Labour’s conference delegates meet in Liverpool in a couple of weeks with a sense of ethical purity after officials banned McDonald’s from buying a stand to advertise itself as a good employer.
The national executive committee took the view that the burger chain’s workers are among modern capitalism’s losers and must be barred.
Jeremy Corbyn was clear: the young, the low paid and the under-represented locked into insecure employment are getting the fuzzy end of the lollipop. And he’s right.
McDonald’s workers are mainly young, are paid just above the minimum wage, lack union representation and are tied to zero-hours contracts. That ticks all four boxes.
The trouble is that although McDonald’s might not be the most generous employer, it does take 16- and 17-year-olds when many wouldn’t, and promotes them quickly. They move through the ranks in such a way that almost all trainee managers can say they started behind the counter. And it pays the government’s living wage of £7.20 to 21-year-olds, when it could pay the minimum wage of £6.70.
Then there is the sad fact that most other companies operate without unions too. And many millennials don’t appear to care, making the Labour leader’s calls for greater union influence about as interesting to young people as the new Beatles film.
It’s clear that zero-hours contracts can rarely be justified. All employers should be forced to offer a minimum number of hours when even the billionaire Mike Ashley, owner of Sports Direct, can promise to give shop staff a minimum of 12 hours’ work a week.
No one should be forced to wait on tenterhooks to find out what hours the company rota has them working over the next week or month. And there’s worse: the 160,000 workers in the care industry, many of them nurses, are effectively subsidising the public purse when they drive from one patient to the next; they are only paid for the time they actually spend with clients.
But for all their flaws, the contracts have their supporters, as shown by a survey last year that found workers using zero-hours contracts to be at least as happy as those on full-time arrangements. Some of these contented workers might even be in Liverpool, working for the security firm Labour has employed for the conference: Crawley-based OCS uses zero-hours contracts, though, it argues, only for one-off events.
The same problem applies to any discussion of young people in relation to housing. The young are not a class or a homogenous group, defeating the simplistic Corbynite view of the world.
Right-to-buy is a classic example. Tens of thousands of people in the lowest socioeconomic groups have cashed in on a 30-year property boom. Even though house prices have soared, their gain might be relatively modest. But they have a stake: and their home could easily be worth more than the £325,000 inheritance tax threshold. That’s why George Osborne promised to raise the threshold on a couple’s wealth to £1m by the end of the parliament. It’s why housing associations are now under pressure to offload even more homes at a discount.
Another element of the property craze is the way many ordinary people have jumped on the buy-to-let bandwagon and built modest portfolios of homes for rent. And they will have felt vindicated after Bank of England chief economist Andy Haldane said recently that property was a better investment for retirement than a pension.
Is it any wonder that one of the Tory government’s first acts was to push through a finance bill that cut the rate of capital gains tax? Since April the level of CGT that applies to property sales has dropped from 28% to 20%. Buy-to-letters have always been lightly taxed. Now it’s a bad joke.
It would be easy to believe that this 1.4-million-strong group of rentiers are all baby boomers and that the average young McDonald’s worker is light-years away from grabbing a slice of the action. But that would only be true if we failed to include the cascade of property wealth tumbling like a waterfall through the population. Homes are a cash machine for people during their working lives and a savings vehicle that often pays out to the next generation when they die. It’s a disaster for the health of the economy, but a deeply embedded reality.
Pensions have also muddied the waters. While it is true that the younger generation is missing out on the bountiful final-salary schemes enjoyed by so many baby boomers, this cash is not just spent by the over-65s on Viking river cruises. Parents and grandparents are increasingly supplementing student incomes and paying for deposits on student flats – especially since Osborne relaxed the rules on access to retirement funds.
For Labour and those like myself who have campaigned on behalf of young people, the millennials’ plight is obvious. But there needs to be a recognition that large sections of them have embraced the flexibility on offer from employers and that, in a wealthy economy like the UK, wealth extraction is an easier option than working in a PAYE job.
The Tories, for all their bluster about industrial strategy and rewarding work, are busy cutting the tax on wealth for a reason. For young and old alike, it is the lifeline they seek: and without a secure alternative, they are not going to give it up.
