The term “precariat” conveys the idea that the old working class, the proletariat, has transmuted into a new social class where work and life are characterised by precariousness and risk.
While the old working class might have been poor and exploited, in the post war era at least, its members had jobs they could rely on. Not so for the precariat of the 21st century. Work and jobs have become fragmented and unstable and this flows through to how lives are fulfilled.
In his book The Precariat: The New Dangerous Class, labour economist Professor Guy Standing says that youth forms the epicentre of the emerging precariat. Following a protracted education process accompanied by massive debt accumulation, young people find that entry points into the jobs for which they are primed for, are scarce or non-existent.
The trajectory for many is a series of casual and short-term jobs, with tenuous links to their education, and limited potential as stepping stones to the jobs they want. A few will take up unpaid internships with family support, and a sizable minority become unemployed. The traditional quest for independence is stifled with many remaining in the family home well into their twenties or later. Some may drift into a rootless existence, isolated from the mainstream.
The lack of suitable trajectories for a young, well educated population fuels dissatisfaction with the status quo, according to Standing. It arises out of thwarted aspirations for status, upward mobility, and stability through employment. For some, it is incurred by an itinerant and alienated existence. Resentments towards an aged populace with its past advantages and future needs of support may also play a part.
The long good bye to youth jobs
In the 1950s or 1960s, young people simply left school in their mid to late teens and got a job. Young men stepped into junior level jobs in business, into apprenticeships in manufacturing or jobs in primary industries. Young women went to work in offices, hospitals or factories often as a precursor to marriage. A few went on to colleges for specific training such as to become teachers, and a very small group went on to universities with a view to the “elite” professions.
But by 1978, high youth unemployment was entrenched and this has hardly changed in the last 34 years. The unemployment rate for 15 to 24-year-olds was around 12 per cent in September 1978 and was 12 per cent in September 2012. This is much better than the youth unemployment rates in the EU at 21 per cent or the USA at 17% but far above the national average for Australia of around 5%. It is close to the global average youth unemployment rate.
The “problem” of youth unemployment from the 1970s was attributed to lack of skills and qualifications. The “solution” to youth unemployment has focused on education and training for the jobs emerging in the post-industrial economy.
To this end, higher education and vocational training have been encouraged in public policy resulting in massive increases in school completion and post-school education participation. Early school leaving has been actively discouraged. Income support policy demands that young people without year 12 undertake training in order to qualify for Youth Allowance.
While decent education for all is always a desirable social objective, its link to decent work outcomes for all has been progressively difficult to sustain. Social stratification in education as documented in the Review of Funding for Schooling, is a byproduct of this dynamic and leads to stratified outcomes in employment.
The new dangerous class?
The growth in precarious employment and a precariat class, Standing argues, is laying the foundation for social upheaval.
To some extent, it is expressed in events such as the EuroMayDay rallies and protests against the World Trade Organisation. It may also be part of the ferment of the Occupy movement. While notable and even significant, these demonstrations could hardly be characterised as a serious challenge to the forces of globalisation, neo-liberal economic policies, and corporate practices which have broken down the old employment models.
Other dangers may lie in the growth of far right, fringe political parties, which can consolidate grievances and resentments of a disenfranchised precariat into a support base, as suggested by Professor Standing. The success of the Golden Dawn party in the Greek elections in May 2012 exemplifies this potential.
But elsewhere the aspirations of the extremist political parties have been curtailed, with limited outcomes for the Le Front National in France and the Tea-Party in the USA in the 2012 elections. In Australia, there are no equivalent political forces at this time.
The real dangers of a precariat with a strong youth component perhaps lie elsewhere in Australia. A lack of opportunities for young people is simply a waste of their talents and skills at a time when Australia’s productivity and growth potential are under question.
In addition, the existence of a precariat is a hallmark of social inequality. As Wilkinson and Pickett argue with compelling evidence in the Spirit Level, countries with high levels of inequality simply do worse than more equal countries.
The precariat is created where opportunities for decent work have been eroded. So a core task for public policy is to restore a “decent work” agenda. The recommendations of the ACTU Independent Inquiry into Insecure Work would help to achieve this.
However, work and jobs may never be reconstituted as they were in the past. Standing proposes a new vision of citizen participation, and work and jobs, linked to provision of basic, unconditional economic security. While none of this is likely for the forseeable future, his ideas sustain some alternative visions for engaging and tapping the creative potential of a youthful – and not so youthful – precariat.
