Hard Work: why we need to change the way we think about work, pay and benefits

The concept of work is at the heart of contemporary political and economic rhetoric.  Slogans about work – about hard-working families, about backing the people who work hard, about being the party of work – pepper political discourse across the political spectrum.  But work is in crisis in a way that you would find hard to deduce from mainstream political discourse.  How do we address this?

In the UK, it is a commonplace that real wages have fallen dramatically in the years since the coalition took office.  But that is really the catastrophic tail end of a long-term crisis.  Real wages – especially for those in the lowest-paid jobs – began to fall long before the economic crash of 2007-8; and there has been a long-term shift in national income from wages to rents on assets.  Increasingly the UK – in common with other Anglo-Saxon economies has become a rentier economy.  Insecurity, zero-hours contracts and casualisation characterise an economy in which underemployment is as significant a factor as unemployment.

And, with prices generally soaring – especially of housing – the number of people in full-time work who need the support of the state has increased dramatically.  And this is the heart of the crisis of work – the basic capitalist deal is that you can support yourself, and your family by selling your labour; but that is clearly not the case.  In the UK, millions of people in full-time work need top-ups from the state in order to afford the basics of life. In housing above all, the average wage – let alone the minimum wage – buys less and less.  We have become a society defined by our inability to afford the houses we were brought up in.

At the heart of this is a fundamental question – can modern capitalism support traditional notions of full employment?  There is already a growing school of thought suggesting that it cannot.  I have blogged before about the phenomenon of secular stagnation, which a growing number of economists – including Larry Summers and Paul Krugman – argue characterise our modern economic system, in which full employment only occurs during times of unsustainable boom.  The implications of this are clear – more than ever before, and certainly more than in the 1930s, unemployment can only be understood in terms of systemic economic factors. To discuss it in terms of individual fecklessness or failure is frivolous as well as cruel.

But political rhetoric seems further away from understanding this.  The discussion of work and benefits is infused with the language of personal blame in a way that has not been the case for a century; with the British Government suggesting that those in receipt of benefit should be psychologically assessed for their attitude towards work, or mandating one-size-fits-all “treatment” for those unable to work due to mental illness, cod psychology is meeting Victorian narratives of desert in a chilling and horrifying way.  The work of Piketty shows that the assets of the wealthy are generated not through work, or innovation, or genius, but by inheritance; at a more mundane level we are moving into the second generation of people in Britain whose only hope of buying a house is support from their parents.  Programmes to put the unemployed into work for their benefits have simply destroyed job opportunities for the unskilled and semi-skilled, reducing real wages while doing absolutely nothing to develop the skills base needed for sustainable employment.

And yet mainstream politicians still talk about the importance of being “hard working” – whether or not as members of families – and claim to speak on behalf of those who strive rather than skive.  It’s a rhetoric that may appeal to a certain kind of audience, and to a certain taste for easy moralising, but economically it is irrelevant and damaging.

And it damages social cohesion.  Vicious demonisation of those receiving benefits gains traction because those in work have seen their living standards fall so dramatically, and become easy fodder for tabloid myths about people living a high life on the state; some Labour politicians, who should know better, have lost the intellectual and moral fibre to oppose electorally cynical and gratuitously cruel politics like the benefits cap, and appear happy to ride this particular tiger. And meanwhile the race to the bottom continues, and the in-work poor are pitched against the unemployed poor while the real economic action takes place elsewhere.

In response, the Left has no big idea.  Once upon a time we had Keynes, who understood the dangers of  inequality and immiseration; Keynes was motivated, not by the urge to abolish capitalism, but to save it from its more zealous proponents.  It was a formula that worked and produced the single short period in Western economic history when societies actually shared wealth more equitably: what looks increasingly like a short benign blip in a much longer-term trend towards inequality. But mainstream politics now is still locked into neoliberal narratives around work and the state, when it is – or ought to be – obvious that those narratives increasingly fail to describe the reality.

We need a big debate around work, pay and benefits.  We need to radically rethink the relationship between the three.  Much of Ed Miliband’s rhetoric suggests that, fundamentally, he gets this; Labour’s proposals for increasing the minimum wage, for example, and its language around the cost-of-living crisis show that Labour is open to a wider debate.  But at the same time it seems afraid.  More fundamental, and more explicit, big thinking is needed.  I’ve blogged before about the arguments around a basic income – it’s cetainly not a panacea but at least its supporters are asking the right questions, and show an admirable refusal to run around like Corporal Jones every time the Daily Mail publishes a benefits scare story.

More than eighty years ago, R H Tawney, writing about Labour’s split of 1931 – which occurred over tellingly similar issues – wrote that to kick over an idol you must first get up off your knees.  More prosaically, Ed Miliband is reputed to have told his advisers to “go big or go home”.  We need to have the debate about the big issues, and reconnect with the daily struggles of people at the sharp end of the most precipitous fall in living standards in more than a century; to stop patronising the people we claim to speak for by offering them small measures of revisionism in place of serious, optimistic engagement.  We can – and should – be so much better than this.

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3 thoughts on “Hard Work: why we need to change the way we think about work, pay and benefits

  1. The problem with a basic income is that it can potentially suit the interests of the wealthy, depending on how it is implemented. Social democrats generally favour a job guarantee, but the right is gradually edging towards a basic income (Universal Credit is nothing if not suggestive).

    The former is well-meaning but misguided, not least because it is anachronistic (fighting the last war) and likely to slip into coercion. The latter is potentially empowering and redistributive, but a more cynical approach could use it to entrench poverty and further limit social mobility, which is where the attraction for the right lies.

    See http://fromarsetoelbow.blogspot.co.uk/2013/07/scoubidou-and-protestant-work-ethic.html for a more detailed analysis.

  2. Not exactly the Gettysburg Address but at least you didn’t mention the Greens.
    Need to examine whether fairness has any natural equilibrium. I doubt it; the rich will always manage to walk over the bodies of the poor to get to the Opera House.
    Also how natural and normal is democracy. The rich will always regard democracy as an inconvenience and rig the game.
    As you point out the significant shift is the increasing proportion, compared to wages, of national wealth paid out in rents and dividends often to individuals who just got lucky in the birth lottery.
    So Labour, if it has the balls, needs to get creative with inheritance tax and nailing tax avoidance.
    To make the game fairer each new generation needs to start afresh without unfair advantage; something that cuts against animal parental instinct but deal with it.
    The current trend is the creation of a cheap pool of labour with minimal rights at the beck and call of capitalist class.
    One of the first acts of a Labour government should be the rolling back of anti union legislation together with strengthening the rights of protest.
    The law is heavily skewed in favour of the rentier class and it should shame any Labour government that whilst in opposition they supported Mike Weatherly’s criminalisation of squatting bill; even a rudimentary understanding of equity suggests that making use of empty buildings to find shelter from the elements is just.
    The right to unionise, protest, a free education, decent health care and adequate housing should all be encapsulated in a written codified constitution.
    This is where the next Labour government can make its mark.

  3. Pingback: One Nation Labour and the search for an economic narrative | Notes from a Broken Society

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