On Wednesday I was sitting staring into space, wondering what I was going to write about this week. The press were preoccupied with mounting debt, and the creeps at Strathclyde Passenger Transport circumnavigating the globe at our expense. Then my phone rang. It was a BBC producer wondering if I would come and talk about why unemployment was no longer an issue. Now, that’s a very interesting question.
Hardly anyone seems to think that unemployment, currently running at 2.5 million in Britain, is going to be a key issue for the general election. An issue, yes, but hardly a dominant one. Yet back in 1979, the last time a refreshed Tory opposition challenged an incumbent Labour government after an economic crisis, unemployment was THE number one issue. “Labour Isn’t Working” said that Saatchi and Saaatchi Tory ad, possibly the most infamous election poster of all time. Unemployment then was only 1.4 million.
True, the unemployment figures were calculated rather differently in 1979, but that doesn’t alter the point. The return of mass unemployment has not been the burning issue it was in the past. In 1979, 53% of voters believed unemployment to be most serious issue facing the country against only 30% today, according to Ipsos Mori. Yet unemployment really is back in a big way. The slight decline in the UK figures last week ( they continued to rise in Scotland of course) by no means indicates that joblessness has peaked. There has been a huge increase in underemployment, with over 7.6 million on part time working. Economic “inactivity” is also up - the numbers who have given up looking for a job, like students, long term sick etc. has risen to 8.8 million. Hundreds of thousands of workers have accepted big reductions in pay in order to hang onto their jobs. One in five young people is unemployed. And the Chartered Institute of Personnel and Development warns that a new shakeout of employment is almost inevitable later this year because of the sluggish economic recovery.
So, why is unemployment not an issue? Make no mistake, a lot of people are really suffering. Ask yourself: could you live on £64 a week jobseekers allowance? Britain has some of the lowest benefit rates in Europe. In Ireland, unemployment benefit is nearly three times what it is here. Many British workers have exhausted their savings and are hitting rock bottom, as the dramatic rise in the claimant count indicates. The pain is partly mitigated by he various government schemes which have frozen mortgage payments and credit card debt. But these subsidies can’t last indefinitely, and when they unwind, we could be facing a huge social problem.
But where’s the public outrage? Where were the ministers squirming on Newsnight? In 1991 when the Tory Chancellor, Norman Lamont said that unemployment was “a price worth paying” for economic recovery he was rounded on by the media. Now no one bothers to compute the price of joblessness. It’s as if we don’t think that governments have any responsibility any more - even though Gordon Brown said, some years ago, that “full employment” was the government’s goal.
In the 1970s and 80s, joblessness was regarded as THE great social evil. The prospect of just one million unemployed was enough to make Ted Heath, the Tory PM, radically change his economic policy in 1971. The Labour PM, James Callaghan, came to grief over it in 79. Under Margaret Thatcher’s monetarist policies in the 1980s, unemployment soared and so did social unrest, culminating in the miners strike in 1984/5. Now it’s back, and we all seem to be just accepting it as inevitable. Even the response to the Corus ending steel-making in Redcar after 150 years has been muted, though a ballot on industrial action has been called.
So, what’s changed? Well, for one thing the nature of employment has. Instead of being in large workforces in manufacturing industry, workers today are largely employed in small companies of under 50 often in poorly organised service occupations. The great strikes and factory occupations in the 70’s and 80’s, like Upper Clyde Shipbuilders and the British Leyland Bathgate, were mobilised like military campaigns. The foot soldiers were workers who all knew each other, lived in the same streets, had similar status and a great sense of class solidarity. Now they are dispersed across all manner of occupations, as security guards, supermarket shelf-stacker, or in call centres. They also have mortgages, which most didn’t in the 1970s, and big debts which put a dampener on industrial militancy. And whisper it, but the influx of several million poorly unionised immigrant workers, willing to accept poor conditions and low pay, has sapped the strength of British labour Instead of union militancy, we have apathy and incapacity benefit. As a result, trades unions are not the political force they were in the 70s and 80s. The last attempted strike action was the farcical BA non-event at Christmas. Before that, it was power station workers downing tools in favour of “British jobs for British workers”.
The other big difference is that the public sector unions have not yet been mobilised in this economic crisis. The recession has hit in the main the private sector. Employment by the state has actually risen by around 100,000 since 2008, during the deepest recession in eighty years, and wages in the public sector have continued to rise, even as non-state workers are taking pay cuts. In the past, public sector workers - nurses, teachers, fire-fighters - had a deep sense of grievance at their poor pay and were leaders in industrial unrest. Nowadays they are a relatively privileged class earning higher wages and with better pensions than their private sector equivalents.
However, this might all be about to change. If and when the next government tries to tackle Britain’s unsustainable public deficit, sacking hundreds of thousands of public sector jobs, then unemployment and industrial militancy are likely to stage a dramatic comeback. There have already been threats of strikes from public sector unions at the mere suggestion of a pay freeze - but much more than that will be required to balance the government books. This may explain why Labour, which tends to do rather badly in times of industrial distress, has held off cutting public spending until after the election is safe and gone.
So politicians may be fooling themselves if they think unemployment is no longer an issue. There is a lag in social awareness. It has taken some time for people to remember what it actually means in terms of ruined lives and social dislocation. If we think society is broken now, just wait until next year and the year after that. When people lose hope they become desperate - and the clock is ticking.