Factor Income Distribution, Work and Employment: Social and Economic Perspectives

Lead Research Organisation: Nottingham Trent University
Department Name: Business School

Abstract

This Seminar Series will explore alternative economic perspectives on the contemporary nature of factor income distribution, work and employment, in the UK economy. The factors to be investigated are capital and labour, and the associated incomes to be investigated are profits (which usually include returns to land in national income data) and wages. The income distribution to capital and labour will be examined, considering the respective power of each in distributive context. The Series will also investigate income distribution within the factor "labour" (i.e. wage distribution). The recent historical context is the contracting output and falling incomes associated with the Global Financial Crisis (GFC), and this represents a significant force for distributive change. Longer-run issues, and post-crisis patterns will also be investigated. The ramifications of this for distribution will be examined by drawing together economists from a plurality of scholarly perspectives (new Keynesian, feminist, post-Keynesian, Kaleckian, radical), with the intention of fostering dialogue, identifying common recommendations, and highlighting matters for disagreement, with regard to our understanding of what has happened, and the optimal governmental responses to it.

The Seminar Series will include six events in all. These will be linked, so that conceptual and methodological issues are considered in earlier sessions, with the outcomes of these seminars used to inform the topic specified at later events. Initially the Seminar Series will identify the present patterns of factor income distribution, work and employment, in the wake of the GFC. This will be considered in the light of the austerity policies of the present government, and in the context of the distribution, work and employment policies of the New Labour governments before it. Thereafter the Seminar Series will evaluate the most suitable data and empirical methods with which to investigate these themes. In the substantive policy analysis three main topics will be elaborated upon, from a number of economic perspectives: macroeconomic distribution; wage inequality; and, employment and unemployment. The Seminar Series will conclude by evaluating various policies which Governments may adopt in relation to the subject under investigation. These include employment rights, trade union policies, minimum wage legislation, education and skills training, national and regional employment strategies, and policies concerned with unemployment. The overarching topical framework within which these will be evaluated is factor income distribution.

Planned Impact

This project will seek to deepen the connection between academic researchers, policymakers and practitioners working within the areas of factor income distribution, work and employment. It will examine a plurality of scholarly approaches, and offer policy prescriptions on the topics for investigation. Policy recommendations, thus devised, will be informed by different conceptual approaches, empirical analyses and normative evaluations. However, in each session, and especially in the closing seminar, the focus will be upon the policy implications of the different treatments.

In the wake of the Global Financial Crisis (GFC) it was recognised that reflection concerning the economics discipline was called for. The discipline was relatively homogeneous in terms of underlying framework and empirical methods. In this context the Head of the Government Economic Service observed: 'it is not useful to define rigour as sticking to the formal stipulations of any particular school of economic thought' (Ramsden, 2012, p.4). This Seminar Series responds to this challenge by simultaneously evaluating a plurality of approaches which, taken together, should be considered in formulating practical economic policies which are of use to government policymakers and other stakeholders. Where different theoretical and empirical studies point in the same policy-direction, this would be helpful for practitioners, reinforcing the basis for the policy. Equally, where there is incongruence it is useful to clearly state the conceptual source of this disagreement. This Seminar Series provides a unique focal point for this evaluation.

The policies which are pertinent to the subject of investigation are employment rights, trade union policies, minimum wage legislation, education and skills training, national and regional employment strategies, and policies concerned with unemployment. On this basis practitioners from the following organisations will be invited:

(1.) Policymakers and government economists. The six seminars will be of interests to economists in the following Government departments: Department of Business, Innovation and Skills; Department for Communities and Local Government; Department for Work and Pensions; HM Treasury. Government Economics Service staff from each will be invited to attend, and participate in, the Seminar Series. Chris Leslie MP (Shadow Chief Secretary to the Treasury) has agreed to participate.

(2.) Office for National Statistics (ONS). In the second seminar the methods of investigation, and limitations of the data, will be evaluated. As part of this it is intended to seek a participant from the ONS. This will provide an opportunity for academic researchers to engage with the organisation which gathers and collates UK data directly. Presenters will also compare UK data with other countries' data, in particular US data.

