Unemployed again – A main feature of capitalism

Jared Phillips

As a result of the recession, the National-led government has been made to face rising unemployment. Its response has been to attempt to offset unemployment with redundancy initiatives and job creation initiatives. The job creation initiatives are partly corporate welfare (if not corporate welfare, then company welfare) and partly based on the provision of freely trained skilled or semi-skilled labour to firms.

Investment into the different initiatives varies. However, the proportions of all such initiatives can only remain completely at odds with rising joblessness.

From a working class perspective, the response to unemployment must be made as a response against the capitalist system. This means recognising that unemployment is an inherent and increasingly (in the long-term) problematic aspect of capitalism. It also means recognising that during an economic downturn the demands and actions needed to significantly alleviate the rate of unemployment and the conditions of the unemployed must take an anti-capitalist form.

A sharp rise in unemployment

In August, Statistics New Zealand reported that there had been a 38.5 percent increase in joblessness between June 2008 and June 2009, and that the number of jobless people had increased in that period to 236,100.

It is commonly acknowledged that in order to produce a more favourable spin, parties in government emphasise the `Unemployed’ statistics from the Household Labour Force Survey, which are significantly lower than `Jobless’ figures from the same survey. A survey participant may be deemed to be ‘not seeking work’ through failure to check job advertisements. So the Jobless category is more relevant in understanding the extent of unemployment. Within the Jobless category is the unemployed category which had increased by 48,000 to a total of 138,000 in the year to June 2009. Also comprising the Jobless category are those defined as being without jobs because they are seeking work but are not currently available, and those who are `discouraged’ (generally this means long-term unemployed). In June these categories amounted to 98,100 of the jobless. The number of ‘discouraged workers’ had more than doubled on the previous year.

The category of work that declined most dramatically was women’s full-time employment, meaning women’s employment was effected disproportionately. While the report showed a general decline in full-time employment, it also showed an increase in the part-time employment category which was up by 7,000 positions in the June 2009 quarter.

The government’s initiatives

Bourgeois democratic governments, whilst functioning fundamentally as institutions of service to the ruling class, also seek to maintain social peace. With this comes the requirement to try and ensure that people have work.

The government’s concrete response to the rise in unemployment has consisted of initiatives – very public relations driven initiatives -for managing both job losses and redeployment throughout the economic downturn.

Last year, still in government, Labour announced a redundancy package following the first wave of recession related redundancies. In October, before its election victory, National counter-posed Labour’s plan with its own transitional relief package which – in comparison to Labour’s policy – was more favourable to lower income families as according to income by number of children configurations.

National’s election was followed by John Key’s Jobs Summit initiative, which consisted of a national forum followed by local forums for business leaders and which included participation from some major trade unions. The major initiative to come out of the Jobs Summit was the job support scheme which has allowed companies employing 100 or more people to reduce the hours of employees by ten hours per fortnight, with a government top-up for those employees at the rate of minimum wage for five hours each fortnight. The intention was to prevent redundancy through the sharing of hours of work reductions. The uptake of the scheme was minimal and the government has reduced the criteria for participation so that firms with 50 staff or more can access the scheme.

The redeployment schemes have included subsidies on training in McDonalds stores, which can cover workers’ wages for up to eight months. There are subsidies for home insulation firms, which have continued to charge consumers more money than have the firms without the subsidies.

Aside from those bits of company welfare, the larger more serious projects include a $5000 subsidy on wages, paid for six months of employment for up to 4000 of the 17,000 young unemployed in the 16-24 age bracket. There’s Community Max, a programme costing up to $40 million which will fund 500 young people to work for 30 hours per week doing `worthwhile tasks in the community’. $50 million will be spent constructing a national cycle-way. And there is a further combined $44 million being allocated to defence-related training, polytechnic placements, and summer scholarships.

The reserve army of labour

The reality is that no job creation scheme, redundancy prevention measure, or redeployment scheme can ever harness unemployment. The rate of unemployment is an outcome of the use (or not) of a permanent force within capitalist production which Marx called the reserve army of labour or the industrial reserve army.

