The year 2016 has been one of political turmoil. The lurches in the polls, from Brexit in the UK to the USA presidential election, are said to indicate a huge backlash of public anger.
The reasons given for this backlash vary across political positions. The right-wing claim it is against metropolitan liberal elites, be they in Washington or London. The centre-left claim (which I agree with) the backlash is fuelled by racism and xenophobia, and sexism in the USA. Both sides, to some extent, blame globalisation, trade, and neoliberalism – especially for a loss of manufacturing jobs which have been moved overseas to China and India.
False promises have been made to the communities worst affected by these changes: especially to the Rust Belt in America and the Northern Heartlands of England – promises of more local jobs and lower unemployment by allowing less trade and fewer migrants. Take back control. Make America great again.
The danger now is that, when these promises fail to deliver, just how much deeper and darker will be the next backlash? As we head into an economic repeat of the 1930s depression, the political lessons are surely plain to see.
And it soon will get worse because of the increased automation of jobs which is only a few years away. From automatic self-driving lorries to online algorithms to electronic control systems, there will be less work in future for drivers, receptionists, call centre staff, caretakers, cleaners, and many other people doing routine jobs.
What can we do to stop this descent into despair and right-wing extremism?
Well, one trite answer to date has been to blame the people with few or no skills and tell them it is their fault and that they need to learn new skills for all the high tech vacancies in the economy. A moment of reflection here should be enough to realise that, firstly not everyone will acquire high skills, and secondly that many of these vacancies are not a sign of an expanding labour market.
Every board of directors wants to hire a computer project team to produce a magic online algorithm which reduces staffing and doubles the company share price, so they advertise in hope. But in the same way that haulage companies have signs for driving jobs permanently painted on the back of their lorries, that doesn’t mean that an additional job exists. Usually it is a sign of a company wanting to displace the current driver with someone willing to work for less.
Another trite answer is to say – don’t worry, the free market will always sort out economic problems. It is simple supply and demand.
Call it creative destruction if you like. The argument is, yes, unskilled and semi-skilled jobs are currently in a long-term decline, but hey, does this decline have to be a problem? In England the first census showed that a massive proportion of the population were agricultural labourers. Every one of the 16 further censuses – spanning 170 years – has shown a continuous decline in agricultural employment. Manufacturing, transport, and clerical office jobs took up the slack. See, we are told, you can always trust the market to adjust and provide.
But now these newer sectors are declining in employment too. Until recently, the public sector picked up some of the slack, before austerity pushed public sector employment down as well.
And this employment decline is concentrated in disadvantaged areas – mining communities, steel towns, textile valleys, seaside resorts. The Rust Belt and the Northern Heartlands, typically.
The solutions here will vary from community to community, and from time to time.
But I want to suggest that a prime candidate for resolving the pressures on unskilled and semi-skilled work is the idea of a universal basic income. People criticised the tax credits regime of the 2000s as being a subsidy to employers to pay low wages. Maybe. But if it wasn’t tapered or means tested, and becomes universal, then it becomes a subsidy for local employment regardless of the skills level.
In the 1980s in the UK many a middle class creative industry was born using the Enterprise Allowance wage subsidy as the midwife. Why not now give the working class the same opportunity?