Education Information

Education Information

THE BIGGER PICTURE

A series of GFTU online seminars every third Thursday starting 15th September 2022 Trade Unionists have to deal with the day to day and the here and now. But what happens at work is affected by wider, global forces also. The balance of those world forces, particularly the US and China is changing. The changes will have dramatic impact.

For free, stimulating online discussion with international experts in these areas, join the

forthcoming GFTU seminars on: China in the world today

Register online now to secure your place

7.00-8.30pm Thursday 15th September The decline of US imperialism 7.00-8.30pm Thursday 20th October Nato – friend or foe 7.00-8.30pm Thursday 17th November Register online NOW at https://gftu.org.uk/bigpicture/ More sessions are planned for the New Year

The decline of US imperialism

China in the world today

The Chinese people have adopted a completely different developmental approach than the West. This route is constantly vilified and attacked

The United States is marred by severe structural difficulties that are increasingly impairing its former ability to get its way and shape

NATO – friend or foe?

the world to suit its narrow interests. A combination of increasing indebtedness (already larger than its GDP), sustained neglect of its domestic infrastructure, poor economic performance and extraordinary levels of military spending are driving it to lose its world supremacy in almost every field. This situation the US faces is compounded by the rise of China as part of an emerging multipolar geopolitics, but more acutely by the growing challenge to the petrodollar. All of this lies to an important degree at the base of both the string of defeats suffered by Latin America’s right-wing forces and the beginnings of the re-emergence of the Pink Tide with left wing electoral victories in Argentina, Mexico, Bolivia, Chile (possibly also in Colombia and Brazil), plus the survival and recovery of Cuba, Venezuela and Nicaragua. This context offers promising

and distorted in the media. So what is the truth, what are the policies that are driving China, is it a force for peace and progress and social and economic development or not? Is a country that has raised 850m people out of extreme poverty as bad as it has been depicted? Do the people have a say or is everything determined by the 96m Communist Party members? Why have 147 of the 193 nations who are members of the UN signed up to its vast belt and road initiative? Why has the US surrounded China with arsenals of weapons? How does China’s foreign policy compare with that of the US and Britain? To consider these and many other issues surrounding China and our perceptions of it join Keith Bennett and Carlos Martinez (who are both expert writers and advisors on China), to take part in an informed discussion.

For some, NATO is a guarantor of peace and a defender of democracy; for others, it is an aggressive expansionary military block, leaving wars and interventions in its wake.

To make an informed judgement let’s look at some of the facts: how and why was NATO formed? How is it funded? What is it doing in the world today? Why is this question of interest to trade unionists and community leaders? How does NATO relate to the UN and the EU? How is Britain involved in NATO and how much does this cost us? To consider these questions and others

CND General Secretary Kate Hudson will provide participants with a critical analysis and background to stimulate debate.

opportunities to progressive forces in Latin America. This discussion will be facilitated by Dr Francisco Dominguez , Specialist in the political economy of contemporary Latin America at Middlesex University.

The Young Members’ Development Weekend is back this November from Friday 11th to Sunday 13 th 2022 at GFTU’s own Quorn Grange Hotel. Established over many years, this is really one of the best Labour Movement events. Engaging, challenging, fun, an inspiring weekend to make new friends, learn about the Movement and develop skills to organise and build your union. The style of the event is learning from each other and sharing experiences. Participants will also hear from leading trade unionists about their work in Britain and overseas. Every year it's been a game changer for those involved and many new leaders have come forward following this motivational experience.

“ The Young Members’ Development Weekend does exactly what it says on the tin and is the only event like it in our movement. ”

“ I still remember how great it was to be spending a weekend with other young trade unionists learning about the movement, politics, economics, international issues and employment rights amongst many other areas, it was my first experience of a trade union event that didn’t just involve motions.”

For an application form, visit the GFTU website and return it to Mark Robinson via markr@gftu.org.uk by 12 noon on Friday 28 th October 2022.

86 Wood Lane, Quorn, Loughborough, LE12 8DB | 01509410970 | gftu.org.uk

TRAVEL & ACCOMMODATION IS FREE TO MEMBERS OF AFFILIATED UNIONS.

11-13th November 2022

GFTU Young Members ’ Development Weekend Agenda: 11 th -13 th November 2022

Friday 11 th

2.00pm - 4.00pm

Arrivals/Check in

4.30pm - 5.30pm

Welcome, icebreaker, Introductions, H&S, outline of weekend, house rules.

5.30pm - 7.00pm

Introduction to trade unionism.

7.30pm - late

Dinner

Saturday 12 th

9.00am - 9.45am

Politics and trade unionism

9.45am - 11.00am

Workshops: 1. Negotiating to win.

