The rise of the ‘precariat’ and the decline of living standards

ON LINE opinion – Australia’s e-journal of social and political debate
Posted Wednesday, 20 August 2014

Guy Standing is Professor of Development Studies at the School of Oriental and African Studies, University of London. As well, he is a co-president of the Basic Income Earth Network. He was for many years a senior researcher with the International Labour Organisation in Geneva. He has written extensively on precarious employment, his best-known book in this area is The Precariat: The new and dangerous class published by Bloomsbury in 2011. This year, Bloomsbury published a sequel entitled A Precariat Charter: From denizens to citizens.

A Precariat Charter is really two books in one volume. The first 126 pages constitute an explanation of how, in the OECD, the uncertainty, insecurity, mass unemployment, the spread of casual employment, the decline of working class solidarity, the hollowing out of the middle class, the stagnation of wages and the disproportionate growth of wealth of the rich and the super rich has occurred since the 1980s, and particularly in the wake of the 2007-8 global recession. He explains the intimate connection between imposition of austerity policies, the rise of what he terms “utilitarian” democracy and expanding inequities and inequalities. He is particularly distressed by the rise in Workfare with its increased impositions of applications for benefits and the growth of precarity traps where “Life is built around queuing, form-filling, providing extensive documentation, frequent reporting for interviews, answering trick questions” and he goes on to say that “taking a low-wage job lowers the probability of obtaining a career job later, a trap made worse by the threat of benefit sanctions if the low-wage job is refused (pp.27-28).”

In the second part of the book, Standing lays out an agenda which the precariat might follow if it wishes to escape the worst excesses of the neo-liberal onslaught which ordinary workers have encountered since the mid- 1970s.

At page 34, he writes:

When the neo-liberal project took off, the defining features were liberalization, which meant opening up national economies to global competition; individualization, which meant re-regulation to curb all forms of collective institution (notably trade unions and occupational guilds); commodification, which meant making as much as possible subject to market forces (notably through the privatization of public services); and fiscal retrenchment, which meant lowering taxes on high incomes and capital.

Throughout the book Standing provides a plethora of examples attesting to his arguments. A couple of striking examples are the fact that “In 1999, China’s exports were less than a third of the USA’s. By 2009, China was the world’s largest exporter (p.37)” and that “the World Bank in 2013 concluded that by 2030 half the global stock of capital will be in today’s developing countries, compared with one-third in 2012…China and India together will account for 38 per cent of global gross investment (p.45).”

In Australia, we have a Treasurer, Joe Hockey, loudly proclaiming that the Age of Entitlement is over and that everyone must contribute to bring the budget back into surplus. But Standing points out that: “In the UK, while the government claimed that all must share cuts to living standards, inequality rose further. Between 2008 and 2012, the richest 1,000 people increased their wealth by 155 billion pounds, more than enough to pay for the government deficit of 119 billion pounds (p 59)”.

Standing notes that:

The moving sentiment of the religious conservative is pity. And as David Hume pointed out, pity is akin to contempt. Losers are failures, worthy of help as long as they show gratitude and earnest endeavour…The road from one thought to the next is well trodden.

By contrast, a progressive starts from a sentiment of compassion. That could be me over there if I made a couple of bad calls or had an accident (p.98).

These alternative approaches to social services are the moral dilemmas of our age: whether to opt for a deserving/undeserving system of workfare saddled with enforced obligations, means-testing and surveillance or to provide a universal income floor as a right of citizenship or permanent residence.

In much of the OECD since the 1980s the values of social solidarity, “compassion, empathy and reciprocity were replaced by pity, contempt and individualism… Ironically, those who claimed to believe in curbing the role of the state led the way in demanding more state regulation of those in need of support… Modern utilitarianism has several guises, but each seems to justify actions in favour of a majority against a minority (pp.101-103)”.

It is of little surprise that Guy Standing opts for an approach based on rights, entitlement and universalism and justifies his approach by relying on five principles:

…a policy… is socially just if (1) it improves the security of the most insecure … (2) it does not impose controls on some groups that are not imposed on the most free groups … (3) it strengthens rights and does not increase the discretionary power of those dealing with citizens … (4) it promotes the capacity to pursue work that is dignifying and rewarding … and (5) it does not impose ecologically damaging externalities (pp. 123-124).

Standing then proceeds to examine 29 separate aspects of life which impinge on those experiencing precarious, casual, insecure employment and underemployment as well as those eking out a living on today’s welfare benefits. By utilising his analysis of what brought us to this point in history and viewing each aspect through the prism of his five principles he builds a useful charter of rights which those in the precariat might do well to fight for.

Take for example Article 25, which argues that:

For workers and the precariat to have an adequate income something like a basic income is essential… The amount should be sufficient to cover basic material needs… for that reason it should be linked to median income, so that it does not freeze a minority in poverty… it must be paid individually…in cash…unconditionally, without behavioural rules… (and) must be universal (pp. 317-318).

He goes on to suggest a moral reason for a basic income is that the wealth of anyone is much more the result of our forebears’ endeavours than our own (p.318-319).

He declares that subsidies to business are distorting, inefficient and fail to assist poor people whereas a universal basic income provides certainty to the low paid and would encourage increased participation in employment because workers are never worse off under such an income guarantee system. “The real disincentive to labour is means-tested benefits, as poverty and precarity traps make it irrational to move from benefits to low-wage labour (p.324).

Guy Standing’s book deserves to be read by anyone who wants to understand how we got from the egalitarianism and optimism of the mid-1970s to where we are now and by all who hanker after a citizenship based on equality, mutuality and freedom.