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Basic Income or Job Guarantee: What is to be Done?

Official unemployment in Australia is at 5.9%, youth unemployment is increasing in full time AND part time labour markets, the number of hours worked is declining each month, and the labour under-utilisation rate at 14.6%. Is it time to start implementing a universal basic income because there is simply not enough work? Or is it time for a job guarantee so that we can do all the work that we need done to create a fairer, sustainable society, fully automating as much useless toil as we can, and allowing us as humans to reach our full potential?

I am personally in favour of the latter. There is plenty of work, just an unwillingness to pay people a real wage to do it.

My inspiration for this view comes from the over 130 years ago, with William Morris’  Useful Work versus Useless Toil .

Morris was aware of automation and where the power and motivation for its introduction comes from. In his words:

“They are called “labour-saving” machines – a commonly used phrase which implies what we expect of them; but we do not get what we expect. What they really do is to reduce the skilled labourer to the ranks of the unskilled, to increase the number of the “reserve army of labour” – that is, to increase the precariousness of life among the workers and to intensify the labour of those who serve the machines (as slaves their masters).”

Michael Kalecki in Political Aspects of Full Employment made the same point as to how capitalism used the threat of unemployment to discipline workers into accepting the useless toil and on how threatening full employment was. He said:

“Industry leaders…dislike of the social and political changes resulting from the maintenance of full employment.”

His contemporary J M Keynes, from a different perspective, was aware of the need to have decent work for a decent society, rather than servant work (waitering, cleaning) to keep us in harness.

Recently the useless work we do has been highlighted by David Graeber writing about Bullshit Jobs:

“In the year 1930, John Maynard Keynes predicted that, by century’s end, technology would have advanced sufficiently that countries like Great Britain or the United States would have a achieved a 15 hour week…Instead technology has been marshalled, if anything, to figure out ways to make us all work more.”

jobs-1

Women march for jobs in New York, 1933. Library of Congress

Work: workers control or technocracy?

In the 1960s, Andre Gorz developed a strong position on these issues, one that many on the left saw as a betrayal of the working class as the agents of historical change. My reading of Gorz was that he recognised the drudgery and mindlessness of much paid employment, saw that automation was not a threat to workers but a means of liberation, given worker control (see Gorz: Critique of Economic Reason; Capitalism, Socialism and Ecology; Farewell to the Working Class; Workers Control (a pamphlet); and in particular A Strategy for Labour (from 1964) where he stated clearly that the development of a technocracy was not a necessary condition of increasing automation of work. A technocracy saw itself as being outside class, in Gorz’s view. This mentality can be seen in the neo-liberalism of all major political parties today.

Worker control reinserts people in the centre of technological change. A job guarantee would help this process because it means that all who can work are able to for a real living wage, as in the notion “from each according to their ability to each according to their needs”. Combined with workers control, they would have agency at workplaces to determine how work is done, what is produced and when they will produce it. The role of worker organisation (i.e. trade unions) is central here, with workers able to organise around a common interest in decent material living standards and decent environmental and social standards in what they produce and distribute.

A universal Basic Income (BI), determined by the experts of the state apparatus (the technocracy), leaves little room for contestation of that income or social and economic policy. As Gorz put it, a new agenda and new purpose for unions must come from moving from “the self-management of work to the self-management of life”.

More recent work on job guarantee ideas in Australia has been driven by the tireless Bill Mitchell, whose Billy Blog gives a daily dose of modern monetary theory (an approach to political economics that a job guarantee marries to). He has been a fearless champion of those who are unemployed and cut off from society, and his work with colleagues at the Centre of Full Employment and Equity at the University of Newcastle has put a solid research focus on how to develop full employment, why it is not only possible but necessary, and why ecological sustainability is at the heart of full employment policy.

