Red Meat Republic - The Story of Beef

Exploitation and predatory pricing drove the transformation of the US beef industry – and created the model for modern agribusiness. By Joshua Specht in The Guardian 


The meatpacking mogul Jonathan Ogden Armour could not abide socialist agitators. It was 1906, and Upton Sinclair had just published The Jungle, an explosive novel revealing the grim underside of the American meatpacking industry. Sinclair’s book told the tale of an immigrant family’s toil in Chicago’s slaughterhouses, tracing the family’s physical, financial and emotional collapse. The Jungle was not Armour’s only concern. The year before, the journalist Charles Edward Russell’s book The Greatest Trust in the World had detailed the greed and exploitation of a packing industry that came to the American dining table “three times a day … and extorts its tribute”.

In response to these attacks, Armour, head of the enormous Chicago-based meatpacking firm Armour & Co, took to the Saturday Evening Post to defend himself and his industry. Where critics saw filth, corruption and exploitation, Armour saw cleanliness, fairness and efficiency. If it were not for “the professional agitators of the country”, he claimed, the nation would be free to enjoy an abundance of delicious and affordable meat.

Armour and his critics could agree on this much: they lived in a world unimaginable 50 years before. In 1860, most cattle lived, died and were consumed within a few hundred miles’ radius. By 1906, an animal could be born in Texas, slaughtered in Chicago and eaten in New York. Americans rich and poor could expect to eat beef for dinner. The key aspects of modern beef production – highly centralised, meatpacker-dominated and low-cost – were all pioneered during that period.

For Armour, cheap beef and a thriving centralised meatpacking industry were the consequence of emerging technologies such as the railroad and refrigeration coupled with the business acumen of a set of honest and hard-working men like his father, Philip Danforth Armour. According to critics, however, a capitalist cabal was exploiting technological change and government corruption to bankrupt traditional butchers, sell diseased meat and impoverish the worker.

Ultimately, both views were correct. The national market for fresh beef was the culmination of a technological revolution, but it was also the result of collusion and predatory pricing. The industrial slaughterhouse was a triumph of human ingenuity as well as a site of brutal labour exploitation. Industrial beef production, with all its troubling costs and undeniable benefits, reflected seemingly contradictory realities.

Beef production would also help drive far-reaching changes in US agriculture. Fresh-fruit distribution began with the rise of the meatpackers’ refrigerator cars, which they rented to fruit and vegetable growers. Production of wheat, perhaps the US’s greatest food crop, bore the meatpackers’ mark. In order to manage animal feed costs, Armour & Co and Swift & Co invested heavily in wheat futures and controlled some of the country’s largest grain elevators. In the early 20th century, an Armour & Co promotional map announced that “the greatness of the United States is founded on agriculture”, and depicted the agricultural products of each US state, many of which moved through Armour facilities.

Beef was a paradigmatic industry for the rise of modern industrial agriculture, or agribusiness. As much as a story of science or technology, modern agriculture is a compromise between the unpredictability of nature and the rationality of capital. This was a lurching, violent process that sawmeatpackers displace the risks of blizzards, drought, disease and overproduction on to cattle ranchers. Today’s agricultural system works similarly. In poultry, processors like Perdue and Tyson use an elaborate system of contracts and required equipment and feed purchases to maximise their own profits while displacing risk on to contract farmers. This is true with crop production as well. As with 19th-century meatpacking, relatively small actors conduct the actual growing and production, while companies like Monsanto and Cargill control agricultural inputs and market access.

The transformations that remade beef production between the end of the American civil war in 1865 and the passage of the Federal Meat Inspection Act in 1906 stretched from the Great Plains to the kitchen table. Before the civil war, cattle raising was largely regional, and in most cases, the people who managed cattle out west were the same people who owned them. Then, in the 1870s and 80s, improved transport, bloody victories over the Plains Indians, and the American west’s integration into global capital markets sparked a ranching boom. Meanwhile, Chicago meatpackers pioneered centralised food processing. Using an innovative system of refrigerator cars and distribution centres, they began to distribute fresh beef nationwide. Millions of cattle were soon passing through Chicago’s slaughterhouses each year. By 1890, the Big Four meatpacking companies – Armour & Co, Swift & Co, Morris & Co and the GH Hammond Co – directly or indirectly controlled the majority of the nation’s beef and pork.

But in the 1880s, the big Chicago meatpackers faced determined opposition at every stage from slaughter to sale. Meatpackers fought with workers as they imposed a brutally exploitative labour regime. Meanwhile, attempts to transport freshly butchered beef faced opposition from railroads who found higher profits transporting live cattle east out of Chicago and to local slaughterhouses in eastern cities. Once pre-slaughtered and partially processed beef – known as “dressed beef” – reached the nation’s many cities and towns, the packers fought to displace traditional butchers and woo consumers sceptical of eating meat from an animal slaughtered a continent away.

The consequences of each of these struggles persist today. A small number of firms still control most of the country’s – and by now the world’s – beef. They draw from many comparatively small ranchers and cattle feeders, and depend on a low-paid, mostly invisible workforce. The fact that this set of relationships remains so stable, despite the public’s abstract sense that something is not quite right, is not the inevitable consequence of technological change but the direct result of the political struggles of the late 19th century.

In the slaughterhouse, someone was always willing to take your place. This could not have been far from the mind of 14-year-old Vincentz Rutkowski as he stooped, knife in hand, in a Swift & Co facility in summer 1892. For up to 10 hours each day, Vincentz trimmed tallow from cattle paunches. The job required strong workers who were low to the ground, making it ideal for boys like Rutkowski, who had the beginnings of the strength but not the size of grown men. For the first two weeks of his employment, Rutkowski shared his job with two other boys. As they became more skilled, one of the boys was fired. Another few weeks later, the other was also removed, and Rutkowski was expected to do the work of three people.

The morning that final co-worker left, on 30 June, Rutkowski fell behind the disassembly line’s frenetic pace. After just three hours of working alone, the boy failed to dodge a carcass swinging toward him. It struck his knife hand, driving the tool into his left arm near the elbow. The knife cut muscle and tendon, leaving Rutkowski with lifelong injuries.

The labour regime that led to Rutkowski’s injury was integral to large-scale meatpacking. A packinghouse was a masterpiece of technological and organisational achievement, but that was not enough to slaughter millions of cattle annually. Packing plants needed cheap, reliable and desperate labour. They found it via the combination of mass immigration and a legal regime that empowered management, checked the nascent power of unions and provided limited liability for worker injury. The Big Four’s output depended on worker quantity over worker quality.

Meatpacking lines, pioneered in the 1860s in Cincinnati’s pork packinghouses, were the first modern production lines. The innovation was that they kept products moving continuously, eliminating downtime and requiring workers to synchronise their movements to keep pace. This idea was enormously influential. In his memoirs, Henry Ford explained that his idea for continuous motion assembly “came in a general way from the overhead trolley that the Chicago packers use in dressing beef”.

 A Swift and Company meatpacking house in Chicago, circa 1906. Photograph: Granger Historical Picture Archive/Alamy

Packing plants relied on a brilliant intensification of the division of labour. This division increased productivity because it simplified slaughter tasks. Workers could then be trained quickly, and because the tasks were also synchronised, everyone had to match the pace of the fastest worker.

When cattle first entered one of these slaughterhouses, they encountered an armed man walking toward them on an overhead plank. Whether by a hammer swing to the skull or a spear thrust to the animal’s spinal column, the (usually achieved) goal was to kill with a single blow. Assistants chained the animal’s legs and dragged the carcass from the room. The carcass was hoisted into the air and brought from station to station along an overhead rail.

Next, a worker cut the animal’s throat and drained and collected its blood while another group began skinning the carcass. Even this relatively simple process was subdivided throughout the period. Initially the work of a pair, nine different workers handled skinning by 1904. Once the carcass was stripped, gutted and drained of blood, it went into another room, where highly trained butchers cut the carcass into quarters. These quarters were stored in giant refrigerated rooms to await distribution.

