Wednesday, October 12, 2016

Green Wage Subsidy - Turning a dead dole into a stimulus for the green economy

One of the weaknesses of free-market capitalism is its tendency to undergo periodic downswings, recessions and depressions, which cause widespread hardship through unemployment and poverty, together with the risks of political instability and war. In a recession, and also in a normally functioning economy, we must ensure that the economy is restarted in a green way. We can create a healthy and beneficial demand in the economy by addressing ecological needs (that is, the needs of environment and society) meaningfully, and at the same time prepare the ground for an introduction of Citizen’s Income by turning unemployment benefits into a Green Wage Subsidy (GWS) as set out below.

EC735 Every local authority will be required to set up Tribunals empowered to judge, systematically according to set criteria, whether the processes and product of public services or private enterprise who come before them are of net benefit to society and/or environment. 

Applicants would typically be operating in the following fields: 

1. energy conservation

2. renewable energy technologies

3. energy efficient goods manufacture 

4. pollution control technology

5. waste minimisation

6. repair 

7. recycling

8. water management

9. sustainable agriculture

10. forestry and timber use

11. countryside management

12. housing - new building and refurbishment

13. improvements to visual environment

14. public transport

15. education and training

16. counselling, caring and healing

17. community work

18. leisure and tourism

19. innovation, research and development

20. in some high unemployment areas, any ethical business which passes a certain threshold in its environmental audit.

EC736. Businesses and public enterprises who think they might qualify may go to the Tribunals seeking "Green Accreditation”. Any economic grouping may apply: public services including local authorities, co-operatives, and private enterprises. The sole criterion for acceptance is that the outcome of their work is to the benefit of society and environment. If successful, they may take on new workers (i.e. in addition to their present establishment) from Job Centres. New workers taken on under this scheme will be allowed to keep their unemployment benefit in their new job. This can be seen as an extension of the present “Earnings Disregard”. In this way, “Job Seekers’ Allowance” and other forms of unemployment benefit change from being a “dead dole” into a Green Wage Subsidy (GWS) which stimulates the green sector of the local economy.

An appeal process will be provided.

EC737 The new employees will retain their benefit payments on entering their new work, and the employer will  bring their remuneration up to the normal rate of pay for the job they are now doing.  The result is that the worker has work and a better income as a result of taking on work, and the employer has a bigger workforce for a smaller outlay than would normally be the case, as his payroll is now subsidised by the benefits agency.
There is no time limit for this arrangement, so that in this regard it behaves in the same way as a Citizen’s Income (CI). 

EC738 It will be illegal for employers to replace previous establishment with GWS workers, and if workers believe that they have been so replaced they can make a complaint to the Tribunals, who would have powers to reinstate the worker or, in the case of repeated offences, to revoke the offending company’s accreditation. Participation in the scheme will be entirely voluntary on the part of both employees and employers. The scheme will be outwith of any existent rules which provide sanctions for claimants who refuse work, and in the event of a claimant refusing work offered by accredited employers, there will not be any withdrawal of benefit.

EC739 In order to avoid unfair competition between established companies and putative start-up companies, those companies applying for accreditation must have been in existence for a five years. In special local circumstances, this rule may be adjusted by the tribunal.

EC740 The GWS money would otherwise have been given to unemployed people on condition that they do nothing, which is the present status of Unemployment Benefit, and is the cause of the present notorious unemployment and poverty traps. Therefore, in the short term there would be no cost to public sector finances, since the money would have been paid out in any case, as unemployment benefit. Some of the GWS money would come back to Government in the form of increased tax revenues, and yet more would come back to society in qualitative improvements such as improved services, diminished inequality and improved morals. Because the GWS is permanent (as opposed to being time limited, which is the case with similar benefits at present) there would be a long term cost analogous to that of CI. These costs are consonant with Keynesian doctrine of the state stimulating work in times of economic depression.

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