Thursday, August 18, 2011

How do we get rid of unemployment?

Unemployment up at 2,500,000 in the UK. Nearly 8% for 16-64 age group, but scandalously, 20% of the 16-24 age group. This 16-24 age group numbered 7.4m in 2007 
and 20% of 7.4m is nearly 1.4m.

Unemployment among 16 to 24 age group heads above one million barrier/a>

That's more than  a million of our youth out of work, detached from the economy and community, short of cash in a culture where you are what you own.

And if a double dip recession develops, as now seems likely, things will get worse.

This situation is intolerable. It will lead to more theft and more riots. Unemployment causes ill health.

It is an insane situation, insane in the sense that the thinking behind unemployment, insofar as there is any thinking, is at odds with reality.

Unemployment represents market failure.

There is no place for unemployment in a green (that is, a real) economy.

When there is work to be done, and people around who are able to do work, it makes no sense to have people idle.

Here is a vignette of this problem in Mozambique.

This is how we can get people back into work, even (especially) in a recession.

1 Set up a tribunal in each Local Authority area with a remit to judge whether the work of an enterprise (public, private or voluntary) is beneficial to society or environment.
2 Enterprises which are accredited as meeting these criteria can take in labour from the Job Centers.
3 The new hands bring their benefit into work with them. That is, there is a 100% Earnings Disregard.
In other words, the benefit in this case behaves exactly as Citizen's Income would work.
4 The employer tops up the pay of the new worker to the going rate for the job.
5 The employer is not allowed to displace old workers with those under the new scheme.
6 There is no element of compulsion in the scheme.

The effect of this "Green Wage Subsidy" (GWS) or "Work Stimulus Scheme" is to provide new work in the green (i.e. constructive) sector. At the same time it increases productivity in the green sector. The work provided reduces poverty, stimulates the local economy, increases social cohesiveness and reduces crime and gang membership. All this comes at no extra cost to the State in the short term, since the benefits would be paid in any case. The GWS just converts benefits from being a dead dole into a stimulus for the green sector of the economy.

It is indeed just taking Ian Duncan Smith's welfare reforms a little further.

More detail on the scheme here.

Community Links is thinking along the same lines.

It is a method of introducing Citizen's Income (which is Green Party policy) in a gradual way.

Unlike having one in 10 people (1 in five of young people) unemployed, it makes sense.

See also: the Philosophy of Work
Scandal of Tesco's use of free labour.


Anonymous said...

20% of 2.5M is 500K... Not that close to a million at all.

DocRichard said...

Anon thanks, you're right, on the scrappy numbers I gave originally. But on delving deeper, I find the 16-24 age group numbered 7.4m in 2007 (
and 20% of 7.4m is nearly 1.4m.

Unemployment among 16 to 24 age group heads above one million barrier

Whatever, it's a hell of a lot, and the fact is that it is totally unacceptable, a serious market failure that promises to unleash more unfocussed civil disorder.

We most clearly and certainly need radical benefit reforms that enables all to access good constructive work, as I hope you will agree.

Belette said...

> Unemployment represents market failure

That isn't clear. Liberal-type economists would tell you that a minimum wage prices low-value work out of the market place; and onerous hire-and-fire regulations make employing folk risky.

If you want to see what unemployment looks like in a market (rather than in the heavily regulated system we have) you'll have to look elsewhere.

johnm33 said...

Steve Keen [ ] who predicted the financial 'crisis' and the failure of the remedies said on a recent 'kieser report' that the only effective way out of our current problems is to increase wage rates faster than inflation, to put spending power back into the real economy. He doesn't hold out much hope of this happening because the power possessors all still take heed of advisers who chorus "no one could have forseen this coming" and didn't.
On an even more recent 'kieser report'[on RT] Catherine Austin Fitts [whos online book detailing her career rising to director(?) of housing in the Bush administration gives a real insight into american politics and the spiders web of control/corruption that pervades the states body politic .. ..] openly states her belief that whats happening is actually 'the plan'. Her blog.. ..
The following one very irate take on the evolving banking 'crisis' in the states.
We're going to have to make up our minds whether its a plan,
and if it is who's in on it, are our politicians stupid on an olympian scale? or talentless moneygrubbers jumping into the banking bandwagon with the same servile attitude they so recently stopped showing murdoch, or has the process of 'liberalisation' moved so far along that none of them feel they have a choice?
Personally i think the financial elite gained the upper hand [over politicians] when harold wilson was forced to approach the IMF back in the sixties and that they have constantly shifted the ground under a more or less hapless bunch of easily led self serving useful idiots, with a fully supportive cast of beaurocrats, ever since. Better expressed here(-
This guy shows more insight into the historic causes of our current situation than anyone else i've read,
and a concise theory on why the idiotic pundits/advisers never learn.
Most of these links come from outside the uk but one of the best uk blogs/debates on finance is at (-
or for a more technical take
The financial elite through their interpenetrating ownership of banks and corporations have achieved supremacy and are currently engaged in a war of attrition, not just among themselves but with soveriegn authorities too, and have no concerns about the real economy as long as they can define the terms of the political debate, because whilst they do the soveriegn authorities supply the battlefields the ammunition and cannon fodder but have no interest in the outcome.

The first thing that needs to happen is for politicians to seize power, change their advisers, and begin to serve the people rather than serve them up. Perhaps our best hope is the refocussing of attention on social issues that the recent inchoate and incoherent rebellion/rioting caused, after all next time they may have a plan.

DocRichard said...

"Market failure is a concept within economic theory wherein the allocation of goods and services by a free market is not efficient".

I think it is pretty fair and accurate to say that the present system is not providing jobs in an efficient way. Even Ian Duncan Smith can see this, which is why he is bringing in his reforms. My proposals are taking his reforms forward, making them more efficient, by actually making work more available, creating new jobs where there were none before.

I think you need to re-read the post, and also the links which set the idea out in more detail. Far from being anything to do with minimum wage, it enables employers to take on new staff at very low cost (without undervaluing the labour of the new staff.

Now, a genuine question: If the UK is embuggered, in your view, by not having a free market, please tell me where to look to find a functioning pure free market? Does it exist? Has it ever existed? If so, when and where?

This is not a rhetorical q, but I really do want to be enlightened on this one.


DocRichard said...


Many thanks for your thoughts, which provide many hours of reading, but I should probably begin with the Debt Generation.

Your links are looking at the problem posed by our malfunctioning economic system from the top of the heap - thin nexus of millionaire politicians and billionaire corporations. It's a filthy world up there, and a bit dispiriting to try to unravel the tangled skein.

ON this post, I'm approaching it from the bottom - from the point of view of the problem of getting the unemployed back to work, back to good work that benefits society and environment.

It is a thankless task, perhaps because, like Lord Buckley's Bear Dance, it is so simple, it evades everyone. I have signally failed to communicate it to my party, the Green Party, who want to bring in Citizen's Income, which I am doing in a subtle gradual way here, but because it is not pure CI, they don't want to know :(

One thing about debt is that of course it is going to increase, because money is increasing, and debt is how money is made.

Now I'm off to look at your links.


DocRichard said...

Yep, all good links, with lots of worthwhile information. Thanks. said...

The writer is totally fair, and there is no question.