Three Cheers for the Unemployed

The Conservative government has made much fanfare recently of the fact that, alongside record employment levels, they have brought unemployment levels down to their lowest point since 1975.

The Conservative government has made much fanfare recently of the fact that, alongside record employment levels, they have brought unemployment levels down to their lowest point since 1975. Thank God! The figures, published by the Office for National Statistics, surely give us proof, if ever it were needed, that the Tories are the party to be trusted with the economy. Thanks to their unique blend of welfare reform, economy-boosting policies and a dash of Tebbit-esque ‘On-yer-bike’ tough love, people are finally finding the work they want.

But, of course, if we consider the matter a little more carefully, it’s not that simple. Beneath the surface lies a far more complex economic picture, as well as several long-term concerns with post-crisis capitalism.

Firstly, real wages in the UK have fallen more than any other OECD country save Greece., This means that, In spite of a record number of people working, the amount an average worker can buy for the pay they receive has dropped considerably.

Secondly, the UK has witnessed a huge increase in insecure jobs, with record numbers of people now working on zero-hours contracts, and a dramatic rise in ‘precarious’ jobs. More people may be working, but the security and permanency of many of these jobs is questionable.

These facts alone give us pause before celebrating the latest employment figures. But we should go further. If capitalism can only end unemployment by locking people into poor-quality work, then perhaps treating the unemployed simply as a “problem” to be solved misses the bigger picture.

Jobs and growth are supposed to be interlinked. As people find employment and make money, they are able to go out and spend, contributing to national growth. But this isn’t the case with post-crisis work. There has been no concomitant rise in growth as unemployment has fallen. UK growth is still lagging behind the US, Germany, France and Canada among others, even with the latter two having considerably higher rates of unemployment. Future prospects look grim as well, with the Office for Budget Responsibility revising the growth rate forecast for 2017 from 1.6% back in March to a mere 0.2%.

We have all heard of ‘jobless growth’, where the economy enjoys an upturn which is not realised in an increase in jobs. Theresa May and her government, however, seem to have masterminded the phenomenon of ‘growth-less jobs’.

The High Employment but Low Growth Economy

Celebrating the creation of a high-employment, low-growth environment as an apparent win for the Conservative’s post-crisis economic policy is a huge danger for the economy, encouraging “low-growth” businesses to flourish.

There can be many reasons why businesses contribute little to the economic growth of a country, low worker pay and ‘off-shoring’ of profits being just two, reflecting a lack of serious investment in skills and capacity at home. Despite a series of allegedly pro-growth initiatives, the Tory government has failed to foster conditions which might entice businesses to engage in this.

The result of this is particularly clear outside of the UKs major cities which have few links to our remaining strong sectors, with most satellite towns and villages failing to benefit from what little growth the UK is managing. This leaves much of the economy stuck in a productivity crisis, which, with employment levels so high, is unlikely to be brought to an end any time soon.

The Reserve Army of Labour

One of Marx’s key observations about the capitalist organisation of labour was that it requires a large, reserve standing-army of unemployed individuals, ready to take up the jobs offered by new and expanding enterprises. As Marx puts it:

“Relative surplus-population is the pivot upon which the law of demand and supply of labour works.”

The idea is a simple one: in order for overseas businesses to set up within a country, or for domestic businesses to expand, they need unemployed people. Without unemployed people, there is no one to do the jobs necessary for that expansion.

In granting unfettered access of our national ‘talent pool’ to employers who specialise in low-hours, precarious and low-productivity jobs, we are wasting the skills and abilities of a whole cross-section of our society. This inevitably makes the UK a much less attractive prospect for potential employers. As a result, Britian is teetering on the precipice of a skills crisis that we can ill afford.

What’s more, it is crucial that this standing army is healthy, happy and educated in order that they can step in and out of new roles as they become available. Brow-beating them with threats of sanctions and bamboozling them with convoluted systems and processes does not help to do this. Neither does leaving them penniless for weeks at a time, forcing them into hunger and increasing the risk homlessness. Poor treatment of the unemployed leads to worsening physical and mental health and, while on a moral level alone this is unacceptable, it is also a fact that poor physical and mental health has a detrimental effect on people’s ability to make a success of work once they have found it.

The unemployed are not a problem, but they need to be supported. Force firms to compete for them and they can support the expansion of businesses and the creation of good-pay, good-condition jobs that help to create a sustainable economy.

This conclusion is at odds with the prevailing attitude towards the unemployed in the UK, fostered by the Conservative government and much of the media. Years of victimisation and vilification of the unemployed has led the population at large to dismiss them as worthless freeloaders who contribute nothing and live a parasitic existence off the state. But this is not true. In reality, the unemployed perform a vital service to society, often living in adverse conditions to do so. It is in our best interests to treat them well, and to help them remain physically and mentally fit. If the government really wants to help those who are struggling to find work, they need to make sure they are in a position to embrace work and prosper in new roles by keeping them healthy, happy and safe, and recognising them for what they are: essential to a brighter future for everyone.

With all of this in mind, celebration of these low-employment figures is more than a little premature. Clearly, it is not the outcome of a booming, successful economy. Rather it is a symptom of an increasingly exploitative economy, and a government that is obsessed with getting people into whatever kind of work is available, regardless of how damaging it is for the individual, the economy or society as a whole.