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Does the EU Work for Working Class People?

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Does the EU Work for Working Class People? Essay Series Does the EU work for working class people? Dr Faiza Shaheen Howard Reed Frances O’Grady Prof Ozlem Onaran Dr Olivier Sykes & Dr Andreas Schulze Bäing Ellie Mae O’Hagan June 2016 Authors Dr Faiza Shaheen Faiza is Director of Class and has previously been Head of Inequality and Sustainable Development at Save the Children UK and Senior Researcher at NEF. Howard Reed Howard is Director of Landman Economics. Frances O’Grady Frances is General Secretary of the TUC. Dr Olivier Sykes and Dr Andreas Schulze Baing Olivier is a lecturer in the Department of Geography and Planning at the University of Liverpool; Andreas is a lecturer at the Centre for Urban Policy Studies at the University of Manchester. Professor Ozlem Onaran Ozlem is Professor of Economics and Director of Greenwich Political Economy Research Centre, University of Greenwich Ellie Mae O’Hagan Ellie is a journalist and political commentator and is Media and Communications Officer at Class. The views expressed in this paper do not represent the collective views of the Centre for Labour and Social Studies (Class), but only the views of the authors. 2 Does the European Union work for working class people? 2016 EU referendum debate Can the European Union deliver for working class people? The Government has announced a referendum on whether Britain should remain in the European Union will be held on Thursday 23 June 2016. But the debate has been narrowly focused on immigration with little discussion on what the referendum means for working class people more broadly. There is a class division on Brexit, with the working class largely in favour of the UK leaving the EU and those in highly paid in professions generally wanting to stay in (YouGov polling April 2016). For many this discontent with the EU articulates itself as an anti-immigration stance – a sentiment that UKIP politicians and the ‘leave EU’ campaign have exploited. This political backdrop has greatly coloured the EU debate - misinformation is common and debates on immigration are wrongly divorced from broader trends in the labour market and EU policies. In light of this, Class set out to make a balanced contribution to the debate, focusing on the areas and issues being overlooked and of most significance to working class people and communities in the UK. We asked key figures from across the labour movement and academic institutions- and with differing attitudes to the- EU the same question– “Does the European Union work for working class people?” – and have compiled their responses in this publication. Does the European Union work for working class people? 3 Has the EU been good for the working class? Foreword This is a group that has seen their wages decline in real terms, who have been growingly subject to precarious working conditions through the expansion of zero hour contracts and casualisation, disproportionately affected by spending cuts, and for those on welfare benefits been the focus of growing scrutiny, sanctioning and public demonisation. There is no doubt that life for this segment of the population has grown worse over the past few decades. But why has this hardship converted in to Eurosceptism? The common answer is immigration. While the working class are not the only ones who worry about immigration, Director of Class Dr Faiza Shaheen, with more than half of the population feeling that immigration should be reduced by ‘a Class is a major predictor of which way you lot’⁴, they are more concerned than other are likely to vote in the upcoming EU groups⁵. Referendum. Those in elementary and Democracy is another – those planning to manual jobs are almost twice as likely to say vote for leaving the EU frequently state they want to leave the EU than those in dissatisfaction with how democracy is or isn’t professional and managerial positions¹. working at the EU level⁶. A similar division exists when considering However, immigration and democracy are qualifications. 70 per cent of those with simply the drivers of concern that are visible. university degrees want to remain in the EU, Once you scratch beneath the surface it is while only 32 per cent of those without clear that there is something more complex qualifications feel the same way². that underlies these frustrations. After all, There are multiple reasons for this difference why should the working class feel more – but the obvious reason is that those higher disgruntled than others about immigration or up the income spectrum gain more from a lack of democratic control? being in the EU than those at the bottom. What do we know? This uneven distributional impact of the EU is the focus of this series of essays. Jobs are where we start our endeavour to answer this question. Howard Reed provides The ‘working class’ is used as a shorthand an overview of the impact of the EU on here to refer to those in manual or wages. Like many he finds little evidence of elementary jobs, on low incomes or welfare impacts of immigration on average wages, assistance – approximately 40 per cent of the but the story does not end here. population³. 4 Does the European Union work for working class people? Several studies have found small negative But again the story is not all positive, Özlem impacts at the bottom end of the income Onaran catalogues the series of actions taken scale. to moderate wages and rights across the EU The overall effects on existing low qualified while reminding us that the UK was not a workers are, however, small and remain passive recipient but rather a driving force for highly contested with causality difficult to the falling wage share across Europe. prove. Stronger evidence has been found How much being part of the EU has driven that more established migrants may lose out market fundamentalism and inequality in the in the labour market as a result of a new UK is a matter of contention. Those arguing wave of immigration. to leave the EU on the left of the political At the other end of the scale, there is spectrum point to the EU and European evidence that immigration has been good for Central Bank as bastions of neo-liberalism, those on higher wages. As such, when taking captured best by the example of Greece and wages alone it is very possible that the imposed austerity⁸. working class have been negatively affected, While the EU certainly has driven some especially when compared to workers with pernicious policies across Europe, the drivers more qualifications. of inequality and falling economic well-being However, as Reed explains, it is misleading to for the poorest in the UK are largely look at wage impacts in isolation. nationally driven. The decimation of union Immigration creates demand as well as power and collective bargaining rights, supply. decline of the manufacturing sector, financialisation and public spending cuts have Migrants have been found to fill labour all been deliberate outcomes of successive market gaps, which may have contributed to UK governments. The EU is not the main an increase in business productivity and in culprit. turn created other jobs. Conservative politician, Iain Duncan Smith At the macro level, Reed argues, the recently quipped that the EU is a "force for increased investment that comes with being social injustice" which backs "the haves part of the EU has benefited everyone. Again, rather than the have-nots"⁹. it is possible that these investment benefits, as well as other economic benefits such as Commentators did not miss the irony of this lower consumer prices⁷, have benefitted statement – with many pointing out that it particular sectors and workers more than was IDS who had implemented cruel cuts on others. the poor and those with disabilities during his time as the Work and Pensions Secretary¹⁰. Frances O’Grady of the TUC underlines the rights that have been won through a co- The dilemma is, as Onaran underlines, ordinated labour movement across the EU – reversing the trend in wages and fighting the the Working Time Directive’s implementation power of banks and corporate lobbyist may which included paid leave for those on be difficult to do as a single nation. Taking the temporary contracts made a material high road on wages risks others undercutting difference to those on low incomes. on labour rights and conditions in an attempt to compete. Does the European Union work for working class people? 5 However, persuading the whole of the EU to The evidence is scant but perceptions are increasing wages is, to put it mildly, a tall powerful. It is intuitive that the large influx of order. One can only deduce that driving immigrants to somewhere like Peterborough change for the poorest in society will be a would have created a shock to the local struggle in or outside of the EU. community and public services. Poor A running theme throughout the essays is management at the local level did not go that many of the benefits of being part of the unnoticed by local residents and has often EU have been invisible. Higher levels of fueled distrust in politicians and local civil growth, or greater innovation because of servants. immigration are not observable to the The evidence is only lacking because we have average person. failed to properly catalogue the local level Olivier Sykes and Andreas Schulze Bäing impacts and hence driven the anger and consider the visible impact in our fourth frustration of those in affected communities. essay, through a focus on EU funded What we don’t know regeneration. Between 2014-2020 a total of Across the different areas we looked – from £351.8 billion EU regeneration and structural wages to community cohesion – there was a investment will find its way to some of the dearth of concrete evidence on the impacts most deprived areas in the UK.
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