Sunday, October 30, 2011

The Precariat

According to a British academic there is a new class of human, working in a precarious economic condition. Job security and longevity is gone for most people as the one percent strive to globalize everything to increase their profits at the expense of a living wage. Class envy? Maybe but most likely class fear. Loss of security ultimately leads to insecurity for all. An ugly forecast from the walesonline.co.uk website:THE widening gulf between the super-rich and workers with a precarious hold on their jobs is putting the UK on a path to social unrest, an economist has warned.

On a visit to Wales, ahead of a lecture to Cardiff Business School, Professor Guy Standing warned of a growing class of people who have little chance of a long-term permanent job.


He suggested these people are to be found not only among the unskilled and low-waged, but also among degree-educated workers who find themselves in a succession of temporary or contract jobs, a far cry from the sort of job security seen by previous generations in Wales’ industrial heartlands.

The Professor of Economic Security at Bath University dubbed these people the “precariat” given their precarious grip on employment.

“This situation is one in which people have to act opportunistically in order to survive,” he said. “It is a very challenging situation.”

He attributed the creation of this growing class of workers to the decisions taken to deregulate global labour markets in the 1980s.

He said that while this globalisation of the jobs market led to increasing incomes for the richest in society it meant workers in the UK were competing against people in China and India who were on a fraction of their wages.

“Governments knew that if they liberalised too quickly, wages and benefits would drop like a stone and all the high-paid productive jobs would go to those countries,” he said. “They made a Faustian bargain, saying we can’t allow that, we will allow consumption to rise with cheap credit and use tax credits to top up wages. As a result government budget deficits began to rise and rise. Every Faustian bargain must be paid and that was what happened in 2008.”

Since Professor Standing’s book The Precariat: The New Dangerous Class was published in May there have been riots in the UK and protests in major European capitals. Most recently we have seen protest camps spring up on Wall Street and near the London Stock Exchange.

Professor Standing, who previously worked as an economist for the International Labour Organisation, is not surprised at growing levels of unrest.

“I think we are going to see a lot more protests,” he said. “I think you are seeing the emergence of a number of movements that have in common a fear of insecurity. At the moment we are at a ‘primitive rebel’ stage where Robin Hood thinking of taking from the rich and giving to the poor is still very prevalent rather than a strategy for structural reform.”

As for this “dangerous class” he has identified, he argues that they cannot be described as an “underclass”.

“The system wants these flexible workers,” he said. “It wants people to be insecure, because that lowers labour costs, but as a consequence millions of people are living insecure lives.”

The Professor said that young people leaving Welsh universities and colleges today have only a small chance of a secure long-term job.

“They are entering a lottery where they have bought a ticket, probably incurring many debts, and that lottery only has a few winners but many losers,” he said. “It has created a tremendous undercurrent of status frustration.”

But he is adamant that it is not just younger workers who ar joining the class.

“They are those who carry laptops and are making good money, but they are doing so in insecurity,” he said.

“There are a lot of people who are in denial until it hits them. People who are actually extremely insecure but don’t want to recognise it. But then sadly it hits them and they realise they have not got the savings, a network of people they can rely on, or entitlements to the sort of benefits they presumed were there.Now we are reaching the stage where a lot more people are sensing their own insecurity,” he added. “A lot of people, particularly those in their 30s and 40s, have become aware that it could happen to them any day. It is causing a lot of intergenerational difficulties. Traditionally people were likely to be looked after by their parents until about 20. Then they had 20 years with no help and then in the last 20 years they provided support to their elderly parents. People are now going into their 30s and 40s still looking to their parents for support in times of need and people don’t have enough wealth and income to look after elderly relatives.”

He suggests that as many as a third of the population could be defined as members of the “precariat”.

“It depends how you define it, and although I don’t want to give firm numbers, at least a quarter of the adult population is in insecure jobs, and together with the unemployed you are talking about a third,” he said.

“But that doesn’t take into account those people are in jobs that to outsiders seem relatively secure, but who are at risk every day. There is a lot of outsourcing, sub-contracting, people working in call centres and people who are seen as contractors, but who in fact are dependent.”

Professor Standing believes the current austerity measures of the coalition government are likely to heighten the levels of unrest, due to the cuts to the welfare state and the loss of traditionally secure jobs in the private sector.

He said that even some of the super-rich were now recognising the dangers of growing levels of inequality.

“The banking community and the elite of billionaires who dominate the international economy have done remarkably well,” he said. “Their incomes went up exponentially between the 1980s and 2008 and they have continued to go up. We have a situation where the super-rich have become the super-super-rich, which is inexcusable, and all the major parties in Britain went along with it.

“They have done very well, but some of them are wise enough to realise that if inequality and insecurity becomes so great that they are unsustainable then riots will break out and if cities are burned and retribution is taken then sooner or later they will be under threat. That is why you see Warren Buffet talking about the need for higher taxes.”

As for what could be done to tackle the problems of job insecurity, the professor suggests that one solution may be the state providing a basic income for everyone, which could then be topped up by earnings.

He warns that without new policies the other alternative is a shift to the far right as voters seek to blame their own insecurity on immigrant workers.

“I am an optimist and believe that a crisis point will lead to the emergence of new political policies,” he said. “I think that we will see an angry period for the next two to three years, but a new younger generation of political thinkers and policy-makers will start addressing these things in new ways that will eventually produce a much better set of policies and institutions.”

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