2. Rights at Work.

3. Art and campaigning.

11.00am - 11.15am

Break

11.15am - 12.45pm Workshops as above repeated

12.45pm - 1.30pm

Lunch

1.30pm -1.45pm

Feedback from AM sessions

1.45pm -3.00pm

International work of unions, practical examples. The struggle against Apartheid in South Africa, solidarity with Kurdish people.

3.00pm - 3.15pm

Break

3.15pm - 4.45pm

Video Reporting

4.45pm - 6.15pm

Equalities, Diversity and inclusion.

7.30pm - 8.30pm

Dinner

8.30pm

Quiz night

Sunday 13 th

9.00am - 10.00am Trade Unions and the Environment.

10.00am -11.30am Politics and Media

11.30am - 11.45am

Break

11.45am -12.15pm Election of delegates to international visit.

Action point planning.

12.15pm -1.00pm

Feedback, wrap up and close

Packed lunches will be available to take away or there will be the option of a sit down lunch.

GFTU Bite Size Online Sessions

Log in every Monday for lunchtime and evening sessions on a variety of topics aimed at union

workplace representatives. Sessions will last no more than 30 minutes and will be accessible through

any device be it a smart phone, tablet/iPad, laptop or computer.

Join us at 12.30pm or 6pm or view the recording after each session.

Register for 12.30pm and again for 6.00pm – but once you’re registered you can attend all of the

sessions at that time.

Register here

The programme for autumn 2022 is below. We will be consulting over additional subjects for the

New Year – let us know your ideas by emailing Mark Robinson via markr@gftu.org.uk.

5 th Sept Mental Health as a Trade Union Issue 12 th Sept Mental Health – 3 next steps for workplace reps 19 th Sept Mental Health – surveying members 26 th Sept Your written particulars/contract of employment 3 rd Oct Challenging and preventing adverse changes to contracts 10 th Oct Fire and rehire – how employers try to do it 17 th Oct How safe is your workplace? 24 th Oct Are safety inspections working for you? 31 st Oct Getting the most out of safety committees 7 th Nov Flexible working – wh at’s working for workers? 14 th Nov How family friendly is your employer and workplace? 21 st Nov Getting equality onto the bargaining agenda 28 th Nov Where next for GFTU learning and our bite size sessions?

EDUCATION OFFER (DATED 14.9.22).

ONLINE TRAINING:

GFTU Bite Size Online Sessions:



For joining instructions please go to: https://gftu.org.uk/bitesize/

Join us at 12.30pm or 6pm or view the recording after each session. Sessions will last no more than 30 minutes.

5th Sept

Mental Health as a Trade Union Issue

12th Sept

Mental Health – 3 next steps for workplace reps

19th Sept

Mental Health – surveying members

26th Sept

Your written particulars/contract of employment

3rd Oct

Challenging and preventing adverse changes to contracts

10th Oct

Fire and rehire – how employers try to do it

17th Oct

How safe is your workplace?

24th Oct

Are safety inspections working for you?

31st Oct

Getting the most out of safety committees

7th Nov

Flexible working – what’s working for workers?

14th Nov

How family friendly is your employer and workplace?

21st Nov

Getting equality onto the bargaining agenda

28th Nov

Where next for GFTU learning and our bite size sessions?

 GFTU's The Bigger Picture: Autumn Series of Online Seminars:

For joining instructions please go to: https://gftu.org.uk/bigpicture/

China in the World Today: 7.00-8.30pm on Thursday 15th September

The Decline of US Imperialism: 7.00-8.30pm on Thursday 20th October

NATO – Friend or Foe? : 7.00-8.30pm Thursday 17th November

 GFTU's Equalities, Diversity & Inclusion Course:

For joining instructions please go to: https://gftu.org.uk/equalities-diversity-inclusion course/ Three evening online seminars will then follow to cascade the strategic approach down into the unions and their branches. This will be suitable for Branch Officers and activists and develop some new thinking. These will take place on:

September 8th 7-9pm.

September 22nd 7-9pm.

October 6th 7-9pm.

 GFTU’s Online provider : Flick Learning : https://www.flicklearning.com/

Please contact Mark Robinson markr@gftu.org.uk should you wish to discuss further.

The True Causes of Inflation: Weak Production and High Profits:

Further information and pamphlet available here:

https://gftu.org.uk/wp-content/uploads/2022/09/The-Real-Causes-of-inflation.pdf

There will be online seminars to discuss it shortly and information will be distributed.

RESIDENTIAL LEARNING:

 GFTU's Union Learning Representatives' Training:

Thursday 13th & Friday 14th October 2022 at Quorn. Three online sessions – 6.00-8.00pm on 18th October, 1st November and 15th November. Further information here: https://gftu.org.uk/gftus-union-workplace-representatives training/

 Young Members’ Development Weekend 2022:

Friday 11th to Sunday 13th 2022 at Quorn.

