It was entirely reasonable of Frances O’Grady, the leader of the union’s umbrella body, to ask for the Treasury to review ending furlough on 30 September. As she pointed out, 23 members of the Organisation for Economic Cooperation and Development (OECD) – the Paris-based club of mostly rich nations – have permanent schemes that shield workers during tough periods.
O’Grady called it a lifeline that kept people off the dole queue and something that in future could be used without any bureaucratic barriers. She said the lack of support for the steel industry – where a system of subsidies might allow short-time working in times of stress without workers being made redundant – was preventing companies in a heavily cyclical industry from making greater investment.
The problem here is technological change.
Start with the agreement that we don’t want howling mobs of the starving every time there’s a change in economic conditions. Cool. So, what do we do?
There are two sorts of economic change. There’re cyclical and there’re structural. Booms and busts – Foxton’s takes on more Sloaney wankers when the housing market booms, fewer when it doesn’t. Actual underlying change – we need fewer people to feed an arc furnace than a blast one, more steel recycling means fewer steel workers.
Sometimes it is true that just short term support to displaced workers is required. Sometimes it is also true that the universe is telling them to go do something else with their lives. Distinguishing between these two, when politics gets involved, is difficult.
So, which sort of support system should we have? One that preserves the current workforce in their current jobs while the cycle turns? One that also traps that current workforce in their current jobs when the structure does?
Or one that turfs everyone out onto the dole regardless and then sees who gets rehired when the cycle turns or who finds something else to do when the structure does?
In the long term the flexibility of moving labour across industries and jobs is obviously going to be more efficient. In the short, well, who knows?
But furlough and the dole are both support schemes for displaced labour. My vote’s to go for the long term here……