The new proletariat: Soon most British employees will be women. But their pay, already low, could fall further, report Nick Cohen and Rachel Borrill

LAST Thursday the 2,200 men at Swan Hunter picked up their toolboxes and trudged out of the gates. The managers of the last shipyard left on the Tyne had revealed there was no more working capital. The shipbuilders knew that, barring a miracle, they would join 2.3 million other men in the dole queues and face the prospect of unemployment for the rest of their lives.

Three days earlier, at the Grand Hotel in Bristol, Gillian Shephard, the Secretary of State for Employment, was at what her department calls a 'New Horizons for Women Opportunity Shop' - a peculiarly cumbersome name for a touring exhibition providing information and advice on openings for women in work and public life. She talked of an exciting, working future. The careers of local achievers, such as Shelley Saxon, who set up a flourishing 'networking' club where professional women in Exeter could exchange ideas, were held up for approval.

The tone was optimistic, almost evangelical. 'These examples,' Mrs Shephard said, 'clearly illustrate what can be achieved if women take full advantage of the opportunities that are available. My aim is to show all women all their opportunities in all areas of national life.'

This contrast - between the bleak future of male manufacturing workers on Tyneside and the supposedly bright prospects for women in the South-west - echoed the most dramatic and far- reaching change in late 20th- century Britain.

As the nature of work changes - with traditional heavy manual labour in particularly steep decline - women are gradually overtaking men as the most important component of the labour force.

The idea that married women go out to work to supplement the family income is familiar. So is the idea that women may be the sole breadwinners during periods when their menfolk are unemployed. But society has scarcely begun to come to terms with the notion that, in a growing number of homes, the woman will be, throughout life, the chief source of family income.

Since 1970, almost 90 per cent of all new jobs created in Britain have gone to women. The results are startling. Just 14 years ago, the number of men in employment (full-time and part-time) exceeded the number of women by more than 45 per cent - 13.1 million against 9.4 million. Last month, the balance of the sexes was almost equal - 10.7 million men in work against 10.1 million women.

According to an analysis published last week by Income Data Services (IDS), a private research company, there was every reason to believe the current trend would continue and women would overtake men. The number of women at work already exceeds the number of men in 11 regions, including Cornwall, Essex, Merseyside, Mid-Glamorgan and Lothian. By the mid-1990s, we will almost certainly be able to say that the typical British worker is a woman.

But, according to Alastair Hatchett, the editor of IDS research, this typical worker will not be the kind of woman who receives invitations to lunch with Mrs Shephard or network with Ms Saxon.

Almost half the women now working - 4.6 million - are in part-time jobs. Huge numbers of these, and a large percentage of their colleagues in full-time work are, by any standards, low-paid. They get pounds 3.08 an hour to work behind a British Home Stores till, less than pounds 2.50 to clean or pounds 3.57 to be a checkout assistant at Sainsbury's - a company that last week announced record annual profits of pounds 733m.

The old proletariat of male manual labour is disappearing; this is the new proletariat.

Many women are clearly supporting male partners. Male unemployment is at 14.1 per cent of the workforce - the highest level since the great depression of the 1930s. One million men have been sitting at home for more than a year. By contrast, just 5.6 per cent of the female workforce is unemployed, a drop of about a third in the female joblessness rate since the mid-1980s. Indeed, the opportunities to work for women have hardly been touched by the recession because the number of part- time jobs has changed little since 1990.

The belief that (largely male) manufacturing has suffered less than (largely female) services is a myth, according to Mr Hatchett.

'But this should not be a cause for rejoicing,' he said. 'Many women part-time workers are earning about pounds 70 a week on rates between pounds 3 and pounds 3.70 an hour. If I was in the Government I would be worried about the tax base; about what is going to happen to government revenue as full-time, well paid manufacturing jobs are replaced by poorly paid part-time posts. I would be worried, too, about the balance of payments if manufacturing does not improve, and not pin much faith on consumers leading us to recovery when the jobs that are being created are low paid.'

But the Government is not worried. Its critics say that it now wants to force down the wages of the new proletariat still further.

Under present laws, 2.5 million of the country's weakest and lowest-paid workers have minimum hourly rates set by wages councils. The councils - where employers, workers' representatives and independent arbiters meet to fix minima of between pounds 2.57 and pounds 3.10 an hour - cover 26 separate industries.

