If you’re blaming public sector employees, the unemployed or immigrants, you’re being divided and conquered by the real culprits

While the majority of people in employment in the UK have had pay rises below inflation,  effective cuts of an average of 4.5% ; the average city (i.e London financial sector) employee has seen their pay increase by 12% in the last six months, while managing directors have had a 21% increase (1) – (2). That’s equivalent to 19% and 37% rises in a year, after inflation. So the real division on pay and conditions is not public vs private sector, but ‘the city’ and top bank executives versus everyone else.

The endless rhetoric about supposedly ‘privileged’ public sector workers and unemployed ‘scroungers’ (while there are at least 6 people unemployed for every job vacancy) is just crude divide and conquer tactics.

The average London financial sector employee will get paid £83,000 plus a £20,000 bonus – or £103,000, compared to a median wage of £26,000 for the UK as a whole (3) – (4).

Around 710,000 public sector workers have either lost their job or are about to lose it, along with many people in the private sector  who’ve lost their jobs due to the knock on effects of a fall in consumer demand caused by the reduced income of the now unemployed public sector workers, or because banks have refused their business routine bridging loans.

It’s not so good either, if you are on a low income and live in socially rented housing, with the government having capped housing benefit and allowed rents in the social sector to rise to 80% of private sector rates, which are also rising as less people can afford to buy their own house, resulting in more renting (5) – (7). In fact many people who relied on social housing are being made homeless – and in the case of the others taxpayers are being forced to pay more to support them by the lifting of the cap on how much landlords in the ‘social’ sector can charge.

So the Coalition’s policies are good for a small minority – mostly in the markets or the city, advertising, public relations and media ownership, at the expense of the vast majority. It talks about the need to ‘protect’ the city and ‘maintain market confidence’, rewarding the people who caused the crisis, while punishing people who do jobs that benefit other people (8).

That’s why it’s been vital for the political success of the Conservative party (and their allies in the ‘city’ or ‘markets’ and banks) that the majority who are suffering should be divided from one another to eliminate the risk of the majority uniting against the small minority in whose interests the Conservatives are acting.

The unemployed as ‘scroungers’ – even though there aren’t nearly enough jobs for all of them

Decades of propaganda from tabloids owned by billionaires and from a Conservative party (and sometimes a New Labour party) largely funded by billionaires and multi-millionaires has been devoted to creating scapegoats – targets to divert blame away from the people who have the actual power and wealth.

One target has been the unemployed – supposedly all parasites who don’t want to work, despite the fact that the figures show there have never been enough jobs for all the unemployed during economic booms never mind during the worst recession since the 1930s.

The Office for National Statistics figures for July to October 2011 show that there were 462,000 job vacancies,  compared to 2.62 million people unemployed – around 6 people unemployed for every job  (and due to many methods of fiddling the figures developed by governments over the years, that is almost certainly an underestimate of the number of people unemployed) (9) – (10).

It’s undoubtedly true that a minority don’t want to work. If there are no jobs available for them even if they did want to, that’s pretty academic though.

The Daily Mail was outraged that Chancellor George Osborne increased benefits in line with inflation – by 5.2%, talking about this as a ‘big rise’ – it’s not. It only stops them being reduced by inflation – in practice they stay at the same level – about £60 a week – rather than being cut.

The propaganda seems to work as intended though, dividing the employed from the unemployed and even getting some of each to vote entirely against their own interests in and in the interests of billionaires and big multinational companies, on the assumption that any ‘benefit reforms’ will target only the undeserving, lazy unemployed and not them.

Which is more of a parasite? Someone on unemployment benefit getting £60 a week? Or a large company, a primary PFI contractor, which gets taxpayers to pay it dozens of times the amount they would pay in interest on a loan to fund construction of a new hospital or school? There’s no doubt the latter get a lot more public money for nothing.

Immigrants and the EU

Then there are immigrants – who don’t get any benefits unless granted refugee status – and then get benefits well below those given to British citizens. They, like the EU, are foreign – and so an easy target to deflect blame on to. The city traders who helped cause the crisis are British; and so supposedly on our side, even after causing the entire problem and being grossly over-paid for jobs many of which harm the majority of people.

