Brexit, workers’ rights and inequality
by Dave Gibney
The question of workers’ rights is a recurring theme in the debate around Brexit. For the most part trade unions in Britain and Ireland are concerned that a hard or no-deal outcome would threaten a regression in the rights and living standards enjoyed by workers across these islands. But, argues Dave Gibney, there is a more complicated set of factors to take into account.
Economic inequality is now higher in the UK than any time since the 1960s. Real wages have been falling since the UK joined the EU in 1973. Coincidently, the regions of the UK with the lowest median incomes are also the regions that voted to leave the EU in the strongest terms.
Hyndburn, Torbay and West Somerset have average median incomes of £17,000, £16,900 and £16,900 respectively. Those constituencies also voted Leave by margins of 66.2 percent, 63.2 percent and 60.6 percent. Hyndburn also rejected the two main political parties of the Conservatives and Labour in the recent European elections, choosing instead to vote for the Brexit Party by a margin of 39.1 percent, Labour receiving 25.5 percent and the Conservatives 8 percent.
To some, it might be difficult to see the connection between low incomes and Brexit, but nevertheless, it is there. Juxtapose the above with the highest income constituency in the UK, London City, which has an average mean income of £58,300 per year and recorded a Leave vote of only 25 percent.
For many communities, membership of the EU has been fruitful. For others, there is a sense that it has provided very little. This helps to explain why those who have the least to lose were among the strongest supporters of Brexit.
Integration within the EU has occurred in an increasingly neoliberal fashion. The ‘four freedoms’ of the single market – freedom of movement for goods, services, labour and capital – without strong collective bargaining provisions, access for trade unions to the workplace and the protection of effective collective actions serves to exacerbate economic inequality, undermines working conditions and results in a reduction in living standards.
The EU: A worker’s paradise?
The dominant narrative is that the EU has been great for workers’ rights. In Ireland it is often said that the EU provided workers with lunch breaks, annual leave and protection against discrimination at work.
Much of this may be true. But, we need to look at where those individual rights came from in the first place.
When Britain and Ireland joined the EU in 1973, almost half of all workers in the European Union were members of trade unions, with a 46 percent density level. However, that figure has now halved and is currently at only 23 percent. Organised worker power is no longer a dominant force within the EU, if it ever was, with corporations and wealthy individuals dictating policies to a much greater extent.
Individual vs collective workers’ rights
The progress made on workers’ rights on the back of strong trade unions within the EU is laudable. However, most of those workplace improvements are in the area of individual rights. The EU has delivered virtually nothing in terms of collective rights. This is evidenced most clearly by the Viking, Laval, Rüffert and Luxemburg rulings. These rulings prioritised economic freedoms and the movement of services over the right to collective action, undermining workers’ conditions of employment and reinforcing the unequal power relations and economic inequality that have grown in Britain, Ireland and across the continent. Furthermore, in recent years, the EU Commission has undermined collective action in Greece and other peripheral countries. The Commission’s agenda has resulted in a decline of workers covered by collective agreements from 83 percent in 2008 to 42 percent in 2013.
Obviously we should welcome measures which protect workers against discrimination based on their gender, race, sexual orientation, or any other spurious grounds. Yes, workers should be entitled to annual leave, maternity leave and lunch breaks. And of course workers should be entitled to basic health and safety provisions at work. However, these individual rights are the minimum we should expect in the twenty-first century, and certainly shouldn’t be seen as a trade-off for collective rights.
Is the EU anti-worker?
The EU does not ban industrial action outright, nor does it prevent workers from joining trade unions. Its anti-union policies are much more subtle. It incentivises privatisation and ‘competition’, in the knowledge that the private sector is much better positioned to undermine trade unions and workers’ rights.
Privatisation is encouraged through economic rules, such as those contained in the Fiscal Treaty (though the UK is not included in this) and the Stability and Growth Pact. When a country’s debt to GDP ratio is above 60 percent, or the state is running a deficit of more than 3 percent, the government of the day is incentivised into moving important public services ‘off-balance sheet’.