But profitability was not just about what happened inside slaughterhouses. It also depended on what was outside: throngs of men and women hoping to find a day’s or a week’s employment. An abundant labour supply meant the packers could easily replace anyone who balked at paltry salaries or, worse yet, tried to unionise. Similarly, productivity increases heightened the risk of worker injury, and therefore were only effective if people could be easily replaced. Fortunately for the packers, late 19th-century Chicago was full of people desperate for work.

Seasonal fluctuations and the vagaries of the nation’s cattle markets further conspired to marginalise slaughterhouse labour. Though refrigeration helped the meatpackers “defeat the seasons” and secure year-round shipping, packing remained seasonal. Packers had to reckon with cattle’s reproductive cycles, and distribution in hot weather was more expensive. The number of animals processed varied day to day and month to month. For packinghouse workers, the effect was a world in which an individual day’s labour might pay relatively well but busy days were punctuated with long stretches of little or no work. The least skilled workers might only find a few weeks or months of employment at a time.

The work was so competitive and the workers so desperate that, even when they had jobs, they often had to wait, without pay, if there were no animals to slaughter. Workers would be fired if they did not show up at a specified time before 9am, but then might wait, unpaid, until 10am or 11am for a shipment. If the delivery was very late, work might continue until late into the night.

Though the division of labour and throngs of unemployed people were crucial to operating the Big Four’s disassembly lines, these factors were not sufficient to maintain a relentless production pace. This required intervention directly on the line. Fortunately for the packers, they could exploit a core aspect of continuous-motion processing: if one person went faster, everyone had to go faster. The meatpackers used pace-setters to force other workers to increase their speed. The packers would pay this select group – roughly one in 10 workers – higher wages and offer secure positions that they only kept if they maintained a rapid pace, forcing the rest of the line to keep up. These pace-setters were resented by their co-workers, and were a vital management tool.

Close supervision of foremen was equally important. Management kept statistics on production-line output, and overseers who slipped in production could lose their jobs. This encouraged foremen to use tactics that management did not want to explicitly support. According to one retired foreman, he was “always trying to cut down wages in every possible way … some of [the foremen] got a commission on all expenses they could save below a certain point”. Though union officials vilified foremen, their jobs were only marginally less tenuous than those of their underlings.

 Union Stock Yard in Chicago in 1909. Photograph: Science History Images/Alamy

The effectiveness of de-skilling on the disassembly line rested on an increase in the wages of a few highly skilled positions. Though these workers individually made more money, their employers secured a precipitous decrease in average wages. Previously, a gang composed entirely of general-purpose butchers might all be paid 35 cents an hour. In the new regime, a few highly specialised butchers would receive 50 cents or more an hour, but the majority of other workers would be paid much less than 35 cents. Highly paid workers were given the only jobs in which costly mistakes could be made – damage to hides or expensive cuts of meat – protecting against mistakes or sabotage from the irregularly employed workers. The packers also believed (sometimes erroneously) that the highly paid workers – popularly known as the “butcher aristocracy” – would be more loyal to management and less willing to cooperate with unionisation attempts.

The overall trend was an incredible intensification of output. Splitters, one of the most skilled positions, provide a good example. The economist John Commons wrote that in 1884, “five splitters in a certain gang would get out 800 cattle in 10 hours, or 16 per hour for each man, the wages being 45 cents. In 1894 the speed had been increased so that four splitters got out 1,200 in 10 hours, or 30 per hour for each man – an increase of nearly 100% in 10 years.” Even as the pace increased, the process of de-skilling ensured that wages were constantly moving downward, forcing employees to work harder for less money.

The fact that meatpacking’s profitability depended on a brutal labour regime meant conflicts between labour and management were ongoing, and at times violent. For workers, strikes during the 1880s and 90s were largely unsuccessful. This was the result of state support for management, a willing pool of replacement workers and extreme hostility to any attempts to organise. At the first sign of unrest, Chicago packers would recruit replacement workers from across the US and threaten to permanently fire and blacklist anyone associated with labour organisers. But state support mattered most of all; during an 1886 fight, for instance, authorities “garrisoned over 1,000 men … to preserve order and protect property”. Even when these troops did not clash with strikers, it had a chilling effect on attempts to organise. Ultimately, packinghouse workers could not organise effectively until the very end of the 19th century.

The genius of the disassembly line was not merely in creating productivity gains through the division of labour; it was also that it simplified labour enough that the Big Four could benefit from a growing surplus of workers and a business-friendly legal regime. If the meatpackers needed purely skilled labour, they could not exploit desperate throngs outside their gates. If a new worker could be trained in hours and government was willing to break strikes and limit injury liability, workers became disposable. This enabled the dangerous – and profitable – increases in production speed that maimed Vincentz Rutkowski.

Centralisation of cattle slaughter in Chicago promised high profits. Chicago’s stockyards had started as a clearinghouse for cattle – a point from which animals were shipped live to cities around the country. But when an animal is shipped live, almost 40% of the travelling weight is blood, bones, hide and other inedible parts. The small slaughterhouses and butchers that bought live animals in New York or Boston could sell some of these by-products to tanners or fertiliser manufacturers, but their ability to do so was limited. If the animals could be slaughtered in Chicago, the large packinghouses could realise massive economies of scale on the by-products. In fact, these firms could undersell local slaughterhouses on the actual meat and make their profits on the by-products.

This model only became possible with refinements in refrigerated shipping technology, starting in the 1870s. Yet simply because technology created a possibility did not make its adoption inevitable. Refrigeration sparked a nearly decade-long conflict between the meatpackers and the railroads. American railroads had invested heavily in railcars and other equipment for shipping live cattle, and fought dressed-beef shipment tonne by tonne, charging different prices for moving a given weight of dressed beef from a similar weight of live cattle. They justified this difference by claiming their goal was to provide the same final cost for beef to consumers – what the railroads called a “principle of neutrality”.

Since beef from animals slaughtered locally was more expensive than Chicago dressed beef, the railroads would charge the Chicago packers more to even things out. This would protect railroad investments by eliminating the packers’ edge, and it could all be justified as “neutral”. Though this succeeded for a time, the packers would defeat this strategy by taking a circuitous route along Canada’s Grand Trunk Railway, a line that was happy to accept dressed-beef business it had no chance of securing otherwise.

Eventually, American railroads abandoned their differential pricing as they saw the collapse of live cattle shipping and became greedy for a piece of the burgeoning dressed-beef trade. But even this was not enough to secure the dominance of the Chicago houses. They also had to contend with local butchers.

In 1889 Henry Barber entered Ramsey County, Minnesota, with 100lb of contraband: fresh beef from an animal slaughtered in Chicago. Barber was no fly-by-night butcher, and was well aware of an 1889 law requiring all meat sold in Minnesota to be inspected locally prior to slaughter. Shortly after arriving, he was arrested, convicted and sentenced to 30 days in jail. But with the support of his employer, Armour & Co, Barber aggressively challenged the local inspection measure.

 

A cattle stockyard in Texas in the 1960s. Photograph: ClassicStock/Alamy

Barber’s arrest was part of a plan to provoke a fight over the Minnesota law, which Armour & Co had lobbied against since it was first drawn up. In federal court, Barber’s lawyers alleged that the statute under which he was convicted violated federal authority over interstate commerce, as well as the US constitution’s privileges and immunities clause. The case would eventually reach the supreme court.

At trial, the state argued that without local, on-the-hoof inspection it was impossible to know if meat had come from a diseased animal. Local inspection was therefore a reasonable part of the state’s police power. Of course, if this argument was upheld, the Chicago houses would no longer be able to ship their goods to any unfriendly state. In response, Barber’s counsel argued that the Minnesota law was a protectionist measure that discriminated against out-of-state butchers. There was no reason meat could not be adequately inspected in Chicago before being sold elsewhere. In Minnesota v Barber (1890), the supreme court ruled the statute unconstitutional and ordered Barber’s release. Armour & Co would go on to dominate the local market.

