A jobless recovery?

Australia’s unemployment rate has increased since the global financial crisis while across the OECD it has reduced but remains high. There is wide concern as to how slow the recovery in employment has been, the persistence of long term unemployment and how much  of what employment growth there has been has been is  in poor quality jobs which contribute to the high rate of underemployment. There are concerns about youth unemployment in many countries including Australia. Further women’s poor performance with the widening gender pay gap is just the tip of the iceberg as to the ongoing disadvantage women experience.

What is going exactly? There has been economic growth and recovery to some degree. Australia is in transition following the mining boom which accounts for reduced economic activity and employment levels in conjunction with the continuing degeneration of manufacturing industry.

One term that is persistently used is the jobless recovery – informing the title of the ILO’s 2014 report on Global Employment Trends 2014: The risk of a jobless recovery. 

I have read many of the  reports of the OECD, ILO, World Bank, WEF, the IMF and  others on the current crisis in employment. Most of them attribute the major factor to slow economic growth with skills mismatch and ageing populations also factors.

However, a new book by David Harvey Seventeen Contradictions and the End of Capitalism is particularly compelling in terms of explanations as to the nature of the current crisis in employment. Harvey’s explanations puts labour replacing technologies and new organisational forms as the most important factors in terms of the crisis and threat of the jobless recovery. Harvey proposes that ‘capital’s immediate purpose is to increase productivity, efficiency and profit rates, and to create new and, if possible, ever more profitable product lines.’ (p. 53)

According to Harvey, the trajectory of contemporary capitalism is towards the ‘disposal’ of labour. But this leads to one of the central contradictions of capitalism – the fast pace of innovation and adoption of labour replacing new technologies undermines the foundation for the success of capitalism which hinges on the consumption and demand for new products. And this can only occur if workers have the income and the means to buy these products. So the drive to efficiency and profits creates an ever great wedge within populations and this is the source of growing inequality.

There is much disquiet about the effect of growing inequality on economic growth as I have written about last year. Harvey’s new book brings into focus the incompatible forces at play in the global economic system which are having such deleterious effects on employment opportunities. While the international agencies might point to the negative effects of inequality, they largely do not go to the source of what is creating it as Harvey does.

David Harvey’s 1973 Social Justice and the City was a core influence on the type of work and research I went on to do. I did an undergraduate degree in economic and urban geography but have had little contact with that field since. But coming across Harvey’s new book and finding its intersection with my research and policy interests in employment and social welfare shows something of the timelessness of the best of scholarly work.

 

 

 

 

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