Links: University of Sydney seminar
United Nations Research Institute for Social Development seminar
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Joe Gartner
Tilter
I thought that I had it tough in tassy in the mid eighties as a youth. I would not trade the precariousness of employment and the paucity of opportunity in the 80s with the vicious social and employer attitudes and consumer expectations of the 2010s. Not for quids.
Peter Ormonde
Peter Ormonde is a Friend of The Conversation.
Farmer
But there has always been a precariat here... an absolute proletariat with nothing but their labour power - unaugmented by skill... seasonal agricultural labour... the place was full of it. Usually mobile, but also local folks who grabbed a chunk of the cash economy when it was there but spent much of their time outside it. Surplus to requirements individually but absolutely essential collectively.
Large slabs of the US economy work on this model - the trailer-park nomads who work two or three…
Read moreDavid Arthur
n/a
Despite a university education, the then-unrecognised debilitating consequences of a major head injury placed me in this precariat class back in the 1980's. It has affected my career trajectory ever since.
So what happens to the former members of this precariat class as they age? They form a permanent underclass, as set out by Peter Ormonde's description of what's happening in the US.
So how can this class be socio-economically re-engaged in Australia? I suggest that a first step would be severe restrictions being placed on immigration until and unless unemployment decreases to a more reasonable level, say 1%.
In turn, this will focus planners' attention on the logistics of relocating Australia's present underclass to where the jobs are, and providing them with the education and skills necessary to perform those jobs.
Roger Simpson
logged in via LinkedIn
The precariat may provide a catalyst for political and social change through a revaluation of the role of work and the economy in providing a worthwhile society. But the most immediate problem caused by the precarious nature of modern work is drug abuse. The nihilistic message produced by irregular and meaningless work, materialism, wealth disparity, unrepresentative politics, failing economic models, etc leads many young aspirants to despair for the future and focus on short term fixes. The drug problems in regional Australia are at epidemic proportions and this more than anything reduces the capacity for young people to engage.
Gavin R. Putland
logged in via Twitter
The precariat exists because of tax policy. Labour is the most heavily taxed factor of production. Both the supply of labour and the demand for labour can shrink or flee in order to escape taxation. But the demand can shrink or flee more easily, because taxation can make it less attractive to hire but can't make it less necessary to work. So when labour is taxed, the demand for labour falls short of the supply.
There are certain assets that can't shrink or flee to escape taxation. But these are…
Read morePeter Ormonde
Peter Ormonde is a Friend of The Conversation.
Farmer
EEEEK! Make it cheaper to hire folks and the blocked market will just unplug itself.
There is also the insidious influence of de-industrialisation - the hollowing out of our manufacturing capacity that has occurred over the last 30 years. Our capacity to offer careers, stability and remotely satisfying work is greatly diminished. Those jobs are in China.
The same argument - with regard to marginal wage rates rather than taxation - is applied universally across the cheap labor states of the US. It has led to hourly rates of around $3.00 in the marginal labor market - Amazon runs on it, sadly.
Doesn't seem just a labor market problem in that sense - seems to also be about what's on offer... lawnmowing, nannies, houskeepers, pool technicians, phone sanitisers.... if you're lucky. More often shelf-stacking. Lots of shelves.
David Arthur
n/a
So long as Australians are simply consigned to the welfare scrapheap, and pre-trained labour freely imported, the precariat will continue to balloon.
Gavin R. Putland
logged in via Twitter
"The same argument - with regard to marginal wage rates rather than taxation - is applied universally across the cheap labor states of the US. It has led to hourly rates of around $3.00..."
STRAW MAN. I am not saying workers should take home less. I am saying we should get rid of taxes that force employers to pay more than the workers take home. If this leads to more hiring, it will improve the bargaining positions of workers so that they can take home MORE.
Dejan Tesic
Former Lecturer at Charles Sturt University
It's a rather simplistic view that the rise of the precariat in Australia (and by no means it is limited to this continent) has to do with immigration policies. The (permanent?) "emigrating" of manufacturing jobs, as hinted by Peter Ormonde, has much more to do with this issue. However, it is much easier to hit at the immigrant workers than it is to have a go at multinational corporations. It is a topic in its own right - how easy it is for the international finance and big business to move wherever it feels like, as opposed to the workers. Therein lies a big part of the reason the precariat is on the rise.
