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The plight of the LSE cleaners sheds light on the nature of precarious work in the UK economy.
The cleaners’ contracts are outsourced from LSE, so the cleaners are actually employed by Noonan. This means that they have lower hourly pay, less holiday and 16 times lower pension contributions than those in LSE’s standard contracts.
At a recent event, during their testimony about their treatment, some of the cleaners were brought to tears when describing their situation which includes being forced to take their own annual holiday whenever the LSE has School holidays. Noonan has also refused to replace cleaning products that are damaging cleaners’ skin.
This raises a number of important questions. The LSE’s outsourcing of the cleaning to Noonan means that the university has a level of plausible deniability. This surely does not excuse the appalling treatment, however. As the LSE is a large customer of Noonan, there must be considerable corporate clout behind its custom. If LSE wanted to bring a large amount of pressure on Noonan, it could.
There is a wider question about outsourcing – where company A pays company B to do roles that it would be inefficient or too costly for A to do. Typically, these will be functions like catering, sometimes IT and payroll, recruitment. This has obvious benefits in terms of the division of labour, and the ability of people to specialise in their given fields. This might not be a bad thing, where proper safeguards are in place and there is due diligence about the nature of the work being outsourced.
It wouldn’t, for instance, make sense for a medium sized business with a canteen to build up the necessary expertise and cost to hire their own catering staff. It would be more efficient for a company that specialises in catering to do this work for them. This is particularly good for charities, or other social corporations that are able to use outsourcing to focus on making their donations go further.
But this can often look bad, and for good reason. The power dynamic of a company employing highly educated, well-remunerated professionals outsourcing often physical and historically demeaning tasks is not to be ignored. There is a wider issue around the hollowing out of the middle of the economy; it is increasingly difficult to come by well paid and respected physical jobs that do not require university degrees, increasing inequality and impinging on the prospects of non-graduates. The LSE cleaners are symptomatic of this wider problem, but this is not inevitable.
Whilst outsourcing has a clear and convincing economic logic, when it goes wrong it exhibits the worst of the modern economy. Mistreatment and casual work, the hallmark of the lower end of the UK’s wage distribution, is something that for once has an easy solution. Here the LSE is able to use its mass as a client, and its buying power to garner a better deal.
The wider problem, however, has no easy and clear solution. Dynamism is an important part of a modern and functioning economy, but those at the sharp end of these sorts of policies are often those in the worst position to cope.