Labour’s jobs guarantee – addressing the big questions

Ed Balls has today announced that Labour’s jobs guarantee scheme – likely to be a centrepiece of its programme at the next election – will be extended for the lifetime of the next Parliament if Labour wins the election.

It’s hugely important that Labour gets this right.  As a society and an economy we continue to feel the effects of the unemployment the Tories created last time they were in office; this time around we have the added issue of a vicious cost-of-living crisis.    It’s also important because  the UK labour market is facing undertain and very difficult times.  A thourough and comprehensive piece by Flip Chart Rick summarises the difficulties we face – a potential future of casualisation and  low-value employment for increasing numbers of people.  Without significant changes the future of work looks grim.  Both in the long and short term there are huge issues for an incoming Labour government.

Of one thing we should be absolutely certain: we must not offer workfare.  As I have written before, the case – moral or economic – for workfare-style schemes, in which people are obliged to take private sector work to “earn” their benefits, is utterly discredited. In economic terms, not only does it subsidise large firms and undermine the position of their smaller competitors, leading to the loss of jobs and the bidding down of real wages; there is now an emerging view that such schemes are actually contributing to the cost-of-living crisis that Labour seeks to address.  And that is before you consider that many long-term unemployed people have paid national insurance for years.

And there is a bigger issue around the rhetoric – sadly sometimes used by some on the Labour right when justifying workfare and punitive sanctions – of “making work pay”: the fact that the gains of economic growth in recent years have largely accrued to rentiers, not workers for a wage.  We know that as GDP levels crawl painfully back to 2008 levels, most people have no real sense that any recovery is under way.  That’s because real wages continue to fall, and those in work – for the most part – simply don’t receive any of the benefits.

So where does that leave the Jobs Guarantee?

There is considerable evidence that Labour has learned at least some of the lessons.  Ed Balls will make it clear that there will be no Government subsidy unless employers can demonstrate that they are not replacing existing jobs, or using the scheme to cut hours.  Writing in Labour List, Steven Timms asks the crucial question  of why, when the economy grows, many people – especially the young – don’t feel the benefit.

And that’s the question that, in the long term, Labour has to ask: what can be done to shift the balance of rewards back from rentiers to wage-earners?  And, more importantly, how do we deal with a model of late capitalism appears to be increasingly incapable of producing secure, well-paid employment for people who sell their labour, and in providing the  resources to fund a more generous social settlement?  It seems clear to me that, insofar as it avoids the economic pitfalls of workfare,  the Jobs Guarantee does many of the right things in the short term. But it’s really a sticking plaster.  Something much more fundamental is needed.

If Labour is serious about being “the party of work” it has to ask some fairly fundamental questions about what work means, and what it’s for.  Meaningful work is part of the human condition; when people are deprived of it their health – mental and physical – suffers.  But workfare is part of the problem, not the solution; and in an economy that seems increasingly incapable of generating paid, secure work in the traditional sense we need to look further.  I still remain convinced that the basic income – for all its problems – could form the nucleus of a new settlement, liberating people from the need to do meaningless work – as so often, William Morris’ phrase about useful work versus useless toil comes to mind.

So by all means let’s have the Jobs Guarantee as one tool to tackle the current economic crisis.  But we need much bigger, much more ambitious thinking too.

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