GREAT EXPECTATIONS 2: DOWN WITH BIG BROTHER

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I’m down with Big Brother- are you?

Let’s look at unemployment and the minimum wage in terms of our new, revised expectations

Unemployment is down-Employment is up?

Reducing the rate of unemployment is the same as increasing the rate of employment- isn’t it?

Well that all depends on what you mean by employment-

Full time employment in developed economies used to mean work that had certain expected entitlements such as:

The right to representation

The right to redundancy payments

The right to claim for unfair dismissal

The right to unemployment benefits

However under the new ‘Supply side’ Monetarist terms of the debate:

 

The right to Representation– Trades union representation is a mere fraction of what it was all over the developed economies in the post war period.

Britain now has some of the most stringent anti union laws in the western world- America is no better.

The right to Redundancy payments– In Britain there is no free access to legal representation, you take your chances at the back of the creditors queue (after the derivatives holders of course, who go straight to the front)

The right to claim for unfair dismissal- Not until you have worked for two years without making a claim in Britain. Before then you can be sacked for no reason.

So you can no longer expect to be employed in the sense the word meant in say, 1970 but that does not mean you are unemployed. In the Saxon Axis it is getting just as hard to be unemployed as it is to be employed.

The right to unemployment benefits – In USA despite the ongoing unemployment crisis payments to the unemployed are being cut back as well as food stamps. Labour participation rates in USA are at levels not seen for nearly half a century.  It is no better in Britain where unemployment payments ‘(Jobseekers ‘Allowance’!) is subject to ever more stringent conditionality tests.

And how does this effect your expectations?

Say hello to:

Zero hours contracts

This is ‘employment’ where the ‘employer’ does not even guarantee the ‘employee’ a minimum number of hours of work, you will simply be called (or not called on the day to do some work (or not). But of course if you are not available you can have wages (that you haven’t yet earned) docked, or even be sacked!

Now:

At zero hours are you employed or not?

Should these jobs be regarded as making the rate of unemployment fall?

Should these jobs be regarded as making the rate of employment rise?

What do you expect will happen?

The minimum wage is going up

Barry Obama and Gideon Osborne are both talking about an executive decision to increase the minimum wage-for Federal employees in USA to around $10 an hour and in Britain to  £7 an hour

Now surely this at least, is straightforward good news.

Well let’s look at the terms of the debate:

First of all the ‘non political’, ‘independent’ Low Pay Commission decides what the minimum wage rate should be

It follows from this that wages are not a matter of economic power because the poorest paid have none; if they did they would not need the state to impose an arbitrary wage rate.

It follows from this that the wage price is not a reflection of the value of the work being done, but of something else. It also follows that no real price signal is being transmitted to the wider market so the pricing signal system has broken down. In other words work is being done that under a ‘normal’ capitalist functioning system would not be done, causing a misallocation of resources.

Secondly, if you can’t negotiate your own wages you are not employed in any meaningful traditional sense of the word (see above)

Thirdly, the Low Pay commission decides the minimum national wage in the national interest, not in the interest of the lowest paid. If it were solely in the interests of the lowest paid then the minimum wage would be £50 an hour!

It follows from this that wages that are not negotiated by a worker in their own best interests cannot be called wages in any meaningful sense of the word!

 What does this mean for expectations?

Since wage rises are generally held to lead to inflation, you can expect that as long as the ability to negotiate wage rates is out of your hands and in the hands of the ‘independent’ Low Pay Commission and inflation rates are in the hands of the ‘independent’ Central Bank of England, you are always , no matter what the nominal figures are supposed to be end up with your disposable income going

DOWN
DOWN
DOWN

So are you down with Big Brother now?

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