The Barber ruling was a pivotal moment in a longer fight on the part of the Big Four to secure national distribution. The Minnesota law, and others like it across the country, were fronts in a war waged by local butchers to protect their trade against the encroachment of the “dressed-beef men”. The rise of the Chicago meatpackers was not a gradual process of newer practices displacing old, but a wrenching process of big packers strong-arming and bankrupting smaller competitors. The Barber decision made these fights possible, but it did not make victory inevitable. It was on the back of hundreds of small victories – in rural and urban communities across the US – that the packers built their enormous profits.

Armour and the other big packers did not want to deal directly with customers. That required knowledge of local markets and represented a considerable amount of risk. Instead, they hoped to replace wholesalers, who slaughtered cattle for sale to retail butchers. The Chicago houses wanted local butchers to focus exclusively on selling meat; the packers would handle the rest.

When the packers first entered an area, they wooed a respected butcher. If the butcher would agree to buy from the Chicago houses, he could secure extremely generous rates. But if the local butcher refused these advances, the packers declared war. For example, when the Chicago houses entered Pittsburgh, they approached the veteran butcher William Peters. When he refused to work with Armour & Co, Peters later explained, the Chicago firm’s agent told him: “Mr Peters, if you butchers don’t take hold of it [dressed beef], we are going to open shops throughout the city.” Still, Peters resisted and Armour went on to open its own shops, underselling Pittsburgh’s butchers. Peters told investigators that he and his colleagues “are working for glory now. We do not work for any profit … we have been working for glory for the past three or four years, ever since those fellows came into our town”. Meanwhile, Armour’s share of the Pittsburgh market continued to grow.

Facing these kinds of tactics in cities around the country, local butchers formed protective associations to fight the Chicago houses. Though many associations were local, the Butchers’ National Protective Association of the United States of America aspired to “unite in one brotherhood all butchers and persons engaged in dealing in butchers’ stock”. Organised in 1887, the association pledged to “protect their common interests and those of the general public” through a focus on sanitary conditions. Health concerns were an issue on which traditional butchers could oppose the Chicago houses while appealing to consumers’ collective good. They argued that the Big Four “disregard the public good and endanger the health of the people by selling, for human food, diseased, tainted and other unwholesome meat”. The association further promised to oppose price manipulation of a “staple and indispensable article of human food”.

These associations pushed what amounted to a protectionist agenda using food contamination as a justification. On the state and local level, associations demanded local inspection before slaughter, as was the case with the Minnesota law that Henry Barber challenged. Decentralising slaughter would make wholesale butchering again dependent on local knowledge that the packers could not acquire from Chicago.

But again the packers successfully challenged these measures in the courts. Though the specifics varied by case, judges generally affirmed the argument that local, on-the-hoof inspection violated the constitution’s interstate commerce clause, and often accepted that inspection did not need to be local to ensure safe food. Animals could be inspected in Chicago before slaughter and then the meat itself could be inspected locally. This approach would address public fears about sanitary meat, but without a corresponding benefit to local butchers. Lacking legal recourse and finding little support from consumers excited about low-cost beef, local wholesalers lost more and more ground to the Chicago houses until they disappeared almost entirely.

Upton Sinclair’s The Jungle would become the most famous protest novel of the 20th century. By revealing brutal labour exploitation and stomach-turning slaughterhouse filth, the novel helped spur the passage of the Federal Meat Inspection Act and the Pure Food and Drug Act in 1906. But The Jungle’s heart-wrenching critique of industrial capitalism was lost on readers more worried about the rat faeces that, according to Sinclair, contaminated their sausage. Sinclair later observed: “I aimed at the public’s heart, and by accident I hit it in the stomach.” He hoped for socialist revolution, but had to settle for accurate food labelling.

The industry’s defence against striking workers, angry butchers and bankrupt ranchers – namely, that the new system of industrial production served a higher good – resonated with the public. Abstractly, Americans were worried about the plight of slaughterhouse workers, but they were also wary of those same workers marching in the streets. Similarly, they cared about the struggles of ranchers and local butchers, but also had to worry about their wallets. If packers could provide low prices and reassure the public that their meat was safe, consumers would be happy.

The Big Four meatpacking firms came to control the majority of the US’s beef within a fairly brief period –about 15 years – as a set of relationships that once appeared unnatural began to appear inevitable. Intense de-skilling in slaughterhouse labour only became accepted once organised labour was thwarted, leaving packinghouse labour largely invisible to this day. The slaughter of meat in one place for consumption and sale elsewhere only ceased to appear “artificial and abnormal” once butchers’ protective associations disbanded, and once lawmakers and the public accepted that this centralised industrial system was necessary to provide cheap beef to the people.

These developments are taken for granted now, but they were the product of struggles that could have resulted in radically different standards of production. The beef industry that was established in this period would shape food production throughout the 20th century. There were more major shifts – ranging from trucking-driven decentralisation to the rise of fast food – but the broad strokes would remain the same. Much of the environmental and economic risk of food production would be displaced on to struggling ranchers and farmers, while processors and packers would make money in good times and bad. Benefit to an abstract consumer good would continue to justify the industry’s high environmental and social costs.

‘Cows carry flesh, but they carry personality too’: the hard lessons of farming



Today, most local butchers have gone bankrupt and marginal ranchers have had little choice but to accept their marginality. In the US, an increasingly punitive immigration regime makes slaughterhouse work ever more precarious, and “ag-gag” laws that define animal-rights activism as terrorism keep slaughterhouses out of the public eye. The result is that our means of producing our food can seem inevitable, whatever creeping sense of unease consumers might feel. But the history of the beef industry reminds us that this method of producing food is a question of politics and political economy, rather than technology and demographics. Alternate possibilities remain hazy, but if we understand this story as one of political economy, we might be able to fulfil Armour & Company’s old credo – “We feed the world”– using a more equitable system.

Socialism Explained - Richard Wolff

What the Working Class Is Still Trying to Tell Us

David Brooks in The New York Times



Republican supporters waited to enter a rally in Indiana where President Trump was campaigning days before the midterm elections. Credit Leah Klafczynski for The New York Times


I was ready for massive Democratic turnout for the election on Tuesday. But I was surprised how massive the Republican turnout was in response.

The Republicans who flooded to the polls weren’t college-educated suburbanites. Those people voted for Democrats this year.

They weren’t tax-cut fanatics. Half of the Republican members of the House Ways and Means Committee either left Congress, ran for other offices or were defeated.

They weren’t even small-government Republicans. The same red states that elected conservatives to office also — in Nebraska, Idaho and Utah — approved ballot initiatives to expand Medicaid. The same red states that elected conservatives also approved initiatives — in Arkansas and Missouri — to raise the minimum wage.

These were high-school-educated, working-class Republicans.

A lot of us pundits said Donald Trump should run a positive campaign bragging about all the economic growth. But Trump ran another American carnage campaign. That’s because American life still feels like carnage to many.

This is still a country in which nearly 20 percent of prime-age American men are not working full time. This is still a country in which only 37 percent of adults expect children to be better off financially than they are. This is still a country in which millions of new jobs are through “alternative work arrangements” like contracting or consulting — meaning no steady salary, no predictable hours and no security.

Working-class voters tried to send a message in 2016, and they are still trying to send it. The crucial question is whether America’s leaders will listen and respond.

One way to start doing that is to read Oren Cass’s absolutely brilliant new book, “The Once and Future Worker.” The first part of the book is about how we in the educated class have screwed up labor markets in ways that devalued work and made it harder for people in the working class to find a satisfying job.

Part of the problem is misplaced priorities. For the last several decades, American economic policy has been pinioned on one goal: expanding G.D.P. We measure G.D.P. We talk incessantly about economic growth. Between 1975 and 2015, American G.D.P. increased threefold. But what good is that growth if it means that a thick slice of America is discarded for efficiency reasons? 

Similarly, for the last several decades American, welfare policy has focused on consumption — giving money to the poor so they can consume more. Yet we have not successfully helped poor people produce more so that they can take control of their own lives. We now spend more than $20,000 a year in means-tested government spending per person in poverty. And yet the average poverty rate for 2000 to 2015 was higher than it was for 1970 to 1985.

“What if people’s ability to produce matters more than how much they can consume?” Cass asks.

