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Guaranteed Employment and Basic Income

By Robert Skidelsky | Public Affairs | June 29, 2012

Governments have to resume responsibility for maintaining full employment. In the United States, I would argue, we both would argue, for socializing medical care. Both will relieve some of the pressure to go on working.

By full employment, though, we don't mean a guarantee of a 40-hour working week. One can have full employment on the basis of 30 hours, or even 25 hours. We don't, though, want a society divided into those, rich or poor, who work 60 hours a week and a large number who can't get enough work to fulfill their basic needs. So full employment, but we have to rethink what we mean by full employment—not the standard full employment that we now think of, but a full employment based on shorter hours of work.

The simplest approach to reducing the hours of work would be to legislate a maximum, to limit the working week, and/or increase statutory vacation times. There's nothing new in this.

I think again, people often say, "But that would be an intolerable interference with the individual right of contract, to work as long as a person wants."

But governments have always interfered with hours of work. From the beginning of the factory acts in the 19th century, they have taken steps to limit the amount of work that an employer can demand of his workforce.

France has taken the lead in this, not just recently in the 35-hour working week, but much earlier they legislated a maximum of 40 hours a week. So they have taken a lead.

Trade unions have always pressed for a shorter working week. And the European work directive also lays down, for guidance only, a maximum working week of 40 hours.

So I don't think we are saying anything so radical in this, though it may seem to be so. It's really just carrying on what governments have always done since the Industrial Revolution.

Within such a framework, it would be open to employers and employees to negotiate flexible retirement and work-sharing arrangements. Now, people are aghast at the idea of work sharing, and it wouldn't apply to a lot of occupations. But in some occupations work sharing is the rational and civilized way of distributing the work burden.

If your objective is to maximize growth, then you don't want work sharing, you don't want an idea that there is a limited amount of work to go around, because you are always trying to increase the growth of the economy. But if growth is abandoned as the main policy objective, then work sharing is a civilized way of bringing about a balance between demand for labor and supply of labor in a world in which automation is shrinking the demand for jobs. I think that's the perspective we have to always bear in mind.

Now, that's not enough. We need something else. That's why we come to favor the idea of a basic income for everyone.

I want to just define it. By basic income we mean income paid by the state to each full member or accredited resident of a society regardless of whether he or she wishes to engage in paid employment, or is rich or is poor—in other words, independently of any other source of income a person may have.

Now, people say, "Oh dear, this will be a terrific disincentive to work." Yes, that is true. But then the incentive to work should no longer be at the center of our aims when we are in a society of abundance. It's a scarcity perspective, and we are trying to say let's let our imagination move forward to a world in which there is abundance or plenty, and then how can we reduce the pressure to work? That would be one way of giving people income independent of work. It has been proposed by many economists.

It is always said that we are too poor to do anything like that, and we should start in a very modest way. Well, I agree we should start in a modest way, but then build it up as the national income grows.

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