___________________________________
Economic Change and Solidarity In the European Union
John Sweeney
The world of work is undergoing major
surgery. Future economic historians may yet
describe the cumulative impact of globalisation,
technological change and new work patterns
that are currently shaking the OECD
(Organisation for Economic Cooperation and
Development) countries as an economic revo-
lution similar in magnitude and significance to
the industrial revolution of the 19th century.
There is certainly plenty of pain around, but
scattered in so many countries and cultures that
this late 20th century revolution will probably
prove to have been beyond the capacity of any
Charles Dickens, or of a Marx and Engels, to
chronicle. From the perspective of the European
Union, the pain is clearly visible in two areas:
(1) a growing insecurity and stress attending
many who are at work in the Union,
particularly in occupations and employments
where earnings have risen a lot; and (2) the
level and persistence of long-term
unemployment together with the growing
number of discouraged workers, primarily men,
who are opting out of the labour force
altogether.1 Not visible within the EU, but no
less real of course, is the impact on workers in
other countries when the Union adopts
protectionist or aggressive trading policies.
Trade Partner or Bully?
That pain and insecurity are widespread sheds
light on the current attractiveness of policies
that often amount to striking at someone else in
order to bring relief at home. (Homo
oeconomicus is not as far removed from the
animal kingdom as he might think; he too is
more dangerous when wounded as well.) For
example, the willingness of the European Union
negotiators during the Uruguay GATT round to
________________________________________________________________________________________
Ethical Perspectives 1 (1994)1, p. 159
___________________________________
jeopardise the economic development of the
Southern Hemisphere in its battle with the USA
over, first, agricultural subsides and, later, trade
in services; its willingness to continue with a
whole range of restrictions on the exports of
Eastern Europe despite the threat that economic
hardship poses to the historic social transition
those societies are currently seeking to make;2
the tightening of controls and restrictions on
migrants seeking work within the EU. An old
order is changing here and yielding, less than
gracefully. The dominance of a relatively small
number of industrial countries, and the
appropriateness of the arrangements they put in
place after the Second World War to faciltate
the development of world trade (the so-called
Bretton Woods institutions — the IMF, World
Bank and GATT), are being questioned, not by
millions of voices which count for little in
economic terms, but by newly important trading
partners whose views can only be ignored at a
potentially significant cost. In some respects the
adjustment of the economies in the EU to the
new global economic environment is a remote
matter, requiring people with considerable
economic, monetary and diplomatic expertise to
resolve. Nevertheless, to people made redundant
in shipyards, clothing and shoe factories, and to
whole communities that have been blighted by
the decision of a major employer to relocate its
plant to a country with lower labour costs, or
that are reeling from the arrival of large
numbers of migrants in their midst eager to
work and save out of low incomes, the forging
of a new international economic order is
immediate, real and painful.
It Hurts to Hold a Job
The first area where insecurity and pain have
___________________________________
been growing within the EU is the growing
pressure on people in good-paying jobs.3 Their
situation, curiously, is seldom linked directly
with the plight of low-paid workers and of the
unemployed, yet it is what the majority of the
workforce who hold jobs is experiencing that,
effectively, determines the direction of political
change and the extent to which it will go. The
process of ‘creative destruction’ is currently
destroying ten percent of existing jobs each
year.4 This, of itself, sows fear among workers
whose standard of living (mortgage, car, school
fees, etc.) is difficult to adjust downwards: if
she or he is the unlucky tenth person, getting
another job may be impossible or only be found
at a much lower salary. Among the workers
who remain, an intensifying competition takes
place to prove their commitment, loyalty and
worth to their company. They must, in short, go
along with the tendency of many employers to
work a core of their employees more
intensively; this can mean working substantial
amounts of involuntary overtime, taking work
home at weekends, assuming more areas of re-
sponsibilty as colleagues who leave are
replaced by temporary or sub-contracted
workers, and avoiding membership of a trade
union. They are also made keenly aware that, in
the course of their working lives, they will have
to change employer several times, and possibly
the nature of their employment, and the pattern
of their working year as well. Moreover, they
are told that their current skills may not be
sufficient to guarantee their future usefulness.
