Is employment at a "record" level? no, but workers' exploitation is!

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18 December 2012

Big private companies keep announcing more redundancies week after week, while 324,000 public sector jobs have been cut over the past year alone and 600,000 over the past two years. But this doesn't stop ministers from boasting about what they call the "record level of employment" which, according to them, has been achieved thanks to their policies!

On paper, this may well seem true. After all, official figures claim that over 800,000 jobs have been "created" by private companies over the past year - far more than those cut in the private sector. Above all, they show that total employment, at 29.6 million, is at an all-time high.

But there's a riddle: despite this rising number of jobs, the economy is shrinking, while private profits are back up to their pre-crisis level. So how can more workers produce less in goods and services, but also produce more profits for shareholders?

Behind the employment figures

First of all, of course, there is a lot of double-accounting involved in these figures. Who knows how many workers are left with no option but to do several jobs, in order to make ends meet? Official employment figures just ignore this!

Then, there is the nature of the jobs which have been created. According to the government's own figures, half of these jobs are part-time. So much so that part-time work is now at an all time high, at 28% of all jobs. Predictably so, since bosses don't have to pay National Insurance contributions for employees working less than 23h/week on the minimum wage!

But nor do they have to pay NI contributions for the self-employed - who, in addition, do not qualify for most employment rights either. So the number of workers in "self-employment" has been soaring over the past three years - reaching an all-time high of 14% of all jobs.

Contrary to the fairy tales peddled by ministers, these self-employed are not "young entrepreneurs" setting up their own "thriving businesses". Half of the increase in self-employment is due to over-50s who became jobless after being made redundant and over-65s who cannot survive on their pensions! Most of these workers have been forced into self-employment because otherwise, they wouldn't have got any job at all. They are effectively used by bosses to replace a waged worker, but without the same rights or benefits. Effectively, they are part-time workers, often with a zero-hour contract. But guess what? In official figures, these self-employed jobs are counted as full-time jobs - which they definitely aren't!

This embellishment of official employment figures is the first key to our mystery.

The pyramidal scam of casualisation

But it's not the only one. Spencer Dale, the Bank of England's chief economist, who, unlike ministers, doesn't have to mince his words, let the cat out of the bag by saying: "One of the most striking - and indeed encouraging - features of the performance of our economy since the financial crisis are the falls in real wages that have been achieved without a very sharp rise in unemployment. Unemployment has indeed risen, but by far less than would have been the case had the labour market displayed the resistance and rigidities of the past." And Mr Dale went on to hail the 15% fall in average real wages (after taking inflation into account) since 2008!

So, there lies the other key to our mystery: the "extraordinary flexibility" of the labour market, to use Mr Dale's words, which has pushed wages down - i.e. the many devices that bosses can use to force workers into low-paid, casual jobs.

Labour had already introduced many of these devices and the ConDems only had to build on this legacy to help the bosses' drive to screw even more profits out of workers, including on the basis of a lower level of production. In particular, the punitive schemes against the jobless which were first introduced by Labour and then reinforced by the ConDems have no other objective.

But, even without ever going through the door of a JobCentre, how many workers are now stuck in a job, where they work for a company A, but are employed by a pyramid of sub-contracting companies B, C, D, etc.. which are all colluding to keep their pay and conditions down, while each claims it's the others which are to blame.

This pyramidal subcontracting scam is another weapon for the bosses to squeeze more profits out of the working class. But it's also another reason for workers to close ranks across all sections and company boundaries, in order to fight collectively, as a class, against these capitalists who are on the offensive against all workers.