Depending on You: Lets get Basic about income and employment

Paper given at the 5th National conference on Unemployment, RMIT, Melbourne 1-2 Oct. 1998

The failure of the state to create enough jobs for all who want them or to share all the available jobs amongst the entire labour force has come to be defined as the ‘unemployment problem’. Various ‘solutions’ have been proffered by governments, welfare agencies, academics and others. My favourite ‘solution’ is the assertion put forward by those who are uninformed about the complexity of this issue. Relying only upon the fact that they are employed and have not encountered difficulty acquiring paid work they happily assert that there is not an unemployment problem: they claim there are plenty of jobs but some people just don’t want to work. They are blithely unconcerned when confronted by ratios between people registered as unemployed and notified vacancies. Nothing in this and, I presume, any other paper offered at this conference will convince them otherwise.

This paper will:

  • examine some of the proffered ‘solutions’ to the ‘unemployment problem’, and suggest why such ‘solutions’ are proposed,
  • describe why governments are intent on blaming the unemployed for their unemployment,
  • consider whether dependency is a problem for government or whether dependency rhetoric is the Howard Government’s ‘solution’ to the political odium which high levels of unemployment create,
  • suggest that concentrating on dependency as the problem does nothing to solve unemployment or provide income security, and argue that the introduction of an unconditional universal basic income would provide the first step towards providing a base from where we might start to identify the real employment/unemployment issues confronting Australia.

Throughout this analysis of both ‘problems’ and ‘solutions’ I will argue that it is our failure to trust ourselves, which in turn leaves us unable to trust others, which causes us to identify bogus ‘problems’ and define unworkable ‘solutions’.

The market solutions

Unemployment, at least in the short term, is recognised by market economists to be a by-product of industry restructuring, micro and macro-economic ‘reform’, increased efficiency / competitiveness and globalisation. Some market economists choose to treat the resulting unemployment as an externality and therefore of little consequence. If they choose to comment upon it all, they assert that in the longer term due to a ‘trickle down effect’ employment demand will eventually pick up and in the long term everyone will benefit because of the increased prosperity (contra Omerod 1994, Langmore & Quiggan 1994). This is the look mum no hands approach where by the economy is left to find its own equilibrium. Jane Kelsey (1994) and Brian Easton (1997) have shown that in the country where this approach to unemployment was adopted with great alacrity it has not solved unemployment nor has it resulted in increased prosperity for the overwhelming majority of New Zealanders.

There is an even more vicious approach to unemployment than look mum no hands approach. That is the it’s their fault or blame the victim (Ryan 1971) approach. Which conveniently denies that globalisation is a game which only the super rich can win. This approach has been around in many guises in Australia since the invasion. Indigenes and convicts were the first to feel its lash. The it’s their fault approach suggests the reason unemployed people are not able to obtain paid employment is the result of a failure on their part. This approach underpinned the worthy / unworthy / less eligibility debates which have raged in welfare circles since the 1834 Poor Laws. It was a central feature of the post World War II “workers welfare state” (Castles 1994) with its work tests and targeting.

The it’s their fault approach has recently taken on a new virulence. Confronted by human service workers who suggest the problems which most pressingly need to be addressed are the absence of decent income support and employment opportunities. Governments in the United States, Britain, New Zealand and Australia assert the problem is dependency upon the welfare state. Defining the problem in these terms almost demands the solution arrived at is the removal of, or substantial reduction in, welfare assistance.

Whilst this it’s their fault approach is normally used as a weapon against impoverished individuals it can be utilised as a tool to denigrate groups of people: ‘welfare mothers’ in the United States, young ‘dole bludgers’ in Australia, and in Pauline Hanson’s Queensland it is employed to marginalise Aboriginal people. Without such a blaming mechanism and such finely tuned dependency rhetoric the Howard Government would not have been able to impose its ‘Dole Diary’, Work for the Dole Schemes and its oh so Common Youth Allowance. The last of these schemes reduced or abolished payments to 46,000 young Australians (Horin 1998, p. 10).

The Hawke/Keating solutions

In 1986 Cass acting on instructions from the then Minister for Social Security, Brian Howe, came up with the active society approach under this regime people who would not have passed the existing work test could still be paid unemployment benefit. Applicants needed to establish that by engaging in training or some other approved activity they were preparing themselves to escape unemployment. Cass (1988) and later Pixley (1993, contra Watts 1995) argued it was necessary to maintain the intimate connection between willingness to work and income support. They argued that this work willingness/income support linkage required the continuance of a targeted income support system.