As Ry Cooder put it in his song, "How can you keep on moving unless you migrate too? They tell ya to keep on moving but migrate, you must not do".
Peter Ormonde
Peter Ormonde is a Friend of The Conversation.
Farmer
No Gavin, the point I'm making wasn't meant to be a straw man, which is why I pointed out the fundamental difference - or the apparent difference, cos in reality there isn't one.
By lowering the costs of employing labor - unskilled labor - (by keeping wages low or cutting them, or reducing taxation or other on-costs like safety and OH&S) the market will clear, they'll all get jobs and these guys will be on track for the sorts of careers enjoyed by their grandfathers down mill.
Fairyland…
Read moreDavid Arthur
n/a
Thanks for the thoughtful reply, Dr Tesic.
For the record, I am not "hitting at" immigrant workers; what I am doing is attempting a profound rejection of the obscene social policies of successive Australian governments, that would rather dole out a few scraps of money at the victims of decades of under-investment in education and infrastructure, while acquiescing to corporate demands for Enterprise Migration Agreements.
The issue of manufacturing jobs disappearing overseas means that Australia emits huge amounts of CO2 to export huge quantities of coal, bauxite and iron ore, and emits further CO2 to import manufactured goods.
Just imagine, if Australia had a decent domestic manufacturing industry, it would be importing workers anyway.
David Arthur
n/a
Dr Tesic, I am not suggesting that the emergence of an Australian precariat is due to its immigration policies. What I am arguing is that present immigration policy facilitates the continuation of poor policy in infrastructure and education.
As well as being economically sub-optimal, it will ultimately prove as socially divisive and self-defeating as have such policies in the US. From afar, the US looks like the shining champion of democracy, yet for many of its own citizens it is just another Third World country.
David Arthur
n/a
Thanks for this, Dr Putland. As it happens, I also think that the tax system could be used to provide motivation to minimise membership of this "precariat". Would you be so good as to comment on the following?
A relatively high proportion of the precariat's income is derived from unemployment benefits, which is funded from general revenue.
On the other hand, creation of secure jobs is pretty much due to the decisions and actions of the economy's "movers and shakers", and its planners and…
Read morePeter Ormonde
Peter Ormonde is a Friend of The Conversation.
Farmer
Yep, good luck with that one David! Worst thing that could happen is that it might work, at least according to our betters.
One of the nasty things that has occurred over the last 40 years, since the 1970's shocks, it the acceptance - no the demand - that we hold to a "natural rate of unemployment" ... anything looking like sinking the reported (a long way shy of the actual) rate of unemployment below 5% will have the RBA reaching for the interest rates lever to slow everything down... the clammy…
Read moreGavin R. Putland
logged in via Twitter
Dear David,
Call me cynical, but in my view, making the taxpayers in the top bracket pay for Newstart would be more likely to focus their minds on cutting Newstart than on creating jobs.
One advantage of eliminating the tax wedge between employers and employees (http://is.gd/draftbudget) is that the benefit to workers and jobseekers is funded by additional production, not by additional taxes on the movers and shakers. Better still, it can be implemented as a boring "business tax reform", which makes it more attractive for business to hire workers but doesn't tread on the toes of individuals.
I think immigration in this context is mostly a red herring. Immigrants not only take jobs but also create them. Which effect is dominant depends on the criteria for admitting immigrants.
Gavin R. Putland
logged in via Twitter
The surest way to reduce the "natural rate" of unemployment -- that is, the minimum unemployment rate consistent with non-accelerating inflation -- is to eliminate the tax wedge between employers and employees. That creates room for take-home pay to rise without increasing the marginal cost of labour for employers, and therefore without causing upward pressure on prices.
Peter Ormonde
Peter Ormonde is a Friend of The Conversation.
Farmer
Tell that to Glenn Stevens, Gavin.
At the slightest indication that we have something approaching full employment will see the folks driving this contraption driving their collective foot onto the brakes like a 50 car pile up.
We have abandoned the notion of full employment - that the economy should even be be aiming at full employment. We have instead adopted a notion that a pool of unemployed at around 5% is a "healthy" balance between feeding folks and keeping their wages low.
I'd call that an admission of failure myself. Not just us - it's everywhere.