Public sector Vs Private Sector

Finally there are the supposedly ‘cushy’ jobs held by public sector workers with ‘gold plated’ pensions. Osborne talks about public sector workers being ‘paid for’ by workers in the private sector, as if public sector workers aren’t doing vital jobs looking after NHS patients, saving people from fires, arresting criminals, teaching children; and as if public sector workers don’t pay tax at the same rate as private sector employees.

While Cameron and Osborne sack hundreds of thousands of these people to keep ‘the markets; who caused the crisis happy, Cameron has pledged to protect ‘the city’ against any EU actions that might reduce their profits.

There are some private sector workers who do vital jobs – there are a lot who fit the description ‘parasite’ very well though – the hedge fund managers trading in food futures traders in  ‘the city’ who effectively spend their time betting that the price of food will rise, then buying up food to ensure it does, causing starvation for many of the poorest people in the world and hunger even for some of the poorest here.

What I don’t understand is how so many people are so easily conned over and over again? How long will they continue to fall for such obvious divide and conquer tactics and be diverted into pointless arguments between the middle class and the working class, between the employed and the unemployed, between public sector workers and private sector workers?

(New Labour government ministers who were on a pay of over £100,000 a year and many of them – including Tony Blair – formerly lawyers – also played the ‘middle class’ vs ‘working class’ divide and conquer card, pretending that lawyers turned MPs and government ministers were working class heroes.)

The vast majority of people working in the public and private sectors, even up to the managers of small and medium sized businesses, are doing work that does benefit society as a whole and are paid a fraction of what the bank and hedge fund managers get.

Yet while bank managers and the heads of the biggest firms are paying themselves between millions and tens of millions a year, plus the same again in bonuses, often at taxpayers’ expense in bailed out banks, the Conservatives’ tactics of divide and rule ensure many peoples’ anger is directed not at the real parasites, but at other people who are also their victims.

 (1) = Astbury Marsden Compensation Survey 2011 – Banking Infrastructure London,http://docs.google.com/viewer?a=v&q=cache:tN8-iJkGpa8J:www.astburymarsden.com/documents/Astbury%2520Marsden%2520Compensation%2520Survey%25202011_Banking%2520Infrastructure%2520London%2520small.pdf+Astbury+Marsden+report+city+pay&hl=en&gl=uk&pid=bl&srcid=ADGEESjCp35WxasQC0uKU6hyPufcF3PKQgqywr0k1qNAEGK_4wMSeFBhohPhKrGo7oTiY4RLukF4E51KGYTxH6kmRfhX-1zs80hIKdv6Ckao6ZzZxFrjD6HI5anmt52lZR3QiNTc0ttx&sig=AHIEtbS9vlPCGJzgvi4HFde7s45wAlnw_w

(2) = guardian.co.uk 23 Nov 2011 ‘UK incomes fall 3.5% in real terms, ONS reveals’, http://www.guardian.co.uk/money/2011/nov/23/uk-household-earnings-fall?commentpage=last#end-of-comments(including people in part-time jobs, fall is 4.5% including inflation – a 0.5% rise minus 4.5% inflation)

(3) = Guardian 28 Nov 2011 ‘Banks under fresh pressure to curb bonus and dividend payouts’,http://www.guardian.co.uk/business/2011/nov/28/banks-curb-bonuses-dividends

(4) = Office for National Statistics ‘2011 Annual Survey of Hours and Earning -Median full-time gross annual earnings’, http://www.ons.gov.uk/ons/rel/ashe/annual-survey-of-hours-and-earnings/ashe-results-2011/ashe-statistical-bulletin-2011.html#tab-Annual-earnings

(5) = BBC News 27 Oct 2010 ‘No change to housing benefit plan – Cameron’, http://www.bbc.co.uk/news/uk-11633163

(6) = guardian.co.uk 22 Nov 2011 ‘Housing strategy prices people out of homes’,http://www.guardian.co.uk/society/2011/nov/22/housing-strategy-prices-people-homes

(7) = guardian.co.uk 16 Sep 2011 ‘UK rents rise by record amount in August’,http://www.guardian.co.uk/money/2011/sep/16/rents-rise-record-amount-august

