speri.comment: the political economy blog

Austerity has transformed the meaning and morality of work in the UK

Measuring economic success through levels of employment obscures the unsustainable and oppressive nature of the UK’s recovery

Craig Berry, Deputy Director at SPERI

Craig BerryWork has of course always been central to capitalist organisation, since the ability of capital to extract surplus value from labour is at the essential core of accumulation processes. In post-crisis UK, however, work has become not only integral to the function of the capitalist economy, but also, it seems, a defining measure of how well it is functioning.

This is in part due to the UK’s stubborn productivity problem, meaning greater labour volumes are required to maintain profitability, and the accelerated transition to becoming an economy dominated by the services sector. But it also relates to how capitalism can be legitimised in an age of ‘secular stagnation’, where elites can no longer rely on distributing the proceeds of growth to maintain social order.

As such, success in increasing employment levels is heralded as a sign of a healthy economy despite the absence of sustainable output growth. Furthermore, when operating in tandem with moralistic narratives around the duty to work, the new status of employment within the regime’s legitimation structure also helps to effectively individualise responsibility for delivering prosperity. We need look no further for the cause of economic difficulties, so the argument goes, than those who refuse to participate in the labour market.

This sentiment has been central to the austerity agenda, which is characterised primarily by the valorisation of personal responsibility. As I argue in Austerity Politics and UK Economic Policy, fiscal consolidation is, at most, a secondary objective of austerity – but the popular notion of austerity as aggregate-level belt-tightening, even if consolidation is never achieved, serves to legitimise the notion that each individual must play their part in fixing the UK’s economic problems through labour market participation.

‘Any old job’ will do. Accordingly, the success of the UK’s labour market masks (with the employment rate at a record high) some very worrying trends. Firstly, earnings continue to stagnate. Average weekly earnings in late 2015 remained around 6 per cent below their pre-crisis peak in real terms.  Secondly, job insecurity and casualisation are growing problems within the labour market. For instance, there were fewer than 150,000 employees with ‘zero hours’ contracts in 2008, but almost 750,000 by mid-2015.

Moreover, a significant proportion of the increase in employment can be accounted for by self-employment. Although people in self-employment typically earn more on average than people in employment, the median self-employee earns less than the median employee. Median earnings for those in self-employment have fallen by 22 per cent since the recession, a trend intimately related to the feminisation of self-employment within the low-pay social care sector. Around 80 per cent of all jobs in adult social care are undertaken by women, and the sector has seen a large increase in self-employment.

There are also, thirdly, significant differences in labour market experiences according to age and geography. Employment rates for younger cohorts and most Northern regions remain lower than their pre-crisis peak. In an age when the dominant mantra is one of self-sufficiency, however, the existence of these problems only serves to reinforce how valuable participating in work is, in that it breeds and rewards individuals of exceptional fortitude.

The ideological synergy between austerity and the meaning of work in the post-crisis environment should lead us to question some of the conventional wisdom on coalition and Conservative labour market policies. For instance, the Work Programme – encompassing job-search services for the long-term unemployed, with providers paid by results – is regarded as a failure insofar as relatively few participants secured sustainable employment through the programme. Yet this was in part because employment growth since 2010 has far exceeded policy-makers’ expectations, meaning that those entering the Work Programme are predominantly individuals that face the highest hurdles to formal employment.

Furthermore, the notion that the Work Programme has failed overlooks its role in reinforcing certain behavioural norms in relation to the labour market, most specifically the imperative for individuals to always be available for work of any description.

We can also question the extent to which cuts to social security benefits have been central to austerity. Although cuts have been severe in some areas (notably disability benefits), benefit expenditure was the same in real terms in 2015/16 as it was in 2010/11. Policies such as the welfare cap, bedroom tax and sanctions have been very high-profile, but saved relatively little money. Ironically, one of the consequences of the UK’s regressive recovery has been much higher expenditure on in-work benefits.

Again, the ideological dimension of these cuts is arguably more significant than their material impacts. Indeed, the area of public spending that has been most significantly affected by fiscal consolidation – local government – has probably affected individuals’ experience of work far more profoundly than cuts to social security. The withdrawal of public services at the local level creates far more pressure on unpaid work, overwhelmingly undertaken by women, primarily in the form of care for children and older people.

It would of course be an over-statement to claim that labour exploitation, strictly defined, is fundamental to the UK’s post-crisis growth model. But it is not difficult to imagine how attitudes around the moral responsibility to work and the needs of capital to drive down labour costs combine to normalise exploitative practices. Increasing reports of ‘wage theft’ may offer an alarming portent in this regard, and the UK’s withdrawal from the EU is more likely than not to exacerbate such problems.

How should progressive political actors respond? Unionisation is clearly part of the answer, but the inherent barriers to unionising modern workplaces have yet to be satisfactorily addressed by the labour movement. The Labour Party is flirting with the notion of a universal basic income, which would, in theory, empower individuals within the labour market by mitigating the compulsion to work (as well as reversing the rise in poverty in the UK). Yet it is not difficult to imagine such policies being utilised by the right to extend conditionality, as citizenship itself becomes commodified.

More generally, I have argued that the left in the UK remains preoccupied with questions around how to increase capital investment, at the expense of questions around what to invest in. Progressives must turn their attention to the nexus between productive practices, corporate governance and everyday economic life – both to challenge how work is now experienced by individuals, and to plot more convincing answers to the UK’s economic challenges.

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Categories: Austerity, Economics, Employment, Europe and the EU, Rethinking Recovery, SPERI Comment, Sustainability | Tags: , , , , , , , , , , , , | Leave a comment

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