Britain's Job Strategy Gets Pressure From EU
LONDON — THE British government's strategy of fueling economic recovery partly through creating new but poorly paid jobs - many of them part-time and held by women - is coming under pressure from the European Union.
Prime Minister John Major's Conservative Party has signaled that it wants to continue the policy of promoting labor market flexibility. The policy has boosted productivity in Britain and kept the unemployment rate (9.7 percent) lower than that of EU rivals like France (12.2 percent) and Spain (23.9 percent).
However, the European Commission in Brussels is pressing the government to extend the employment rights of low-paid workers. The result is that the economies British managers have been able to make by employing a high proportion of part-timers, and keeping their wages low, are under threat.
Patrick Minford, an economist at Liverpool University, was one of the driving forces behind the low-wage strategy when Margaret Thatcher was prime minister, and he still calls it ``the best answer'' to Britain's growth problems.
He points out that there are 20 million unemployed in the EU, and the figure is rising. In Britain, jobless numbers are falling about 100,000 every three months.
A closer look at the British statistics, however, confirms that the progress Mr. Minford approves has been bought at a human price.
A high proportion of new jobs are part-time, low-paid, or both. Many who have left one job for another have had to accept a lower income and living standard.
John Hawkins, a home-loans adviser in London, is earning 5 ($7.50) an hour on a short-term contract. Two years ago, he was laid off by a bank that paid him three times as much for what he thought was a tenured position. ``I am now technically employed,'' he says, ``but my employers have got the best deal, and my family is suffering.''
A determined bid to protect such arrangements lay behind the government's refusal last year to sign the Maastricht Treaty's ``social chapter,'' which aims to safeguard workers' rights. David Hunt, the employment secretary, says applying it would undercut Britain's economic recovery and ``destroy jobs.''
Government critics point to the trend toward part-time and temporary employment of women. More than 4 out of 5 of those who work less than 16 hours a week are women.
The government has also laid itself open to attack for failure until now to give part-timers a right to notice of dismissal and compensation, if they are laid off.
Article 119 of the Treaty of Rome, to which Britain is a signatory, is supposed to guarantee equal pay for equal work. EU regulations call for ``equal treatment'' of men and women at work.
Anticipating trouble from Brussels, the House of Lords in March ruled that part-timers should enjoy the same job-protection rights as full-timers. The government also improved the rate for female employees claiming maternity benefits. Employers have expressed alarm at these developments. John Wentworth, who operates a small clothing factory in outer London, worries that the rules will oblige him to cut his force of 24 women to 18. ``That means half a dozen people losing their jobs, and me losing output,'' he says.
AT present, according to official statistics, part-timers occupy 1 in 4 of Britain's 21 million jobs. Mr. Wentworth points out that the economics of his factory are based on hiring women willing to accept flexible hours and wages as low as 3 an hour.
Government ministers are bracing themselves for more calls from Brussels to improve workers' rights and to encourage creation of more full-time jobs. There are also strong domestic pressures to contend with.
The opposition Labour Party has affirmed it will fight the next general election with acceptance of the Maastricht social chapter as a key plank of its policies.
Labour is also committed to introducing a national minimum wage, which would bring Britain into line with other EU countries.
In the 1992 general election, it promised a minimum wage of 3.4 an hour. Labour Party sources suggest that, next time, it would promise 4 an hour.
Ten percent of all workers earn less than that. Some 17 percent of women are paid under 4.
With Labour scenting victory at the next election, it seems likely to put an attack on the government's low-wage policy at the heart of its own election strategy.