Further information here: https://gftu.org.uk/young-members-development-weekend 2022/

GFTU's Community Courses 2023:



Various dates at Quorn.

Further information here: https://gftu.org.uk/gftus-community-courses-2023/

 GFTU’s Trade Union Management Programme (TUMP) 2023:

Leadership & Management TM1. (2 days).

Management Communication TM2 (1 day) + Coaching & Mentoring in the Trade Union Workplace TM4 (1 day).

Managing People TM3 (2 days).

Financial Management TM5 (2 days).

Managing a Health & Safety Environment TM6 (1 day) + Specialist Themes TM7 (1 day).

Dates to be confirmed and information will be distributed.

TU Apprenticeship:



https://www.instituteforapprenticeships.org/apprenticeship-standards/trade-union-official/

A plethora of presents and resources are available on the GFTU Website shop section: https://gftu.org.uk/shop/

Including but not limited to:

 Trade Union Education (Transforming The World):

Trade union education has been in the doldrums for years – it generally lacks modern teaching methods, has outdated content and avoids key areas of history, economics and politics. This book aims to change all that – to mark out new ground that will bring trade union education back to life. This book has inspired new courses to train people to become better mentors in the trade union context.

£9.99.

The Many Not The Few:



An illustrated history of Britain shaped by the people.

A union rep and his granddaughter discuss the history of the labour movement, from the 14th century right up to today. Sean Michael Wilson has done a brilliant job assembling his workers’ manifesto, with the stoic assistance of historical advisor Doug Nicholls. Robert Brown’s simple, straightforward no -nonsense black and white art style is perfect for portraying this epic march through the heroic efforts of many an individual and collective to fight for the rights of the many over the greed of the few.

Foreword by Jeremy Corbyn.

£9.99.

Working River CD:



Working River, is the latest album from Folktree Recordings in partnership with General Federation of Trade Unions. The partnership is designed to collect and popularise music and verse, recording the lives and deeds of those who live and work around the Thames – one of the most famous rivers in the world! We have produced 21 tracks to showcase just some of the music and song, new and old, that tells the stories of the lives of working people and their largely hidden histories. The words are theirs and recall the legends and deeds of those who, so often, go unheard or are even lost completely with each turn of the tide.

£12.99.

Community Courses. Confirmed dates for 2023.

Trade Union Education for all: Ideas and Methods.

 Wednesday 5 th April - Thursday 6 th April 2023 (overnighter). Follow up Thursday 4 th – Friday 5 th May 2023 (overnighter).

 Thursday 27 th April – Friday 28 th April 2023 (overnighter). Follow up Thursday 25 th May – Friday 26 th May 2023 (overnighter).

________________________________________________________________

Developing trade union strategy for community development.

 Friday 14 th April 2023.

 Friday 9 th June 2023.

Working with the Community as Trade Unionists.

 Thursday 11 th May – Friday 12 th May 2023 (overnighter). Follow up Wednesday 14 th June.

 Thursday 18 th May – Friday 19 th May 2023 (overnighter). Follow up Wednesday 21 st June.

All courses are in GFTU Classrooms

Community Courses. Confirmed dates for 2023.

Trade Union Education for all: Ideas and Methods.

 Wednesday 5 th April - Thursday 6 th April 2023 (overnighter). Follow up Thursday 4 th – Friday 5 th May 2023 (overnighter).

 Thursday 27 th April – Friday 28 th April 2023 (overnighter). Follow up Thursday 25 th May – Friday 26 th May 2023 (overnighter).

________________________________________________________________

Developing trade union strategy for community development.

 Friday 14 th April 2023.

 Friday 9 th June 2023.

Working with the Community as Trade Unionists.

 Thursday 11 th May – Friday 12 th May 2023 (overnighter). Follow up Wednesday 14 th June.

 Thursday 18 th May – Friday 19 th May 2023 (overnighter). Follow up Wednesday 21 st June.

All courses are in GFTU Classrooms

GFTU Learning and Development Review

Roles in scope of the review

Lay Leadership Roles

1. Workplace representative/shop steward

2. Workplace union learning rep

3. Workplace equalities rep.

4. Workplace Health and Safety rep

5. Senior workplace rep/convenor

6. Branch executive committee member/officer – branch secretary, treasurer, chair,

7. Lay leadership role i.e. regional executive, specialist committee’s etc

8. National lay executive committee member/officer

Paid Trade Union Employees

9. Local or Regional organiser (TU Officer Apprentice Standard applies)

10.Union manager (officers)

11.Union manager (office and admin)

12.Admin support

a. Membership b. Other

13.Specialist support a. Finance b. Facilities c. Legal

d. Information Technology e. Communications

14.Hotline/advice officer

Profile Outline

For all roles

Core knowledge

- Trade Unions in society - Community organising models - Core aims and beliefs - Democracy and engagement - Why members join - Principles of organising - Inequality and Equality as a TU issue

Core skills

- Listening - Advocacy

- Understanding and implementing agreements - Range of Administration and communication skills

Core Behaviours

- Personal organisation - Commitment to trade union values - Collaborative working and collective responsibility - Fair and inclusive - Resilient and motivated - Challenges

For specific roles

In addition to the core KSBs above, a profile for each containing the following:

- The main duties expected to be carried out - The role specific KSBs needed for the person to be effective and to carry out the duties for the role.

