Welfare system ‘normalises’ precarious work

The Australian trade union movement is reinvigorating its fight against insecure jobs. This is one of the most important battles in these times of burgeoning inequality. The ACTU’s new documents to back up its fight Australia’s insecure work crisis: Fixing it for the future and Jobs You Can Count On are well researched and broad in scope. Its proposals cover strengthening of labour law across many dimensions, a bolstering of industry policy for jobs growth, and a suite of initiatives to foster the social and economic inclusion of marginalized groups.

While there is some difficulty in assessing exactly the full extent of insecure employment, the ACTU in one of it’s new reports, drawing on OECD data, considers that it covers 40% of Australia’s workforce and stands at the third highest level of non-standard employment in the OECD (p.5).  The ACTU portrays Australia as a global pacesetter in the creation of various forms of insecure employment.  But the Australia Institute in its new factbook on insecure employment has put the figure using a variety of indices, at over 50% of the workforce. 

This renewed focus and analysis of insecure employment however continues to be deficient in one important respect – the role of social welfare in actively promoting the growth and take up of precarious jobs. I gave a paper on this at the ILO in 2013 entitled Social policies lean on deficits in labour regulation in Australia to fuel jobs growth and reduce welfare dependency. The topic of this paper was the way in which the tough welfare to work regime in Australia actively contributes to the growth of precarious work because people receiving unemployment payments (Newstart Allowance) have no choice but to take poor quality insecure jobs under the terms and conditions of social security law and of course because payments are so low.

This theme is taken up and expanded in a recently published article in the Work, Employment and Society journal on the struggles of insecure workers. The article by a group of researchers at the University of Manchester explores the role of social welfare in ‘normalising’ precarious work and asserting it is an alternative to unemployment. It is an important article in that it is making a conceptual transition between the worn out differentiation between unemployment and employment. The way that social welfare works through activation strategies is that it demands that unemployed people take up any form of work regardless of low wages, insufficient hours or precarity.

But it may also be the case that the government will subsidise an unemployed person to take up a low quality job which is now the case in the UK under its Universal Credit system. Under this system, low paid workers may also be subject to conditionality of receipt of benefits, including income tax credits and housing subsidies. These workers are under pressure to find employment that enables them to entirely self-sufficient. In effect, people in paid employment, especially low paid and insecure, are treated as if they are unemployed. And indeed because of the precarity of their employment and insufficient income they share many characteristics of unemployed  people. The nature of such social welfare systems also promotes the growth of precarious employment because there is a large pool of people available to take up such jobs. As the Manchester University researchers say in their articleThe consequence is a blurring of the unemployed/employed divide and a normalisation of the take up of fragmented, low paid and short-term jobs.

The article also takes on a troubling issue about the potential outcome of a universal basic income (UBI) in further enabling the growth of precarious and low paid work. At the heart of the case for a UBI as proposed by Guy Standing is that it eliminates conditionality of social welfare and thereby eliminates the pressures on individuals to take up precarious jobs. But the Manchester authors propose another scenario – that a UBI will actually consolidate and ‘normalise’ precarious employment as the quality of jobs becomes of less consequence to workers and employers have even less obligation to provide secure, decent jobs as workers will always have a UBI to fall back on. Importantly, this outcome defies the founding principle of the ILO that labour is not a commodity….which means not treating workers as objects or things or machines but as human beings with fundamental human rights. The UBI could actually serve to promote further commodification of labour.

In place of a UBI, the Manchester academics argue that there should be a greater focus on reinvigorating labour standards and decommodification of labour which fundamentally involves strong labour rights across core factors  including wages, job security, and leave entitlements. Based on their research across 6 countries in the EU – UK, France, Denmark, Germany, Slovenia, and Spain – they argue for a 4-pronged approach to revitalising employment protection and decommodifcation covering security, opportunity, fair treatment, and life beyond work (SOFL). Across the countries they studied, aspects of these settings were variously evident. Fundamental to the SOFL vision however is reconstituting social welfare systems so they do not play a role in commodification of labour by fostering the growth of precarious work which is an outcome of their conditionality requiring unemployed to take on poor quality employment.

The authors do not underestimate the complexity – challenges and contradictions – of the present situation (indeed the title of the article) with the present situation in employment and social welfare policies. Nevertheless, they make an important contribution in highlighting the enormous impact that social welfare has on employment and particularly the growth of precarious employment as I have long argued. This is an important and neglected connection as noted by academic Ian Greer in his article Welfare Reform, Precarity and the ReCommodification
of Labour which is indeed a background to the Manchester article.

Social welfare systems around the world and in Australia have become significantly corroded in terms of their core role in social protection for citizens confronting social and economic challenges at points in their lives. They have degenerated into systems of social control and oppression and have a troubling role in facilitating the growth of precarious employment. The Manchester University article makes an important contribution in promoting an alternative vision of social welfare that does not encompass a UBI and circumvents some of the concerns I have about it also particularly its potential to further consolidate inequality.

Back to my starting point, about the ACTU’s reinvigorated fight on insecure employment. It needs to countenance the role of social welfare more strongly.



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