Demonisation of the unemployed harms the economy more than it helps.
At the present our society is facing a set of problems that are unique in the history of humanity. Thanks to a limited understanding of science that we have developed over the last few hundred years we know a great deal about food production, creation of fertilisers, even genetically modifying plants to increase yields etc. No matter how one feels about all the different technologies and methods in farming it is undeniable that one of the results has been an increasing population. Combine this with our gradually improving medical knowledge and our growing reticence to send huge numbers of people into wars and you find that the global population is growing massively.
At the same time as this growth is happening we are also developing far more efficient production methods, automation, robots, vehicles, etc, that reduce the number of people needed to run many business types. Where an office worker would once have had a secretary, they now have a computer, and type themselves where they would never have dreamed of doing so in the past. Where deliveries once took days to transport across the country with the use of numerous horses and the supporting services of stables, farriers, etc, deliveries not take a day as one man in a white van drives to their destination. I need not list all the ways in which modern technology has saved us time and money in the work place because everyone probably has many more examples in their own mind than I can think of.
These developments have of course created work as well. While we have become more productive it is also obvious that this is hand in hand with massively increased production. Look back half a millennium and you will see a society where most people owned only a handful of items and most money was spent on food. Today we probably have more items in our pockets most of the time; look around the room and you will no doubt see hundreds of different things, some of which will be technological marvels that would have looked like magic to that person of half a millennium ago. Naturally if so many more things are being invented and made then there will be a lot of jobs created by their production. However, necessity being the mother of invention, there is a huge effort put into the creation of labour saving devices, with the result that we all have a lot more free time than we once did. With mankind’s constant effort to amass more wealth and safety it is natural that employers will take advantage of some of this labour saving machinery to reduce their work force and lower their costs.
The problem with this is of course the fear that led saboteurs to throw their clogs into the early machines that were taking their jobs. The spanner in the works of modern economics is rising unemployment. Humans have a need to work on a deeply hidden psychological level. While a cursory glance at nature will reveal that most animals spend a lot of time conserving energy and humans have descended from the same origins, it is a tendency towards industriousness that has enabled us to rise to the height we have as dominant mammalian species on the planet. It is improbable that evolution ever intended us to work like machines for solid days, day after day; the rise in stress related illness attests to this, but we certainly do have a deep seated need to keep busy and be industrious.
King Solomon was regarded as being a rather wise chap. In Ecclesiastes 9:10, King Solomon instructs “Whatever your hand finds to do, do it with your might, for in the realm of the dead, where you are going, there is neither working nor planning nor knowledge nor wisdom.” Our industry is something that keeps us happy; when a person sits with nothing to do for too long it does not take long before boredom and depression set in. The fact that the quote above comes from the bible demonstrates that work is something that has been preached as being important on a moral and spiritual level. At present there is a moral crusade against the NEETS and scroungers who are not contributing to society. The seemingly endless recession hand in hand with our healthy population levels and work automation has led to a large number of unemployed people. The rigours and stresses of modern life and the many new chemicals and substances surrounding us are leading to effects on general mental and physical health that is preventing a great many people from keeping to the 40 hour schedule of the modern work week. The support that all these people need is being focussed on as being one of the drains on public finances.
Despite the fact that very little public money actually goes to people who are not contributing to society this group makes a convenient scapegoat and forcing them back into work is being touted as one of the many solutions being offered to help us back out of the recession. There are a number of points that render this approach unhelpful. Firstly it has long been acknowledged that there is no such thing as zero unemployment. Zero unemployment would not be desirable anyway as an absence of unemployed and penniless folk would lead to vendors being able to increase prices, which would lead to inflation. The only way zero unemployment would be possible is if people were not able to leave jobs, as if they did leave jobs they would become unemployed until they found another job. If people never leave jobs then there is no incentive to try and retain staff by offering a decent wage. The world where there is zero unemployment is a pipe dream inhabited by indentured servants paying high prices for their goods. As long as there are unemployed people it is possible to demonise them and use them as scapegoats for the failure of the government’s long term economic plan but in reality most of these unemployed folk are simply hopping from one job to another. These are all people who are in the process of improving their economic success by moving from inferior employment towards better situations. They are folk who have become unnecessary in one area of the world of employment but will soon become needed in another area. This is the free movement between employers that enables the system to keep running at optimum efficiency. The number of people who are actually targeted by schemes to deal with long term unemployment are a tiny number compared to the official unemployment statistics. The small amount retained to aid the economic recovery becomes so inconsequential when this is realised that it is nowhere near worth all the newsprint and publicity it generates.