The bulk of his book is a series of ideas for how we can reform labor markets.

For example, Cass supports academic tracking. Right now, we have a one-size-fits-all education system. Everybody should go to college. The problem is that roughly one-fifth of our students fail to graduate high school in four years; roughly one-fifth take no further schooling after high school; roughly one-fifth drop out of college; roughly one-fifth get a job that doesn’t require the degree they just earned; and roughly one-fifth actually navigate the path the system is built around — from school to career.

We build a broken system and then ask people to try to fit into the system instead of tailoring a system around people’s actual needs.

Cass suggests that we instead do what nearly every other affluent nation does: Let students, starting in high school, decide whether they want to be on an apprenticeship track or an academic track. Vocational and technical schools are ubiquitous across the developed world, and yet that model is mostly rejected here.

Cass also supports worker co-ops. Today, we have an old, adversarial labor union model that is inappropriate for the gig economy and uninteresting to most private-sector workers. But co-ops, drawing on more successful models used in several European nations, could represent workers in negotiations, train and retrain workers as they moved from firm to firm and build a safety net for periods of unemployment. Shopping for a worker co-op would be more like buying a gym membership. Each co-op would be a community and service provider to address a range of each worker’s needs.

Cass has many other proposals — wage subsidies, immigration reforms. But he’s really trying to put work, and the dignity of work, at the center of our culture and concern. In the 1970s and 1980s, he points out, the Emmy Award-winning TV shows were about blue-collar families: “All in the Family,” “Taxi,” “Cheers,” “The Wonder Years.” Now the Emmy-winning shows are mostly about white-collar adults working in Los Angeles, Seattle, Boston, New York and Washington. 

We in the college-educated sliver have built a culture, an economy and a political system that are all about ourselves. It’s time to pass labor market reforms that will make life decent for everybody.

Behind BJP's Election-Winning Machinery

The workers who bought out their bosses – and secured their futures

By Aditya Chakrabortty in The Guardian


It had all been going so well. In this smoothest of seductions, John Clark and Alistair Miller hadn’t had to do a thing. There they were, itching to sell their business and get on with retirement. Then one day in the middle of 2015, this American firm – big-time, way out of their league – swung by the factory outside Glasgow and asked: what price do you have in mind? This was followed by an invitation back to the multinational’s European headquarters in the home counties.

So off popped Miller. The two sides were inching towards the dotted line when he casually inquired what the Americans would do with their new Scottish premises. This one question sent the needle screeching across the record. 

As soon as the managing director across the desk started talking about “exploring possibilities” and “transferable technologies”, Miller knew what she meant. Their Scottish operation would run for another six months, a year tops. Then it would be shut – and the order book and the technology shifted down south. And when the factory disappeared, so too would the jobs and the livelihoods of 60-odd workers and their families. Selling up would hand the owners a huge cheque, and leave their staff on a tiny giro.

“You’d be sitting back with your piles of cash,” says Clark, “but at some point you’re going to bump into those guys. Some of them have been there longer than me. I know their families.”

“Those guys” helped to build this place. Since its launch in 1986, Novograf has gone from printing signs for vans to working with some of the biggest chains in Britain. It has become expert in the branding that envelops you while shopping, eating or holidaying, but which you never take in. Walk around a Co-op supermarket, and the signs guiding you to the wine and beer or fruit and veg aisles will be Novograf’s. Pop into a Pizza Hut and the wood-look flooring will have been made and laid by Novograf employees. Stay at an Ibis Styles hotel and the big fat number on your room door probably comes from their East Kilbride factory. Then there’s Greggs, Iceland, Tesco, Waitrose …

Miller and Clark hadn’t poured six decades of their combined lives into this venture only to leave a plump carcass for others to feed on. But the two sixtysomethings had run smack into one of the central problems of British capitalism: how to ensure a company’s owners look after it. Pretty much any spiv with a chequebook can buy a business in the UK and ruin it as they want. Westminster will ask few questions, expect even less accountability, and never learn any lessons. That fanatical British adherence to open markets and property rights leaves the staff, the suppliers and the public counting for little. 

The publisher of Horny Housewives, Richard Desmond, bought the Express stable in 2000 without New Labour ministers raising an eyebrow. A once-great paper was wrecked and hundreds of journalists lost their jobs, but Desmond pocketed nearly £350m before he sold it to Trinity Mirror this year.

In 2005, Manchester United football club was snapped up by the Glazer family, who paid for it by borrowing hundreds of millions that they loaded on to the club’s balance sheet – before shifting its headquarters to the tax haven of the Cayman Islands, a 10,000-mile round trip from the club’s Old Trafford stadium.

Philip Green may strip BHS bare; Cadbury can be ravaged by Kraft; Australian investment bank Macquarie can run Thames Water into the ground then, as a reward, get the public’s Green Investment Bank. Each time owners damage a business, employees and often customers get shafted, and local economies suffer – while a handful right at the top cash in.

But Miller and Clark can tell you how much depends on the simple fact of ownership. It helps shape the business model, the ethos and culture of a company. However, even as they tried to secure a careful owner for their business, all the plausible options were a no-go.

Sell to a rival? Their staff and values would be discarded like used wrapping paper. Cash out to private equity? A green light for a corporate ransacking. Neither man’s children wanted to trudge in their dad’s footsteps, and senior management were not in a position to buy them out.

‘I could be sitting back on piles of cash. But at some point you’re going to bump into those guys. I know their families.’ John Clark, chairman and former owner of Navograf. Photograph: Murdo Macleod for the Guardian

Just then, a postcard flopped on to the doormat. “Thinking of exiting your business?” it asked. When the man from Scottish Enterprise, an agency of the Holyrood government, told them about worker ownership, he got blank faces. The biggest employee-owned firm in the UK, John Lewis, was a Novograf customer, yet all Clark knew about its structure was that once a year the company would be on the news for paying “partners” a tax-free bonus. Which was lovely, Clark and Miller thought, but what did that have to do with them?

Employee ownership is as simple as selling a company to its staff. Over 300 British firms have done it, from Arup architects to Waitrose. But it is as radical as giving the people who create a business’s wealth the right to share in it. That wealth is no longer handed over to remote shareholders in the form of share buybacks and dividends.

When Clark and Miller “got off our butts” and visited a few of the 95 Scottish firms now owned by their employees, “we learned that their productivity was higher, that they were more resilient in bad times, that they were more inclusive of all their staff”.

Giving workers control over their companies doesn’t just make the firms more successful, it also makes the workers a lot better off. Last year, the California-based National Center for Employee Ownership analysed US jobs figures and found that younger workers who are worker-owners enjoy 33% higher wages and 92% higher median household wealththan those who aren’t owners.

The British government knows much of this, because it commissioned a report that told it so. The very first line of Graeme Nuttall’s 2012 review reads: “Employee ownership is a great idea.” After lobbying by Liberal Democrat ministers, two years later chancellor George Osborne scrapped capital gains tax for employers who transferred a majority share of their business to workers. This was back when Osborne and David Cameron would hymn “the John Lewis model”.

Just like “the march of the makers” and the “big society”, the fad has left little trace. Of the 2,617 full-time equivalent civil servants at the Department for Business, not one is dedicated to promoting worker ownership, as advised by the Nuttall review. The same report also recommends “the appointment of a minister responsible for promoting employee ownership across government”. Yet this department confirmed to me that not even its most junior minister holds any such brief.

That silence partly explains why employee ownership remains so exotic. When Clark and Miller announced their idea for selling the company to their staff, they hired a local hotel, put on fancy nibbles and gave a great presentation. “The very first question we got was, ‘Have we still got a job?’” remembers Clark. “Nobody had a clue what it meant,” recalls factory technician David Anderson. “People assumed that everyone was going to have to get a mortgage to buy the company.”

Four hundred miles north of Whitehall, the far smaller Scottish Enterprise employs eight full-time staffers to promote and advise on worker ownership and other “inclusive models” of organising companies. The SNP government is full-square behind it, and the Herald, the Record and the Scotsman newspapers trumpet this Inverness holiday resort or that Hebridean jewellers being taken over by its employees.

