Abstract
Taking the work of Amartya Sen as a point of departure, a case is made that there may be no single policy with as many potential benefits as a guaranteed job at a living wage–benefits package for every person ready and willing to work. The case is outlined in 4 arguments. Along the way, numerous social and economic costs of unemployment and underemployment and benefits of full employment are catalogued. Reference is also made to how the right to employment is supported by a variety of arguments for social justice, an area in which Sen has made important contributions.
In a monograph written for the International Labour Office in 1975, Amartya Sen outlined what he called three aspects of employment: the production aspect; the income aspect; and the recognition aspect. The first two mean that unemployment results in forgone output of goods and services for society, and lower incomes for the jobless and their families (with attendant negative impact on spending and sales). The third aspect implies that the unemployed are denied the opportunity to satisfy a deeply felt human need for social recognition tied to work. This analysis surpasses the mainstream neo-classical economic view of work as a ‘disutility’ (embodied in the labor supply curve), where individuals are presumed always to prefer leisure and must in a sense be bribed to work. Outside of economics, of course, in anthropology, social psychology and sociology, the importance of employment for self-identity and community has long been recognized. Within the dismal science, this kind of analysis has been much rarer. E. F. Schumacher, in his widely reprinted essay on ‘Buddhist Economics’ from Small is Beautiful, also famously argued that there are three crucial aspects of work for the employed. Work provides people with …a chance to utilize and develop [their] faculties; to enable [them] to overcome [their] ego-centeredness by joining with other people in a common task; and to bring forth the goods and services needed for a becoming existence. (2010[1974]: 38)
In several later papers, Sen elaborated on the costs of unemployment and the benefits of employment (1997; 2000). Full employment policy can be supported by a variety of arguments, including the argument that employment is, or should be made to be, a right for all persons who wish to work. Quite a strong case can be made that, within the present institutional context of modern capitalism, there is no single policy with as many potential benefits as a guaranteed job for every person ready and willing to work.
In what follows, the case for the right to employment is outlined in 4 arguments. Along the way, there will be an opportunity to catalogue numerous social and economic costs of unemployment and benefits of full employment, many of which have been noted by Sen during his illustrious career. Reference is also made to how the right to employment is supported by a variety of arguments for social justice, another area in which Sen has made path-breaking contributions.
The first argument for full employment is that the economic and social costs of unemployment – direct and indirect – are staggering and thus the benefits of full employment are real and substantial. Unemployment causes permanent losses in potential output of goods and services; economic, social, psychological and other problems resulting in poverty, crime, ill health (physical and mental), divorce, suicide, drug addiction, homelessness, malnutrition, poor pre-natal care, ethnic antagonism, school dropouts, broken families, etc.; deterioration of labor skills and productivity; and more (see, for example, Jahoda, 1982; Kelvin and Jarrett, 1985; Feather, 1990; Darity and Goldsmith, 1996). As Sen argues: There is plenty of evidence that unemployment has many far-reaching effects other than loss of income, including psychological harm, loss of work motivation, skill and self-confidence, increase in ailments and morbidity (and even mortality rates), disruption of family relations and social life, hardening of social exclusion and accentuation of racial tensions and gender asymmetries. (Sen, 1999: 94–5)
The benefits of full employment thus include improved security for society’s most downtrodden, alleviation of a variety of social and economic ills, social and political stability, and expanded output and income. In addition, full employment also can stabilize business expectations and have a positive impact on the wages and status of unskilled workers (Vickrey, 1993: 9). It has also been argued that full employment increases efficiency. Removing the threat imposed on workers by the existence of a reserve army of unemployed, leads to workers who will feel more confident to move out of one job and into another. This often means a movement from a lower-productivity job to a higher-productivity job.
Quite simply, a compelling argument can be made that the benefits of full employment outweigh the costs of its achievement (Moosa, 1997; Piachaud, 1997). While this argument can be used to support a utilitarian approach, it is also important for those who are critical of utilitarianism. Mainstream economics often focuses on the opportunity costs and trade-offs involved in establishing rights such as the right to employment or the right to a minimum income (Kriesler, 1998). Thus establishing a clear net benefit for full employment is crucial in countering arguments that such rights will reduce efficiency or slow economic development.
The second argument for full employment is based on the idea that, just as there are human, political and civil rights, so too are there economic and social rights, of which the right to employment is one of the most important. Tool makes the important distinction between natural and human rights: The natural right to employment…is a non-empirical, non-experiential, extra-causal, conception of what ought to be. Its credibility derives from the acceptance of an antecedent metaphysical belief which cannot be integratively incorporated into the human inquiry process. The human right to employment is grounded in the continuum of factual experience and rational appraisals of actual consequences experienced and is validated by inquiry-embedded instrumental social value theory. (Tool, 1998: 285; original emphases)
In any case, many recent authors have argued in support of employment as a human right and full employment policies as the means of securing that right (see, for example, Harvey, 1989; Burgess and Mitchell, 1998; Neville and Kriesler, 2000). These views find support in US President Franklin Delano Roosevelt’s 1944 State of the Union Address, and in similar proclamations made in many other countries as well. The right to employment may also be found in a number of United Nations documents, including the Universal Declaration of Human Rights. If individuals are ready, willing and able to work and have no employment opportunities, it is government's responsibility to guarantee employment. Therefore, even if it was argued or could be shown that the costs of eliminating unemployment would be greater than the monetary benefits, government would still be responsible for guaranteeing full employment.
