September 3, 2015    7 minute read

MIND THE GAP – But Not Our Pay Gap

   September 3, 2015    7 minute read

MIND THE GAP – But Not Our Pay Gap

Regardless of the unpleasant working conditions, the long and tedious working hours or even the fact that spend their entire working day hidden from the Sun, there are many that are hugely displeased with the tube drivers recent call for higher pay. It’s not just that the majority of the working population of London had to find other means to get to work on the 9th July, but it is the justification for their inconvenient actions, along with their stubbornness in demanding a pay rise on what is already considered an overpaid salary, that have struck a nerve in the heart of the Capital.

Perhaps at the heart of this problem is the fact that a large majority of Londoners believe these tube drivers to be overpaid in the first place. At a starting salary of £49,673, making them part of the top 20% of earners in the country, it is understandable why the topic is hot on everyone’s lips, and for the wrong reasons. While there are many left-wing arguments in favour of this controversial pay rise, and worth noting that many of the drivers have spent a number of years working as station staff, perhaps the strongest argument for the rise is a right-wing one. The reality of the situation is that in a capitalist society such as our own, there is no such thing is an overpaid worker, and wages are set by market forces; in this case the demand and supply of tube workers. One could argue that anyone who thinks tube drivers are “overpaid” does not understand how a capitalist economy works. Their large pay check now seems logical given that the demand for them is huge as it is arguably the cheapest and most efficient way of travelling around London, and the supply would presumably be relatively low given the working conditions and the mundane work routine. Now this argument would all be fine and dandy in an ideal world with efficiently working perfect labour markets. However this market, like most labour markets, is not perfect.

London’s tube drivers; an elite cadre?

The ability of unions to restrict the supply of tube drivers by maintaining a closed shop and insisting that the Transport for London (TfL) offer the job to current underground workers first, has given unions significant leverage when demanding pay rises for their members. After decades of this, the drivers wages have risen and risen, and is perhaps about to rise once more, much to the distaste of many. It is interesting, however, that the prominent critics of the recent strike do not have nearly as much an issue with overpaid footballers, bankers’ bonuses or CEO’s wages. If the drivers were not striking, would London be even be making that much of a fuss over their pay, or humbly applauding them for doing a job that many consider to be dirty and dull? chart(1)

Why don’t other recognised working groups do the same?

One might question why other important working groups – that also have large unions backing them, along with barriers to entry into the market – such as policeman, firefighters and nurses do not push for higher wages? The answer lies in the nature of these vocations, as they are within the public sector and constitute a larger number of workers. If these groups were to demand higher wages, even as small as half a percent increase, it would have a damaging effect on public finances costing millions and coming right out of the taxpayer’s pocket – and thus be strongly rejected. Given that the tube drivers are a more specialised and niche group their calls for higher pay, no matter how controversial, are conceded to. As a result, the pay gap between these important public sector jobs and the tube drivers is substantial. Now the union backing these workers, the National Union of Rail, Maritime and Transport, maintain that the strike is not related to pay, but instead their members’ work-life balance. Given that they have a 36-hour working week and a 43-day annual leave there are many that are not convinced by this. Furthermore the fact that the drivers rejected their 2% pay rise and £2,000 bonus is more evidence to corroborate that the strike is entirely pay related. Graph to Show the pay differences between tube drivers and important civil servants

Who does this really benefit in the long run?:

Perhaps in the long run this pay rise will, rather ironically, benefit all but those tube drivers, as the TfL will inevitably seek out cheaper means of running the oldest underground system in the world, thus moving towards capital as a substitute. If the TfL passes this reduction in costs onto consumers then they too will benefit. The technology required for designing self-driving cars has already been harnessed by Google, so how long till a large multinational company sets to work on creating safe driverless trains? In a recent survey of 59,000 produced by the Telegraph, 84% believed that the tube driver’s job could easily be done by a robot, and at a significantly lower cost at that. But that is the fate that awaits a lot of us it is just that the tube strikers are capable of squeezing in the occasional pay rise – while your typical worker is not – before the inevitable takes place. I mean if you possessed what every Londoner wanted, were not easily replaceable and able to hold London at ransom until you got your way wouldn’t you?

‘The Second Machine movement’

This issue over robots replacing traditional occupations has been discussed amongst academics since the dawn of artificial intelligence, and will unlikely disappear but instead become a significant problem for companies and their employees alike as we progress further into the 21st Century. Ryan Calo, professor at University of Washington School of Law with an expertise in robotics, illustrates;

“Historically what we thought was that robots would do things that were three D’s: dangerous, dirty and dull…Over time, the range of what the robots can do has extended”

More and more blue-collar jobs are being taken over by our robotic counterparts, and as companies shed costs in search of higher profits even white collar jobs become exposed. Director of engineering at the Internet giant Google predicts that by 2029 robots will have reached human levels of intelligence. Many people fear a jobless future due to what is being coined “The Second Machine Movement”, the first being that of the Industrial Revolution around 200 years ago. The key difference this time around is that instead of overcoming the limitations of human muscle and manpower, our intricate new designs are developed with extensive cognitive abilities that trump humans in a number of ways.

What it means for us?

There is the potential, therefore, for those that are the helm of large tech, or even robotic companies, to harness their creations for either good or bad. The use of the word bad may prompt the image of a Terminatoresque world, or a nerdy dictator controlling the masses with their dominant-in-every-way creation, however this is not what is implied. A more likely scenario would be a large-scale wipe-out of jobs and companies alike, if the robot distributor were to harness the robots abilities in practice, than to sell them onto already established firms within industries. What the state will do to prevent these technology/robotic firms from achieving this is anybody’s guess, but will be determined by the current political regime, leader and party in the world’s biggest economies. While the industrial revolution resulted in a net increase in jobs, there is uncertainty over whether this will happen this time around, as those losing their jobs to robots are unlike to have the resources at their disposable to acquire the skills required to design and programme these robots. As a result, questions over inequality come into play. What experts have come to realise, which can help cure some fears of future job loss, is that robots are only efficient at completing the structured, objectively bound tasks, while homo sapiens are – and will continue to be – capable of creative thinking, interacting emotionally with other humans and using our situational judgment above all else.

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