The recent furore over Osborne’s plans to allow workers to swap their rights in exchange for shares in the company must not be allowed to detract from what is essentially a good idea: allowing employees material investment in their places of work thereby bypassing the need for coercive governmental legislation. In this case, however, any debate over the role of workers privately negotiating their own terms of employment with their employer has been overshadowed by the messenger, as Osborne’s dreadful public image not only poisons the chalice but stabs the drinker for good measure before throwing them, weighted, down a remote well.
But just because the idea has been proposed by a bumbling fool doesn’t mean we shouldn’t give it some deeper thought. In theory, the current government is here attempting to make it easier for companies to hire people and for people to find jobs through allowing the employee to privately negotiate the terms of the contract and have a stake in the business. This is, needless to say, excellent. In theory. In practice however, what Osborne is proposing will merely make commonplace the employee exploitation. There is no reason for the company to grant favourable conditions to owning these shares thus eradicating at a swipe any stake the employee could have in the company for which they work. We would be left with a situation where the young, already obligated to work for nothing in unpaid internships would, after the debt of university and internships, be forced to work under constant threat of losing their jobs with no way of recourse. Nor would the companies gain much if anything from this. While it is true that they may be able to hire and fire workers more easily there is no evidence that this would actually have any impact on the job market. Under constant threat of losing their jobs and with little if any disposable income what incentive would people have to spend what little money they have instead of saving it in case they get fired next week with no settlement package?
As ever, Osborne has missed a fantastic opportunity. By providing massive tax relief to companies which mutualise their work force through favourable stock options while leaving the details to negotiation between the company and employee he could have increased job security, spending power and worker happiness at a stroke. Instead, he’s presided over another PR disaster for the current government and increased whispering over whose side the coalition is really on during tough times.