Internationally, Robert Pollin (Back to Full Employment, MIT Press, 2012) and Heidi Garret-Poltier (Creating a Clean-Energy Economy: How Investments in Renewable Energy and Energy Efficiency Can Create Jobs in a Sustainable Economy Lambert Publishing, 2011)) have outlined how the USA can develop full employment via the creation of a sustainable green economy, Pavlina Tcherneva has pointed out that a job guarantee gives a sound basis for a good society and ensures full participation (without coercion) to women and “minority” (i.e. less powerful) social groups. Stephen Hail, another economist working on this in Australia (in Adelaide) and who regularly promotes the idea (see his facebook page Green Modern Monetary Theory and Practice for regular updates) argues strongly that a BI promotes the division in society between unemployed and employed, despite providing an income to all unemployed. This division excludes and does not seek inclusiveness.

As Hail has expressed it:

“We need never run out of useful things people can do for each other or for the eco-system, so we need never run out of potential paid occupations. Automation frees us up from doing some things so we can spend our time on others.”.

A job guarantee would define a minimum living wage, as opposed to a BI that would provide a state-sanctioned allowance and thus most likely act a subsidy for employers. A BI would allow employers to get cheap labour because those workers will be getting a certain level of income from elsewhere. Moreover, BI does not act in a countercyclical economic way, as the job guarantee would in providing a “buffer” to the unemployed, thus reducing the power of management over those dependent on a wage.

Recent work by scholars on labour market transitions (e.g. Gunder Schmid and Bernard Gazier in Europe, John Buchanan and Ian Watson in Australia) emphasizes the need to provide income and thus health and security to people as they transition through life. A flexible labour market that workers want would allow people to easily move in and out of jobs into training, sabbaticals, child birth, child care, general study, other types of work without the stresses we all face in trying to find new jobs if we drop out of paid employment.

Ongoing controversies and lessons from labour struggles

The BI has thoughtful and influential supporters, not least Philippe van Parijs, Robert Skidelsky, Paul Mason, Yanis Varoufakis, Guy Standing, Daniel Raventos and Julie Wark, for example. All these thinkers have strong egalitarian a social justice standpoints from which they approach the issue. As Navarro has argued  there is no uniform interpretation of a BI, just as Bill Mitchell notes that the job guarantee idea is not a locked in program.

Navarro points out that the reason Keynes’s idea of the 15 hour working week (or Gorz’s 1,000 hour year) are not in place is because of political variables, particularly the power of capital versus labour. It is not technology that holds back reducing the work week. High unemployment and social deprivation are not the result of technological advancement or the lack of need from humans, but a deliberate political choice by conservative forces who hold the power of the state and corporations in their hands. Organising against these forces can be done via work which remains central to humanity, and provides shared feelings, experiences and assumptions at a collective level, and allows local development of alternatives and local power.

Small examples may be seen in the Spanish cooperatives of the 1930s and the Spanish town of Marinaleda today (see Dan Hancox: The Village Against the World, Verso, 2015). Hilary Wainwright has set out the great potential of the Lucas Aerospace example recently:

“We are in new times for trade union organisation but interest in democratic economics is increasing, with the spread of green and solidarity economies and commons-based peer-to-peer production. All of which has deepened ideas about connecting tacit knowledge and participatory prototyping to the political economy of technology development…”.

The Green Ban movement and worker control on some building sites in Sydney in the 1970s were other examples of the assertion of worker and community power at local levels that challenged employer/government technocratic assumptions. How work was organized is central to these struggles and victories:

“We need to control the production of that wealth so that it can be allocated towards social need not profit” 

The current state of the labour “market” is not technologically driven, inevitably eliminating work, but a function of capitalism’s drive to accumulate more wealth for the few. To accept this state of affairs and to ameliorate it by paying a BI does not challenge that inequality or the power structures. It depoliticizes, just at a time when the need for political economic opposition and alternatives are more crucial than ever for planetary survival. A BI seems an acceptance of the oft repeated Thatcherism “there is no such thing as society.

The Maoist nation of contradiction (it is not either/or but both/and) indicates a way forward. My conclusion from the current discussion is that the job guarantee provides a superior political economic approach as a way of attacking unemployment, a situation caused by politics not technological advancement. Providing jobs that are constructed for and created by workers who are able to use their imaginations and creativity together provides us with a way to shape an ecologically sustainable future ourselves, rather than having a technological state apparatus imposing its form upon us.

