Thursday, 3 March 2016

Osborne and the Armies of Under-Employed

The chancellor has come round again to of course "Blame Labour", as is the long lasting and middels successful approach to bolstering Tory vote in times of adversity. Now he is trying to firmly pin under-employment and the large social benefits bill which accompanies it, on Labour policy on 'in work benefits and tax credits', known at the time as 'making work always pay'.

As with privatising the Police or bothering to invest in Trident 2 when the Russians or Chinese could buy out the Tory party if they wanted to, the Chancellor will feel the irony of the free market bite him if the Tories live out another parliament and see the fruits of their drive to economically marginalise more voters. What he forgets is the very reasons why 'making work pay' was made policy.

Back in the 1990s Britain was in two transitions- the long term de-industrialisation continued while the privatised service sector grew rapidly and started devaluing work. New enterprises within consumer services blossomed partly by metropolitan and shopping centre demand, but also on the availability of cheap, part time, temporary labour which lowered their cost base significantly. There was of course both a need to have part time staff, and a ready supply from students in particular, or people locked in low wages looking to work harder in job number two.

The problem was that these type jobs came to predominate many areas of the country because of the savings to be made by employers on inconveniences like pensions and redundancy money which permanent staff used to enjoy. Graduates found themselves in the mid nineties that the market for their 'breeze block' university degree skills was saturated. They competed with unqualified school leavers for flipping burgers and cleaning offices. Under-employment became the new hidden social ill. The sickness spread from fast food and shop-jobs to everything from hospital hygeine, life gaurds, supply teaching, agency nurses and airline cabin staff.

The unemployed long before 'in work benefits' could work part time and as long as they kept under 50% and a certain earnings limit, they could claim the dole anway. What Labour tried to do was to coax people off this 50% margin, where many would actually avoid working too much because they would then fall off benefits, while in good knowledge that their employers would cut their hours at a later date or lay them off altogether. Thus they avoided the paper work and bad cash flow of waiting for both their last pay cheque and their first new dole money.

Labour also wanted people to get used to asking for more work, and hoped that as the economy grew, more of these jobs would become less marginal and go over to full time. The trouble was, that both Blair and Brown also wanted to continue and even extend the 'flexible portfolio career' so did not tamper with enmployment laws weakened under Thatcher and Grey Man Major. There was no real economically meaningful improvements in maternity leave, it just got better for some in permanent employ, who may well have had such terms offered as loyalty 'credits' from their better employers anyway. No improvements in the rights to a permanent contract or extended hours.

For people with young families, the benefits culture became all too attractive in comparison to low paid, part time, temporary jobs with no hope of maternity, and the single mum in the council flat became both a small but expensive phenomenon, and a Tory stereotype to bash the welfare state with. The Tories would rather today, forget that Labour tried to reverse this trend by making-work-always-pay more than sitting on purely benefits. Now though they suddenly see that 38% (need citation, it may include tax credits which are not necessarily in the departments budget) of the under pension age social welfare pie goes to these type of benefits.  They suddenly see this as a suibsidy to industry! Wallmart in the USA, have long realised this and have an army of employees who are cheap and readily available, topped up with state benefits.

Now George Osborne run on a knife edge of not being able as a Tory, to weigh down business with a less flexible work law which would favour workers right to full time, permanent employment. While on the other hand he wants to cut this bill and get people off these benefits. He wants to then offer no other incentive than 'go find a full time job' in effect, because by nature of where they stand now, they are in those positions because employers prefer them and can get a virtually endless supply of either UK or now EU and refugee workforce to fill them regardless of benefits on the side.

The heart of the matter is that these benefits are caused by the nature of the post industrial economy and the deskilling of the workforce into a service economy, and privatisting public services with their 'expensive' full time, unionised workers. It still remains pro-rata cheaper to employ part time and/or temporary staff than take on people permanently to longer guaranteed hours.

The old argument of the Tories was that there will always be a demand for out of office hours part timers, seasonal workers and peak hour supplementary staffing, and that indeed there are many students, house wives and early retired people who get real income from these jobs. Also that rather false holy cow of the modern, Eatonite Tory party, THe Small Business, who are always talked of being the future, may be dependent on part time workers to get a foot into growth beyond being one man bands. The trouble is that too much of the economy has gone this way, and the last Tory government let the bill for part timers only rise as we entered the recession aka the finance crisis.

Any UK chancellor in the next parliament has to rather recognise that Capitalism is inherently unbenevolent, and needs democratic laws to reign in its excesses of exploitation. Blair and Brown tickled the situation and cajoled some part time workers and long term marginal benefit workers into working a little more or into taking up those rather low level  jobs that were available. As stated above, the Tories initially did not want  However what is needed is the reduction  or removal  of the pro-rata per hour on costs advantages of part time, temporary staff so that employers face no barrier in how they choose to cover requirements, and gain loyalty and productivity from full time, permanent staff in greater numbers.

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