Class-angst for the yanks while the robots come for the Resolution Foundation

Morning all,

Parliament was back with a bang this week, as we saw the publication of the most significant legislation improving workers rights in a generation (more on that below). Plus, we’ve inched closer to confirming the leader of the opposition, and every day brings us more fevered Budget speculation. We’ll be discussing the opportunities (and the challenges) facing Rachel Reeves on Monday at the launch of our Budget preview report. We’ve sold out of in-person tickets, but you can still watch along online.

Keep reading for research on reps, robots and rights.

Have a great weekend,

Mike

Interim Chief Executive
Resolution Foundation

Dispute divergence. It’s been a huge week for millions of workers, as the Government published their long-awaited worker’s rights legislation. This Bill is needed in part because we no longer live in the union-dense days of yore, when workplace disputes were resolved (or not) in smoke-filled rooms. But how do we handle conflict at work today? This interesting piece of research commissioned by Acas tries to figure it out. Turns out that people (both unions and employers) are getting rusty at resolving disputes, as intense economic pressures drive negotiating positions further apart. This has not made for harmonious industrial relations – as we all learnt during (what the kids called) hot strike summer. In fact, the researchers suggest the rise of more restrictive union recognition agreements (where *only* pay is on the table) has compounded the issue, with fewer tangential concessions available to progress negotiations. The report emphasises that anti-strike legislation introduced by the last government may have had the perverse effect of making it *harder* to resolve disputes, with unions reps pushed by minimum ballot thresholds to spend more time constructing a dispute than planning for its resolution. Good news then that much of that legislation will be repealed by the Employment Rights Bill. Check out the Government’s ‘Next Steps’ document to see where they plan to go from here.

Robot researchers. Hope you’re not sick of hearing about all the ways in which AI will transform the world… Next up – qualitative research! This paper showcases a platform that will conduct interviews with research subjects (through an on-line chat interface) and even analyse the outcomes. It’s obviously early days, but the tool certainly shows how we might soon be blurring the divide between quantitative and qualitative research if we can quickly and cheaply gather richer and more insightful data than you can get from a traditional survey but without losing the power of large samples. And how long until SkyNet will be drafting your weekly Top of the Charts emails? The robots will have to pry the keyboard from my hands…

Class curse. As we mentioned a few weeks ago (“Ephemeral elites”), being born into privilege in Britain *really* helps. But those folks across the pond like to think they’re not quite as constrained by class. The most recent podcast from the FT argues otherwise, in an interesting conversation with Anna Stansbury around her recent paper addressing the ways in which class is “awkward to talk about” in the states. The question at the heart of this study is how people continue to be shaped by the class environment in which they were raised, even after earning a PhD and in demonstrably elite employment. The analysis reveals that first-generation college graduates are “underplaced” – as in, they end up working at lower-ranked institutions than the quality of their work would suggest. Class prejudice seems to explain why they didn’t find more prestigious employment. This isn’t good news for any of us. As Anna herself put it, we should care for the “banal economic reason” of efficiency: “If you assume that talent is something that’s evenly distributed, then we should care if people that are talented aren’t getting to fulfil their talent, because it’s worse for overall productivity”.

Spousal perspectives. Those of you with partners – how much do you trust their economic insight? This paper describing an experiment of households in Germany reveals some troubling trends. When a household receives information about their position on the income spectrum, it matters who acts as the conduit for that information. When the husband is informed first, his wife changes her beliefs. But husbands are not as attentive when wives are the first to know (cue lots of rueful smiles from all our female readers). A troubling insight, in line with the research on gendered gullibility (‘following fibs’) we featured recently.

Credit cliff-edges. Recent work from the University of Bath explores the interaction between Universal Credit, ‘passported’ benefits and other means-tested help for working claimants. The researchers show that problems can arise when receiving one benefit – say Pension Credit – acts as a trigger (or a ‘passport’) to getting another form of state support (like – as of this winter – the Winter Fuel Payment). If your income rises so that you lose entitlement to the Pension Credit, then you also lose the passported benefits, and you may end up worse off overall. Cliff-edges are a particular issue for families in Scotland, because families that lose entitlement to Universal Credit also lose all of the Scottish Child Payment, worth £2,784 a year for a family with two children. The key takeaway here is the inherent trade-offs in using receipt of means-tested benefits to passport people to other forms of support. It may save you from needing to invent a whole new means-test process, but the outcome inevitably is that these cliff-edges get steeper.

Chart of the week

UK policy makers often laud our flexible labour market, but a far less welcome aspect of it is the lack of employment protection for workers. Currently, employees in the UK have to wait two years before they have protection against unfair dismissal – meaning that, until then, an employer can fire someone without giving a reason. The UK is a real outlier here – of the 38 OECD countries, 36 have a lower qualifying period for unfair dismissal (no prizes for guessing the sole country that is worse than the UK…). This will all change though, once new measures included in the Employment Rights Bill come into effect (in autumn 2026). Specifically, the Government is proposing ‘day one’ protection against unfair dismissal, although firms will be allowed to use probation periods during which the bar for dismissal will be lower. COTW examines how the UK’s qualifying period for protection against unfair dismissal has changed over the decades, and how we compare internationally. The UK’s qualifying period has bounced around a lot – although always higher than the OECD average. The Government will now consult over the length of the probation period, but has stated its preference for a maximum of nine months. This would mark a major change from the two-year qualifying period the UK currently has, but it still feels very conservative, both internationally and intuitively. First, as the chart shows, the majority of OECD countries have a qualifying period of five months or less. Second, probation periods are meant to allow firms to assess whether someone is able to do the job they’ve just started – and it shouldn’t take nine months to make that call. So, we’ll be writing in to argue for six months.