What this means can be illustrated through the case of Ireland. When domestic water charges were introduced in 2015, one of the key reasons cited by government was to move expenditure on water services ‘off-balance sheet’. In order to do that, the utility (Irish Water) had to receive 51 percent of its funding through end-user charges. That required a metered water system. Of course, once an income stream is established through charges, it makes it easier to privatise in the future. The fact the EU tried to force Greece and Portugal sell their water utitlies wasn’t lost on water protesters in Ireland.
Once privatised, the EU’s rules prevent monopolies, dictating that there must be competition in the market. As usual, with competition comes a race to the bottom in terms of working conditions.
Public sector employment is often the antidote to this race to the bottom and provides upward pressure on conditions of employment. The moves towards privatisation can be seen in the decline of public sector jobs. In 1992, more than 23 percent of all workers in the UK were in the public service, whereas today that figure is 16 percent – a 30 percent reduction.
While the blame for this may not be entirely at the door of the EU, many see it as a contributory factor.
EU leaders out-of-touch with workers’ reality
In her acceptance speech to the EU Parliament, the newly elected President of the European Commission, Ursula von der Leyen said: “Today, 500 million Europeans live in freedom and prosperity.” The fact that 22.4 percent of all citizens living within the EU are at risk of poverty is lost on her. That’s more than 100 million people who have just been informed that they are prosperous, while they make the difficult decision about whether they feed their children or turn on the heating this week.
These myths about EU prosperity don’t stack up. The mainstream media consistently reports that the EU is great for jobs and workers’ rights but this is not the lived experience of workers across the EU.
In the post-war era up until the UK joined the EU (1945-1973), the average unemployment rate was 2.3%. In subsequent years up until the Brexit vote (1973-2016), the UK’s average unemployment rate was 7.3%. It more than trebled. Ireland’s figures are similar. Average unemployment between 1960-1973 was 5.5%, whereas during the period between EEC membership and 2016 the average unemployment rate has increased to 10.5%, almost doubling.
This high rate of unemployment is part and parcel of the EU’s demands for low inflation, while a large supply of reserve workers also serves to keep wages low.
The fact that inequality in the EU has been growing for forty years is not a coincidence. It’s structural. The EU and its rules ensure the top 1 percent of the population accumulates obscene wealth, and in most countries, this is facilitated further by national governments.
Sovereignty was cited as the second most important reason UK citizens voted for Brexit. The perception among many Leave voters is that the EU dictates certain rules within which governments must operate.
For example, it is extremely difficult to renationalise an essential industry under EU rules. It would be virtually impossible for the UK to renationalise its rail network operations inside the EU because of the Fourth Railway Package, a new piece of legislation which will introduce market competition into rail systems, requiring countries to introduce privately operated routes. This comes into effect in 2023 and we can expect workers’ pay and conditions of employment to deteriorate as companies begin to compete with each other for lower costs.
On the road to self-destruction
The 2016 Brexit vote has made it much more difficult to be critical of the European Union. Dare question EU policies in this environment and run the risk of being branded an ill-informed idiot, a racist or a Nigel Farage supporter.
This portrayal of those with opposing views to the prevailing mainstream position as backward Neanderthals is ideal for the anti-democractic forces within the EU. It’s also extremely dangerous, because without critique, they can double-down on the very practices that contributed to the Brexit vote in the first place, such as: the promotion of the worst excesses of capitalism and privatisation; increases in economic inequality and reductions in living standards; the expansion of the EU’s imperial project, including the creation of a European army; and the financialisation of everything we need to survive, even water.
The problem the EU has, and which has been illustrated throughout the Brexit debacle, is that the privatisation agenda and the four freedoms valued so dearly – free movement of goods, services, labour and capital – are likely to result in the self-destruction of the EU unless there is something done to tackle economic inequality.
The future of the EU?
This requires much stronger collective bargaining rights, including a fundamental right for trade unions to access workplaces and undertake inspections on workplace compliance, the outlawing of union busting activities with strong penalties as a deterrent and uninhibited collective action protections. It is clear from past experience that the EU institutions are not on the side of labour in this endeavor, and even if they were, it would require the collective agreement of 27 member states to implement the necessary reforms to address these issues. Looking at the overall composition of national governments and the results of the recent European elections, the prospect of this seems more distant than ever.
About the author: Dave Gibney is the communications officer for Mandate trade union, the main retail union in the Republic of Ireland, and joint coordinator of the Right2Water campaign.