Christine Elliott is a co-founder and close ally of Arts Social Action and – as Chief Executive of the Institute for Turnaround in London- is obliged to keep a close, professional eye on key developments affecting our social and economic environments.
Since 2015 is also a watershed year for Arts Social Action’s own key themes – of Climate Change and Inequality – we’re very happy that she has agreed to share with us some of the insights from her 2014/15 report to IFT members, published in the ‘Swift’ house journal for January 2015.
It’s a time at which both to reflect on the year past and to plan the next twelve months’ professional and personal goals and themes. In a seasonal leader column (‘Food banks are a blight on modern Britain‘, the FT (for Tuesday Dec. 9 2014) threw its readers a tasty morsel – such a shame it was a red herring.
“On many measures Britain has rarely been more prosperous” trumpeted the author, citing more people than ever in work and seemingly oblivious to the fact that much of this ‘work’ is part-time, low-paid, quality poor, zero-contracted employment. There has been a big jump in low pay and zero hours contracts. According to new data from the TUC, in 2008 one in 20 men and one in 16 women worked in the casualised labour market. Now one in 12 men and women are in precarious employment – zero hours contracts, agency work, variable hours and fixed term contracts.
In 2008, there were 655,000 men in casualised labour; that has now risen by 61.8% to 1.06 million in 2014. The statistics on women show a rise from 795,000 to 1.08 million, a 35.6% increase. Since 2008, only one in 40 new jobs has been full time and the headline is that currently, over two million people (over 6% of the workforce) have precarious employment. Around half of these have zero hours contracts, says the Chartered Institute of Personnel Development; while the Work Foundation estimates only 44% of zero hours contracts last two or more years.
Never mind! Black Friday and Cyber Monday were barnstormers, with a till-ringing Christmas predicted. It’s surely the FT’s humour that is black – IFT’s December Forum hosted by Pinsent Masons in Manchester with Richard Pennycook as guest speaker foresaw a penurious January for the retail trade, which is facing new challenges especially in foods and garments. There is a large and puzzling shortfall in productivity, which underpins estimates of the economy’s ability to grow without generating too much inflation. Some analysts attribute the lack of real growth in wages in the UK to the country’s low productivity. Low wages mean less discretionary spending and more hardship.
Then there’s reward in proportion to value. The average FTSE 100 chief executive’s pay increased from £4.1m to £4.7m in 2013, said a report from the non-partisan The High Pay Centre report last July. With executive pay in FTSE companies almost 180 times more than that of the average worker, is it really any wonder that big business has failed to re-establish trust in the wake of the UK’s long recession? Are we kidding ourselves that this situation is sustainable or desirable?
Should we in turnaround and transformation be concerned about this state of affairs? Is pronounced and long term disparity in employment security and reward not a blessing to the bottom line?
Fortunately, other media were able to enlighten us more with front page coverage of a new report from the OECD that provides the first clear evidence on how inequality curbs economic growth, not just a morsel, but dramatically. Since the gap between rich and poor is now at its highest level in 30 years in most OECD countries – including the UK – might not closing that gap deliver the FT’s food bank cleansing programme? The clear message is that the widening inequality gap in income and assets is as bad for the economy and for most of us in business as well as the arts. What a pity the FT journalist had other fish to fry.
In the same way that Ebola was Africa’s problem till it reached into the developed Western world, growing inequality has become a systemic issue
Our members and partners are fair-minded, rational people, striving to save jobs and make the organisations they serve not only viable but sustainably so. Many of us know other members and friends who are donating time and money to food banks, homelessness charities and other essential support services this Christmas.
The Bank of England’s Chief Economist, Andrew Haldane, spoke at the Royal Society in December and among his remarks was the emphatic view that institutions, including the Bank, have a role to play in tackling inequality with the tools and techniques at their disposal.
Prior to the World Economic Forum (WEF) annual meeting now opened in Davos, research by Oxfam showed that the share of the world’s wealth owned by the best-off 1% had increased from 44% in 2009 to 48% in 2014, while the least well off owned just 5.5%. The study revealed that on current trends, the richest 1% would own more than 50% of the world’s wealth by 2016. At the same time, economic experts polled for the WEF annual risk report concluded that conflict is a bigger risk to stability than inequality; which neglects the fact that the root cause of conflicts is not infrequently, that very inequality.
For 2015, where we can, let’s also resolve to apply our own special skills to tackling workplace inequality – before it becomes an even bigger crisis. It is time to transform for the better the prospects of fellow citizens who are stakeholders in business as a properly functioning part of wider society. In so doing, evidence strongly suggests we will help turn around the economy, and for the long term.
Christine Elliott 2015