Just two decades ago, newly devolved Holyrood paid through the nose for inward investment and prayed that the multinationals would repay their lavish subsidies with lasting jobs. They rarely did. Hewlett Packard, Chunghwa Picture Tubes and many others pulled the corporate equivalent of a one-night stand.

 ‘Everyone received a decent tax-free bonus last year, and also took part in the first-ever staff survey, which led to sick-pay and leave entitlement becoming more generous.’ Photograph: Murdo Macleod for the Guardian

Holyrood can still relapse – such as when it gifted Amazon £2.5m of taxpayers’ money and got back a distribution warehouse in Dunfermline. But Scottish Enterprise’s Sarah Deas talks of fostering a Mittelstand – a German-style dense network of medium-sized businesses that think long term and honour their social obligations.

Which is a reminder that British business is not some political monolith – that it can break left as well as right. White-haired Clark is appalled at “the FTSE guys”, the chief executives paid 100 times the average wage of their workers. “What are they doing to deserve that?”

Clark is not, he says, “some paternalistic capitalist” or a “crusader”. He’s “hardnosed”, and with Miller got a fair price for Novograf. But they’ve also taken big risks to ensure their workers could afford it. It proved impossible to raise cash upfront for the purchase price. “Not one of the major banks was interested. Not even our own.” So Clark and Miller turned themselves into a bank – handing over the company shares while allowing employees to pay them back over a few years, with interest. And with conditions: as long as the pair retain an interest in the firm it cannot relocate more than 200 miles away, “because that would defeat the entire purpose of the deal”.

At the end of 2016, all the shares in the company were transferred from the two original owners into a trust held on behalf of all staff. Just over a year later, the all-new, same-old Novograf still feels eggshelly, as if everyone is trying to gauge what’s changed. Its new managing director, Jennifer Riddell-Dillet, has to tell employees: “Remember you’re an owner.” She both manages and works for her staff, one of whom sat on the panel that interviewed her for the job.

Novografers like to tell you that this isn’t “some socialist paradise”, that there are still bosses and workers; but the priorities have changed. Formerly a senior manager for two PLCs, Riddell-Dillet says: “Public companies are only about external shareholders. There, employees are the asset of the business – but they’re a sweatable asset. Here, you think, ‘If I just drive them into the ground it will be less fulfilling, less rewarding and it will be more ruthless.’”

Everyone received a decent tax-free bonus last year, and also took part in the first-ever staff survey, which led to sick pay and leave entitlement becoming more generous. Anderson, a Novograf lifer, says: “The people on the factory floor definitely feel more in control than before. Anybody can now say, ‘I don’t see why things have to be done that way’ – and someone’s got to answer.”

That power requires some growing into. Production manager Michael Carr has become a director of Novograf, and has struggled to get his head around the accounts. And with no previous experience, Anderson and business development manager Margaret Nelson now make up half the trustee board. The other two trustees will be Miller and Clark, until they’re finally paid off. “It’s obvious that they know what they’re talking about and we don’t,” says Nelson. “Challenging your old boss is an intimidating thing.”

But employees will challenge on their expert subject: their daily work. Just last week, an employee showed Carr a cheaper and quicker way of assembling signs. They would never have spoken up before, he says, yet that one simple thing could save “a few thousand pounds in man-hours and material”.

In its first full year of employee ownership, Novograf’s sales shot up 20% and the company took on an extra 22 people. That success followed on from a strong performance in 2016, but Riddell-Dillet reckons their direct stake in the outcome did drive employees to put in “the blood, sweat and tears”.

Not all the savings are strictly necessary. Not so long ago, now-chairman John Clark, while washing his hands in the gents, reached over to the soap dispenser. He remembers a thin jet of lotion flying out – “Whoosh ... it hit me amidships” – all over his stomach. He charged over to the man responsible for ordering in supplies and told him the new soap was far too thin. While Clark stood dripping, the man nodded. “Aye, that was me,” he said. “I’ve watered down the soap by half to save money.”

Airbnb, Uber, eBay: in this intangible world workers must adapt to survive

John Harris in The Guardian







As descriptions of capitalism go, it’s surely one of the best ever written: poetic, urgent, and as much to do with metaphysics as economics. According to the Communist Manifesto: “Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify.” And then the kicker: “All that is solid melts into air.”

Whatever their shortcomings as revolutionaries and futurologists, Marx and Engels’ vision of ceaselessly changing economies and societies seems just as pertinent now as it did 169 years ago, with one particularly surreal caveat.

Most traditional conceptions of capitalism have been founded in some notion of material stuff: physical property, premises, machinery, goods. But the companies at the forefront of the 21st-century economy have a very different way of operating, as evidenced by one of the year’s most talked-about books. It has a title that, somewhere in the socialist hereafter, must have been greeted with mirth by the ghosts of Karl and Fred. Written by the economist Jonathan Haskel and the innovation researcher Stian Westlake, Capitalism Without Capital may sound like a riddle but actually makes perfect sense.

Airbnb has revolutionised the market in accommodation but owns no property. Chinese online giant Alibaba is reckoned to be the world’s biggest retailer but holds no stock. Neither does that byword for modern shopping, eBay. Meanwhile, Uber has arrived to upturn personal transport but owns no cars.

Such are the strange ways of what is becoming known as platform capitalism: a model which took a shift that had been under way since the 1970s to its logical conclusion. Cutting-edge capitalism is increasingly weightless. What makes the difference between winners and losers is not physical things, but such quicksilver commodities as ideas, knowledge, research, software, brands, networks and relationships.

Haskel and Westlake centre their story on a shift in investment, away from “tangible” assets to these “intangible” items. In the United States, the share of GDP devoted to the latter is reckoned to have overtaken the former in the mid-1990s; in the UK, the watershed was reached towards the end of that decade. In other countries – Italy and Spain, for instance – investing in old-fashioned kit and plant still takes precedence. But in all the statistics there is a clear implication: that as we head into the future, intangibles will rule.

This cuts across many of the usual laws and expectations of economics. Physical assets, in any crude understanding, can be bought and sold. But intangibles are much more difficult entities. As the authors say: “Toyota invests millions in its lean production systems, but it would be impossible to separate these investments from their factories and somehow sell them off.”

Intangible assets are open to “spillovers”: the tendency of ideas and innovations to spread, often way beyond the intentions of their inventors. As part of the same process, they tend to have synergies with each other, often unexpectedly: “The MP3 protocol, combined with the miniaturised hard disk and Apple’s design skills, created the iPod, a very valuable innovation.”

And, liberated from any dependence on a fixed stock of machinery, the creations of these intangible assets can spread at speed, and quickly dominate their field – which is why Uber has become inescapable in less than a decade and 13 years after Facebook’s launch, Mark Zuckerberg’s social network is central to the lives of a quarter of humanity.

The world, then, changes quickly. The physical production that companies still need is increasingly both outsourced to distant, low-wage countries and automated. Even employment in what we think of as “services” is looking alarmingly vulnerable to robotics and artificial intelligence. Meanwhile, intangibles dominate not just the business world but our everyday lives. From music through books to cars, the centrality of physical stuff is dwindling away.

So an inevitable question arises: in economies and societies in which the intangible is king, and having a specific skill tied to a particular activity seems much less valuable than a generalised set of attributes, who will prosper? And who is in danger of sinking?

As Haskel and Westlake see it, the future belongs to people who can thrive in an ethereal, unpredictable world, and endlessly adapt – “product managers, lawyers, business development people, design engineers, marketers, head-hunters, and so forth”. Or, put another way, “people who combine decent data-analytical skills with the soft skills needed to broker relationships inside and outside their own company”.

These people cluster in cities – where, as evidenced by the increasingly costly London, New York and San Francisco, their ever-increasing presence is pushing up property prices. The fact that their mixture of aptitudes can easily seem rare often fosters a “cult of talent” that pushes their pay into the stratosphere. They move to urban areas, partly in pursuit of the kind of “synergies” and “spillovers” mentioned above, and network their heads off.