The second undesirable factor in the demonization of the unemployed is the stigma surrounding unemployment. Those who become unemployed feel such an urgent need to return to the work place that they will accept jobs far sooner than they would if there was not such a stigma. The problem with this is that people will hurry themselves into jobs that do not pay their full worth. The evidence for this can be seen in the gradually drop in wage that is being experienced across the country. Newsnight has said that wages are expected to return to pre-recession levels sometime during the 2020s. It might not be the haste to return to work that is causing the wages to fall but it is certainly allowing the wages to fall. It is common for unions to call strikes in objection to the failure of wages to increase, yet here are people across the country rushing into positions with lower wages or with zero hour contracts. The employers are taking advantage of the measures being brought against the unemployed, even to the extent that employees are being sacked from their jobs and then being replaced with unemployed people who need not be paid the minimum wage. This is an obvious circumvention of employment law that should not be accepted. If people were not so eager to escape the stigma of being associated with the tiny minority who are deliberately unemployed then employers would have no other option than to offer a decent wage, and if the unemployed were not forced to work until they could find a job then they would be able to take the jobs that would not be done by the unemployed and unpaid.
The dropping wages that are supported by the increased desire people have to get back into work leads to a far more significant effect that is detrimental to society as a whole. Where there are lower wages the amount paid to tax is naturally going to be lower. A larger number of people are going to find themselves below the tax cut off and will not be paying any tax at all. A larger number of people will find themselves earning less than they would in more prosperous times and will therefore be paying less in tax than they would otherwise. The working population of the country is massive and all those of us who are earning lower wages would ordinarily be contributing vast amounts to the economy through tax. At present this money being saved in wages is money that is being retained by the employers; in most instances the employers will be using the services of accountants to find any methods available to reduce the tax they pay. It is a well known issue that large companies use many different methods to avoid paying tax, yet they are now being given a situation wherein it is becoming possible to retain more of the money they would otherwise have given to employees who pay tax, and the companies are using these methods to further reduce their tax payments.
The lower wages that are being seen around the country are leading to lower spending. Despite a few successes in the retail sector on Black Friday and Cyber Monday it was noted that spending did not reach the levels that had been expected. This was partly due to retail fatigue brought on by a glut of possessions, less available spending money and an underlying realisation that even where the public are spending the money we are so much part of the consumer equation that we are becoming products ourselves. Money that is available is being largely spent on rent and food. Food is free of VAT so is not contributing to the public coffers. There is little left over for spending on luxuries and gifts and what there is available is being sucked up by the companies that are closest to being national monopolies. VAT on luxury items is therefore not forthcoming and the appearance is that there must be a level of collusion between electric companies, gas companies, broadband companies, etc, raising prices year on year, who are all large enough to employ accountants and tax lawyers with a far higher level of skill than can be afforded by the public sector which is trying to retain some of this money.
The result is an economy in decline.
It is evident that a large number of the ‘solutions’ being offered to the problem of recession are being implemented purely for reasons of publicity. The government wish to be seen as being proactive in finding our way out of the recession. At the next election it is extremely valuable to be able to say that ideas were put in action that led to a reduction of the deficit and the national debt and greatly improved the lives of all Britons. At present it appears that the ideas are not leading to the ends that were expected. Had all the indignities of the last few years actually resulted in economic recovery I would probably feel far more magnanimous towards the current cabinet. The measures implemented look more akin to the measures of an average driver when sliding on a patch of ice, actively steering in what appears to be the right direction but is actually pushing the car into an ever more extreme skidding slide. The hands currently at the tiller of public finance are far too heavy to negotiate the delicate task of restoring balance to our economy.
It seems obvious that in an ever changing world we need ever changing ideas to find solutions to the issues that face us. Imagination and creativity are what is called for in solving the problems of an ever more automated society. We do not need to be forcing people into graft and labour just so that we can look as though we are being proactive and thereby gain enough votes for another disastrous four years of governance, we need to be nurturing the creativity and imagination of all those who do not find themselves immediately drawn into the employment situations available. It is education where we should be focussing our attention. A line from the Facebook film a few years back was that graduates from Harvard made their own employment. That is what should be expected of everyone who is at a short end. We should all be capable of spotting the gaps in the market and thinking of ways to cater to that need. There is no need to force people into working as little more than slave labourers if they are given the abilities to discover their own uses and their own jobs. Nobody wants to work for peanuts to further the success of a company that doesn’t even value their contribution enough to offer a fixed contract with adequate hours at adequate pay. Train the unemployed to make their own employment and numerous problems we are faced with will simply solve themselves.
Posted on December 5, 2014, in business, Economics, Management, Philosophy, Politics and tagged austerity, companies, company, Ian Duncan Smith, tax, unemployed, unemployment, Workfare. Bookmark the permalink. Leave a comment.