(8) = Guardian 07 Dec 2011 ‘David Cameron threatens veto if EU treaty fails to protect City of London’, http://www.guardian.co.uk/world/2011/dec/07/cameron-threatens-veto-eu-treaty

(9) =  Office for National Statistics ‘Labour Market Statistics, November 2011’, http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/november-2011/index.html

(10) = Labour market statistics: 16 Nov 2011 – Vacancies - http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/november-2011/statistical-bulletin.html#tab-Vacancies

The demonstrations across the Middle East and North Africa have been as much about jobs and pay as democracy from the start

While most of the focus has been on demands for political democracy the protests across the Middle East and North Africa have been as much against unemployment, for jobs and for higher pay from the start. For instance in early January the BBC reported ‘The number of people killed in unrest over unemployment in Tunisia over the weekend has risen to 14, officials say…. The protests first broke out in December over a lack of freedom and jobs.’ (1)

The Tunisan man whose suicide by setting himself on fire set off the protests came from a family whose farm land had been taken by a bank after it foreclosed on the families debts. (2)

In Egypt at the end of January they reported ‘At least eight people have been killed and dozens injured since the protests against unemployment, corruption and rising prices began on Tuesday.’ (3)

This is not surprising as political and economic equality go hand in hand – and similarly for political and economic inequality. Having a job does you little good if you are jailed without fair trial, tortured or shot; while having the right to vote is not much good if you’re homeless or struggling to make enough money to be able to afford to eat.

In every case the global recession caused by the financial crisis and corrupt and brutally oppressive undemocratic governments have played a part. In most (e.g Egypt and Tunisia) neo-liberal economic policies promoted by the IMF and ‘developed world’ governments have also played a role. Even while these policies were creating economic growth poverty was increasing and unemployment wasn’t falling. With the recession, both rocketed.

In Egypt Amnesty international reported that as the clean up of Tahrir Square began “In hospitals, banks and insurance companies, employees gathered to demand better pay and working conditions.”  Protesters for higher pay include everyone from public sector employees such as ambulance drivers to tourism workers (4) – (5). Mubarak followed neo-liberal economic policies recommended by the IMF. While this resulted in economic growth,  the benefits went to a small minority. Mubarak’s family has an estimated fortune of $70 billion, another thousand families who are close to Mubarak benefited greatly and unemployment fell, more than half the population lives on less than £1 a day and there are a million homeless street children in Egyptian cities (6) – (10).

Trade unions have also been important in many cases. In Egypt it was the General Strike called by trade unions that seemed to tip the military into finally forcing Mubarak to resign (11).

(sorry for repeating some of one of my previous posts on Egypt here but i thought it justified a post of it's own on how from the start of the protests in Tunisia on, jobs, pay and unemployment have been core issues)

Last updated 1st March 2010

(1) = BBC 10 Jan 2011 ‘Fourteen killed in Tunisia unemployment protests’,http://www.bbc.co.uk/news/world-africa-12144906

(2) = Independent 21 Jan 2011 'Tunisia: 'I have lost my son, but I am proud of what he did'', http://www.independent.co.uk/news/world/africa/tunisia-i-have-lost-my-son-but-i-am-proud-of-what-he-did-2190331.html

(3) = BBC 28 Jan 2011 ‘Egypt protests escalate in Cairo, Suez and other cities’, http://www.bbc.co.uk/news/world-middle-east-12303564

(4) = Amnesty Livewire 14 Feb 2011 ‘The new face of Egypt’,http://livewire.amnesty.org/2011/02/14/the-new-face-of-egypt/

(5) = BBC News 14 Feb 2011 ‘Egypt crisis: Protests switch to demands on pay’, http://www.bbc.co.uk/news/world-middle-east-12448413

(6) = IMF Survey Magazine 13 Feb 2008 ‘Egypt: Reforms Trigger Economic Gr
owth’,http://www.imf.org/external/pubs/ft/survey/so/2008/car021308a.htm

(7) = guardian.co.uk 04 Feb 2011 ‘Mubarak family fortune could reach $70bn, say experts’,http://www.guardian.co.uk/world/2011/feb/04/hosni-mubarak-family-fortune