Extend the notion of intangibles into questions of culture, and you have a key to what is unsettling western societies

The old world is a factory canteen in a company town, full of harried workers keeping their heads down before they graft on a production line; the new reality is symbolised by a street-corner coffee shop full of people answerable to a mixture of employers, who may be either working or socialising, or both.

I know this tribe of people increasingly well. Around a month ago, I spent an afternoon at the tech division of the insurance giant Aviva, housed in what it calls a “digital garage”. The first person I met was the twentysomething who had recently designed all the visual aspects of its websites and apps, and came not from the world of financial services, but the games company Activision.

A few yards away, some of his colleagues were working on a classic example of spillover and synergy, perfecting software that will allow people to access spoken financial advice via the Amazon Echo. That week, they were working in insurance. The next, they might be bringing their talents to a completely different part of the economy.

Obviously, not everybody is like that. And as consistent work involving physical stuff increasingly falls away, it seems the clash between two very different kinds of people will characterise the painful birth pangs of a new reality.

In a frustratingly brief section of the book, Haskel and Westlake tentatively put Brexit and the election of Donald Trump in this context, which seems absolutely right. Indeed, extend the notion of intangibles beyond assets and into questions of culture, and you have a key to what is so unsettling many western societies: on one side sit social forces loyal to such ideas as place, vocation and family; on the other is a cluster of people happy to accede to the modern economy’s demands and reinvent themselves whenever required, and be free of such quaint baggage.

“The history of all hitherto existing society is the history of class struggles,” says the Communist Manifesto. The future will be too, with the kind of ironic twist that those two 19th-century Germans would have found delicious: that taking capital out of capitalism will probably spread uncertainty and agitation as never before.

How do Non Disclosure Agreements Work?

Shannon Bond and Jane Croft in FT


Many of the women who have spoken about sexual harassment by Harvey Weinstein, the Hollywood film producer, signed non-disclosure agreements. Such agreements have been criticised for being a tool used by the wealthy and powerful to silence victims. 

What is an NDA? 

An NDA is a legal agreement signed between two parties to share confidential information or to keep trade secrets private. They are widely used in the business world, such as in mergers and acquisitions, where one company receives sensitive financial information about a business it wants to buy. 

“The original legitimate point of a non-disclosure agreement is for people to talk about business ideas together and make sure someone does not run off and start their own venture,” says Robert Ottinger, founder of the Ottinger Firm, a US employment law practice. 

NDAs are also used in employment settlements so that workers cannot speak about events that happened during their employment, such as sexual harassment. 

“What is absolutely de rigueur in our business these days is the employer pays you money and you will never say anything about it again,” says Kathleen Peratis, head of the sex discrimination and sexual harassment practice group at the New York law firm Outten & Golden. 

“They’ve been used more lately to hide people’s dirty secrets. The consequence is the public never knows,” Mr Ottinger says. “We sign settlement agreements every week, and you can’t tell anyone but your spouse, your accountant and your lawyer.” 

How secure are NDAs? 

NDAs are legally binding. However, once confidential information enters the public domain, there is a question as to how an NDA could be enforced. 

“If the information is something very, very bad, such as allegations of sexual harassment against an employer, there is a public interest argument that this should not be covered up,” says one UK employment lawyer. “If other women who have not signed NDAs suddenly start speaking out then there is a question of whether the information is still confidential or has now entered the public domain. If it is now deemed as public, an employer would be unlikely to succeed in the courts if they sought damages against someone who has breached an NDA.” 

Ms Peratis says clients have recently asked about the consequences of breaking their confidentiality agreements. “What I say is, you made a deal. If you choose to violate that deal, you are at risk of having this guy demand what the contract allows him to demand. But I also tell them, if you’re the first to come out with this your risk is high. If you’re the third or fourth, your risk is not so high.” 

In the UK, lawyers reject the idea that there will be a flood of parties breaching NDAs in light of the Weinstein case. However, there is a possibility that the use of gagging clauses may be curbed, particularly in the UK public sector, which have historically been used to stop workers flagging safety concerns. 

What is the legal position for an employee who breaks an NDA? 

In both the UK and US, an ex-employee can be sued for breaching a confidentiality agreement. A company can seek damages from the former staff member and can try to claw back all or part of any financial settlement. In the UK, they can also seek an injunction preventing the former employee from speaking out again. 

Paul Quain, partner at GQ Employment Law, says UK employment settlement agreements usually have a clause in the agreement that allows ex-employees to speak out about confidential information if they are “required by law, HMRC [HM Revenue & Customs], any regulatory body”. 

This means that an ex-employee would be able to speak to UK lawmakers at a parliamentary select committee hearing, to UK tax investigators or to the UK financial regulator despite having signed such an NDA. 

In the US, NDAs cannot lawfully prevent people from reporting claims to law enforcement and government agencies, such as the Equal Employment Opportunity Commission, or responding to a subpoena. 

US federal law does stop “employers from preventing employees from their right to engage in what are called ‘concerted activities’,” says Maya Raghu, director of workplace equality at the National Women’s Law Center in Washington. “That can include restraining or preventing employees from discussing sexual harassment complaints among themselves. That can be an unfair labour practice.” 

How does an NDA differ from a non-disparagement agreement? 

Non-disparagement agreements are more specific than NDAs and mean that both parties (such as an employer and employee) agree not to make derogatory or adverse statements about each other. 

Are the numbers of NDAs increasing? 

Mr Quain says the number of NDAs has been increasing since the 1970s and 1980s as companies have become more concerned that sensitive information could be leaked. “It may be that companies started to get their fingers burnt and confidential information was made public. They are now pretty standard in employment settlement agreements,” he says. 

Ms Peratis recalls the first time she saw such an agreement mooted, about 40 years ago. “I said to the lawyer on the other side, ‘Ah, you want silence. That’s going to cost you a little more.’” 

Today, she says, “no conversation like that ever occurs any more because it is absolutely expected that with every single employment settlement agreement there will be a confidentiality agreement . . . Anybody who says these days I am not going to agree to confidentiality is not going to get a deal.”

Why have rights if workers fear using them?

Low-wage employees rarely claim what they’re entitled to for fear of being branded troublemakers by their boss


Barbara Ellen in The Guardian



It may be time to quash the myth, once and for all, that the only reason that low-wage workers don’t exercise their employment rights is because they don’t know about them. Perhaps even when they do, they fear that to exercise them would risk them being branded troublemakers and penalised. It’s also possible that employers know about this fear and cynically exploit it.

A TUC study has found that many low-paid workers (people with combined household incomes of £28,000 or less) are being “disciplined” for taking childcare-related time off. Forty-two per cent of parents felt they’d been stigmatised and punished for asking for more flexible hours, with some worrying that they would be given worse shifts or even lose their jobs, and 29% were dipping into annual leave when their children fell ill.

The report said that many of the low-waged seemed unaware that they had a legal right to 18 weeks’ unpaid parental leave if they’d held their jobs for a year, though these rights did not apply to everybody and could be impractical for those on zero-hour contracts (where shifts could change on an employer’s whim). What’s more, the rights became “meaningless” if workers felt that utilising them could lead to them being branded provocative, unreliable and, ultimately, unemployable.

Perhaps it’s time there was a new kind of narrative from the world of work and children, one that goes beyond even the unfolding shambles of the government’s election nursery care promises. Generally, it’s all about women being forced off the “fast track” on to the “mummy track” once they become parents or cyclical outbursts about how the macho nature of work culture isn’t conducive to parenthood or the holy grail of work/life balance.

Then there’s the saga of “parents versus non-parents”. There are tales of office-based sniping about parents arriving for work late, and leaving early, with parents feeling stressed, resented and misunderstood, and non-parents feeling that parents get far too much special consideration for their little darlings’ bouts of tonsillitis.

While all of these points remain valid, the TUC findings show a different world, one where the very notion of “work-life” balance would be considered a tasteless joke and where a working parent’s struggles doesn’t just mean a few covert snotty looks from the marketing team when they leave early for the school nativity play. It sometimes means the choice between using your holiday to look after your children when they’re ill or risking irritating employers and ending up on some unofficial shit list.