They regulate the pay of hundreds of thousands of workers in retail, food shops, pubs, hotels, restaurants and clubs as well as the few employees left in the feather industry (500) and the coffin furniture business (200). Two million of the workers protected by the councils are women.

Mrs Shephard - who spoke so eloquently of women's opportunities in Bristol - now judges that the councils have 'long outlived their usefulness'. Under her Employment Bill, now going through Parliament, they will be abolished in October.

To charities and pressure groups fighting to keep the wages councils, the lack of public concern and debate about the issue is astounding. Joanna Foster, outgoing chairwoman of the Equal Opportunities Commission, said the Bill had 'enormous implications'. Women on very low pay 'who are already struggling to make ends meet' would be left open to 'even greater exploitation' if the measure became law. Wages councils with their blanket minima were one of the few instruments that ensured men and women received equal pay, she added. If they were to go, the gap between male and female wages - already one of the largest in the European Community - would be bound to widen still further.

The wages councils (originally called boards) are not some creation of the post-Second World War 'corporate state'. They were set up in 1909 by Winston Churchill, then a Liberal minister. He said the demands of the market should be set against the demands of conscience.

'It is a serious national evil,' he told the Commons, 'that any class of His Majesty's subjects should receive less than a living wage in return for their utmost exertions. It was formerly supposed that the working of the laws of supply and demand would naturally regulate and eliminate that evil. But where you have no organisation, no parity of bargaining, the good employer is undercut by the bad and the bad employer is undercut by the worst. Where these conditions prevail, you have not a condition of progress but a condition of progressive degradation.'

The abolition of wages councils was a policy made without public debate. There were reports in 1985, during the high noon of Margaret Thatcher's premiership, that ministers regarded the councils as living fossils and that they would have to go. But in the face of opposition from managers as well as unions, ministers limited the 1986 Wages Act to taking under-21-year-olds out of the councils' ambit and to removing their powers to determine holiday entitlements.

That appeared to be that. The 1992 Conservative general election manifesto made no mention of removing the safety nets. During the campaign, Michael Howard, then the Secretary of State for Employment, seemed to promise that they would stay for the foreseeable future. There were 'no immediate plans to abolish them', he told the BBC's Election Call. 'We will keep them under review . . . it may take a considerable period of time.'

The pressure for their abolition just eight months later came, according to Tory insiders, from Michael Forsyth, the right-wing MP for Stirling, who is Mrs Shephard's deputy.

Mrs Shephard herself now argues that guaranteeing a minimum wage for the lowest paid 'inhibits the creation of new jobs'. Mr Forsyth added: 'Most of the workers covered by wages councils are not poor. Many work part-time and live in households with two or more earners.'

Even if some genuinely poor people with 'heavy family commitments' were affected, state benefits, which did not exist in 1909, would help them, he said. In any case, he alleged, the abolition of controls on the pay of young people in 1980s had provided no evidence that wages would fall.

Peter Bottomley, Tory MP for Eltham, disputes most of these claims. Even on Mrs Shephard's own figures, he says, it would require at least a 15 per cent cut in wages to achieve a 1 per cent increase in jobs.

The arguments of companies that have lobbied for abolition seem to contradict the government belief that there is no danger of wages falling. A spokesman for the Ladbroke Group, which owns the Hilton Hotel chain, was quite open on the issue last week.

'We may want to hire five workers at the cost of four today,' he said. 'These are very hard times in the hotel trade and we need flexibility in our business.'

Chris Pond, director of the Low Pay Unit, believes that Churchill's argument of the bad undercutting the good still applies. 'If one of the big supermarket chains starts cutting, I'd expect the others to follow suit,' he said. 'A few groups, like Marks & Spencer and John Lewis, which are known for their quality of service and taking care of their workers, would certainly resist, but I have no doubt other chains would have no hesitation in acting to maintain their competitive edge.'

City analysts are divided. Some, such as Andrew Burnett, a food retail analyst with NatWest Securities, argue that there is no need for the big three food chains to risk losing staff by cutting pay. Others argue that everything is up for grabs in a 'saturated' grocery market. They point to the willingness of the big three to gain market share by trading illegally on Sundays - even though, as Iceland, the frozen food group and opponent of Sunday trading says, it entails adding to the burdens of low-paid staff by pressuring them to accept 'an unwelcome intrusion into their family lives'.