In 1993 a Federal Government white paper entitled Restoring Full Employment declared “The loss of production through unemployment is the single greatest source of inefficiency in our economy. Unemployment is also the most important cause of inequality and alienation for individuals, families and communities.” (p.1) Langmore and Quiggan (1994) produced Work for All which essentially proposed a rediscovery of Keynesian economics and a massive expansion of job creation coupled with work sharing. The Government white paper Working Nation (1994) chose not to directly address the prime difficulty identified in Restoring Full Employment (quoted above), nor did it adopt the prescription outlined in Work for All. It opted instead to attempt to boost growth in the hope of creating more jobs and for increased training, case management of unemployed people and a job guarantee for a limited period for long term unemployed people. By the time Labor lost office in early 1996, there had been some lowering of unemployment to 8.5% (ABS 1996) and Working Nation seemed to have for the first time since 1974 actually reduced the numbers of people who were experiencing long term unemployment following a recession (Stromback, Dockery & Ying 1998).

Dependency rhetoric in full swing

The incoming Howard Government declared Working Nation to have been a failure and set out to demolish the training infrastructure of their predecessor. For good measure they privatised half of the Government employment service and dismantled the Skillshare network. For one month in its term of office it managed to have the officially admitted level of unemployment come in at below 8%. The Howard Government has opted for a combination of the look mum no hands and it’s their fault approach.

On both sides of the Tasman

What we are seeing is a partial globalisation of welfare policies occurring in English speaking countries since the mid-1980s. The Australian Child Support Agency was fathered in New Zealand and mothered in England before being shipped out here allegedly as an orphan. The welfare cutbacks in the United States and Britain of the late 1980s were replicated in New Zealand in 1990 and Australia in 1998. The workfare schemes of the United States have been translated into work for the dole schemes in Australia and New Zealand. The Clinton’s five years and you’re off welfare for the rest of your life coupled with wider Wisconsin ‘reforms’ are being pushed as part of the new Social Responsibility Code in New Zealand (O’Brien1998) and Howard’s mutual responsibility programs here (Tomlinson 1997).

Dob in a welfare bludger hot lines proliferate. In Australia there is an incessant search for the ‘fraudulent’ claimant (Nolan 1997). Dobbing in your neighbours has proved so popular in New Zealand that it is leading to gross inefficiencies in welfare policing.

Social Welfare benefits crime manager Joan McQuay says her team receives more than 670 calls and letters each week from people dobbing in others they suspect of benefit fraud.
Social Welfare announces only eighteen people have had their benefits reduced because they did not meet work tests during the first year of the programme. 29,000 people were subject to the work tests (The Jobs Letter (NZ) No.77, 27th April 1998 p.2).

Clearly, we know that economic rationalism is driving government economic policy in the countries mentioned above (Pusey 1991, Rees, Rodney & Stilwell 1993, Omerod 1994, Kelsey 1995, Easton 1997, Murray 1997). It would seem logical to argue that there is an intimate connection between the economic policies prevailing in the mode of production and those prevailing in the mode of distribution (Tomlinson 1989, Ch. 5). There have always been idea transfers between these countries. But something different is now happening compared with the late 1960s early 1970s. Then social scientists avidly read journals and books particularly from Britain and the United States with a view to finding out about the latest progressive ideas in order to attempt to improve welfare provision here. What is now happening is that governments on both sides of the Tasman are looking at reductions of the social wage in each other’s countries (which have been implemented without major disruption) in order they might duplicate social welfare cut backs in their own nation.

The assault upon social welfare, the social wage and industrial conditions being waged by powerful national and transnational corporations has been incorporated as current Australian Government policy. The Welfare State has also been criticised by human service and social policy critics of both the left (Gorz 1985, Stilwell 1993, Watts 1995, Tomlinson 1997, Rankin 1998)and the right (Murray 1997, Riches1997, Green 1996, Selbourne 1994 ). It is therefore likely that without some innovative thinking there will be a continuing diminution of the social safety net which is supposed to sustain the least affluent. “It’s time” to consider the implementation of a Universal Basic Income (UBI) as a replacement for the income support mechanisms which are now in place.