What do we know and not know about Trade Union online learning?

Introduction

Over the past few years Trade Unions have embraced to various degrees the online delivery of training for union reps and officers. The covid pandemic accelerated the use of online delivery often in an ad hoc manner to react to the complete lack of availability of face to face training. Prior to the pandemic some organisations had pushed towards online training as a means to address declining numbers attending face to face courses (sometimes due to less facility time), a curriculum that didn’t work for ever yone, various behaviours (e.g. drinking culture on residential courses), personal pressures such as caring responsibilities, etc.), to save costs and to increase accessibility. The creation of Union Learning Fund funded IT hubs enabled some unions to use technology in the delivery of rep and officer training. Often this was either to complete e-learning modules aided by a tutor or to allow research on the internet to support face to face training. In terms of online delivery, the lines between training and providing information have become blurred with online meetings and webinars being used to impart information to wider groups of members (but this cannot really be referred to as “training”) . There are many aspects of online meetings for learning and development that have been adapted and utilised for organising purposes especially around engaging and involving members in campaigns but, again, this has been for purposes other than training. This paper is intended to start the process of reviewing what role online training can take in the training and development of union reps and officers. It concludes with a number of questions for further consideration. The use of webinars was beginning to grow with unions using a variety of platforms to disseminate information to generally large groups of members and/or activists. They were largely one way traffic with little interaction from participants other than occasional use of polls within the sessions. The TUC developed a replacement for its 10-day programme which was available online with learners completing a number of tasks on their own. Tutor support was available but there was no interaction with other learners – the course was in effect computer based training. Individual unions, GFTU and the TUC all created computer based, bite sized E learning modules that individuals completed online. Typically, these sessions were short (30 minutes or so) and the learner was prompted through various stages via an online learning portal. Pre-pandemic

1

Face to face training programmes were by far the most used training option with a number of unions very concerned about the policy direction of the TUC to replace its taught programme with E-learning provision. It should be noted that these concerns mainly focused around the methods of delivery (individual, computer based learning with no co-learner interaction) rather than the fact that it was online. There was much talk of “blended learning” in pre -pandemic days but not much sign of it actually happening. Reps tended to be trained either on face to face courses or via E-learning based training packages – an organised combination of online and real world provision was rarely provided. In reality, blended learning has tended to mean some individual directed learning (pre course reading, research or direction to online resources) followed by face to face training.

Changes forced by the pandemic

During the pandemic, it was regarded as inappropriate to deliver face to face sessions and many unions replaced their face to face training with an online equivalent. Group sizes remained broadly the same, as did the activities and structure of the programme.

There was a wide range of skills (amongst tutors and trainees), from just competent to very competent to embrace or be disengaged by this approach.

Online platforms allowed for the creation of small groups so it was possible to run a course with plenary discussion sessions and a number of small group activities during the day.

Many of the aspects of a face to face course could be recreated including the ability for a tutor to “visit” each of the small groups to check on progress.

This format also allowed for much shorter “bite size” sessions to be run whilst maintaining individual participation through small group and plenary sessions.

Unions also significantly increased their use of webinars as information giving vehicles to larger groups of activists and/or members.

Types of learning

We should be clear about the difference between online learning and what is referred to in this paper as E-learning. Online learning has the potential to be rich, interactive and engaging with the use of many of the techniques developed by trade union educators for face to face courses. E-learning involves individuals interacting with a pre-ordained computer programme that takes the learner through a number of stages. There is no scope for interaction with other learners during specific online sessions though there have been attempts to bring learners together after they have completed a module.

2

The term webinar has become widely used to describe many different types of online meetings. For the purposes of this paper we describe them as follows:

Webinar – a largely one way platform where the host and a panel of speakers present information to an online audience. Various forms of media can be shown by the panel. The audience can be invited to participate via polls and a chat function but usually would not be able to speak during the session. There are now lots of providers – some of the main ones are Zoom Webinar, Gotowebinar, and Webex webinar. Online Meeting – a fully interactive online meeting where all participants can participate usually by voice and video. Other functions are available including polling, whiteboards and chat function. Some platforms allow for attendees to be placed into breakout rooms and then be recalled to the plenary group.

Post pandemic – what’s happening

To varying degrees, unions are switching back to face to face provision whilst continuing with some online learning. This has seen all of the elements of online learning continuing (but less of it) together with the reintroduction of face to face programmes.