This situation appears to be multifaceted. Many low-wage workers in insecure positions don’t have the legal right to ask for more flexible hours (as well as lacking many other legal protections). Those who have rights may not be aware of them. And those who are aware of their rights may be afraid to use them, understandably so.

All of which leads to another issue, one flagged up by the TUC report, which undoubtedly affects every move a low-wage parent worker makes – that employers definitely know their workers’ rights.

However, they also know that they have the upper hand in this ugly era of sanctioned worker exploitation. And so even if a lone voice does dare to raise itself, it could be effectively muzzled and silenced, just with the unspoken threat of the worker being stigmatised, penalised, even losing the job altogether.

There it is: not just the problem, but the disgrace, the human rights calamity of low-wage, insecure British work culture in the 21st century. What use are employment rights when there’s a thriving culture of workers being systematically intimidated into disregarding them?

How to overcome the Master Slave Dialectic in Capitalism

Prof. Wolff on Hegel's Master-Slave Dialectic

Access to justice is no longer a worker’s right, but a luxury

Aditya Charkrabortty in The Guardian


Laws that cost too much to enforce are phoney laws. A civil right that people can’t afford to use is no right at all. And a society that turns justice into a luxury good is one no longer ruled by law, but by money and power. This week the highest court in the land will decide whether Britain will become such a society. There are plenty of signs that we have already gone too far.

Listen to the country’s top judge, Lord Thomas of Cwmgiedd, who admits that “our justice system has become unaffordable to most”. Look at our legal-aid system, slashed so heavily by David Cameron and Theresa May that the poor must act as their own trial lawyers, ready to be skittled by barristers in the pay of their moneyed opponents.

The latest case will be heard by seven supreme court judges and will pit the government against the trade union Unison. It will be the climax of a four-year legal battle over one of the most fundamental rights of all: the right of workers to stand up against their bosses. 

In 2013, Cameron stripped workers of the right to access the employment tribunal system. Whether a pregnant woman forced out of her job, a Bangladeshi-origin guy battling racism at work, or a young graduate with disabilities getting aggro from a boss, all would now have to pay £1,200 for a chance of redress.

The number of cases taken to tribunal promptly fell off a cliff – down by 70% within a year. Citizens Advice, employment lawyers and academics practically queued up to warn that workers – especially poor workers – were getting priced out of justice. But for Conservative ministers, all was fine. Loyal flacks such as Matthew Hancock (then employment minister) claimed those deterred by the fees were merely “unscrupulous” try-ons, intent on “bullying bosses”. Follow Hancock’s logic, and with all those time-wasters weeded out, you’d expect the number of successful tribunal claims to jump. They’ve actually dropped.

At each hearing of Unison’s case, the judges have wound up asking to see actual people for whom the fees have represented a barrier to justice. One was sure that“if the statistics … were drilled down to some individual cases, situations would be revealed that showed an inability on the part of some people to proceed before an employment tribunal through lack of funds”.

Should the supreme court judges want the same thing, they could meet Liliana Almanza. They’d find her a compelling witness, although she finds it hard to sit down for too long due to three herniated discs in her lower back, which make her feel like she’s lugging around “a lot of heavy weight” and which send pain shooting into her hands, legs, shoulders and neck. She also has sometimes severe depression and anxiety. The physical pain and the mental illness can feed off each other.

Almanza has worked as a cleaner at the University of London since 2011 and never kept her conditions from her employer, an outsourcing company called Cofely. Then came a new supervisor, who Almanza felt had it in for her and who piled on extra work. Almanza was sent to the “punishment floor” – actually three floors, normally handled by two people, but she had to do the work on her own and in little time. The extra workload, especially the pushing about of a hoover and a mop, caused her so much pain that she sometimes felt dizzy. Yet when Almanza complained, she says the supervisor either laughed or told her to sign off sick. Despite being required under law, there was no adjustment for her disabilities.

Almanza, who is Colombian, remembers the supervisor telling her how Latin Americans were a bunch of beggars. Other times, she’d call Almanza a “bitch” and a “whore”.

On the worst days, Almanza would walk over to Euston station and stand at the platform’s very edge. She’d wait for the tube to come. Then “a light would come on” and she’d pull herself back.

Almanza did exactly what ministers would want and submitted a grievance using Cofely’s in-house procedure. It was rejected. She appealed and did not hear anything for months. However desperate her situation, she would never have found the money for a tribunal. Some are exempt from the fees, but Almanza and her husband – both cleaners – apparently earned too much money for her to qualify. Nor does the means-testing account for living costs, even though after renting a single room in a shared ex-council house in London and paying bills they have almost no money each month.

Her union, the tiny Independent Workers of Great Britain (IWGB), pitched in some money to go to tribunal and helped crowdfund the rest. As soon as she did, Almanza remembers that her employer made a number of adjustments and lightened her workload.

I contacted Engie, as Cofely has been rebranded, for its response to Almanza’s charges. Its statement reads in part: “We do not tolerate discrimination in the workplace and all claims … are investigated thoroughly. Following extensive investigation of the allegations brought against Cofely Workplace, all claims were denied and Cofely was formally discharged from the proceedings by the court on 24th May 2016.” The court documents actually show that Cofely was discharged because the contract was taken over by another company, which also reached a settlement with Almanza.

Without charity and the shoestring resources of the IWGB, Almanza wouldn’t have been able to file a claim. If she could testify to the supreme court, what would she say? “I would tell the judges if I hadn’t been able to go to tribunal I don’t think I’d be here today. If I’d continued like that, I wouldn’t have been able to tell this story. Maybe it sounds like an exaggeration, a movie. But it’s one thing to talk about it, another thing to live it.”

What is productivity and why is the UK's so poor?

Larry Elliot in The Guardian

The shortfall in productivity compared with other developed economies has long been Britain’s economic achilles heel. It is a problem that Conservative and Labour chancellors have been grappling with for decades.

Productivity is a guide to how good a country is at delivering the goods and services that are bought and sold. Technically, it is the rate of output per unit of input, measured per worker or by the number of hours worked. In layman’s terms, it is a measure of what goes in and what comes out.

In some sectors, productivity is easy to measure. A factory that makes 1,000 cars a day with 50 workers is twice as productive as a factory that requires 100 workers to do the same job. In other parts of the economy, assessing whether productivity has improved is harder and less objective.

At face value a fast-food joint that employed the same number of chefs to cook the same number of hamburgers as they did a year earlier would not be showing any increase in productivity. But if the quality of the hamburgers improved, that would be a productivity gain and statisticians would try to capture the improvement in the official figures.

There are a number of ways in which a firm can make itself more productive. It can invest in new machinery that makes the production process more efficient. It can employ more highly skilled staff. It can train workers so that they can fully exploit the equipment they are using.

It is through productivity improvements that living standards rise. For many years, the annual increase in productivity in the UK averaged around 2%, although there were periods when it was lower and periods when it was higher.

Each year since the early 1990s, the Office for National Statistics has published an international comparison of productivity. This showed that UK productivity was 9% lower than the average of the other six members of the G7 (the US, Japan, Germany, France, Italy and Canada) but this gap narrowed to 4% by the time of the 2007 financial crisis.

Since then, however, productivity in the UK has barely grown and the gap with the rest of the G7 has widened to 18%. The gap with Germany is 35% and with the US 30%.

There have been a number of explanations for the dramatic deterioration in productivity: the availability of unskilled cheap labour has deterred firms from investment; the poor quality of UK roads, railways and broadband network; the shrinkage of the financial sector, which had been a source of high-productivity jobs in the boom before the 2007 crisis; and the misallocation of capital to “zombie” firms kept alive by ultra-low interest rates rather than to dynamic new enterprises.

The government’s autumn statement document states that improving productivity is the “central long-term economic challenge” for the UK. Philip Hammond, the chancellor, has identified better infrastructure, technology and skills as the foundations for doing so, which is why he unveiled a new £23bn national productivity investment fund and backed Sir Charlie Mayfield’s productivity council in his autumn statement. But this is a goal that requires long-term investment and commitment.

