Government figures on the labour market are, on the face of it, perplexing for socialists. They show employment up and unemployment down, both apparently to ‘record’ levels. But this is in the shadow of an extremely weak post-recession recovery, when the picture shouldn’t be anything like as rosy.
What is really going on? As so often with capitalism, there’s much more to the headline statistics than meets the eye. This book is a good guide to some of the main underlying trends, most of which are far less flattering to the Tories’ stewardship of the economy than they’d like to admit.
Blanchflower, now an academic in the US but who spent a period on the Bank of England’s Monetary Policy Committee in the late noughties where he was notable for taking issue with the majority stance, focusses on ‘underemployment’, the phenomenon whereby most workers might have jobs, but a significant proportion have jobs with fewer hours than they’d like.
He shows how the figures for underemployment rose sharply in the wake of the Great Recession of 2008/09. While they’ve come down since, they’re still higher than the levels that pertained before the slump.
Despite superficially robust data for employment and unemployment, therefore, the figures for underemployment point to a much slacker labour market. As such, the persistence of underemployment is a key factor in the lack of wage growth and workers’ (correct) sense that life is far from good.
Related to this, the book is clear that the poor productivity performances of most major economies, including the UK, are largely due to the use of comparatively low-paid labour in place of more expensive investment.
Along the way, Blanchflower notes that the use of inexpensive labour (relative to machines) and the use of involuntary part-time and zero-hours contracts and the like is down to employers’ desire to maintain profitability.
So far so good, but this is where we come to the book’s main weakness. As a Keynesian, he doesn’t really have an explanation for the markets’ reluctance to invest, beyond the feeling that “the people have lost their pep”. His solutions – mostly involving letting the economy ‘run hot’ to stimulate investment – fall short of what’s needed to completely eliminate the damage to workers’ mental and physical health that the ups and downs of economic cycles have wrought.
As readers of this magazine know, a proper understanding of exploitation and the role of the falling rate of profit in undermining investment and leading to slumps, is a precursor to accepting that the system as a whole is rotten and has to go. But there’s much in this book that’s useful for socialists who, rather than return to the good old days, want to achieve precisely that.