Basic income and citizenship

Many writers have argued that a minimum income guarantee should be a right of citizenship. Most, when questioned on this point, say that they would include all people who have permanent residency. As the Auckland Unemployed Workers Rights Centre puts it:

Our support for the (Universal Basic Income) UBI has always been on the basis that it should be a basic right of residency, a recognition that we are all stakeholders in society and that a UBI would provide choices and flexibility for people to participate in and contribute to society (1998, p.6).

I share the view that all permanent residents of a country should have an entitlement to a Basic Income and would argue that in a mature democracy in relation to the need for and the right to be provided with a basic income of both citizens and permanent residents are not significantly different.

Ensuring both citizens and permanent residents have a right to a basic income is an act of inclusion, even incorporation. Installing a UBI will be a small step not a panacea for all social ills. Even if we succeed in putting in place in our country a universal basic income this will only mean the removal of one obstacle (albeit an important one) to introduction of a socially just society. For as disability activist David Morell (1998), warns “Citizenship is more than ‘inclusion in the community’.” (p.16) He says:

‘inclusion’ in the ‘community’ is not enough. Indeed, the very concept does not make sense. The ‘community’ itself is so full of oppression, separation, exclusion, diverse interests and conflict for many of those who are already ‘included’ in it as to render the uncritical use of the of the concept positively misleading and the pursuit of the goal of inclusion disempowering (p.17).

A Basic Income is just that – an income floor guaranteed to all permanent residents. For it to be meaningful it has to be set at a level sufficient to ensure everyone sufficient to maintain them above the Henderson poverty line.

Economics of surplus: are we attacking the wrong problem?

It would matter little what level of unemployment existed in Australia if we were able to find a way to provide all permanent residents with a basic income sufficient to sustain them provided we were prepared as individuals and as a society to allow people to define their own social meaning outside the paid workforce and to be willing to recognise others evaluation of their importance to self.

Perhaps this is a pipe dream in a country where:

  • the Federal Government’s response to the High Court’s exposure of the myth of terra nullius and the Court’s determination that native title and lease holders rights could co-exist but that where the two conflicted the existing rights of leaseholders prevailed, was to remove indigenous people’s rights over property in order to “provide certainty to pastoralists and miners” (in fact to expand the existing property rights of national and transnational owners of capital),
  • the Prime Minister John Howard chose the National Aboriginal and Islander Day Observance Committee (NAIDOC) Week to push through Native Title Amendment Act in the Senate,
  • we participated in an eight year blockade of Iraq – the imposition of sanctions in that country resulted in the death of over 1 million Iraqi children (Arbuthnot 1998, Simons 1998), and connived with the Indonesian dictatorship in the subjugation of East Timor for 23 years,
  • we seem more intent upon negotiating Multinational Agreement on Investment (MAI) treaty (DEETYA 1998 p.10)than in meeting the United Nations foreign aid targets so as to help assist the 1,000 million people living on the brink of starvation,
  • the nursing home user pays regime which the Government imposed on frail aged Australians undermined the confidence of the majority of the elderly (Macklin 1998),
  • we display an uncaring attitude towards fellow Australians experiencing disadvantage and disability, and
  • we denigrate people excluded from paid employment reinforcing the impression that we as a nation are oblivious to the suffering of our less advantaged comrades.

If we are to build an alternative way of relating to our fellow citizens then we will need to jettison much of the economic rationalist ideas which now clutter our intellectual saddle bags.

Stripped of its finery economics is about how we exchange our surpluses, whereas as a science it has somehow been transformed into an economics of scarcity where everything is expressed in monetary terms. …We have created the shadow of scarcity, the polar shadow of which is greed. This is fuelled by the dominant world paradigm based on rationality and self-interest. … Fortunately we are not always rational and will cooperate when we really come to know and trust each other and have the power and resources to implement solutions. This is the foundation to an economics of abundance – of labour, goodwill and renewable resources (Fricker 1998, p.1).

The last part of this paper will examine the obstacles to the development of such trust.

The bludgers wouldn’t work in an iron lung

The most frequent response I have encountered when discussing the introduction of a Basic Income with people who have not thought a lot about Australia’s system of income support is: “If everyone could get ‘the dole’ for doing nothing then none of the bludgers would work they’d just go and lie in the sun on Surfers Paradise beach.”and when I ask: “Why do you think that?” They say “Well I wouldn’t go to work if I could get away with it.” Usually when pushed on this response people say that they’re bored with the work they are doing and would like to have time to write, read, do further study, spend more time with the family, do more interesting work or that they just need a break. But at the moment, they are working too hard or doing too much unpaid overtime (which they claim they to need to do either to keep their job or to do their job well). If pushed further many admit that going to work provides meaning in their lives and that they work, for reasons in addition to economic necessity. They may even agree they couldn’t manage anything like their current standard of living on an income at the Henderson poverty line and would work to maintain their current consumption level. Some accept that in large part their identity is tied to their conception of themselves as someone who works, who produces, who contributes to the society and even to the type of work that they do. Almost invariably, when they reach that point of analysis, they revert to their first statement “Yeah, I’d still work but if you had a Basic Income in place, we’d be overrun with dole bludgers and very soon there’d be hardly anyone working and the whole society would be bankrupted.”

