from organising them. The trick is to begin by admitting that there is a problem. Once it is acknowledged, ways can be found to re-learn habits of solidarity.

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