(3.) Employee Organisations. The TUC Economics and Social Affairs Department have been contacted to solicit engagement. The participation of additional Trade Unions (e.g. USDAW) will also be sought. Given the interest in factor income distribution, and the potential conflicts which may arise as a consequence, ACAS would represent another interested practitioner body. Dialogue with the TUC about representation at the Seminar Series is on-going.

(4.) Employer Groups. Dr Stephen Rosevear (Director of Research and Policy, Cogent Sector Skills Council) has agreed to participate. Cogent is the Sector Skills Council for the Chemicals, Pharmaceuticals, Nuclear, Life Sciences, Petroleum and Polymer Industries. They are licensed by Government to help employers in these science-using industries to address their workforce development needs so that they can compete successfully.

In addition to liaising with policymakers and practitioners, the series will seek to inform the public more broadly concerning distribution (see Pathways to Impact).

Publications


10 25 50
 
Description There are profound problems associated with the wage share in contemporary societies, including the UK economy.

Brexit has created significant uncertainty which may exacerbate the fragile state of the UK economy, which was already impacted by the global financial crisis and a prolonged period of depressed wage growth since the 1980s.

Consumption is often fuelled by rising household debt, but the former needs also to be considered in the context of environmental sustainability. Distribution of work, connected to unemployment and underemployment, as well as gender roles in the household, undermine attempts to create a more equal society.

The changing nature of work has ramifications for skills and regional policy.
Exploitation Route A review of papers for consideration in a special issue of a peer-reviewed academic journal is already underway.

http://www.economicissues.org.uk/

A report on the findings is in preparation for dissemination with associated press release.
Sectors Communities and Social Services/Policy,Environment,Government, Democracy and Justice
 
Description Session 1: Distribution, Work and Employment: Identifying the Problems (June 7th, 2015) 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact The seminar outlined the main distributive issues and practical problems facing UK workers, organisations and policymakers, as well as identifying a broad typology of mainstream and heterodox approaches. This was developed in terms of specifics, with Professor Ariel Wirkierman (Catholic University of Milan) exploring Piketty, and his relationship to Pasinetti's work. The process of financialisation was discussed, this being key in understanding contemporary approaches to factor income distribution, work and employment. The paper by Dr Jo Michell (University of West England), examined "Factors Generating and Sustaining the Financial Crisis: Functional Distribution of Income". It has been observed within professional economics that an appreciation of history can improve our understanding contemporary events, and to that end Professor Victoria Chick (University College London) posed the question, "Can we Learn from UK Deflation and Distribution in the 1920s?" Finally, as per the proposal in the Case for Support, the seminar sought to understand and develop the link between economics and HRM; thus the paper by Professor Steve Fleetwood (University of West England), explored "What are Labour Markets and How Should We Analyse Them?" The session ended with a roundtable discussing the political and social context of factor income distribution, and future organisation.

The event was attended by 38 delegates, including 15 doctoral researchers. Feedback confirms that this was a valuable introductory Session.
Year(s) Of Engagement Activity 2015
URL https://factorincomedistribution.wordpress.com/
 
Description Session 2: Analysing Distribution, Work and Employment: Methods (December 17th, 2015) 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Postgraduate students
Results and Impact This seminar examined quantitative approaches used to explore factor income distribution, work and employment. Elena Papagiannaki (Aston University) examined "Alternative ways of Evaluating Labour: An Outcome Based Approach with Data of Unpaid Overtime from the UK Industries". This paper discussed the appropriateness of mainstream regression analysis. Mixed-methods research and triangulation were explored by Dan Wheatley (Nottingham Business School), who presented on "Quantitative and Mixed Methods Approaches to Work and Employment". This served as a bridge to the discussion in the afternoon, which opened with Lisa Schulte (University of Greenwich), Charles Umney (Leeds University), Ian Greer (Cornell University), Katia Iankova and Graham Symon (University of Greenwich) discussing "Insertion as an alternative to Workfare: Active Labour Market schemes in the Parisian Suburbs, utilising qualitative research methods". Finally, John Marsh (Nottingham Business School), Bruce Philp (Birmingham City University) and Tim Sharpe (Newcastle University, Australia) presented on Achieving Full Employment: History, Theory and Policy. This explored a plurality of mainstream and heterodox approaches, considering issues such as involuntary unemployment, the NAIRU, the job guarantee, and post-Keynesian demand-management.