The issue of work withdrawal and affordability has been debated ad nauseam and there is no compelling evidence to support the assertion that people provided with a UBI would desert work in droves. (See NZUBI Web Site, Van Parijis 1992, VCOSS and Good Shepherd 1995, Tomlinson 1989, Ch. 3, 1991, Watts 1995, contra Pixley 1993). Nor is there any evidence that a UBI is unaffordable (Rankin 1998, VCOSS and Good Shepherd 1995). There is an abundance of contrary evidence to the assertion that if a UBI were in place then people would leave work in large numbers and that a UBI would be unaffordable. The interesting feature is the resilience of such beliefs.

An explanation

The most compelling explanation of the resilience of these myths is that it is our failure to trust ourselves which in turn leaves us unable to trust others. Our reluctance to trust ourselves or to trust others to continue to contribute to the society derives from a central conservative ideological position which conceives of humans as inherently imperfect. The belief in the flawed nature of humans derives from either the concept of original sin or from the belief that though we might start off life without blemish on our journey we become corrupted -as we are sinned against we learn to sin. Robert Theobald (1998) suggests that “Today we are largely driven by a belief in original sin; we feel that most people, most of the time will behave destructively unless constrained by coercive power” (p.1).

The lack of optimism about fellow humans found in the ranks of those who oppose the introduction of a UBI, their conservatism, their need to blame and coerce the least affluent / advantaged, their denigration of the very people from whom they extract surplus capital and the those who constitute the reserve army of labour, is only matched by their fervent desire to exploit to the maximum the environment and their fellow humans for individual gain (Tomlinson & Lincoln 1995). The exploitative belief structure which seems to be driving both economic rationalist and anti-UBI agendas is a unique, sometimes contradictory, blend of classical conservative and market liberal thought. It takes unto itself beliefs in the sanctity of privately owned property yet can legislate to abolish indigenous people’s property rights (Native Title Amendment Act 1998).

The Benthamite principle of greatest good for the greatest number is supposedly arrived at as the end result of intense individualised competition. Liberty is, for economic rationalists, a freedom from restraint. Freed even from the restraint of tradition, good form or the ‘common good’. The promotion of the individual’s right to exploit, which economic rationalists define as freedom, reduces the ‘common good’ to the end results of trickling down prosperity – a urinary rather than a unified economic theory.

The promotion of ‘self provision’ over collective provision suits those with the capacity to provide for themselves but is a statement of intending neglect of those unable to afford to provide for themselves. Beyond this basic criticism of self provision several writers (ACTCOSS 1991, Pha 1992, ACOSS 1998)have pointed out that many of those who are allegedly providing for themselves are quite wealthy individuals who receive a considerable subsidy from the state. The better off superannuates receive far greater assistance from the state than do pensioners.

The very Governments (of the United States, Britain, New Zealand and Australia) who are flirting with an international treaty to guarantee international capital (MAI) protection are those engaged in removing existing rights of workers and welfare beneficiaries. They want industrial relations deregulated but want to maintain the highly regulated modes of distribution.

The adoption of economic rationalism and globalisation with its associated downsizing and job exportation, its user pays and self provision, its denial of citizenship (exemplified in Maggie Thatcher’s “There’s no such thing as Society” statement) coupled with the plunder by transnational corporations of the third world’s labour and ecological resources constitutes this celebration of extreme individualism. All of this goes under the name of world best practice. In the Australian context world’s best practice means:

  • cheapest: accomplished by non-unionised labour, long (12 hour) shifts, lack of environmental protection, gutting of award conditions, unsafe work sites-all of which add to the increased likelihood work place injuries, that is industrial murder,
  • deregulation,
  • competition,
  • individualised contracts,
  • low paid, casual / insecure of employment, in a word in immiseration.

There is an alternative and that alternative starts with the introduction of a Universal Basic Income.


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