Wednesday, October 12, 2011

Unemployment is bad for everyone. And also unnecessary.

Today, unemployment reaches its highest level since 1997. 
8% of our citizens jobless, and for young people the figure is 23%.
2,570,000 people condemned to money worries, anxiety, depression, anger and alienation. 
Unemployment brings mental and physical ill-health to individuals (leading to an increased burden on the NHS), poverty to their neighbourhoods, and last but not least, falling tax revenues to the Treasury, and rising costs on the Social Security bill.

You can see that the Coalition is worried, because Chris Grayling is saying it is all down to the international financial crisis. "Nothing to do wiv me, mate. I never touched it".

Sorry, Chris, unemployment is your responsibility. You said the private sector was going to come in and re-employ all the poor bastards you have kicked out of public sector jobs, and this has not happened. It has not happened because it is against your religion for Government to provide a stimulus in a recession.

The Government is going to have to do another U-turn, and provide a stimulus to get people back to work. 

But how? Without making the dreaded Deficit even worst? 

There is a way.

The Economist suggests seven general adjustments to economic policy to reduce unemployment including “incentives that cut the cost of hiring, particularly for extra new workers”.  

This is where the Green Wage Subsidy comes in.

Serious problems require radical solutions. The Government should take the DWP reforms one step further than  Ian Duncan Smith’s reforms, and transform benefits into a stimulus to the green sector of the economy.

It works like this: 

First, local authorities will set up tribunals with a remit to judge whether any enterprise, public or private, is acting to benefit society or environment. 

Organisations that are accredited by the tribunal will then  be able to go to the local Job Centre and take on workers. These workers will be allowed to continue receiving all their benefits while working in the approved organisation. The employer will top the benefits up to match the going rate for the job. There would be a simple, in-built feedback mechanism to prevent employers from displacing existing employees with the new subsidised intake.

More details on the scheme here: Green Wage Subsidy (GWS), or Work Stimulus Scheme (proposal to the Department of Work and Pensions).

The GWS produces multiple wins: 
  • individuals win by getting work that improves their finances, 
  • businesses win from increased productivity and 
  • the local community benefits from environmental and social services. 
  • The national economy benefits from the increased tax take, decreased NHS and criminal justice costs and from improved social integration and national happiness.

In Bills of Health I estimated that 1-2 million new jobs could be created in the green sector of the economy.

Pride of place in receipt of accreditation from the tribunals would go to
  • energy conservation, especially insulating homes. This scheme has already been developed by the Green New Deal group. The effect of energy conservation is to take people out of fuel poverty, and to reduce imports of natural gas, which will help the UK balance of payments. It also helps to achieve the Government’s vital CO2 reduction targets.
  • Renewable energy technologies and manufacturers of energy efficient goods 
  • pollution control technology, 
  • waste minimisation 
  • water management.
  • small and medium enterprises who carry out repair and recycling 
  • sustainable agriculture
  • forestry
  • timber use
  • countryside management
  • traditional crafts such as coppicing, hedge-laying and thatching  
  • housing industry. New building will benefit as well as repair and refurbishment of existing properties.
  • anything that results in improvements to the visual environment, such as painting street furniture since there is a great deal of evidence that this will result in improved general happiness.
  • public transport
  • education and training
  • counselling, caring and healing
  • community work, leisure and tourism
  • innovation, research and development
It must be emphasised that there is no element of compulsion in this scheme. Participation of both employers and employees will be voluntary. It is also a non-time limited scheme, at least for as long as the economic recession lasts. At that time we can have a mature national discussion on the merits of Citizen’s Income, which is very close in effect to the GWS, and from which it is derived.

The crowning glory of this scheme is that it comes at no cost to the Treasury. The benefits would be paid anyway, but grudgingly, as a dead dole paid on condition that the recipients spend their whole time in the dispiriting task of searching for jobs that do not exist.

With the Green Wage Subsidy, that same money is transformed into a stimulus for a vibrant and positive sector of the economy that benefits society and environment.

Unemployment is bad for people bad for society, bad for the economy, bad for Government, bad for everyone.

Unemployment is also unnecessary.


This is an update of my  third Huffington Post blog, which can be viewed in all its glory here


RobB said...

Slightly of topic It seems to me that the citizens income should also be awarded on the basis that say 4 hours a weeks work is done for community type projects such as suggested for GWS. I feel that this work should be compulsory to all whether a company director or unemployed as a kind of responsibility to society.
I think just to award citizens income as a right without a responsibility would not work as some people would take the money without giving or appearing to give back much and society would find that hard to accept.

DocRichard said...

Sorry Rob I cannot agree. Citizen's Income is essentially a dividend of the national wealth. I agree that responsibility should come with rights, but we cannot enforce responsibility.

I know that this worry is a major block to implementation of full CI, but GWS sidesteps this objection, and enables people to see how CI would work. I see similarities with the position of women in WWI: once women were seen to ba able to contribute to the economy by doing "man's work" during the war, suffrage became politically possible.

RobB said...

Thanks Richard, I think you are probably right. I still like the idea of everyone from the highest paid to the unemployed being encouraged to work together regularly for short periods on some sort of worthwhile project similar to the GWS.