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Monday, 31 October 2011

Jobs and Wages

There is a great deal of talk - and much less action - from government about the need to create jobs in the economy to produce growth. There is also a recognition that any sustainable increase in jobs should focus on 'manufacturing': a series of sectors that have been continually in decline and in default throughout the careers of most working retail bankers, setting up institutional and psychological barriers to lending for any such development. There is also a very emphatic policy from the Department of Work and Pensions to push benefit recipients into employment.

Most bar-room conversationalists, through the length and breadth of the Kingdom, take it as axiomatic that that there are 'no jobs' that have any attraction for many of the British unemployed. There is huge resentment about the plain fact that there is still a torrent of immigration into unfilled existing jobs as well as of benefit-hunting immigrants. In the high-earning employment categories, British graduate doctors, scientists and engineers migrate to North America and Australasia; and their places in the UK are filled in the NHS by Europeans, Asians and Africans, and in science and technology by Europeans and Asians. Thousands of British engineers, physicists and mathematicians are also lost to the 'real ecnomy' when they take employment in casino banking. In middle remunerated ranks, plumbers and builders from East Europe have supplanted much British recruitment. In hourly-paid jobs with some 'unsocial hours' working Brits are conspicuously less abundant among applicants than are migrants.

If the country is to avoid Islamisation by mass immigration, British people have to fill the jobs that are available in Britain: but the second-and third-generation non-employed population show no inclination to work. Hitherto they have been able to show how much benefit they would loose if they took jobs: they could surrender 38 or 40 hours a week of their time to the discipline of the workplace and receive only a few pounds a week in higher nominal income. So the glib answer is to say that their benefits must be reduced. This supposedly would provide a stick and a carrot: the individual would have a lower standard of living if they did not work, and would have the opportunity - perhaps - to buy more if they did get work.

But if such people have children, an ages-old problem arises. It appeared first in its contemporary form in the eighteen-seventies when Poor Law Guardians began to put up workhouse orphans for fostering by working families. Tables were drawn up of the clothing, food and other necessities that each such child would need: and it was immediately evident that the sum of money required to deliver that subsistence each year was very much more than any lower-paid working family had for each of their children. The same arithmetic applies today: the cost of keeping a child in care or in state-sponsored fostering is far more than the portion of millions of parental earnings that they can make available for each child. This recognition is carried forward in the 'tax credits' that governments give to families. If wages are reduced in real terms the 'needs' of children will have to be provided for in increased credits. This is axiomatic, because it is pretty well universally accepted that nobody can expect seriously deprived children to grow into good citizens. So if tax credits [or their successors] are to keep pace with prices, any incentives or penalties on parents to 'make them work' will largely be rendered nugatory.

Of course parents are only raising children for part of their lives: but many, many people think in terms of short-term living rather than of lifetime earnings, or career progression [when many jobs offer no prospect of promotion]. So the conundrum of 'childrens' needs' set against rates of parental remuneration will not go away. Hence much of the government's talk about employment, pay rates and benefits, is nonsense. Deeper thinking in this, as in other crucial issues, is urgently needed.

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