Tuesday, January 3, 2017

Guaranteed Employment explained


On January 1st 2017 the economist Tony Atkinson died at the age of 72. He was the driving force behind the development of the field of poverty and inequality studies and inspired the work of the hit French economist Thomas Piketty. In his 2015 book "Inequality - What can be done?" Atkinson set out 15 proposals for combating the increasingly urgent problem of widening inequality.

In this article I'm going to look at his third proposal of the 15; that the state should work to reduce unemployment and guarantee work to anyone who seeks it.


Unemployment

As a result of the ideological battles of the 20th Century the economists Karl Marx and Freidrich Engels have acquired terrible reputations, however the fact remains that they developed damning critiques of capitalism that stand as true today as they did when they were first written over 150 years ago.

One of Marx's most telling insights is that capitalists require a standing army of unemployed labour in order to maximise their own profits. The objective of this "Reserve Army of Labour" being to dissuade the rest of the labour force from demanding higher wages or better working conditions out of fear of being sacked and thrust into absolute destitution.

Marx spotted this brutal characteristic of capitalism in the 19th Century and it's still blights the lives of millions to this day. It's undeniable that the UK state actively maintains this pool of unemployed labour to this day. The Westminster government and the Bank of England both embrace this harmful theory that too high a percentage of workers in jobs is a bad thing.

As long as capitalism continues to keep a certain percentage of the workforce in destitution in order to keep the rest in order, then there will always be unemployed people. They obviously can't just "get a job" if the economy is actually being deliberately rigged so that there's always a scarcity of jobs.

Welfare

The idea of running a punitive welfare regime that punishes and harasses the unemployed into finding work is abhorrent when there simply aren't enough paid jobs to go around. Such a draconian system is always likely to end up punishing people who are less capable of jumping through all of the bureaucratic hoops in order to prevent their social security payments from being cut off. People with learning difficulties and mental disabilities end up getting sanctioned into absolute destitution because they can't deal with the stress and bureaucracy, while the tiny minority of hardened benefits freeloaders will simply continue to learn and adapt in order to carry on gaming the system as they always have.

In short we have a welfare system that is so badly designed that it actually punishes the most vulnerable (who are the most likely to end up in the deliberately maintained Reserve Army of Labour) for their inabilities to deal with all of the draconian, dehumanising and often Kafkaesque postcode lottery that is the UK welfare bureaucracy .

Guaranteed Employment

Tony Atkinson's proposal on Guaranted Unemployment is that the state has a duty to provide basic employment to anyone amongst the unemployed who is willing to seek it. Here's exactly how he put it:
"The government should adopt an explicit target for preventing and reducing unemployment and underpin this ambition by offering guaranteed public employment at the minimum wage to those who seek it."
This is dramatically different from current practice because under Iain Duncan Smith's direction the Tories rolled out mass "Workfare" programmes to compel the unemployed into abandoning their labour rights (the right to earn the minimum wage for example) and working for no pay, often at giant highly-profitable multinational corporations (thus replacing jobs that could have been done by paid employees with a never ending supply of free labour from the Tory government).

The current system works by condemning people to absolute destitution if they refuse to comply with these labour extraction schemes on the grounds that they shouldn't have to "earn" their paltry subsistence benefits because they've already paid for them through years of National Insurance contributions.

Instead of using the threat of absolute destitution in order to coerce people into exploitative unpaid labour schemes as it does now, the state should make sure that anyone who wants to work for a fair wage has the opportunity to work for a fair wage.

A system that guarantees a job opportunity to anyone who wants one would massively improve the welfare system by helping people to avoid becoming trapped in it. It would also be beneficial because it would provide the state with a large flexible workforce that could be utilised for the general good of the nation.

The fear

The idea of a societal responsibility to provide paid jobs to anyone who is willing to work would lift a huge burden of stress off the general workforce. If every worker knew that they'd have a guaranteed job to fall back on if times turned bad for them, they'd be liberated from the stress of worrying about the terrible consequences of losing their job.

The problem for die-hard capitalists is that they believe that fear and stress amongst the workforce is good and necessary. They think that in order to maximise their own profits it's vital that the general workforce should be to afraid to push for higher wages or better working conditions for themselves. They refuse to support the concept of "a paid job for anyone who wants to work" because as beneficiaries of the capitalist system, they like it just the way it is.


Productivity

The appalling belief that it's necessary to keep a percentage of the workforce jobless and destitute in order to keep the rest of the workforce in their place is easily countered by the absolute mountain of evidence that happy and unstressed workers are far more productive.

In my view it's no coincidence at all that the UK has one of the most draconian and poorly funded welfare systems in the developed world, and that the UK is suffering an appalling productivity crisis as British workers continue to lag further and further behind workers in rival economies like Germany and France.

Poverty

I've outlined the case for Guaranteed Employment from various perspectives in this article, and also in this previous article from 2013. The last one I'm going to put forward is the reason that informed and motivated Tony Antkinson's career; the alleviation of poverty.

If every worker had a right to a paid job, then rates of poverty would decline dramatically. If every parent had a right to a job, then child poverty rates would be significantly reduced.

When it comes to the concept of Guaranteed Employment we're left with two positions to take. We either accept it as a potential solution to several pressing social and economic issues, or we dismiss it because we believe that in order for capitalism to function it's necessary for people to be afraid of unemployment, and for children to grow up in poverty, so that capitalists can take a bigger slice of the wealth for themselves.


What we can do

  • Learn more about Basic Income, which is another heterodox economic policy aimed at alleviating poverty.

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