Neale Towart

Radical Leisure

In his classic 1967 article “Time, Work-Discipline and Industrial Capitalism,” E. P. Thompson described English workers’ everyday struggles against the capitalist regimentation of life. Workers of many sorts resisted the very designation of time as the proxy for work, and time measurement as the measure of labor; people still held onto earlier, alternative ideas of work, time, and leisure. In studying pre-capitalist societies around the world, Marshall Sahlins and later anthropologists have documented other cultures’ similar prioritization of a richness of social interaction over that of material goods. In what Sahlins called the “original affluent society,” affluence was measured by leisure rather than by the accumulation of wealth.

The union movement pushed for reduced hours until the apparent failure of the campaigns in Australia for a 35 hour week. This happened as the”neo-liberal” order reasserted itself via the oil crisis and what those on power called the crisis of democracy (ie there was just too much of it going on for them to be able peacefully accumulate anymore!)

PKIU More leisure ours yacht

Eva Swindler in Monthly Review last year asked “why did organized labor stop fighting for shorter hours? No one seems to know. Clearly this choice coincided with other deeply conservative union developments, including purges of leftists from the ranks. A desire for free time was even painted as an effeminate demand of the weak and women. Whatever the causes, however, it is clear that since organized labor ceased its push for shorter hours, work hours leveled off and then began lengthening, despite ever-increasing worker productivity. If work time is to be reduced again, history shows that it is workers themselves who will have to accomplish this.

The Cashless Debit Card: a review of the reviewers

Janet Hunt reviews the reviewers of the cashless card, and finds them wanting.

The concept of a ‘Healthy Welfare Card’, now renamed as
the Cashless Debit Card (CDC), was a recommendation
of the Forrest Review into Employment and Training
(Forrest 2014). It was seen as a development from
income management which has been occurring in parts
of Australia since the Northern Territory Emergency
Response, when it was first introduced for Aboriginal
communities there.  In March 2017
the Department of Social Services released a ‘Wave 1’
evaluation undertaken by Orima Research of the CDC
trials in Ceduna and Kununurra.

Janet-Hunt_web

One of the questions under review that has gained a lot of attention was “Have there been reductions in the consumption of alcohol, illegal drug use, or gambling?”

Some Survey participants said they though there had been “some” reduction in at least one of these. However 77% indicated no change. Results varied between Ceduna and Kununurra perhaps pointing to other factors being crucial. Concern about ICE use was heightened.

Police statistics indicated little or no change in crime and violence Ambulance call outs to public places did reduce, but seems to have been replaced by more call outs to private locations

Overall what is not highlighted by the official review is that there are many social problems that could be addressed by positive interventions in the areas of housing (including domestic violence safe houses), employment and public health provision (particularly mental health).

“If these trials are not helping people who live in
considerable poverty and a different program could, then
change is required. Positive programs and services to
address the problems, including housing and job creation
that could make many more people’s lives better (Klein
2017), may offer far greater value for public funds than the
CDC program and do more to improve Indigenous lives. “

The changing nature of apprenticeships: 1996–2016

NATIONAL CENTRE FOR VOCATIONAL EDUCATION RESEARCH
HIGHLIGHTS
Adult apprentices now represent a significant proportion of all apprentices in training, with 28% in the trades and 45% in the non-trades compared with 8% and 22% respectively, 20 years ago.
For the first time since 1996, a decline in the number of non-trade apprentices has resulted in the proportion of trade and non-trade apprentices converging, across both age groups, but more so for the younger group.
The increasing prevalence of and support for alternative models of apprenticeship delivery, in particular, the proportion of adult apprentices completing a trade apprenticeship in two years or fewer, has increased markedly over time, from around 28% in 1996 to over 50% in 2016.
Adult trade apprentice completion rates have steadily increased over time, while younger trade apprentice completion rates are on a slow but steady decline

Too much identity politics and very little class politics?