The reserve army of labour is not exactly synonymous with the unemployed. The term `unemployed’ describes the group that is without work at any one time, whereas the reserve army of labour is a description of the ever-increasing proportion of the population that is superfluous to the general requirements of capitalism. It can be deployed during a boom period and then released during a slump period.

The reserve army becomes superfluous to the needs of capitalism because capitalist expansion is characterised by a continuous replacement of the use of living labour with the use of dead labour. Put another way, the labour power purchased from workers is replaced by machinery as capitalist interests use the efficiency of machinery to compete against one another. Whilst labour-power is not completely replaced, its ratio measured against machinery is steadily reduced. The intensification of labour and increases in working hours can also contribute to the growth of the industrial reserve army.

The reserve army though is not just a product of capitalist expansion. Capitalism couldn’t expand without the reserve army holding down wages and creating cheap labour supplies for new enterprises or new regions of capitalist development. In summary, the reserve army of labour is an inescapable creation of capitalist development, and capitalism cannot develop without the reserve army of labour. This is how unemployment is unavoidable within capitalism.

Degradation and deprivation of unemployed by government

Despite the inevitability of unemployment within capitalism, and despite concrete attempts by governments to offset unemployment, operating at a more subjective or ideological level, is the moral condemnation of beneficiaries by capitalist governments, especially present since neo-liberalism became the dominant economic outlook and practice.

In New Zealand this practice has been referred to as `beneficiary bashing’ and has been an on-and-off practice of governments since the early-1990s, depending on the intermittence of higher levels of unemployment.

Against the current picture of rising unemployment, which clearly shows the social need for an expansion of social security measures, Minister of Social Development Paula Bennett has caused several affrays in the media and with beneficiaries advocates. She did this firstly by releasing to the media the personal details of a beneficiary couple who had complained about the removal of the Training Incentive Allowance and then by publicly targeting the so-called ‘Top 50’ beneficiaries in the country (those who receive the most income support, including one-parent families) for review.

This type of government/state-led ridicule has been normalised by previous National-led and Labour-led governments. For example, the National Party heavily reduced benefits in 1991 by reducing basic welfare incomes and itemising additional payments according to means-tested individual needs. In 1998, Prime Minister Jenny Shipley pushed a ‘work-for-the-dole’ programme through her government’s Code of Social Conduct, which was accompanied by a campaign to encourage people to report on others whom they suspected of misusing benefits. The work-for-the-dole system, labelled `the community wage’ by the government, actually hampered the ability of unemployed people to move into jobs with genuine employers.

Following this, Labour-led governments consciously ignored the demands of workers’ and beneficiaries’ organisations to raise benefits back up to pre-1991 levels. In 2004 Labour’s Steve Maharey, acting as Minister of Social Development, used the Jobs Jolt scheme to target beneficiaries on the basis of work testing, drug testing, and living in remote areas. Finally, before it was removed from government, Labour seamlessly scrapped the special benefit which allowed beneficiaries in hardship to receive a weekly amount equivalent to proven weekly deficits.

Government condemnation of the unemployed is often seen as and criticised as being political populism and an opportunist appeal to `redneck’ voters. The resultant political strategy is a liberal one; that individuals including politicians, should not attribute negative connotations to (or say bad things) about the unemployed.

It is important to counter-pose this approach with the understanding that the degradation and depriving of the unemployed is part of the capitalist superstructure and produces many benefits for the employing class, such as compliant workers who fear being demoted into the unemployed ranks of the working class. The main point of the degradation in particular is to play sections of the working class off against one another.

Fighting unemployment

Capitalism is inseparable from unemployment, however, this does not mean that revolutionary socialists sit back and discuss fighting capitalism as an abstract concept. Revolutionary socialists emphasise demands and actions that can form a plank between current working class struggles and consciousness and upcoming class battles. Such demands that have been followed up by action have included demands against redundancy that have been backed up and won by strikes and occupations, and the winning of shorter working weeks for the same pay as a measure against redundancies.

Revolutionary socialists oppose the use of demands and actions that temporarily alleviate unemployment without producing class awareness and that go nowhere in terms of fighting capitalism over the longer term. With the continuing growth of partial unemployment the subsequent demands for secure hours of work and job security are sure to become stronger but need to be posed in such a way that they confront capitalism itself and do not contribute to its strengthening.

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