January 29, 2018
Britain is dividing into seven new classes of worker as the gig economy grows, according to think-tank the RSA (the Royal Society for the encouragement of Arts, Manufactures and Commerce). Striving, Thriving or Just About Surviving has been published to coincide with the launch of the RSA’s Future Work Centre, following RSA chief executive Matthew Taylor’s employment review for Theresa May last year. The report warns of a 30:40:30 society: while around 30 percent live comfortably, economic insecurity is “the new normal” with 40 percent just managing and a bottom 30 percent not managing to get by.
The survey claims to reveal how economic insecurity is increasingly widespread in the UK:
- 43 percent of workers do not have anyone in their household whom they could depend on to support them financially in the event of hardship.
- 32 percent in-work have less than £500 in savings, 41 percent have less than £1,000 and 29 percent are concerned with their level of debt.
- less than half of employees (44 percent) feel they have progressed within their careers over the last five years, and only 40 percent feel they have good opportunities to progress in future.
A new online tool, released as part of the research, lets users explore which new ‘class’ they are, based on interviews and a survey of more than 2,000 people by Populus.
Britain’s new classes uncovered: are you a ‘striver’, an ‘idealist’ or ‘chronically precarious’?
- The Chronically Precarious: the reliably broke, this group is typically on a steady contract albeit with low pay. 60 percent have less than £1,000 saved and they have low job satisfaction and little autonomy at work. Typical job: sales assistant.
- The Acutely Precarious: typically broke and experience significant income ”yoyo-ing”. Work is low-paid and unlike the Chronic Precarious, irregular. This is a young group and 45 percent have a degree. Typical job: hospitality.
- The Flexi-workers: love their job, even if it doesn’t pay well: 83 percent are satisfied but 59 percent earn less than £21k. High levels of savings: many are redundant ‘second careerers’. Value autonomy above security. Typical job: freelance photographer.
- The Steady-Staters: feel well-treated (90 percent) and well-paid (69 percent), even if work is a means to an end. But they have low-savings, and rely on work for income so are vulnerable to a shock: their routine jobs are at high-risk of automation.Typical job: local govt admin.
- The Idealists: mid-earning, passionate and often millennials (50 percent under 35), 70 percent think they make a positive contribution to society. Most likely to rely on others e.g. parents for income. Urban and 25 percent have more than £10k saved. Typical job: charity worker.
- The Strivers: regular job with high income and high savings, but they feel the link between hard work and fair pay is broken: 73 percent are stressed but only 20 percent think their pay reflects this. Typical job: senior train manager.
- The High-Flyers: the wealthiest group: 55 percent have more than £10k in savings. Successful at exploiting automation: most likely group to value new technology. High job security, high autonomy and high fulfilment. Typical job: director of an IT services business.
Precarious finances are a daily reality for two new classes (the ‘chronically precarious’ and the ‘acutely precarious’) and other groups like the ‘Steady Staters’ will likely experience this regularly in the future as automation takes off, the report warns.
Researchers note ‘flexibility’ offered by the growth in atypical forms of employment such as gig work is valued by some groups, like the ‘flexi-workers’, who welcome how the gig economy lets them pursue creative projects. But for the ‘chronically precarious’, ‘flexibility’ is weighted on the side of the employer.
The report concludes that state support must be overhauled to address rising insecurity:
- Giving councils a larger role in their local economy including by devolving the Living Wage to local authorities and/or Mayors.
- Addressing low-pay, poor skills and job progression, and the effect on insecurity, through establishing powerful sectoral bodies to bring together employers and workers modelled on Swedish Job Security Councils.
- Helping individuals adapt by increasing incentives to save and introducing personal budgets to retrain as automation hits: half of workers have had no training since they left school, the study notes.
- Expanding workplace rights for the growing self-employed – a key target group for both main political parties – by offering them state-funded paternity pay and/or adoption leave, funded by their National Insurance contributions.
Brhmie Balaram, report author and senior researcher at the RSA, said that automation is only one part of modern insecurity: “The gig economy has rightly captured the public’s imagination in recent years. People who find work on platforms often struggle to make ends meet as they go from job to job, with no sick pay and no entitlement to the national living wage. But our new research reveals that economic insecurity now stretches right throughout our labour market, including within jobs that appear safe on the surface.
“From retail workers to warehouse operatives, and from care workers to cleaners, we are beginning to uncover the hidden millions who are chronically broke year in, year out. Let’s not get distracted by automation and machines coming after our jobs. The real danger for this group of workers is a childcare bill unpaid and yet another rent rise around the corner.”
Anthony Painter, director of action and research at the RSA, added economic insecurity is the ‘new normal’: “Economic insecurity is the new normal and policymakers must address this. In the 2000s we saw pay delinked from productivity and in the last decade we’ve seen economic security de-coupled from having a job. So just as we rightly celebrate high levels of employment, the challenge of economic security remains enormous and may even be getting more difficult.
“We need rights, responsibilities and a modern social contract based on support for people as they navigate the inevitable change that is coming from changes to the cost of living, technology, and Britain’s international competitiveness. If we can provide proper support then this will share future growth opportunities more equitably and help the economy better meet the needs of all.
“Without very significant action on skills, transition between jobs and up the earnings ladder, greater support for families in the form of childcare and parental leave, and new rights for key groups of workers such as the self-employed, we will remain in a situation where only a third can really be seen as properly economically secure. A sense of national urgency is required.”