Not only is the right to employment considered of utmost importance in and of itself, but it has, directly and indirectly, the potential of fostering – perhaps more than any other single mechanism – a broad spectrum of rights associated with social justice. Human rights that are promoted by access to employment include the rights to: a decent standard of living; contribute to the community; live free from crime; good health; live free of discrimination; develop talents, skills and capacities; a long life; adequate nutrition; development and self-improvement; decent housing; opportunity; and children’s rights.
The power of stable, full employment to secure a whole series of other social and economic rights explains its significance and priority on the human rights agenda.
It is important to recognize that the right to employment is both a positive and a negative right (see Gewirth, 1996: 217–20). It is a negative right in the sense that all persons and entities must refrain from creating obstacles to an individual’s ‘obtaining, performing, or retaining productive and remunerative work’ (ibid.: 217): The right to employment is also a positive right because of the crucial impact of unemployment on both freedom and well-being. Insofar as the market, represented by private employers, fails to provide work, its primary respondent must be the state as the community of rights. It is the state, acting through the government, that has the correlative duty to take the steps required to provide work for unemployed persons who are able and willing to work. In this way the government, acting for the community of rights, becomes the guarantor of full employment. (Gewirth, 1996: 216)
The fourth argument is that full employment is an ethical imperative in a capitalist economy. In capitalist economies, individuals and families are largely responsible for providing for their own well-being. In all industrialized and many developing economies, most workers do not have the means of production to provide for their own subsistence, but rather must obtain the means of purchase and means of payment (money) necessary for buying the means of subsistence by selling their labor-power in the market. In addition, the requirement that taxes be paid in government currency means that even those possessing the means of production to provide for their own subsistence nevertheless must enter the labor market to obtain currency to settle their tax obligations. Unemployment, the failure to obtain employment that earns wages or salaries paid in money, thus has a dire impact on the jobless in an economy organized as capitalist (Forstater, 2003). Even largely self-sufficient farmers will lose their means of livelihood (their farms) if they do not earn sufficient money income to pay taxes – necessitating that they either sell a portion of their production or find a paying job off the farm in order to pay the money required.
In a society in which unemployment is systemic, public inaction constitutes social assignment of workers and their families to poverty and/or various forms of assistance: It is obvious that specialization of labor…has proceeded to the point where receipt of a continuous money income provides the primary access to the material means of life and experience. All adult individuals, as a condition of their own psychological, physical, and cultural continuity, need to have regular access to an adequate flow of money income that provides the ‘tickets to participation’ in most aspects of economic and social life. (Tool, 1998: 285–6) An economy is unjust, further, when it tolerates significant or protracted involuntary unemployment. Since, as everyone knows, in an exchange economy availability of a job to provide continuous and adequate money income is a source of economic discretion, of economic freedom, those without jobs and income are economically, and to some extent politically, disenfranchised. (Tool, 1979: 332)
Doubtless there are many other arguments for full employment; these categories overlap and should be treated as provisional. Clearly, however, the arguments for full employment – both individually, and taken together – are compelling. The crucial point is that unemployment is endemic to capitalism. Of course, even if unemployment were not inherent in capitalism, the arguments for government policies to promote full employment would still be strong, but the existence of persistent involuntary unemployment provides a strong justification for the priority of full employment initiatives.
Within the present institutional framework of modern capitalism, there may be no single policy with more potential benefits than true full employment, or a guaranteed job for every person ready and willing to work. Unemployment harms individuals, families, neighborhoods, villages and communities; job creation brings real, tangible, direct and indirect social and economic benefits, not only for those employed, but for all members of the community as well as the community as a whole.
It may not be the case that the total benefits of job creation are a simple summation of the social, macroeconomic and microeconomic benefits. Rather, there may be a mutually reinforcing dynamic at work, in which benefits in one area increase the benefits in others. In other words, the principle of cumulative causation may apply, in which positive feedbacks and reinforcing dynamics predominate. The total effect may therefore be greater than the sum of the individual impacts. These are the social and economic multipliers that result from job creation, and benefit individuals, families, neighborhoods and communities in multiple ways.
Much of Sen’s work has been dedicated to bringing ethics back into economics. While he has often been a sharp critic of mainstream neo-classical theory, he has never made a complete break, perhaps in the hope of bringing as many fellow travelers as possible along with him. As much as or more than any other contemporary economist’s, Sen’s influence has been felt well outside his discipline, above all in philosophy and ethics. Economics as conceived of by Amartya Sen above all else must be in the service of improving the lives of real people. It would be difficult to think of a better place to start than with a government-guaranteed job at a living wage–benefits package for all.