8 ideas for a new social contract for good work

Put alongside the moral urgency of the pandemic, the twin challenges of growing economic insecurity and labour market transforming technologies require a new social contract for work.

The RSA Future Work Centre began as an exploration of how technology and public policy could be harnessed towards the pursuit of good work. That remains our mission, but with the arrival of Covid-19 we now find ourselves in the grasp of a social catastrophe. The pandemic has shone an unforgiving light upon vulnerabilities that already lurked within our economy and society. But it also represents a moment of ‘collective sacrifice’ at which we might reimagine the institutions responsible for work and redraw their respective rights and responsibilities. This is the objective of our latest report, which outlines a blueprint social contract for good work.

Creating a new social contract

Drawing upon the Future Work Centre’s Four Futures of Work scenarios, we identified four systemic policy challenges a new social contract must tackle:

• Stronger worker voice: How can we support trade unions to innovate and reverse the long-term decline in membership? What other mechanisms are needed to give workers more stakeholder power over how technology is adopted in the workplace?  

• Democratic data: What rights should people have over the data that is collected on them at work? Can we reign in the power tech companies have over markets by regulating their power over data?

• A modern safety net: How can we support workers financially during potentially long periods of unemployment and retraining? How can we create parity of esteem between employees and independent workers, including those in the gig economy?
• Lifelong learning: How can we reskill workers for the jobs of the future, particularly those at risk of automation? Can we elevate the status of undervalued workers by creating opportunities for upskilling within these occupations?  

In responding to these challenges, and in the hope we can build a bridge to a better future beyond the pandemic, we advocate eight ideas we hope can form the basis of a new social contract for good work:

1. To adapt to the changing world of work, unions will need to experiment with new forms of organising, including those that make use of digital platforms or provide new kinds of financial services. A union innovation deal could help to support this innovation through an investment fund and changes to restrictive legislation.
2.  To help scale stakeholder worker power over the economy and technology, whilst moving to a more democratic model of the firm we need works councils. Starting with any business which requires a bailout as part of the Covid-19 pandemic, the government should develop a British model of co-determination and legislate so all firms with more than 20 workers must set up a works council.
3. To give people rights and power over technology-driven changes to management, we need a minimum universal floor of data protection for workers. A data covenant for workers would mandate that employers give workers access to all the data they collect about them and explain how it is processed.
4. To increase stakeholder worker power over the lucrative data economy we need data trusts. These institutions wouldprovide a new governance model for public and private data troves, which could offer both more democratic approach for the individual data holders and move us towards a mixed economy of data ownership. 
5. To provide a safety net that is both resilient to economic shocks and truly empowers workers to transform their circumstances, we need a universal basic income. Establishing a universal basic income of £5,000 a year could be funded by replacing Universal Credit, modifying existing tax entitlements such as the personal allowance and new, redistributive taxes on Big Tech.  
6. To allow true ‘flexicurity’ in the labour market we need to expand entitlements such as sick pay to all workers. Portable benefits would allow self-employed workers to accumulate these benefits on a pro-rata basis and carry them across multiple employers. They could be funded through an ‘engagers tax’.
7. To help all workers futureproof their skills, we need to provide a universal entitlement for lifelong learning. Personal learning accounts would give all workers annual training credits they can spend on courses accredited by the government. This could be funded through reform of the apprenticeship levy.
8. To transform our public employment services in line with the needs of the future of work, we need a new Job Security Centre, based on Swedish-style job security councils. This would provide targeted support to workers who are at greatest risk of automation or heavily affected by the pandemic, redirecting people to growth industries through rapid retraining and upskilling.

Bridges beyond the pandemic: a stakeholder model of capitalism?

Insights from two systems theorists guided us towards these policy ideas. From Frank Geels, professor of systems innovation at the University of Manchester, we took the importance of intervening in systems at three distinct levels in order to give the push for social change deep roots. ‘Micro’ innovations are nurtured, scaled and shaped by institutional ‘meso’ regimes, before being elevated by ‘macro’ policy, frameworks and norms into a new paradigm. 

From Donella Meadows, we took the importance of dynamic ‘self-organisation’ to long-term system resilience. In policy terms this led us to the view that unions and other worker voice institutions introduce critical feedback loops to capitalism; that good work for all depends, to a great extent, upon boosting the collective stakeholder power of workers over the economy and technology. This helped shape our broader designs for the social contract beyond the pandemic, which we hope will see a move towards a more ‘stakeholder’ model of capitalism.

Indeed, in some respects the central aim of our new social contract is a transfer of responsibility away from individuals: we believe individuals should enjoy good work as a right and that it is the responsibility of all the other institutions involved in work to help them secure it – but principally worker voice organisations, both new and old.

This shift is not just about amplifying worker power. Stronger worker voice can also lead to a more flexible and dynamic form of capitalism. A more stakeholder or ‘corporatist’ model of capitalism – grounded in a stronger relationship between workers, unions and employers – can create a social contract that is both more resilient and where firms face less regulatory red tape. 

With the government’s job retention ‘furlough’ scheme as perhaps the prime example, the pandemic could be accelerating us towards this model. That would be a win for good work appropriate for the world beyond the pandemic. After all, if changes in the social contract really are born of collective sacrifice, then there are a great many workers to whom we now owe a deep obligation.

Read the report: A blueprint for good work