One of the joys of not being economics editor of Newsnight anymore is... being able to state when the Institute for Fiscal Studies is talking out of its derriere. Today they've had a go at Labour's plan to offer statutory sick pay to the lowest-paid workers 1/... ifs.org.uk/articles/labou…
2/ At present there's a lower limit on SSP: you have to be earning more than £123 a week to get it. That leaves 1.1 million workers without access, two thirds of them women...plus you don't get SSP for the first three days of absence... .tuc.org.uk/blogs/scrappin…
3/ Labour wants to scrap the lower limit and start SSP from day one. But, says the IFS, that will likely be passed through into lower wages. According to models based on American data, all attempts to raise the statutory benefits of workers lead to wage cuts... labour.org.uk/wp-content/upl…
4/ Whether its safety inspections, health insurance or maternity leave, says the "empirical evidence", they always lead to wages being cut, says the IFS. But... Labour is proposing to increase access to the minimum wage, and over time increase it to a Living Wage...
5/ Ah, says the IFS, in that case it could lead to younger workers being laid off; same for zero hours contracts, and in any case we don't really know whether workers want any of this... What? It's a central demand for all unions, the TUC and many anti-poverty campaigns...
6/ The first problem is the IFS is modelling this on America, where employent rights and unionistation are weak. Labour is proposing to simultaneously enact modest in-work benefits, together with the minimum wage and a comprehensive union rights agenda....
7/ The point is: whether workplace benefits lead to wage cuts or - to the contrary - being absorbed by capital (lower profits, dividends etc) depends on something called the class struggle (aka "employment relations")... that's the flaw in the argument...
8/ In fact, these apparently small tweaks to workplace rights occupy a big space in Labour's thinking. In her Mais lecture @RachelReevesMP outlined their aim: to remedy the huge loss of potential talent and productivty that happens because many women are trapped in low-paid jobs...labour.org.uk/updates/press-…
9/ Why am I so down on "maternity leave and safety inspection lead to wage cuts"? Because the same argument is used by neoliberal economists against tax increases: "all taxes on capital filter down to the worker" is an article of faith for the right. Yet it's actually a matter of struggle...
@RachelReevesMP 10/ So when you hear the IFS stuff cited as "evidence" that Labour's policies will harm workers, the answer is: model the whole package. The proof will be in the execution: these small tweaks could have large and long-term effects on the lives of millions of people...
@RachelReevesMP 11/11 And on the doorstep they are popular. Because more than 7 million workers rely on statutory sick pay, and not having to cut down on food and heating bills because you are sick should be a right, not a privilege.
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