Sunday, 21 June 2009

No Pain No Gain? Shares v Pay as Economic Reward

Colleagues,

As a teacher of trade union/labour studies for over 15 years now I have never found a time that wasn't 'interesting'. Similarly, as a leftist, I always see the historic permutations in our modern times.

And so to the latest news that the British Airline Pilot's Association (BALPA) has agreed to a unique pay bargaining outcome which over the next five years will see pilots have share allocations instead of pay increases.

Some of you might find such an outcome deplorable. Please have a look at today's article in The Observer Will Hutton if that's the case: http://www.guardian.co.uk/commentisfree/2009/jun/21/will-hutton-british-airways-pay

Although Hutton writes within the context of trade union 'partnership' in an era of decaying capitalism I personally don't think that we as trade unionists should write him off automatically.

Hutton's position is much broader and you can see this in his video following a Unions21 event earlier this year. In it he propounds a more fundamental review of, for example, the position of trade unions where the state takes a greater stake in financial services: http://www.unions21.org.uk/node/51

In addition, in the Observer piece, he cites the work of Daniel Kahneman (2002 Nobel Prize Winner for Economics) to support the increased recognition of the position of workers to validate their greater significance in pay determination. There is a great interview with Kahneman on YouTube where you can derive some sense of this: http://www.youtube.com/watch?v=c4LdtAJaZPA

These events run alongside the momentous decision by the United Automotive Workers of America (UAW) to agree a controlling share in General Motors http://news.yahoo.com/s/ap/20090529/ap_on_bi_ge/us_gm_uaw

For me much of these recent developments came together when earlier this month when I chaired a Unions21 event on the position of trade unions and cooperatives. Ultimately the suggestion at this event, and with what I have referred to here, suggests that we must discuss the controlling role of workers in relation to the organisation's they work for - a lot of this reminds me to some degree of what I read as a teenager in the work of Coates & Topham and workers' control.

The global economic depression is ironically accelerating the debate (and outcomes) around the greater degree of direct worker intervention in corporate financial activity.

Is this a bad thing?

Please let me know what you think.

As ever I hope that I stimulate alternative views. If I do please be constructive with your criticism.

Cheers

Ian

10 comments:

Wilf said...
This comment has been removed by the author.
Wilf said...

Seems to me that this is also an opportunity to reopen the debates about industrial democracy that were taking place in the late 70's.

The fallacy that the bosses should get huge rewards because they have mystical skills and know what they are doing, has now more than ever been exposed as rubbish. Increased involvement of workers in major decisions can only in my view help to start countering the short termism that has emerged as a result of virutally all investment being viewed from the perspective of a venture capatalist.

Ian Manborde said...

Hi Wilf,

Many thanks for the input.

Although there will be some criticism of the re/emerging debate here I agree with you in that it allows the left/tu movement to revisit the original thinking here that partially has its roots in syndicalism/workers' control movements.

Naturally, there are those who suggest (with some credibility) that worker's/business owners share no common ground - and the latest wave of industrial unrest at oil refineries exemplifies this. However, we cannot/should not always rule out every conceivable route via which a workforce is able to exert greater influence on bargaining issues.

Cheers Wilf - hope to meet up again soon.

Ian

Never Surrender! said...

What a load of crap!

Syndicalism was never based on an acknowledgement that the market-based economy (e.g. Hutton) reigned supreme and that worker capitatulation was the answer to their economic status.

You and me must have been reading different material as I was growing up - in fact, I grew up - I'm not sure you did.

How the hell does the lack of pay progression equal a forward strategy for trade unions? Its only because the pilots, like Willie Walsh, are on salaries that allows them to accommodate one-off payments, that allows this disgraceful measure to move ahead.

Tell me in truth Ian which other kind of worker can go without their pay?

SUNNY said...

The last person speaks as a true UK trade unionist, and what I mean by that is that most workers 'go without pay' all the time.

How nice to have salaries and contracts but what about the majority of workers outside of the trade union movement who dont have your luxuries?

Not a wonder that you are always going on about how poorly unions organise workers. Listening to the rubbish of the last person its not surprising.

Ian Manborde said...

Colleagues,

You will have seen that I had to withdraw the first response to what I had posted here - but still some of you are determined to provide abuse rather than reasoned thought.

I expect and so should you.

Ian

Del Ansar said...

Ian,

Such as a pity as you say that some trade unionists just rubbish ideas and use crude language. Is this how they behave in negotiations?

Anyway, whilst I have some concerns about the issues you raise I understand that in some cases, like the UAW at GM, that the situation is being driven by the global recession and in that some way workers are beneffiting.

My concern though is whether if the good times even return, should we revert back to our traditional positions are we looking at a continued embedding of unions in the machinery of management?

If this is the case I do not support such a trend.

Workers and employers often have divergent needs and interests and a pluralistic approach is often needed here with a clear demaracation of roles and boundaries.

Ultimately I do not share your optimism and enthusiam for this emerging trend of share ownership. If it is such a good idea why didn't we have it before the recession?

I hope I have done my bit to raise the tone and level of debate.

best wishes

Del

Fred said...

Can workers excercise control over their lives by accepting pay cuts in exchange for shares? the Meidner Plan in Sweden as been active since the mid 1980's. It is a levy on profits which buys shares in companies. Has this resulted in a measure of workers control. I think not. Even in Sweden, which is an example of what could be achieved with the consistent application of a Social Democratic programme, the market economy rules. Share allocations to workers bind then to the current economic system. What is needed are measures to educate workers to challenge the right of the employing class to make decisions based on maintianing their wealth and power. And this means reviving the ideas for workers control and social ownership of the commanding heights of the economy. The current crisis means there has never been a better time than to put forward the ideas for a democratic socialism. The demand of shares for workers is not going to take us one step towards this goal.

Ian Manborde said...

Hi Fred,

Many for thanks for this - glad to see that your ICT skills are gathering at a pace!

Your position is clearly fixed at one end of the spectrum within this debate, and I keen to acknowledge that your historical stance is accurate.

My original contention still remains I think which is that the global recession appears to have manifest certain challenges for the position of organised labour, albeit within the confines of market economics.

Where I primarily share your position is that organised labour should not just seek a temporary 'handout' of share control but should their new found status to concertedly push for and organise a much more radical control of enterprises.

I say this as I do not see a this long-term outcome being reached currently from the range of deals that are currently being struck.

Much like that which is currently being written in the press about the return of the bnus culture within the finance sector so soon after the recesssion started - we cannot assume that - left to its own devices - the position of workers will accrue greater control without strateguc efforts to make it so.

Thanks again for your input Fred.

Cheers

Ian

Carol J said...

Hi Ian

I'd be very wary of the notion of salary/pay sacrifice in order to "share" in the sucess of the employer as a future reward.

My long-held veiw is that a fair day's work should gain you a fair day's pay then and there, not in a few years time or in a form that cannot be accessed and used to the worker's benefit as and when they see fit.

I have argued with colleagues in the banking sector that yes, share options/free shares, variable performance related pay etc look great when the business is booming, but look what happens when the business goes bust - the "average" worker loses any rights to the "total reward" they have earned, but those directing the doomed strategy continue to earn large salaries/bonuses etc. (The 5% of my salary which I received in free shares in 2005 has dipped to being worth £49 when I left HBOS this month.)

If workers are to take a "share" in their employer in this way we must be careful to ensure that they have suffiicent influence and control of the company and its long-term strategy to ensure equity in rewards and risks.

Indeed, I'd personally only back this position if the workers earned a decent, living wage day to day with any shares/bonuses being a "real bonus" not a top up to a living wage.

Cheers,

Carol