(8) = guardian.co.uk 06 Feb 2011 ‘A private estate called Egypt’, by Professor Salwa Ismail, London School of Economics,  http://www.guardian.co.uk/commentisfree/2011/feb/06/private-estate-egypt-mubarak-cronies

(9) = guardian.co.uk 14 Feb 2011 ‘Egypt's army calls for end to strikes as workers grow in confidence’,http://www.guardian.co.uk/world/2011/feb/14/egypt-army-strikes-workers

(10) = UNICEF ‘A new approach to Egypt’s street children’,http://www.unicef.org/infobycountry/egypt_30616.html

(11) = Guardian.co.uk 09 Feb 2011 ‘Egyptian talks near collapse as unions back protests’,http://www.guardian.co.uk/world/2011/feb/09/egypt-protest-talks-union-mubarak

Why welfare to work won't work in the UK

President Clinton signs the 1996 Responsibility and work opportunity act which gave federal approval to state 'welfare to work' laws which are the model for British 'welfare reforms'

‘Perhaps the greatest danger of our national life arises from the power of selfish and unscrupulous wealth
which influences public opinion largely through the press’

Joseph Rowntree (1836 – 1925) , businessman and philanthropist, - one of the first people in Britain to do research proving poverty was not caused only by alcoholism or the laziness of those in poverty.

(What follows is a summary – to see the full version with contents links and sources on my website go here.)

Tabloid newspaper owners and the leaders of the main parties in both the US and the UK have promoted myths about the causes of unemployment and poverty and so the solutions to them. The ‘welfare reform’ narrative of the tabloids and the Labour, Conservative, Republican and Democratic parties has been that there are plenty of jobs for everyone but that the supposedly ‘out of control’ growth or expansion of the welfare state has led to generations of people in the same households deciding to live on benefits as this gives them a better and easier life than working would. This is portrayed as having placed an increasing burden on those who do work and as being the main cause of poverty. Just as US welfare to work from the 1990s on returned to a 19^th century view of poverty as due to the moral failings of the poor (especially ‘laziness’ and being ‘unwilling to work’) the same has happened in theUK, with government adviser and Labour MP Frank Field  advising the Conservative-Liberal coalition that poverty is primarily caused by bad parenting rather than low incomes.

Labour MP and adviser to the Conservative-Liberal Coalition government - Frank Field - who believes poverty is primarily the result of bad parenting

This is coupled with political rhetoric about ‘social mobility’, ‘meritocracy’ (whether Labour or Conservative) ,‘equal opportunity for all’ and a ‘classless society’, in which politicians talk as though getting everyone into work will increase all of their incomes and get them out of poverty, as though there are enough jobs with a living income for everyone. The assumption is that as more people come off benefits and into work the welfare bill can be cut, the welfare state can be cut further or gradually phased out as the private sector takes over from it - and everyone will be better off.

Surveys show these claims have influenced British public opinion to become more hostile to those on benefits, with a majority now seeing them as lazy and opposed to increased redistribution of wealth through taxation and welfare.

The trouble is that even politically massaged Government figures, along with research by charities like the Joseph Rowntree Foundation and think tanks like the IPPR, shows that there are between hundreds of thousands and millions more people unemployed than there are job vacancies in the UK through recessions and economic booms over past decades to present.

Employers also told researchers that, far from the unemployed being unwilling to do the kind of jobs they used to do, most applicants were considered over-qualified by the employer

They also show that large numbers of people going into work remain in poverty (under 60% of median income or £119 per week for an adult or £288 for a couple with two children) or in deep poverty (a third or less lower income than that) – and that there are more people in work and in poverty than out of work and in poverty in the UK, with newly created jobs increasingly becoming part-time and/or low paid over the past two decades and over 1 million people who want full-time jobs only being able to get part-time ones.

Despite the tabloid myths this is not due to over-generous benefits, but due to low minimum wages, a lack of enough in-work benefits for those on low incomes. For instance unemployment benefit is only between £51.85 and £65.45 a week depending on age in theUK, just as it was under the previous Labour government.