In the main there appears to be a separation of online training from face to face – i.e. blended learning is still not happening very much.

GFTU has piloted a blended course for workplace representatives which consisted of two days face to face training followed by three 2-hour online sessions. The first pilot course saw a significant drop off in attendance from the face to face course (14 attended the face to face course and 6 attended the online session). The WEA has extensive experience of delivering online learning and has developed systems to support its delivery. They have run learning programmes for educators on the effective delivery of online learning and have a lot to contribute to the debate.

Pros and cons of main online learning options

The following table lists some of the main advantages and disadvantages of the main online learning options.

There are some advantages and disadvantages that apply to all online delivery methods and these are:

Advantages:

- It can overcome some access issues for learners with travel difficulties, caring or other responsibilities, disabilities, etc by allowing access to learning opportunities from their own home.

3

- It facilitates session s that otherwise wouldn’t be viable face to face – for reasons of cost and/or travel time.

- Sessions can be recorded and shared with those unable to attend.

- Sessions can be held at very short notice for any size of group.

Disadvantages:

- There are access issues in terms of ability to use IT, access to the right equipment and the internet, and quiet space in order to take part. This can be offset in a number of ways - additional time is needed to practice and gain confidence with new digital skills; tutors have to plan carefully to ensure that learners have the necessary skills by the time they want to use them.

- Informal learning can be more difficult to facilitate due to lack of casual and non task based conversations.

- Some participants lack either the confidence or motivation to participate in online sessions – it can be more difficult for the tutor to subtly draw them in during an online session. Conversely digital tools can enable the voice of people who may not otherwise have the confidence to contribute, e.g. using Menti

- One to one tutor interventions are not impossible but can be difficult to make.

- Similarly, sitting in a room on your own can be very dispiriting. Conversely linking with others can break isolation - it takes a bit of time to become familiar with the format, after which often people behave much in the same way as when in a room.

- Using some of the functionality takes expertise and experience – of both the tutor and the group

- Online sessions can be intense and difficult to run over a prolonged period of time, though this depends on the type of learning activities - how active learners are and how sessions are planned

E-learning

Advantages: - Allows for information to be presented in a consistent manner - Once set up can be cheap to run (big economies of scale), though can be expensive to develop effectively - Can be structured to test understanding (though if not done well the danger is it is used simply to test memory recall) - Records completion for compliance records - Quickest of all methods for learners to complete Disadvantages

4

- Closely associated with employers’ compliance training methods - No opportunity to ask questions - No interaction with other learners - No feedback from a tutor - L eads to “click and move on” rather than reading and understanding - Does not develop skills - Danger that employers will allow time off for e learning but not other types of training. - Allows for large numbers of people to participate and contribute. - Breakout rooms can be used to encourage participation. - Tutor can control access, who speaks, etc. - Allows for use of other tools such as whiteboards to aid collaborative working - Can be easy to help participants with any tech difficulties Disadvantages: - Can be difficult to manage the group - Numbers need to be kept to similar sizes to face to face courses - It can be difficult to build and maintain the momentum of an online course if it is run in short sessions Advantages: - Can accommodate very large groups - Large groups can give compelling poll results - No issues of controlling the group Disadvantages:

Online Meetings/Courses Advantages:

Webinars

- Very limited interaction with the group - Licences for platforms can be expensive - Difficult to offer tech support

Online Learning and Trade Union Pedagogy

Embracing online learning does not mean rejecting the existing pedagogic principles that have long underpinned trade union education. Instead, we can use technology to enhance these principles so long as we are careful in our programme design.

We have to get it right, it’s not necessarily easy (and it’s easy to get it wrong), but technology can support the following (and far more):

- Helping close the digital divide and equipping trade union members with essential day to day skills (in the same way that unions have helped address literacy and

5

numeracy in working class communities).

- Making learning student centred, participative and active.

- Supporting learners who may be uncertain about the learning process (both real world and online).

- Helping participants to bring their own lived experience to the training environment and giving them a voice and respect often not available elsewhere.

- Structuring learning so that everyone participates and all voices are heard.

- Allowing for collaborative learning with the exchange and debate of ideas and solutions.

- Building in checks on learning so the tutor can ensure that all participants reach the desired level of learning.

- The development of creative learning environments that stimulate and engage.

- Accrediting and validating learning for learners (often for many union reps the first “qualifications” they have been awarded).

What can the future look like?

Whilst there is still lots to be learnt, Trade Union educators have developed expertise and understanding of how to implement successful online learning and development programmes. There is a demand from some learners for the availability of online learning to continue – often for reasons of access. There is also a demand from other learners for a full return of face to face learning. There has never been a better time for Trade Union educators to map out what a blended approach to learning and development should look like. In order to do this we need to further develop how we share ideas about delivering the best learning experiences for our learners.