Robert McDougall
Small Business Owner
hence those that punish and denigrate the "dole bludgers" (sic) should actually be grateful to them. without that 5% unemployment, they would be paying a hell of a lot more in interest and costs of living.
David Arthur
n/a
Without that 5% unemployment, everyone entering every small business will be a potential customer.
With 5% unemployment, however, one in 20 people entering a small business is a potential shoplifter.
David Arthur
n/a
Thanks Dr Putland, my observation is that the top bracket payees have already made a pretty good fist of minimising access to NewStart.
I am NOT raising immigration as a stand-alone issue. The reasons this economy needs immigration, despite it having to fund a growing pool of unemployed people, is that the unemployed people don't live where the jobs are, and don't have the skills that the vacant positions require.
Solve those two problems first, and watch unemployment (and much of the demand…
Read moreRobert McDougall
Small Business Owner
thats not true, and a little unfair to accuse anyone not employed as being a thief
David Arthur
n/a
I think you've missed my point, Mr McDougall, which is that people with jobs can generally afford to purchase goods and services, whereas people without jobs generally cannot purchase those goods and services, even if they want them.
There is no point telling them to just get a job, because they don't live where the jobs are, or they don't have the skills and knowledge for the jobs, or both.
We either take action to stem the growth of the precariat, or continue following UK and US as they slip and slide into the Third World.
Robert McDougall
Small Business Owner
I agree with you there. I personally believe that a healthy society provides opportunity to engage and be productive to all its members. Part of that is stability through tough times, particularly for children and unfortunately that takes a certain amount of money in today's world.
In addition, every cent that people receive though unemployment benefits gets spent, as in directly circulates back into the economy so every extra dollar provided directly boosts economic activity.
Very different from a drop in interest rates, as that money currently tends to pay off the mortgage quicker so minimal boost to economic activity there
Peter Ormonde
Peter Ormonde is a Friend of The Conversation.
Farmer
Can't argue with that.
It's a measure of the smaller mind I reckon - they are so outraged by the idea of someone getting something they aren't entitled to - something that they themselves aren't getting - that they rush to condemn and demnd they be "cut-off".
What they don't seem to understand is that by providing basic purchasing power afloat out here, we are actually better off as a country and a community than by having an indecent number of starving poor folks and their kids wandering about, willing to work for scraps.
There's a good reason why we dropped the Oliver Twist poorhouse model of welfare... in fact there are lots of good reasons. Seems folks just forget.
Norman taylor
worrier
>It's a measure of the smaller mind I reckon <
I agree with you here.
Having worked in government and having dealt with policy makers and customer service staff who think like that, it is very worrying.
Payment arrears. Many policy makers and customer service staff seem to think that customers deliberately delay paying as part of some great scheme to a) get a benefit for themselves, and b) make a fool of the staff. My take is that these late payers are in some kind of crisis, and their lives…
Read morePeter Ormonde
Peter Ormonde is a Friend of The Conversation.
Farmer
One of the truly disturbing things about an interest in history Norman is that one discovers the role of such small folks in persecuting people as required on behalf of "us all". ... the record keepers, pass-issuers, inspectors, list-makers who make it all possible when you really want to grind some group of "threats" or "outsiders" into a paste. The folks who apply themselves with missionary zeal.
The seeds of the totalitarian pack instinct... an ugly business. Never far away.
Thanh Maksimov
logged in via Twitter
"Following a protracted education process accompanied by massive debt accumulation, young people find that entry points into the jobs for which they are primed for, are scarce or non-existent."
"for which they are primed for"? Editor should've picked this up.
Anthony Nolan
Ruminant
The best nivestment in the future of Australia is an army of young, highly educated unemployed people. Hopefully they'll be so educated that they'll actually be unemployable. If you are concerned that fascism might be a danger then try and act as an intellectual and political leader for the disenfranchised yoof. Point them towards eco-activism and social justice. Otherwise, get out of the road because whining about the unfairness and inequity of the global economy isn't going to cut it.
Bob Trussler
writer
My view is that many people are hired to do a task, rather than employed in a job.
This short-sighted view is partly due to the 'managers' having a short term focus.
There are jobs where people are hired for the long term, but with a management change or a re-structure everything is short term again.
This churning of the workforce brings in people with new ideas and so on, but it cannot be cost effective in the longer term when you factor in training, getting staff up to speed, and loss of corporate memory (just to mention a few).
It is a management problem.