Neoliberalism has tainted our relationship with employment

The era of job insecurity, falling wages and job shortages, has put the balance of power in the hands of our bosses and created a backlash against the very concept of ‘work’.

Philip Hammond: “There are no unemployed people.”
Philip Hammond: “There are no unemployed people.”

Over the last four decades politicians have told citizens that when it comes to employment creation the government is helpless and relies entirely on the good will of private investors. Thus, in our present times, ‘work’ is defined solely by that which allows capitalists to make a profit, and by our unhealthy obsession with consumerism.

A ‘natural’ rate of poverty

What people are not told is that Neoliberalism considers unemployment a macroeconomic necessity; a theoretical concept called NAIRU (Non-Accelerating Inflation Rate of Unemployment) prevents governments from reducing unemployment below a certain level in fear of rising inflationary pressures. This is what Mark Carney, the governor of the Bank of England, refers to whenever he talks about the UK’s “natural rate of unemployment”.

It is of course, nonsense.  A baseless fear of impending inflation which ensures chronic job insecurity for the benefit of corporations. The narrative was instrumental in undermining the Keynesian consensus of prioritizing the provision of employment. Thus, the neoliberals advocated that the private sector should become the main job creator and demanded that government restrained itself from providing employment to those the private sector chooses to reject. Less they restrict private sector access to cheap labour.

“Labour is not a commodity. Not subject to “supply & demand” It takes removal of labour rights to lower wages.”
Ann Pettifor (economist and author 25/05/2017)

Society abandons full-employment

Full employment targets were thus abandoned in the 1970’s, both in the UK and throughout the world. And even during the more lenient Labour governments of Blair and Brown, a portion of the population remained dependent on unemployment benefits, indefinitely.

J.K. Rowling may be grateful for the policies of the 1990’s but her story is the exception and not the rule.  For many, the belief that persistent unemployment was a desirable macroeconomic condition trapped them in unemployment misery.

The mixture of poverty, economic and social exclusion resulting from unemployment has been identified throughout the western world as a main cause of suicide, irrespective of the safety nets on offer. And the longer you remain in its web, the more difficult it is to escape.

“The overwhelming importance of having a job for happiness is evident throughout the analysis and holds across all of the world’s regions. When considering the world’s population as a whole, people with a job evaluate the quality of their lives much more favorably than those who are unemployed. The importance of having a job extends far beyond the salary attached to it, with non-pecuniary aspects of employment such as social status, social relations, daily structure, and goals all exerting a strong influence on people’s happiness.”
De Neve, JanEmmanuel and Ward, George W., Happiness at Work (February 1, 2017).

Class war rears its ugly head

To add insult to injury, Neoliberalism blames the unemployed for their misery. A decade ago the right wing media in the UK capitalized on persistent unemployment to label the unemployed as the scroungers of society. The result was a population prepared to vote to inflict lethal punishment upon those left behind.

Ken Loach's film "I Dalniel Blake" tells the story of two benefit claimants struggling with a benefit system designed to punish the unemployed.
Ken Loach’s film “I, Daniel Blake” tells the story of two benefit claimants struggling with a benefit system designed to punish the unemployed.

It is amidst the fear of unemployment, of social exclusion and the tyranny of capitalists that the idea of a Universal Basic Income (UBI) has gained ground.

There are many versions of UBI, the most popular is that which offers a minimum income (equivalent to a living wage) to replace unemployment as well as other benefits. It intends to provide freedom from exploitation by giving people freedom from the need to be employed.

The idea is not new and has appeared many times throughout history, championed most famously by the likes of Milton Friedman.

UBI vs traditional means tested benefits

Contrary to what most people believe, the role of benefits isn’t just one of compassion.

Means tested unemployment benefits provide an automatic economic stabiliser; in times of downturn they automatically cause government deficits to increase, generating fiscal stimulus which prevents demand from falling too low, and the economy from collapsing.

It is this automatic mechanism which often impedes Tory governments from reducing the deficit through cuts in public spending, even as they hack away at our economic safety nets.

But there is nothing automatic nor stabilizing about UBI. Making employment ‘optional’ for all risks undermining our productive capacity while incomes and demand are sustained. Inflation could make UBI inadequate as a living income very quickly, and would require increases, which would only repeat the inflationary cycle to destructive effect.

It is also not difficult to imagine those who do continue to work becoming resentful of UBI dependents, both for generating an inflationary burden and for choosing to become full-time consumers. It will not be long before the right-wing media capitalises on this resentment, demands that UBI dependents be penalised, and history repeats itself.