Scandinavian countries have been a shining light for worker and social rights, but the evidence is that globalism has undermined equity and workers rights. Asbjørn Wahl  looks at what has happened and what are some paths forward.

In our European surroundings, the level of unionization has almost halved over the last 30 years, and labour rights, labour laws and collective agreements have systematically deteriorated and/or been completely abolished. Most things are worse than here in Norway, but that does not mean that we are unaffected by this development. Much is going in the wrong direction here, too, even if it unfolds more slowly than in most of the rest of Europe. There is no doubt that Norway is still on the upper deck of the global welfare ship, but much indicates that it is the upper deck of Titanic.

In short, we can summarize that the inequalities in society are increasing also with us, and more authoritarian relations are emerging at the workplaces, including through an Americanization of organizational and management models, as the public Work Research Institute has so well documented. Wage growth for those at the bottom of the ladder has stagnated.

A newsletter published by the Norwegian Confederation of Trade Unions (LO) summarized this development quite well in a recent article, based on a new report from the independent research institute Fafo:

fafo
“If the trends continue as they are today, Norway will soon have as great inequalities as Germany and Great Britain. A new Fafo report shows that Norway is no longer a country of low inequalities. Norway is changing rapidly, and the lowest paid are the losers. Wages of the lowest paid in the private sector has virtually stood still since 2008 (…) fewer and fewer of those with the lowest wages have a collective agreement” (11/09/2016).

More low-paid work is part of the problem, not the solution

Reducing Wages of Australia’s Lowest Paid workers would worsen the sociao-economic situation says John Buchanan

Employer organisations such as the Australian Retailers Association, supported by the federal government, have recently argued that wages for Australia’s lowest-paid workers should be increased by less than inflation. This would mean a cut in real wages. But none of their assertions are sustained by evidence or research.

australia-productivity

Three arguments have been put forward to cut the minimum wage. First, that the cut will ensure employers create more low-paid jobs, thereby reducing unemployment. Second, that low wages are not a problem anyway, as low-paid workers are “often found in high-income households”. Finally, that there have not been sufficient productivity improvements to support wage increases for the low-paid.

This is counter to the current thinking on wages. After advocating for decades that Australia needed more (downward) “wage flexibility” to solve unemployment, key international agencies – including the World Bank, IMF and the OECD – now recognise this misses the point. Australia’s award wages for our lowest-paid workers are among the highest in the world and this is now recognised as a good thing.

Meanwhile, deepening inequality, much of it originating in the labour market, is retarding the demand necessary to sustain output and employment growth. If people’s real earnings fall, then they have less to spend. When people spend less, demand for goods and services falls, and in turn so does the demand for labour (i.e. jobs). This is why a cut in wages for low-paid workers will not create jobs; rather it will reduce living standards for those earning them.

Benchmarking Working Europe 2017

The European Trade Union Institute (ETUI) has some sobering statistics on the state of Europe for working people, and some solid proposals on how to deal with issues.

Benchmarking-Working-Europe-2017_detail

The European Commission’s autumn forecast from November 2016 (European Commission
2016a) predicts GDP growth slowing to 1.5% in 2017, with employment
increasing by only 0.9%. These modest forecasts reflect concerns over possible economic
uncertainties elsewhere in the world and over the UK’s preparations to leave
the EU. The European Commission has been worried enough to argue for the benefits
of a slightly expansionary fiscal policy across the euro area countries, albeit with no
means to ensure its implementation. This, it hopes, will supplement the effects of its
investment plan and the ‘structural reforms’ implemented in recent years in a number
of countries. Unfortunately, these measures will bring very few benefits.
The key to sustained recovery should be fiscal policy, both to stimulate internal
demand and to create the basis for a more serious investment plan.

The European Commission’s rhetoric and accompanying policy measures reflect neither the depth of the problems nor the extent of policy change required to tackle them. There has been a verbal recognition that past policies have failed and that a big change is needed if GDP and employment growth are to be restored and maintained, but this has led only to half-hearted and uncoordinated responses. The key to supporting sustained growth is a switch to expansionary policies, raising demand through higher public spending and higher pay
levels.