Some areas for further discussion include:

1. What is the experience of the different online platforms and which features do educators value the most?

2. What models of blended learning have unions tried and which ones are working the best?

3. What other models could we explore, e.g. tutorial-based online learning, Sugarta Mitra's self-organised learning environments

6

4. How can unions combine all the elements of learning (directed reading, independent research, video, CBT, webinars, online courses, face to face, etc) into the best possible learning experience?

5. What do we know about the demand for the different modes of delivery of learning – and how will this impact on future learning offers?

6. How are online courses best set up and supported to ensure they run smoothly for learners?

7. What recommendations for unions can we make about which online options work best in particular situations?

8. How have educators encouraged collaborative working on online platforms?

9. Which “add - ons” such as Zoom Whiteboard, Google Jamboards, etc work best and how are they currently being used?

10. How can we develop formative assessment methods for online learning to ensure that learning is taking place?

11. How can we grow the collective knowledge of union educators to improve their ability to deliver successful online programmes?

Recommendations

1. Include questions about the online learning preferences of union representatives and officers in the surveys carried out as part of the reviews of GFTU affiliates’ training provision.

2. Invite union education officers and others to comment on this paper and amend it accordingly.

3. Identify suitable partners such as the WEA to help us develop our ideas.

4. Hold a round table discussion of union educators and others to finesse this paper and start to answer the questions above.

5. Report back to the GFTU EC.

6. Develop a GFTU guide/hub to online and blended learning.

7. Establish a development programme for union educators around online learning.

7

TRANSFORMING THEWORLD TR DE UNI N EDUCATION TRANSFORMING THEWORLD Edited by Mike Seal

Trade union education has been in the doldrums for years – it generally lacks modern teaching methods, has outdated content and avoids key areas of history, economics and politics. This book aims to change all that – to mark out new

ground that will bring trade union education

back to life. This book has inspired new courses to train people to become

better mentors in the trade union context.

only £9.99

Order your copy now: https://gftu.org.uk/product/trade-union-education/

gftu.org.uk

The True Causes of Inflation: Weak Production and High Profits

Costas Lapavitsas James Meadway and Doug Nicholls

Sept 2022

Progressive Economy Forum

The True Causes of Infation: Weak Production and High Profts Costas Lapavitsas, James Meadway & Doug Nicholls

September 2022

3

Table of Contents

1. Introduction

7

2. Some defnitions

9

3. The weakness of aggregate supply and the impact of Covid-19

13

4. The problem is not “too much money”

21

5. The problem is not that wages are too high

26

6. The problem is that profts are too high

30

7. How not to deal with high infation

35

8. For a real plan to tackle infation

37

5

1. Introduction

The “cost of living crisis” in the UK can be simply summed up: prices, especially of essentials, are too high, and wages, and other working-class incomes are too low. The basic steps to resolving the crisis are simple: prices, especially of essentials, must be brought down, and wages, salaries, benefits, and pensions must be increased. This pamphlet shows that the big businesses dominating production and distribution make huge profits out of high inflation, while working people lose out. It sets out factual evidence to illustrate that the source of record profits is the fall in real wages as inflation rises. A large part of the income of working people is transferred directly into the profits of big business. The pamphlet also shows that the deeper roots of the “cost of living crisis” lie in the unique weaknesses of the productive side of the British economy. These weaknesses can be clearly seen in very low investment and poor productivity growth for many years. These arguments are made to clarify how the government and trade unions could in practice deal with the problem of inflation. The answer must be wage increases to stop the income of workers from falling. It must also include price controls and regulation of profits to stop the transfer of income from workers to big business. More fundamentally, the answer must involve sustained public intervention to deal with the weaknesses of production, especially of manufacturing, and to rebalance the economy in favour of industry and other productive sectors. The UK must become more self-reliant in the years ahead. The plain argument that high prices go together with high profits, falling wages, and weak production is often distorted and hidden by mainstream commentary in the media and elsewhere. To explain the crisis, it is usually argued that wages are too high, or that the government has “printed” too much money. It is also argued that events far away, such as the war in Ukraine, are solely to blame. This pamphlet shows why these arguments do not work. The causes of the crisis are ultimately to be found in relations of property and power in the economy that have created deep problems because production is focussed on profit making. It

7

is vital that working people should avoid paying for the “cost of living crisis” and the UK economy is put on a different course for the benefit of the vast majority.

