The New Reserve Army of Labour

This post was written by Jacob on November 7, 2010
Posted Under: Economy,Trade Unions

Marx has a wonderful term for the role that unemployment plays in capitalism. He calls it “the reserve army of labour.” The point of this concept is that whilst employing people allows a capitalist to accumulate value, having unemployed people allows you to drive down the price of labour. It’s a simple supply and demand issue: when many people want jobs, then they will have to lower their price more and more.

It’s not the sort of thing that you’d think would really affect countries with a minimum wage. The guarantee of a certain minimum return on a certain amount of work stops the price of labour falling too low, and guarantees a certain (albeit low) standard of living for workers. So, in a recession such as ours, rather than seeing the price of labour falling rapidly, what you’d expect to happen would be just an increase of jobs paying minimum wage.

£2.17 an hour?

Unfortunately, our lovely government looks to be doing away with all that. In a speech made today, Iain Duncan-Smith has outlined plans to force jobseekers’ into working positions for no more than their benefits. This means that people will be working 30 hour weeks for £65. That’s £2.17 an hour, or 36% of the minimum wage.

He has said that if people refuse this option, they will have their benefits cut off for three months. So that’s it, work for a third of the minimum wage, or starve, lose your house, perhaps even lose your children. That’s a pleasant thought.

But above and beyond this coercion, the new system will put added pressure on all people employed in similar positions to those that will be taken on by benefit claimants. Why would a local council pay someone minimum wage to sweep streets when they can get the work done cheaper? And of course this new labour would undercut all the laws that secure workers’ rights. Being on placements without employment contracts will undermine all labour law. If you go on strike from your position you can effectively be immediately sacked by having all pay cut off. You can’t unionise either, because for all intents and purposes while working 30 hours a week the government won’t recognize you as having a job.

It is time to fight for workers rights, to demand that all benefit claimants in this position have a right to join a trade union, and to receive at the very least a minimum wage if not a living wage for any work they do. We must also ask the question of what the government expects of people who have their benefits cut off. How are they expected to live, without turning to crime? Who can live on £0 a week?

Even with the protection from massively low wages on paper, this government is returning to the economics of the reserve army of labour, side-stepping laws in order to save money by targeting the poorest of the poor.

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Reader Comments

julia

There’s a moral issue, as well as an economic one. Here is a helpful dictionary definition:
Slavery, n.
1. (Law) the state or condition of being a slave; a civil relationship whereby one person has absolute power over another and controls his life, liberty, and fortune
2. the subjection of a person to another person, esp in being forced into work

And another:
Slavery is any of a number of related conditions involving control of a person against his or her will, enforced by violence or other clear forms of coercion. It almost always occurs for the purpose of securing the labour of the person or people concerned.

#1 
Written By julia on November 7th, 2010 @ 11:23 pm
Micke

According to the Daily Mail, they won’t even get thier £65 a week, but will have thier income dropped to £30 – £40 a week.

#2 
Written By Micke on November 8th, 2010 @ 6:24 am
Gloria

This idea has been knocking around since the Welfare Reform Bill back last year – where ‘work-for-your-benefit’ clauses were, I think, defeated…

The current govt has drawn heavily on the workfare system in America. In the US they also have ‘the 99ers’ – so-called because they have been receiving unempt benefits for 99 weeks or more get all state support cut off. Very worrying.

What I don’t understand is why ‘policymakers’ think it’s a good idea to wait until people have been unemployed for a significant period of time before putting in sanctions, sorry, incentives, sorry, sanctions. I was thinking this when I had my ‘back to work’ meeting at the Jobcentre after being on JSA for 8 weeks. It was quite helpful, and cheering to be in a room with ten others in the same boat (Genuinely. That’s a story for another time). But it would have been great to have that the week I started claiming. Similarly, rather than making people work, why not offer them voluntary work AND CALL IT THAT if people can and want to? Encourage people to build up experience. Anything else looks like you don’t WANT them to get a job, or in fact you are in some sense admitting that there isn’t much point in getting a job in the first few months, because there aren’t that many. And if you’re on JSA you’re a slob anyway, and you probably won’t work unless a gun (the withdrawal of any small income you have ) is held to your head. Yum.

Work being a condition of benefits is not only immoral and illogical, it’s also legally problematic. Argh.

#3 
Written By Gloria on November 8th, 2010 @ 4:58 pm

This is why as well as hanging out in city-centres at weekends, the unions and campaigners need to be organising Claimants Unions at jobcentres. Give some practical advice for claiming unemployment benefits, but also show the reserve labour force that they have power in proportion to how they are organised.

Its a difficult argument to win, but even the unemployed need to know that by giving in to these measures they are not only reducing the conditions of their fellow workers, but also perpetuating the abuses of the state.

This apart from the fact that this is modern day slavery. Just as prisoners don’t deserve any freedoms or engagement with their society and fate, neither do those who can’t find a job.

#4 
Written By T Coles on November 8th, 2010 @ 6:29 pm
Will Richardson

It’s now become clear to me that what’s needed is a Job Guarantee with the state as Employer of Last Resort, for all un/der-employed at minimum living wages, maybe around £8 an hour in London and the South East and £7 outside.

At a national level this will boost demand and incomes for all, leading to a welling up of wealth and it’s the ultimate in fiscal automatic stabilisers to smooth out the peaks and troughs of business cycles.

Given real unemployment in the teens and supply gaps the risks to prices are low, if the government simply used QE to put money where it would be used, this would ‘cost’ around 2-4% of national income.

It’s normal to have zero interest rates and budget deficits where the private sector wants to net save and most countries have trade deficits, unless the state allows public deficits to support private saving, output goes unbought and supply/income gets cut.

This is my explanation of mondern monetary theory expounded by Australian Economist Bill Mitchell at the Centre of Full Employment and Equity.

http://bilbo.economicoutlook.net/blog/

#5 
Written By Will Richardson on November 8th, 2010 @ 7:59 pm
Ralph

Why must there be a German word for “joy at someone’s death”? This sounds almost like a racist comment to me. My German partner tells me that she doesn’t know of any word or phrase that expresses joy at someone else’s death.

Ralph

#6 
Written By Ralph on November 19th, 2010 @ 2:28 pm

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