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The problem that never went away

Unemployment has not gone away because, as Eddie George has admitted, the labour market needs unemplyment to function properly

At the beginning of August it was announced that the UK manufacturing sector had finally fallen into official recession, that is two consecutive quarters of negative growth. Given that capitalism tends to be at the height of what it is capable of immediately before it goes into crisis, it is worth examining what conditions the height of British capitalism constituted.

It is particularly pertinent to examine employment, both as an index of the scale of modern capitalism, and in terms of the fact that recession will inevitably cause unemployment to rise from whatever levels it still stands at. Unemployment has come to be seen as a long term feature of capitalism. Indeed, the Governor of the Bank of England, Eddie George, got into trouble a couple of years back for stating what is widely known in professional circles to be a fact: that the labour market requires a degree of unemployment among workers in order to be able to function properly.

Even during the long post-war economic stability, full employment was always taken to mean a margin (in the hundreds of thousands) of unemployed people. It is a notable fact that during Labour's first term, Gordon Brown, in the light of favourable employment figures, decided to proclaim once more that full employment was their aspiration. Of course this time full employment meant a much higher margin of unemployment than it did in the 1960s. In the context of the routine millions of unemployed in the economy since then – with up to three million unemployed in the UK as little ago as 1992 – getting it below one million would do.

In recent months the media was able to announce the headline that unemployment had fallen below one million for the first time in twenty years. This figure was arrived at by the governments preferred method of calculating unemployment – the claimant count. It is obvious quite why they should prefer to measure unemployment solely in terms of how many people are claiming unemployment benefits, largely because these people are costing the state money, but also because it produces a generally lower result, since not all unemployed people are claiming benefits. The UN recognised International Labour Organisation (ILO) measure of unemployment – using a survey to find people who are out of work and have sought work in the previous four weeks and able to start within a fortnight – places unemployment currently at 1.48 million.

This level of employment still represents a record high, with 24.4 million people currently in work. The intensive exploitation of workers up to April this year was also very high. With a total of 920.6 million hours being worked a week (as compared with 850.3 million in 1992). This works out at something like an average of 38 hours per week for the average full-time worker, with some 24 percent of the workforce working 45+ hrs. The UK economy requires a massive amount of effort to operate. These figures represent an increase in work being performed above that which would stem from a simple increase in the number of workers.

The extensive increase in the workforce can be seen from the actual decline of self-employed workers as a trend. The statistics for self-employment are liable to distortion at the best of times due to the numbers of contractors who, whilst bureaucratically self-employed for tax purposes, actually simply sell their labour power to firms on a temporary basis. Although the changes to IR-35 have seriously affected their tax status, it still remains a significant part of corporate culture. The position of these contractors highlights the contradiction that lies between the trend of proletarianisation and the fantasy of self-employment (and thus freedom) as propounded by Thatcherism. Yet again, a seeming way out within capitalism turns out to be a blind alley.

These levels, of course, although aggregated nationally by the Office for National Statistics don't reveal the uneven character of these levels of employment. The spread of this variety is quite wide. In the North East unemployment (ILO basis) was 7.7 percent, compared to the south-east (excluding London at 6.4 percent) which had 3.3 percent. Even these figures do not tell the whole story, since within these regions it is possible to find specific areas and estates where unemployment soars: since, after all, unemployment and poverty tends to cluster, for reasons of housing costs if nothing else. Of course, the simple measures of unemployment do not cover the exact extent of economic inactivity within a specific area.

The clearest problem within this context is that of rising long-term sickness. Labour ministers have managed to incur the wrath of disabilities groups by trying to clamp down on the rise in long-term sickness benefit, largely by claiming that many of those who are on that benefit are simply the unemployed cynically re-designated by the Tories to remove them from unemployment statistics. It has to be asked why Labour did not draw attention to this callous behaviour in the 1997 election, rather than waiting until the time came to lower their budgets. Perhaps the beneficial distortion of the statistics served their purposes too for a while? Nonetheless, it is clear that a huge growth in long-term sickness benefit has occurred, from 414,000 recipients in 1993 to 727,000 in 2001.

The real measure of unemployment as a problem can be found in long-term unemployment. Over a third of the currently unemployed have been unemployed on a long-term basis (over 6 months). As of April this year 222,000 had been unemployed for over two years. Many of those people will probably never find employment again. Within the context of clusters of unemployment, it becomes possible to see how such areas can become charged with desperation and misery.

That even at the height of economic prosperity capitalism can leave so many members of its society in abject misery and poverty demolishes absolutely the lie being propounded by Tony Blair that "economic prosperity" is automatically in everyone's interest. The anarchy of the capitalist market lies at the heart of the problem. In April this year there were some 395,000 (and rising) job vacancies that could not be filled due to the disproportion between the use-value of labour power required and the quality of labour available. This relentless and blind pursuit of the market has led to the utter denial of ability for over a million workers.

In this context, it becomes understandable why the government places so much emphasis on training and directing labour in an effort to bridge this gap. It is, though, a wasted effort since the problem lies with the subordination of labour to the needs of capital accumulation, rather than its own self-development. The subordination of human beings to the law of "no profits, no work" means that we live in a society irreconcilably opposed to our interests. The presence of large-scale unemployment even in times of relative economic boom and super-high profits alone proves this. If a slump is round the corner, we can possibly look to a return to three million on the dole (or maybe more), as in the recent past. Only the removal of the wages system itself will free us from the threat of its inevitable consequences.