The pamphlet is the product of close collaboration between the General Federation of Trade Unions (GFTU), the Progressive Economics Forum (PEF), and the European Research Network on Social and Economic Policy (EReNSEP) at the School of Oriental and African Studies, University of London (SOAS). We wanted to produce a tool for education courses, a strong set of arguments to strengthen campaigning by placing the current crisis in a historical context, and to look forward to fresh solutions. Naturally along the way we had to bust the myths spoken daily about inflation, usually by those who benefit most from it. The route ahead for the UK must be the reverse of that taken over the last forty years, led by Margaret Thatcher. Markets cannot be relied upon to run society, and pioneer advanced technology and environmental protection. Nor obviously can they ensure that our primary needs of food, homes, energy, transport, and utilities are affordable. Britain’s extreme unleashing of market forces involved unprecedented privatisation and selling of public assets, wholesale deindustrialisation, and deregulation of the finance sector. It included the systematic introduction of anti-union legislation and break up of collective bargaining and the erosion of the value of pensions as well as continual downward pressure on wages. Corporate economic and political power was tremendously strengthened and, as a result, big businesses have been able to help themselves to extraordinary profits. Their means of doing this, often with additional government funding, as trade union leaders have pointed out, are shameful for an advanced country. No amount of windfall taxes, household subsidies and the like will stop this profit binge. Major structural change is needed. If this is not done, the current toxic mix of weak investment, low productivity, and high inflation is likely to lead to stagflation that has historically had dire consequences across the world. It is very encouraging that unions are rising again to the challenge, but this time we need to work with community organisations, campaign groups, and small businesses to create a new coalition. The aim should not be simply to protest against the injustices of capitalism and defend the rights of working people. Rather, it should be to develop a new economic strategy ensuring the essentials of life, good jobs, and civilised conditions for all.

8

2. Some definitions

There is nothing mysterious about how the economy operates. It is about how we work with each other to produce the things that we need and use, from cars to construction to telesales. But the way we do this is organised primarily around profits, which are obtained by a small group at the top of society. And so, understanding how the economy works is about understanding property and power: who owns the resources and commands the wealth produced by society, and who creates it for them? This is not how economic issues, including the “cost of living crisis”, are typically presented to us. In the news and elsewhere, the economy seems like a vast and strange machine that makes demands on us, or forces us and our families to take economic pain. Reporting on economic affairs in the UK usually focuses on the complex workings of financial markets that are often presented as being as unpredictable as the weather with only a few “experts” able to understand them. “Inflation” is the rate at which prices are increasing on average. If inflation is 9.4%, it means that prices have gone up 9.4% since this time last year. So, something which was £10 this time last year is likely to cost £10.94 this year. The major effect of prices rising is that the value of money falls – you can buy less than you used to be able to with each £1 when prices go up, and the higher the rate of inflation, the faster your money falls in value. It is important to remember that the inflation figure is only an average, and most goods and services will change in price faster or slower than the average figure. To find this average rise from all the different price changes, government statisticians at the Office for National Statistics (ONS) put together a “basket of goods” which is supposed to represent what an “average” household would consume in a month – what share of their income is spent on food, or housing, or fuel, and so on. To cut through the confusion, we must first clearly define some of the jargon normally used.

9

The average household does not really exist, of course, as people buy many different things every month. This can be a problem when dealing with inflation since people on lower earnings consistently spend proportionally more of their income on essentials like food and energy than the better-off. As a result, the price rises for essentials will tend to hit the poorest much harder than the inflation rate suggests. There are two main ways for the ONS to calculate the inflation rate: the “Consumer Price Index” (CPI) and the “Consumer Price Index with Housing costs” (CPIH). CPI is the figure most usually quoted by the media, since it is also the inflation figure the Bank of England is supposed to be trying to control. The older “Retail Price Index” (RPI) is still sometimes cited but has not been the official measure of inflation for a decade. Because all three measures involve slightly 1 different ways of calculating the “average” price rise, they tend to give slightly different rates of inflation. For simplicity, we only use CPI in this pamphlet – but it is worth remembering RPI is typically higher than CPI. The CPI is often referred to as the “headline” rate of inflation because it is based on the standard basket of goods, including food and energy. The “core” rate of inflation, on the other hand, excludes food and energy prices on the grounds that these prices are highly volatile and do not reflect what is going on at a deeper level. The headline rate can contain enormous price variations that matter greatly to the standard of living of working people. In July 2022 headline inflation in the UK stood at 8.8%. But motor fuel prices had risen by 42.3% compared to a year ago – well above the headline figure. Clothing prices, on the other hand, rose only 6.2% in the same 12-month period – so they are still rising, but at a slower rate than the headline figure. “Real terms” refers to economic figures after taking account of inflation. For many decades, inflation has always been above zero – in other words, prices have steadily risen, but at different rates. This means that whatever £1 buys for you today, it is likely to buy less in the future, since the price of everything you could buy with that £1 is likely to have risen by the rate of inflation.