While many of the measures of poverty used are relative to they are reliable indicators that many of those on these incomes are suffering some forms of absolute poverty – i.e are unable to afford some basic necessities and so suffering frequent hunger, cold and subsequent long term health problems for adults and developmental problems for children. For instance the JRF’s 2000 study found 9.5 million people in Britain could not afford to heat their homes adequately, 4 million couldn’t afford either two meals a day or fruit and vegetables to eat ; and 6.5 million people went without essential clothing such as a warm waterproof jacket or decent shoes (with 2% of children lacking a warm waterproof coat or properly fitting shoes and many unable to afford a healthy diet). One parent interviewed in a later report ate nothing but bread so their children could eat better diets, while another (in 2008) said being in poverty meant “Being hungry, only having enough food to give the children, hoping they would leave some leftovers on the plate, so I wouldn't be so hungry.”)

There are also absolute measures of poverty used, based on the number of people in any year whose income has fallen below 60% of what was the median for a chosen benchmark year. The British government used 60% of the median in financial year 1998/1999 as it’s measure of poverty until 2010, when 60% of the median in 2010 was chosen as the benchmark for the next decade (though the new government may well choose a different definition).

British Prime Minister David Cameron and Chancellor (finance minister) have claimed that under their Labour predecessors welfare spending was “out of control” - but the figures don't back their claims up

Treasury figures also show that welfare spending in the UK has actually fallen as a percentage of GDP (national wealth) between 1997 at 7.76% (during an economic boom with lower unemployment) and just over 7% in 2009 (during a deep recession with higher unemployment) – (credit to Duncan’s Economics blog for pointing this out). Despite the “there is no money” rhetoric the UK increased it’s GDP per capita (wealth per person) by around 67% over the same period on World Bank figures.

This is even more striking as 1997 was an economic boom year with relatively low numbers of unemployed people (and so a lower cost in unemployment benefit) while 2010 was a deep recession with relatively high unemployment levels and benefit costs.

If looking for unfair government spending going to those who neither need nor deserve it there are many better candidates for cut. These include Private Finance Initiatives or ‘Public Private Partnerships’, which the Conservatives began, Labour expanded and the Coalition are planning to expand again, leading to increased taxes for cut services; Export Credit Guarantees to British Aerospace for arms and dual use equipment going to dictatorships and human rights abusers (often including those who later become our enemies such as Saddam Hussein’s forces in the past); and military aid to dictatorships.

US government figures and independent studies show ‘welfare to work’ programmes in the US have led to greatly increased poverty and homelessness.

Cutting benefits and public sector jobs during a period of recession also risks further reducing demand in the economy and a spiral of falling demand and increased job losses in the private sector.

Cartoonist Steve Bell on British welfare minister Ian Duncan Smith MP's welfare to work plans

This may well lead to many of those persuaded to vote to punish those on benefits for supposedly all being workshy fraudsters suffering alongside many of them due to the reality that many are poor or unemployed through no fault of their own – and that even if everyone who isn’t working tried to get work there aren’t enough jobs.

This shows that the model of welfare reform adopted by the main parties in both countries is bound to lead to increasing levels of poverty for the unemployed and many in work alike unless it’s changed to expand the welfare state and public sector employment and government intervention to provide more in-work benefits for those on low incomes, along with increasing minimum wages and more public sector jobs

The Joseph Rowntree Foundation found that relative poverty for pensioners declined throughout New Labour’s period in government from 1997 to 2008/9 and relative and absolute child poverty fell too, but as out-of-work poverty fell, the numbers of people in work but in poverty rose.

The Institute for Fiscal Studies’ 2010 report estimates increases in the numbers of adults and children in poverty of hundreds of thousands each year as a result of the Coalition’s policies

This is not to deny that there are some people defrauding the benefit system or who are unwilling to work. It does show that there’s no evidence to suggest the tabloid rants claiming they are the majority of the unemployed or poor are true ; that ‘laziness’ is most definitely not the only cause of unemployment ; and that welfare spending and benefits are if anything too low and too hard to get in low income jobs. Any welfare reforms that would have a chance of reducing unemployment and poverty would have to provide more in work-benefitsm, or a higher minimum wage, or both, along with more public sector jobs.

(This post is a summary – to see the full version with contents links and sources on my website go here.)