Friday, March 23, 2012

The Bottom Line: private sector subsidised employment

Readers based in the UK might want to check out the Mary Portas documentary series on Channel 4 at present (also on 4OD catch-up).   If you have been put off by the presence of Portas, or the Channel 4 marketing guff for the series, it is still worth watching.

In summary, Portas is a very well-known retail consultant in the UK, who has re-opened an old garment factory in the North of England.  This area's industry was largely based on textiles and has been devastated by competition from imports.  The documentary typically suffers a bit from the "dramatic editing" that seems to blight most UK factual TV output these days, but it does give a real voice to the people in these communities and the effect long-term joblessness has had on them and their families.  In amongst the "oh no, we've run out of lace!", there is one of the most damming, hard-hitting and brutal depiction of the psychological effects of unemployment I have seen on UK TV since the '80s.

Over 300 queued for just 8 minimum-wage, temporary machinist jobs.  Many had never had a job in their lives.  One 20-year-old spoke of how money had always been "given" to him - it was a genuinely moving experience to buy food with money he had earned for the first time in his life.  Others spoke of the boredom of unemployment and wanting to do something. The town is run-down and dilapidated; there are people standing around idle.

The project appears to be an example of a private-sector employer with public subsidy funding.  I think the trainees' wages were being paid for via one of the UK govt's apprenticeship programmes, with Channel 4 and probably some other private sources stumping up the rest.  So, probably not a true "job guarantee" in a sense, more of an apprenticeship with government funding.

I would underline the demand for these jobs: over 300 seeking textile work for less than £6 per hour.  I think we have a very, very long way to go before hitting NAIRU or any other "optimal" rate of unemployment.  

Many of the trainees were so damaged by joblessness, the concept of turning up at a fixed time and place to carry out set tasks was totally alien to them.  The private sector would struggle to hire these people, even on a subsidy (in last night's show, one machinist had to be fired).  This is where social sector employment comes in.  The unemployed have been damaged by a pervasive culture of joblessness and will need "fixing" before they can hold down a private sector job.  

In the UK, the NHS offers medical assistance even though it may not be "optimal" or "productive" in some economic models.  Helping the long-term unemployed build the skills to find private sector work is an "NHS for jobs".

This is not the same as Workfare or work experience.  A job is a reciprocal arrangement - I give you some of my time and labour, you give me some money.  Schemes like the Work Programme miss out this crucial link.  It's like learning to drive without turning the engine on.

The Mary Portas scheme, the government reports into the Future Jobs Fund and countless studies show that being paid for a day's work is central to the commitment and success of the schemes.  It's not the only requirement for contentment in a job, and it isn't always essential otherwise there wouldn't be volunteers.  But here we are re-training a group of people to understand the most basic processes of employment - that it is the means of self-support in exchange for labour.  To fully appreciate the meaning of this process, a job is the only option.  There is no substitute.

Programme Home Page:

Interview with Mary Portas:

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