If we want to understand the true change in someone’s income, we obviously need to take account of the fact of constantly rising prices. This is the value in

RPI lost its National Statistic status in 2013. 1

10

“real terms”, and it is easy to work it out for changes in income - just subtract the rate of inflation from the change in income to find the change in real terms. For instance, if a pay award this year is 10%, but inflation is 5%, the real terms pay increase is 5%. If the pay award is 2%, however, the real terms change in pay is a fall of 3%. In the first half of 2022 the fall in real wages in the UK was extraordinarily high by historical standards. In August 2022 the main measure of inflation (the 2 “Consumer Price Index”, CPI) stated that prices on average were rising by 9.6%. This was the highest rate of inflation for forty years. The Office for National Statistics also estimated the change in wages and salaries over each month. Their estimate of “Average Weekly Earnings” (AWE) showed that wages and salaries, excluding bonuses, rose by only 4.3% in July 2022. This means that the real value of wages and salaries fell, on average, by 5.3%. “Supply and demand” refer to how we produce, buy, and sell goods and services by using money. “Supply” refers to the amount of a good or a service available to buy at any point in time. If there is an increase in that amount, its supply has increased. When we take all the goods and services produced in the country, we have aggregate supply. The pandemic of Covid-19, and the lockdowns imposed to deal with it, caused severe disruption in how goods and services are produced and sold – whether semiconductors or restaurant meals. Aggregate supply was reduced. It is very important to remember that the disruption caused by Covid-19 came after ten years of persistent underlying weakness in the production of goods and services in the UK. The weakness of aggregate supply across society is the key to understanding inflation. “Demand” is about how much of a good or service is wanted at any point in time and, crucially, whether those wanting the good or service have the money to pay for it. If demand goes up, it means more people are trying to buy a good or service with the money they have. Demand, in other words, must be effective and, in our society, this means being backed by money. It is very important to realise that a large part of demand also comes from firms which buy machinery, raw materials, energy, and other inputs from other firms. When we take demand (backed by money) across the whole of society, we have aggregate demand, which is also key to inflation.

Real wages fell by around 3% year-on-year to June 2022 (see https://www.ons.gov.uk/ 2 employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/ averageweeklyearningsingreatbritain/august2022).

11

These two ideas matter because in a market for any good or service, we would usually expect the price to be set by firms competing for customers. But how they do that depends on several factors, two of which are crucial for the “cost of living crisis”. The first is what is happening to aggregate supply and demand across the economy. The second is what the property structure of an industry looks like, which enterprises control supply, and how much market power they have. If aggregate demand is boosted, then we can expect people with money to try and buy many types of goods and services. We can also expect firms to meet this demand by increasing supply in their own markets but at the same also trying to raise prices since demand is generally strong and they are chasing after profits. Clearly, much will depend on how strongly firms will be able to increase aggregate supply. If aggregate supply is restricted, prices will rise rapidly and consistently, that is, there will be inflation. Firms will, of course, still be making profits. In important sectors and markets of the economy, where huge enterprises have great power over supply – for instance, in energy – we can expect firms to increase prices in targeted ways to ensure massive profits. Inflation offers endless opportunities for speculative profits by those who own and control the productive resources of society. The price is paid by the rest of us. With these fundamental ideas – inflation, real terms, and demand and supply – we have enough to start to deal with the wrong arguments presented by the mainstream about inflation, and to show what is really happening in the ”cost of living crisis” and how it should be confronted.

12

3. The weakness of aggregate supply and the impact of Covid-19 Everyone recognises that Covid-19 was a catastrophic shock for the world economy. With new variants circulating, and lockdowns and restrictions recurring in different parts of the globe even in 2022, along with the continuing pressure on healthcare systems, the pandemic will be a source of serious difficulties for a long time yet. If we set aside the public health aspect of Covid-19 and look only at its economic impact since early 2020, we can easily identify a crucial part of the inflationary surge that we are experiencing. Lockdowns and other restrictions were implemented by governments across the world from early 2020, starting with the lockdown of Wuhan in China on 21 January. At the height of the efforts to suppress the disease, some two and a half billion people lived under some form of serious restriction. Such unprecedented restraints placed on so many countries across the world inevitably had a massive impact on economic activity. Aggregate demand collapsed as people were not allowed to live normally, and demand especially for services like airline travel or shopping on high streets or restaurant meals, fell very sharply. Aggregate demand also fell as enterprises postponed their investment plans in the face of great uncertainty. Responding to the collapse in aggregate demand, many enterprises rapidly cut back supply – especially of services – in many cases, going bankrupt, or in others making staff redundant. The shock to aggregate supply was great, particularly as in the UK the supply side has been weak for many years. In 2020 several countries in lockdown plunged into one of the worst recessions seen in history. Only extensive UK government support, provided mostly to 1.9 million enterprises, prevented even more widespread unemployment and misery. Support included increased spending to pay for workers’ wages, such the £70bn furlough scheme in Britain. It also included subsidies, tax relief, postponement of

13