Adam Smith Institute

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Be careful what you wish for

It’s a reasonably standard claim, that workers should gain lots of things over and above their mere wages from their employment. Rights to this and that, good things that should be provided. The problem, of course, is that all of those things cost money. Compensation of the workers becomes rather higher than the wages of the workers. Which does lead to things like this:

Meat companies across Europe have been hiring thousands of workers through subcontractors, agencies and bogus co-operatives on inferior pay and conditions, a Guardian investigation has found.

Workers, officials and labour experts have described how Europe’s £190bn meat industry has become a global hotspot for outsourced labour, with a floating cohort of workers, many of whom are migrants, with some earning 40% to 50% less than directly employed staff in the same factories.

The Guardian has uncovered evidence of a two-tier employment system with workers subjected to sub-standard pay and conditions to fulfil the meat industry’s need for a replenishable source of low-paid, hyper-flexible workers.

About 1 million people work in Europe’s meat sector, with unions estimating that thousands of workers in some countries are precariously employed through subcontractors and agencies.

Well, yes, the larger the wedge between compensation and wages then the larger the temptation to find alternative arrangements which close that gap. This always being true, the more mandates are loaded onto formal employment there more less formal structures attract.

This is not something restricted to the meat sector, it’s one of those unfortunate facts of life.