A better guide to the future behaviour of employers than speculative prophecy is what they do now. In the sectors of the low pay economy not covered by the councils, such as the private security industry and residential care homes, pay of between pounds 1.50 and pounds 2.50 an hour is commonplace. Meanwhile, the dwindling band of wages inspectors discover illegal underpayment in one-third of the workplaces they visit to check if wages council minima are being observed.

To this, Michael Forsyth replies that, although it is true that one-third of employers under wages councils act illegally, this affects relatively few employees - on average, only two per workplace. In other words, most employers pay most of their workers at least the minimum.

His reassuring words are unlikely to cheer Amanda Peters (not her real name) who works 32-and-a-half hours a week for four diffferent employers and collects pounds 76.98 for her efforts.

Mrs Peters is 38 and lives in inner Birminghan. She works as a part-time cook in two pubs, as a sales assistant in a greengrocer's shop and as a cleaner. She is married with two young children. Although her husband works, and thus she is not, according to Mr Forsyth, really poor, the family could not afford to repay the mortgage on the council house they bought or meet their fuel bills if she did not seek out as much work as possible.

In a diary of her working week, she wrote: 'My jobs are low grade with low grade wages, which unfortunately seems to be the only type of job that a married woman with a family can get.'

She does five lunch and evening sessions a week as a pub cook. 'But I don't just cook, I serve the customers, wash up, clean the cooker and mop the floors.' Both pubs illegally pay her less than the wages council minimum.

Every Monday and Friday evening is spent cleaning an office for pounds 1.50 an hour. 'I have two-and-a- half hours to polish and dust six offices, clean and disinfect two toilets and a kitchen. Sweep, mop and polish the showroom floor,' she writes.

Two mornings a week Mrs Peters works in a greengrocer's for pounds 2.68 an hour. 'For five-and-a- half hours I serve, restock and clean with just a half-hour break for lunch.' Thursdays are her 'days off' when she does all the shopping, ironing and cleaning.

'I wonder what the hell I've done to deserve this lot,' she says. 'I am totally exhausted, but I still have to run a home and care for a husband and two children.'

Mrs Peters' plight, and that of hundreds of thousands of other women threatened by the abolition of wages councils, has aroused little public comment.

Tory backbenchers, who were prepared to rebel over pit closures and the loss of male miners' jobs, have been almost wholly silent. Only Mr Bottomley and one other have persistently expressed doubts. Mr Bottomley blamed the left as much as the right for the neglect of low-paid women.

'Most trade unions are ambivalent because they represent organised, white, male full-time workers,' he said. 'As for the people who write on women's issues in the newspapers, the only time they see the low-paid is when they stop off at a food counter.'

Opportunity 2000, the charity run by Business in the Community - and vocally supported by John Major and Mrs Shephard - has also had little to say.

It aims to persuade companies to give women equal employment rights and a chance to get the best jobs in industry and the public sector. But it has appeared to be less interested when the women in question are teetering on the edge of the underclass rather than knocking as well-qualified professionals at the door of top management.

In January, Lady Howe, the project's chairwoman, was asked whether she would follow the Equal Opportunities Commission and condemn Mrs Shephard's Bill. She fudged the question. There were more important issues as far as equality was concerned, she replied. The way forward was through training and the promotion of 'best practice'. These would lead to increases in pay. Yet the argument over the pay of Mrs Peters and millions of other women that Lady Howe evades is essentially the same as it was in Churchill's day.

Michael Forsyth put the view for total deregulation in a letter to protesters last December. 'The Government believes that, without the councils, wage rates will adjust to suit local economic circumstances, thereby stimulating economic growth. Businesses themselves are best able to judge what they can afford and what levels of pay are necessary to recruit and retain suitable workers.'

To Chris Pond, this is a recipe for further economic decline and exploitation of weak and isolated workers. 'Employers who pay low wages don't train or invest in their workers. Essentially what is being proposed is that we become a low- tech, sweatshop economy.'

Mrs Peters is too tired to argue. 'At the end of the week all I want to do is go home and die,' she said.

(Photographs and graphs omitted)