More so, if unemployment benefits alone are not an effective way of providing opportunity, it is unclear what would make UBI any different. Would it awaken the entrepreneurial spirit of the unemployed? Or would it just become an excuse to blame them for their lack of it?

“The robots are coming”

To tackle the fear of diminishing production, the notion that ‘the robots will soon do everything’ has been peddled primarily by Silicon Valley CEOs as one of the main arguments for a standalone version of UBI.

They maintain that workers are irrelevant now that supermarkets have automatic tills, and human ability will have no value once UBER introduces self-driven cars. From now on the robots will make all the goods, and the robots will make the robots that make the goods, and the robots will make the robots that make the robots that make the goods. And the role of humans in servicing humanity will soon be obsolete.

But not to worry, they say, because robots will bring with them a sort of paradise for workers where they can just sit back and do only that which pleases them, with no labour responsibilities to worry about.

Leave that to us, they say, relax. For this is a paradise CEOs don’t want for themselves. They are essential, you see, robots could never replace their almighty intellect.

The robots are coming and there are no more jobs to be done, despite the challenges of climate change, despite the shortages of nurses, engineers, teachers, police, fire service, social workers, despite the need to tackle loneliness in old age and an aging population, and despite the dire state of our society’s mental health.

In the future, robots will cure depression with radio waves, and there will be absolutely nothing that human interaction can achieve that could not be done better by an intel microchip. Except of course, the jobs of CEOs.

The truth is, CEOs would never allow robots to take their power away from the means of production. Reducing people to consumerism is absolutely fine, so long as that helps to remove from them the burden of providing them with job opportunities.

Despite the hype, there is no reason to believe that the current exponential technological advances will have a different effect on our individual productivity than the industrial revolution once did. History tells us that technology always displaces, not replaces workers, and it often brings with it new sets of labour demands ready to be fulfilled by the next generation.

Workers should ignore the Silicon Valley doomsayers and welcome technology as a means to achieve our collective aims, and enable us to focus on other ways of contributing to our collective well-being.

New technologies always bring new types of labour requirements.
New technologies always bring new types of labour requirements.

Protecting workers from the tyranny of capitalists

How then, do we ensure that workers are not treated as disposable commodities by the private sector?

Put simply, the only way to eliminate job insecurity is through job security. A government funded job guarantee (JG) would smash the neoliberal dogma which condemns a portion of the population to unemployment. It forces the private sector to compete against the public sector for workers, and can be applied in conjunction with other types of benefit safety nets, including UBI.

A JG unleashes the UK government’s full capability as the monopoly issuer of Pounds Sterling (£) by offering both a guaranteed minimum income and maximizing the nations use of productive resources.

Society as a whole would benefit. The jobs to be done, could be democratically organized at local level, and defined as we please according to our needs and available skills (do we need more musicians, artists, charity workers, child carers, inventors, etc.?). It could offer flexible employment options and a choice of part-time or full-time employment.

Even if machines were set to cover most of our basic needs, there remains an infinity of ways in which we can enrich each other’s lives.

“[standalone] UBI supporters live under the mistaken impression that the only productive, useful jobs are jobs from which the capitalist can derive monetary profit.”
Ellis Winingham (US Economist).

A job guarantee would also serve as a superior automatic economic stabilizer, and diminish the risk of inflation through maintaining a constructive link between demand and productivity.

Time for change

Transitional periods such as the one the UK currently inhabits present both risks and opportunities. During times like this, it can be difficult to discern between them, as risks can be disguised as opportunities, and vice-versa.

Whatever solutions we propose to tackle our present problems, it is imperative that we do not lose sight of what matters to our happiness and collective well-being, nor settle for the continued dominance of Capital. A right to full participation in economic life through employment must be at the heart of a new social order, along with freedom from destitution, a decent wage, a good work-life balance, and real power over the means of production.

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Patricia Pino

Patricia Pino is an engineer, artist and campaigner living in London. She joined the U.K. Labour Party movement in early 2015 and is a board member of Republic: a non-politically affiliated organization campaigning for an elected head of state. Though her values are aligned with those of the organizations she has joined, she believes in thorough questioning of the issues rather than blind loyalty to any particular ideology. Throughout her involvement in the Labour movement, she written extensively on issues regarding economics. An advocate of Modern Monetary theory, she endeavours to present new economics findings in a way which is accessible to the masses. She has often been assisted by renowned MMT economist, Bill Mitchell, in this task. It should be noted that she writes only on a personal capacity — her views may not necessarily reflect the views of the various organizations she has joined.