Full, not contingent employment

From The Green Benches: an analysis of the ONS data shows that since 1979, fewer than 4 million jobs have been added to the UK economy. More tellingly, 55% of the jobs added in the last two decades have been part-time jobs.

This is alarming, and not surprising. Since the 1970s the UK has been undergoing an accelerating adopting of neoliberal thinking and policies from the United States of America, prepared and checked for compliance in the plethora of highly influential right-wing thinktanks which were spawned in the 1950s (The Curse of TINA) but which continue to reproduce rapidly and which bridge the Atlantic.

The temporary employment sector in the US had a turnover of $547M in 1970. In 1980 the turnover had increased to £3.1B, and by 1992 to $16.8B.  General Motors eventually ceded its place as the country’s largest employer to Manpower Incorporated, a multinational temp agency. Manpower Incorporated’s revenue grew by an average of 7% per year during the 1980s. (See Robert Parker, “Flesh Peddlers and Warm Bodies)”. Tellingly, the expansion of “contingent employment” is not cyclical: it has continued to grow during recovery and recession. Secure, full time work has been replaced by insecure, part-time or even fractional-time work. Skilled work has been replaced by unskilled work. The standard explanations: that it is business’ response to technological change, or to mergers, or to globalisation are inadequate or incorrect. It has been normalised.

Business (and Government) seems to be driven by the priority of cost cutting, and by an urgent anxiety to “externalise” the workforce. I have to own up to writing this piece on a Mac, but this reminds me that regardless of its vast and rapidly accumulating wealth, Apple’s US presence is minuscule. The manufacturing is managed and done by an externalised workforce outside of the US. Similarly, successive governments of the United Kingdom since the 1970s have externalised the public workforce; first to various “agencies” and QUANGOs but then to private corporations. The current Coalition government has only one objective: to end state provision of services. To do so it is both cutting cost by cutting jobs and by cutting terms and conditions, and continuing to position the roles of the public servants who remain so that they can be moved from state employment to the private sector. Even the armed forces are not immune, as a quick study of private security contractor numbers will demonstrate. Police stations in parts of the UK now have personnel wearing the logos of a multinational security corporation. A private, profit driven management layer has been inserted into an NHS hospital, and NHS services are being subcontracted to private corporations. In the education sector the distinction between a state school and an independent school is being removed: for-profit businesses are running state schools. Private companies are running welfare and care homes.

For business (and for public services run like businesses), profit is sought through the continuous reduction of costs which often goes under the guise of “continuous improvement” and almost always goes under the shameless pretence of “efficiency savings”. It is as if business has bought into the idea that businesses are only profit-maximisers, one of the magnificent myths of neoclassical economics (see Prof Steve Keen, Debunking Economics). Businesses have as their (sometimes only) reason for existence, the reduction of unit labour costs.

The complicity of UK and US governments in this transition from full- to contingent- employment since the 1970s cannot be denied or obscured. Using the misdirection of increasing “competitiveness” and creating a “flexible workforce”, successive governments have disarmed and suppressed Trades Unions through legislation and where necessary through use of police and security forces. (Elsewhere it was done through assassination, imprisonment, and torture as in Chile and indeed wherever the Chicago Boys directed dictators’ “structural reforms”. ) As a direct result, workers’ rights have been all-but eliminated. The terms and conditions of employment whether it be with regard to hours, overtime pay, pensions, leave, or dismissal have been rewritten time and again, ever in favour of the employer, and this has been done with the full support and intervention of governments.

After the 1930s and World War II UK and US governments had commitment to “full employment”. But full employment and an empowered labour force are both blockers to compression of unit labour costs. The goal of maintaining full employment has replaced with an aim to maintain insecure, part-time and fractional employment together with unemployment; empowerment has been replaced by fear: you are lucky to have not even a job, but some work.

There is an obvious but massive self-inflicted problem caused by reducing incomes, which is that people cannot afford to consume. The solution looked like a win-win, especially for the financial sector: indebtedness. And there is a related problem caused by insecurity: unwillingness to be indebted (unless you are so impoverished you simply have to borrow to live). The current debt deflation is not a sovereign debt problem, that is a misdirection; it is a private debt problem: the overwhelming debts of the private financial sector and of households.

Because the perfect business in the neoliberal world is one that can create money, create money from that money by lending it, and create even more money from that money by the trade in derivatives; trade that provides nothing to the businesses whose shares are being repeatedly bought and sold. That business is banking, particularly investment banking. It requires hardly anyone.  Banks create money from nothing, whenever they create a loan. (97% of money in the UK is created by private banks: the notion of “governments printing money” is laughably outdated). Trades are done automatically by computer programme; stacks of servers processing millions of trades, shares being “owned” for milli-perhaps micro- seconds. Trades are profitable whether share prices rise or fall: only volumes matter.

The creation of employment is therefore what us IT people call, without irony,  “non-trivial”,m and there are a number of prerequisites.  The first thing to recognise is that we don’t just want jobs, we want fairly paid, full-time jobs with security and reasonable terms and conditions. In other words, the exact opposite of the exploitative work found in China and elsewhere and not the return to the early 1800s seemingly the aim of the present Coalition.

The next thing to admit is that there has to be a rejection of TINA and a complete revision of our cultural attitudes to employment (and to unemployment). There must be a recognition that there are services which the private sector cannot provide, but which the private sector needs and which must be provided by the public sector using tax and borrowing. Those things include healthcare, education, utilities, welfare and pensions. We must aim to end fear.

Similarly there has to a fundamental change in attitudes of and towards business. Business has to be seen as socially responsible and make itself part of the community, which means businesses must not be allowed to avoid or evade taxation. Employees must be respected and valued, not burned and churned. In other words, the whole nonsense that is neoclassical economics’ theory of maximisers has to be thrown out. Business’ objectives must be long-term and driven by quality, not short-term and driven by cost-cutting. This means that the ownership and directorship of businesses must be secured and protected from the carpetbaggers and looters who buy businesses, self off their assets, load them with debts then sell. There have to be ways to make businesses more stable by preventing their owners and top managers from looting them. Businesses must add value: derivatives trading has to be stopped.

We must promote and demand ethical employment. Exploitation of employees must be seen as unacceptable, not as cheerily macho management.

This will take time. In the short term there are number of things we could consider:

  • Stop slashing public employment. You cannot create employment by creating unemployment.
  • Stop offshoring and favour UK businesses which employ in the UK
  • Tax businesses, bringing into use money currently lying idle or being used for speculation.
  • Initiate and drive a government programme to build good quality, energy efficient, social housing. Lots of it. Then look at the rest of the housing stock.
  • Refresh school and hospital infrastructure
  • Put an end to unpaid overtime and introduce maximum working hours.
  • Encourage home working and local work-bases to reduce commuting and revive small businesses to support people in dormant towns and villages. Deploy broadband nationwide.
  • Nationalise the energy and water utilities on order to start a real Green revolution by refitting all buildings to be energy efficient and improve infrastructure such as mending pipes and refitting pavements and roads to collect rainwater.
  • Address the agriculture industry to supply local markets and shops (It has been estimated UK agriculture and related industries need over 60,000 new people in the next few years)
  • Help small businesses with cash-flow by enacting legislation to make sure invoices are paid on time.
  • Create a national – or, preferably, many local – banks, or credit companies to invest in local businesses

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