Underemployment should be an aspiration

A debate this morning about underemployment on the BBC’s flagship current affairs programme, Today, demonstrated the desperately narrow frame of thinking used by pundits in the mainstream media.

Prompted by ONS statistics due to be released on the phenomena of underemployment, Justin Webb rightly noted that there is an ‘economic story’ and a ‘human story’ to underemployment.

Tackling the economic story was BBC economics editor Stephanie Flanders:

“Given the economic climate of the past few years, underemployment could well be seen as preferable as the pain has been shared. But as we move into a period where we look for increased growth and productivity it could well become a problem”

No indication from Flanders that moving towards an economy where we work less hours could conceivably be preferable, necessary even.

No sense that keeping more people in work doing fewer hours could relieve transport congestion, climate change, stress and free-up people to take part in voluntary activities; looking after elderly relatives, etc. That this could ease the burden on public services such as hospitals and care homes. No. Growth = good, according to Flanders. That is all.

Research by NEF shows how reducing the number of hours people work to 21 hours a week could in fact have major benefits across a range of social, economic and environmental problems being experienced today. The problem, of course, and the reason most commentators fail to even consider such a scenario is because the inevitable question arises: how could people live on so little?

Yet this is not a winning argument. It merely points to the lack of political imagination. It is rarely if ever considered in mainstream political debate that wages are simply too low, in general, and why this might be so.

Back in the 1930s there was a fertile debate about wages and unemployment sparked by the Social Crediters and, in particular, the movement’s intellectual leader, Clifford Hugh Douglas. A thought-provoking comment from C.H. Douglas at that time notes that far from unemployment being something to be feared it should be an aspiration for a technologically-advanced society.

This line of thinking so runs against the grain of ‘conventional wisdom’ presented in the media that at first it seems ridiculous. Until you think about it and begin to recognise, as NEF and others have done, that working fewer hours is a logical consequence of living in a technologically advanced, overpopulated society – that achieving ‘full employment’ is an impossible and dangerous task. As Robert Anton Wilson put it succinctly: “unemployment is not a disease… so there is no cure”

The fault of this narrow line of thinking lies more with Labour than the Conservatives, as it happens. The fertile ideas of C.H Douglas and others in the Guild Socialist movement of the Thirties were crushed by the Fabians, then coming to prominence in the Labour party, as their subscriptions and supporter base relied on people being in work. So while the Fabians sought to improve working conditions and wages for the employed, self-interest meant advocating ‘not working’ as an aspiration was anathematic.

Critics of Social Crediter ideas claim implementing a social credit (or national dividend) would be inflationary. This is debateable – Douglas’ ideas have never been implemented fully (the ‘Alberta Experiment’ in Canada was only partially implemented and deemed unsatisfactory by the man himself) Indeed, that these more ‘offbeat’ ideas are not being debated is the problem being flagged up here. Moreover, focusing solely on inflation has its own downsides.

The hawkish position adopted on inflation since the Eighties did not help economists and policy makers to see the financial crisis coming; it was in fact part of what blinded them. A read of Bank of England chief, Mervyn King’s 2004 letter to then-head of the US Federal Reserve, Alan Greenspan, demonstrates this.

Chiding those ‘who are too young to belong to the inflation generation’, King advocates Greenspan’s price-stability approach. Despite ‘house prices rising at 25% per annum’ King claims it is impossible to predict a bubble and, besides, the BofE’s job is to ‘mitigate the fallout when it occurs’ – emphasis added to show the clear moral hazard created by King in 2004.

Whatever the truth behind claims that a social credit would be inflationary; it is not part of NEF’s proposals. NEF and other groups, such as Positive Money, are more interested in other aspects of C.H. Douglas’ work, also written about by Irving Fisher, Hyman Minsky, Milton Freidman, Steve Keen and others at various points – the credit-creation capabilities of banks.

It is beyond the scope of this post to go into detail about each author/group’s proposals – all are different. But all believe that the fractional reserve system of banking has a distorting effect on the economy leading to speculative bubbles, and, for Positive Money and NEF at least, an upwards movement of wealth toward those at the top of society.

The Today Programme feature ended with what Justin Webb coined the ‘human side’ of the underemployment story. Two workers, one with a post-graduate qualification working part-time in a cinema, the other a ‘copywriter’ on PAYE (likely meaning employed by one of the content farms that proliferate online at present), both of whom are struggling to pay bills and, as Webb repeatedly emphasised, ‘want to work more’.

The copywriter’s final comment summed up all that was wrong with the debate and the way it was framed. In a tone of desperation, when asked by Justin Webb what she hoped might happen in the future, she said:

“I’m just hoping I might be able to take a holiday at some point… or just a weekend off”

To which Justin Webb chuckled in knowing agreement, thereby ending the segment.

Yes, he seemed to say, ‘working seven days a week and still unable to make ends meet – that’s the nature of being underemployed in a recession’. But is it? As the links in this post demonstrate, and as a line of intellectual thinking that goes back to the 1930s and likely beyond demonstrates, scraping by in precarious employment in order to make ends meet is not an inevitability. It is a symptom of the way the financial system is currently structured.

Those proposing genuine alternatives therefore deserve a space at the debate – if only so that their ideas can be scrutinised rigorously, adapted or discarded if needs be. Few of the groups proposing more ‘radical’ ideas claim they have the solution – only that they want to spark a wide-ranging discussion about future policy.

The despair felt by the two ‘underemployed’ guests on the show perhaps speaks of a burning desire in all of us to be active, but equally it could demonstrate the stigma attached to being underemployed and broke in a society that, as Douglas and NEF suggest, would do as well to see some un[der]employment as an aspiration.

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