The unavailability of decent jobs is a problem that looks likely to get worse. But there’s a policy solution for this: a job guarantee underwritten by government
After the election, Theresa May promised to help out Tory MPs in “dire financial situations” after losing their seats. It was met with precisely the derision you’d expect. A party that has spent seven years trying to starve people into jobs that aren’t there has suddenly discovered the downsides of involuntary unemployment. The heart truly bleeds.
It is overambitious to expect any insight to trickle into Tory thinking off the back of this. As the party political wing of the Just World Fallacy, their entire policy set is based on erroneous “clap louder to make the economy go faster” thinking that disregards structural impediments to income and employment in favour of a 19th-century moralist approach where the only thing preventing you getting a job is some unaddressed flaw in your character. For the rest of us, though, this is just an example of an obvious truth: It doesn’t matter how hard you’ve worked or how much you want it, if there’s only one job available and you’re the candidate that comes in second, you still haven’t got a job.
The unavailability of jobs is a problem that looks likely to get worse rather than better. PricewaterhouseCoopers predicts that up to around 30% of UK jobs may be lost to automation in the future. This would increase productivity but leave more people out of work, a trade-off that we’ve still not had the courage to grapple with as a society.
Sensibly discarding “aspiration” as the sole engine of employment and growth, we must turn our attention to the structures and mechanisms of the economy itself. John Maynard Keynes said, back in 1933: “Look after the unemployment, and the budget will look after itself.” Historically that has held mostly true.
Keynes, however, didn’t foresee the immense rise in jobs that don’t provide enough income to cover basic needs, nor the dedication of governments to preserving unsustainable rent to wage ratios. We have created an economy over the last 35 years that rewards managers who can “innovatively” pay people less and less money, and propped up consumption by innovatively lending them more and more money at interest. Such astonishing recklessness has left the weakened foundations of our economy struggling to hold up the weight of the bloated oligarchs at the top of the pile.
Some post-Keynesian economists have been trying to popularise a new idea to tackle these structural problems: a programme known interchangeably as the job guarantee (JG) or employer of last resort (ELR). Rather than waiting for money to “trickle down” from tax breaks, bank bailouts, or other investment, JG proponents argue the government should simply directly employ people.
Rather than going to the jobcentre to jump through hoops in order to qualify for an income that barely enables people to subsist, people will simply be offered a job and paid at a “base wage”. Employees are hired “off the bottom”, unlike programmes that aim to stimulate the economy and create jobs in the private sector, which usually take the most-skilled first. The jobs would be designed around the work that needs doing in our society but which the private sector sees no profit in doing.