The event concluded with a roundtable directed at postgraduate researchers, led by Professor Ron Smith (Birbeck University of London) and Dr Gary Slater (Leeds University Business School). There was a great deal of discussion and the event overran. A number of doctoral students established important contact with leading researchers, and other doctoral researchers examining distribution, work and employment.

The event was attended by 20 delegates, including 7 doctoral researchers. Feedback confirms that this was valuable, providing methodological insight for doctoral students.
Year(s) Of Engagement Activity 2015
URL https://factorincomedistribution.wordpress.com/
 
Description Session 3: Capital, Labour and Growth (31st March 2016) 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact This event looked at the distribution of income examining micro and macroeconomic processes. Focus was upon distribution defined primarily with regard to capital and labour, but also in the context of rent-seeking. Distribution by class (by category of income) was examined drawing on various contributions. Dr Andrew Brown (University of Leeds) examined "Capitalism, Exploitation and Financialisation", and Professor Nick Potts (Southampton Solent University) examined "Surplus Profits and Progressive Land Ownership". The former paper argued that abstract theory regarding distribution between capital and labour needs to be developed in concrete explanations. The latter paper explored how progressive forms of land ownership can impact distribution of income more generally.

In the second session Dr Geoff Tily, Senior Economist at the TUC, provided a practitioner perspective, and contributed to, and benefitted from, the debate. He explored "Government Spending Cuts, Demand, Supply and the Earnings Crisis" and related this to TUC policy.

In a departure from the original proposal the forthcoming EU referendum were discussed in a panel "Brexit, Work and Employment". This comprised: Dr Steve McCabe (Birmingham City University), who examined EU policy on work and employment in terms of regional policy; Dr Geoff Tily (TUC), who outlined the TUC stance on the forthcoming referendum; and, Dr Arantza Gomez Arana (Birmingham City University), who provided insight into the ramifications from the vote in global perspective. The differing perspectives and political economy of the impending vote was investigated, noting in particular the conflicting perspective on the left and right, which created a complex typology. Although the panel broadly supported the EU as an institution, instances like the Greek financial crisis had undermined its credibility.

The event was attended by 21 delegates, including 5 doctoral researchers, a senior economist from the TUC and regional policy consultant from the West Midlands. Feedback indicates that the topical nature of the debate around Brexit clarified the ramifications and prospects for work and employment for delegates in the run-up to the referendum.
Year(s) Of Engagement Activity 2016
URL https://factorincomedistribution.wordpress.com/2015/12/17/book-your-place-on-seminar-3/
 
Description Session 4: Wages, Work and Employment: Patterns and Sources (September 14th, 2016) 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Postgraduate students
Results and Impact The event included an introduction from Professor David Spencer (Leeds) and an outline of the Call for Papers for the Economic Issues Special Issue on the theme of the seminar.

The first session included presentations from two PhD students who had been active in the seminar series. The first paper was presented by Camille Heslop-Martin (Nottingham Trent) who examined "Employee's perception of comparable worth in UK academic institutions". Evidence was presented demonstrating occupational crowding of men and women, with female-dominated jobs typically paying less than male-dominated jobs. Thereafter Alexandra Arntsen (Birmingham City University) considered the link between income and sustainability, examining "Environmental and Societal Attitudes to Working Hours in Feminist Perspective". This paper began from the premise that environmental degradation is a profound and present threat and that work time reduction is one of a number of strategies which can be adopted to combat it. Attitudes to work time and the environment have a gendered dimension which it was argued are a product of work-centred preferences. Data presented showed that the link between consumption, work-time and environment degradation is inconsistent with stated and revealed preferences.