Once, firms cherished their workers. Now they are seen as disposable

Will Hutton in The Guardian


 

July 1909: a street in Bournville village near Birmingham, a new town founded by chocolate manufacturer and social reformer George Cadbury. Photograph: Topical Press Agency/Getty Images



More than 100 years ago, the Cadbury family built a model town, Bournville, for their workers, away from the overcrowded tenements of central Birmingham. Cadbury’s vast chocolate factory was at the centre of thousands of purpose-built villas, a village green, schools, churches and civic halls.

The message was clear. Cadbury cherished and invested in their workers, expecting commitment and loyalty back, which they got. Sir Adrian Cadbury, now in his 80s, still proudly shows visitors how his Quaker forefathers felt a genuine sense of responsibility to their workers. His family believed in capitalism for a purpose – innovation and human betterment.

Jeff Bezos, founder of Amazon, would regard the Cadbury family as crazed. His relationship with his workforce is entirely transactional: they are to give their heart and soul to Amazon, undertaking to follow Amazon’s “leadership principles”, set on a laminated card given to every employee, and can expect to be summarily sacked if they don’t make the grade. These injunctions are aimed at not only Amazon’s fork-lift truck drivers and packagers but also at its executive workforce.

At first glance, the principles seem unexceptional, exhorting “ Amazonians” to be obsessed with customers, drive for the best and think big. In practice, they mean workers have to be available to Amazon virtually every waking hour, as a devastating article claimed in last week’s New York Times. The workers should attack each other’s ideas in the name of “creative challenge” and buy into the paranoid culture Bezos believes is essential to business success, with their hourly performance fed into computers for Big Brother Bezos to monitor.

Working at Amazon has become synonymous with stress, conflict and tears – or, if you swim rather than sink, a chance to flourish. It is, as one former executive described it, “purposeful Darwinism”: if the majority of the workforce can flourish in such a culture, you have a successful company. Bezos would claim in his defence that he has founded the US’s most valuable retailer that ships two billion items a year. Cadbury ended up being taken over. Better his approach to capitalism than defunct Quakers, except now everyone is expendable. This is the route to success. Or is it?

The nature of firms is changing. The capitalist world of the so-called golden age between 1945 and the first oil crisis in 1974 was defined by Cadbury-type companies. Even if they didn’t build estates in which their workers could live, big companies offered paid holidays, guaranteed pensions related to your final salary, sickness benefit and recognised trade unions. Above all, they offered the chance of a career and personal progression.

This was the domain of the corporation man commuting to a steady job in a steady office in a steady company with their blue-collar counterparts no less secure in a steady factor. It delivered though. If western economies could again grow consistently at 3% or 4%, underpinned by matching growth in productivity, there would be delight all round.

The companies were much more exciting than they looked. They were purposeful – repositories of skills and knowledge, seeking out new markets, applying new technologies with an appetite for growth. In Britain, great companies such as ICI, Glaxo, EMI, Unilever, Thorn, British Aircraft Corporation, Marconi along with Cadbury were centres of growth and innovation.

A critical doctrine at the time was they were held back by trade unions and soft economic policy that encouraged inflation. The proof that inflation was so damaging is scant and beyond the print, coal, rail and motor industries, British trade unions were pretty weak and pliant. What instead held these companies back was the evaporation of the guaranteed markets of empire. Second, a short-term, gentlemanly, disengaged financial system was unable to mobilise resource behind these companies and their greater purpose as imperial markets shrank. That wasn’t widely understood then – and certainly not now. Instead, the economic problem was defined as pampered, unionised workers, a view further entrenched by an avalanche of free-market economics from the US. Worker privileges and rights must cease.

So to the firm of today. The new model firm no longer has workers who are members of the organisation in a relationship of mutual respect and shared mission with committed, long-term owners; rather, the new ownerless corporation with its tourist shareholders employs contractors who have to pay for benefits themselves and can be hired and fired at will.
They are throwaway people, middle-class workers at risk as much as their working-class peers. Unions are not welcome; pension benefits are scaled back; sickness, paternity and maternity benefits are pitched at the regulatory minimum. Last week, the Citizens Advice Bureau said it estimated that 460,000 people nationwide had been defined by employers as self-employed (and thus entitled to no company benefits), even though they worked regularly for one employer, often in office roles. It is the same approach that has delivered 1.4 million zero-hours contracts. All this allegedly is to serve growth. Except over the last 20 years, growth, productivity and innovation in both Britain and America have collapsed. These new firms whose only purpose is short-term profit with contractualised workforces turn out to be poor creators of long-term value. The exceptions, paradoxically, are the great hi-tech companies such as Amazon, Google, Apple and Facebook.

The alchemy of their success is they combine innovative technology, produce at continental scale, invest heavily and commit to a great purpose, usually because of the powerful personal commitment of the founder. Bezos may have constructed a Darwinian work environment but it is all “to be the Earth’s most customer-centric company”. He has invested hugely to achieve that end, but his workplaces, by contrast, seem terrible.

But even Bezos does not want to be depicted as an employer with no moral centre: he urged his employees to read the offending article and refer examples of bad practice to his human resources department.

Ultimately, long-term value creation can’t be done by treating your workforces as cattle. It’s the great debate about today’s capitalism. It would be a triumph if it was taken more seriously in Britain.

Five countries including India, China and Russia account for 61% of all slavery

Modern slavery affects more than 35 million people, report finds

Five countries including India, China and Russia account for 61% of all slavery, says Australia-based Walk Free Foundation

• Larry Elliott, economics editor
• The Guardian, Monday 17 November 2014 13.02 GMT

The total number of people enslaved by region, see full image here. Photograph: Walk Free Foundation

More than 35 million people around the world are trapped in a modern form of slavery, according to a report highlighting the prevalence of forced labour, human trafficking, forced marriages, debt bondage and commerical sexual exploitation.

The Walk Free Foundation (WFF), an Australia-based NGO that publishes the annual global slavery index, said that as a result of better data and improved methodology it had increased its estimate 23% in the past year.

Five countries accounted for 61% of slavery, although it was found in all 167 countries covered by the report, including the UK.

India was top of the list with about 14.29 million enslaved people, followed by China with 3.24 million, Pakistan 2.06 million, Uzbekistan 1.2 million, and Russia 1.05 million.

Mauritania had the highest proportion of its population in modern slavery, at 4%, followed by Uzbekistan with 3.97%, Haiti 2.3%, Qatar 1.36% and India 1.14%.

Andrew Forrest, the chairman and founder of WFF – which is campaigning for the end of slavery within a generation – said: “There is an assumption that slavery is an issue from a bygone era. Or that it only exists in countries ravaged by war and poverty.

“These findings show that modern slavery exists in every country. We are all responsible for the most appalling situations where modern slavery exists and the desperate misery it brings upon our fellow human beings.

“The first step in eradicating slavery is to measure it. And with that critical information, we must all come together – governments, businesses and civil society – to finally bring an end to the most severe form of exploitation.”

Countries identified as leading the fight to end modern slavery include Australia, Austria, Georgia, Ireland, the Netherlands, Norway, Sweden, Switzerland, the UK and the US. Only Australia, Brazil and the US, however, were making efforts to address the issue in government procurement and the supply chains of businesses operating in there.

Modern slavery is a live political issue in the UK, with a bill on the issue moving through parliament and David Cameron highlighting it in his speech to the Conservative party conference this year.

“But there’s still more injustice when it comes to work, and it’s even more shocking. Criminal gangs trafficking people halfway around the world and making them work in the most disgusting conditions,” Cameron said.

“I’ve been to see these houses on terraced streets built for families of four, cramming in 15 people like animals. To those crime lords who think they can get away with it, I say ‘no, not in this country, not with this party’ … With our modern slavery bill we’re coming after you and we’re going to put a stop to it once and for all.”

Olly Buston, WFF’s movement director, said: “There is still a chance that the modern slavery bill will make Britain’s anti-slavery laws the best in the world. But the draft bill must be strengthened. Children and other victims of slavery need to be properly protected. And the bill must ensure that businesses take action to end slavery in their supply chains”.