Building on the roundtable at the previous seminar, The Leeds event finished with a discussion considering the likely impact of the Brexit decision on incomes and employment. Clearly the precise meaning of Brexit is still being worked through, but the connections between possible outcomes and the level and distribution of income can be identified. Dr Marco Veronese Passarella (Leeds University) showed that the UK has suffered a cut in real hourly pay of about the same magnitude as Greece between 2007 and the end of 2015. Fellow panellist Paul Forrest (Head of Research at the West Midlands Economic Forum) pointed to the remarkably poor performance of UK productivity in recent years, which has stagnated post-crisis despite a recovery in output. This indicates that Brexit is a potential negative shock to an economy that is already suffering from forces, policies and structures that are intensifying adverse trends in income distribution.

The event was attended by 20 delegates, including 7 doctoral researchers. Feedback confirms that this debate was valuable in identifying the ramifications of the Brexit vote, as well as providing an opportunity for academics, PhD students and policymakers to interact.
Year(s) Of Engagement Activity 2016
URL https://factorincomedistribution.wordpress.com/2016/04/01/book-your-place-on-seminar-4-june-2016-lee...
 
Description Session 5: Employment and Unemployment (29th November, 2016) 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Postgraduate students
Results and Impact This seminar returned to London and papers were presented directly related to the theme of the seminar series. The papers presented offered alternative methodological strategies to consider distribution. Nadia Garbellini (University of Bergamo) examined "Inequality in the XXI century: A critical analysis of Piketty's work" building on the previous work in this area, for example Ariel Wirkierman contribution in the first seminar. Engelbert Stockhammer (Kingston University) looked at "Determinants of the Wage Share: A Panel Analysis of Advanced and Developing Countries". He found that wage shares have declined in OECD countries since 1980, finding a negative effect of globalisation, coupled with welfare state retrenchment.

In the afternoon session Sarah Marie Hall (University of Manchester) examined "Everyday Austerity: Family Life, Finance, and Facing Multiple Front". This explored the impact of austerity on everyday family life, with a focus on familial and intimate relationships (especially gender, class and intergenerationality) based on a longitudinal ethnography with families in Greater Manchester. Finally, Jonathan Perraton University of Sheffield) looked at "Inequality, Debt and Consumption: Evidence from European Economies". Evidence indicated that in the US incomes were decoupled from productivity growth from the 1980s and stagnation was offset by rising household debt. This is replicated to some extent in the UK and Ireland, and in the rest of the EU there was a long-standing fall in the labour share of national income.

The event was attended by 36 delegates, including 16 doctoral researchers. Feedback confirms that the discussion was useful in helping frame research questions, and in connecting to policymakers. In addition to the seminar the event was dovetailed into a second event on the next day, a postgraduate research workshop organised by the Open University. This is available at the following URL: http://www.open.ac.uk/ikd/events/insights-methodological-approaches-economic-research.
Year(s) Of Engagement Activity 2016
URL https://factorincomedistribution.wordpress.com/2016/09/20/book-your-place-on-the-final-two-seminars-...
 
Description Session 6: Policy Recommendations (14th December, 2016) 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Postgraduate students
Results and Impact This seminar considered the implications of the discussion in the series for skills policy, regional policy and macroeconomic policy and distribution.

In the first morning presentation Craig Holmes (Pembroke College Oxford) considered "Technology, inequality and the role of skills policy". This argued that new technologies substitute routine tasks, hence there is a decline in middle skill occupations and growth in low skill jobs. To combat this the author recommended emphasis on transferable skills to cope with greater career disruption. At the same time the concentration of capital was identified as a problem which warranted interventions to leading to greater dispersion in the ownership of capital.

The second paper by Will Rossiter (Head of Nottingham Economic Strategy Research Bureau) considered "Inequality in regional and local economic development strategy and practice". It identified inter and intra-regional inequalities which were not being addressed, and recommended raising regional productivity. This was to be set in a policy context which focussed on policy initiatives targeting inclusion, renewal and cohesion.

In the afternoon Howard Reed (Landman Economics) presented a paper on "The UK wage share, 1948-2015: evidence from aggregate data". This data showed that real living standard rose in line with rising prosperity to the mid-1970s but since the 1980s living standard for workers became decoupled from growth, with rising inequality.

The seminar ended with a discussion of the proposed special issue of Economic Issues.
Year(s) Of Engagement Activity 2016
URL https://factorincomedistribution.wordpress.com/2016/11/30/final-seminar-policy-recommendations-14th-...