Unless they throw themselves into learning, it
is likely that, every 3 to 5 years, one half of the
commercial value of their present skills will be
lost. It is small wonder that some people with
apparently ‘good’ jobs feel that unemployed
people have little to teach them about
insecurity.
Here too some of the defensive strategies
that people in employment adopt punish others
more than they resolve the situation. For
________________________________________________________________________________________
Ethical Perspectives 1 (1994)1, p. 160
___________________________________
example, there is a growing resistance to paying
‘able-bodied’ people from general taxation for
‘doing nothing’ and, so, there is a new
willingness to institutionalise ‘workfare’, i.e. to
make payments to people judged capable of
work conditional on their performing assigned
tasks or undertaking assigned training. Research
done to date shows that any savings to the
taxpayer from alternatives to the indefinite
payment of unemployment benefit are
extremely difficult to establish (they rely on
key assumptions made about the dynamics of
peoples’ situations, i.e. what happens in the
future). What is more, the situation of many of
the unemployed people being targetted for
workfare has been made more difficult by the
very ability and new willingness of people with
relatively good qualifications and work
experience backgrounds, when unemployment
strikes them, to take more lowly jobs that,
formerly, were the preserve of the least skilled.
For example, hairdressing salons can now select
trainees purely from among those who have
successfully completed their full cycle of
schooling. The least skilled are simply being
pushed off the lower rungs of the labour market
ladder. The emerging phenomenon of ‘work
rich’ and ‘work poor’ households can also be
understood in this regard. This refers to the
development of a pattern whereby some
households seem able to bring in several wage
packets, whereas others are getting none at all.
After all, it is members of households headed
by a person in employment (their spouse and/or
older children) who stand to know more about
employment opportunities and who can afford
to accept low pay because their earnings are
really supplementing another income. So, for
example, the partners of employed men are
seen to be much more likely to hold some type
of job than are the partners of unemployed
workers.
It Hurts Not to Hold a Job
___________________________________
The pain and virtual ostracisation of the long-
term unemployed, however, identifies the real
victims of rapid economic change in the Union
today. These are the people to whom much of
the cost of free-trade policies, and of the inten-
sifying competition for jobs, gets passed on.
There is no-one below them, however, to whom
they can pass it on in turn. The evidence is that
they are finding it more and more difficult to
break back into employment. The unskilled
male worker over 35 who is made redundant
after near continuous employment since he left
school and the unqualified school leaver are the
most typical examples of people in this
situation. As years pass receiving social
benefits, their ability to compete for further
jobs and their motivation to do so lessens. This
latter is not due to any inherent attractions in
their life style but, on the part of older workers,
it can be the result of a deliberate decision to
concentrate on the employment prospects of
their children rather than on their own; while
on the part of younger workers, it is more
usually due to a total collapse in their sense of
self-worth.
Perhaps some of the long-term unemployed
are vociferous supporters of unions that
advocate protectionism and political parties that
want to send migrant workers home. More
usually, however, they have no links at all with
unions or labour movements and are too
alienated from politics to bother to vote. If
frustration leads the long-term unemployed to
strike out at others, it is primarily where a
small minority of them resort to anti-social
activities such as crime and vandalism. A far
larger number are more accurately described as
turning their frustration in on themselves. They
do this in a variety of ways: abandoning all
hope of holding a job again, withdrawing from
the labour market and forging a new sort of
existence through combining dependence on
social welfare with roles in their family and
________________________________________________________________________________________
Ethical Perspectives 1 (1994)1, p. 161
___________________________________
neighbourhood; succumbing to ill-health,
insofar as the status of being sick is much
easier to live with than that of being
unemployed; beginning to drink heavily,
leaving their home and ending up in the ranks
of the most destitute.5
Wrong to Turn Back
In the light of these upheavals affecting the
world of work, upheavals which are exacting
this high toll in human suffering — and from
which only a privileged and cosmopolitan elite
are wholly escaping6 — the prescription of
more technological innovation rather than less,
of more free-trade and more economic growth
is not to be taken lightly. Will it also entail
more individual and social trauma? Yet these
are exactly the medicines being prescibed by
the European Commission and the OECD in,
respectively, the Delors White Paper on
Growth, Competitiveness and Employment
(December, 1993) and the OECD’s Jobs Study:
Unemployment in the OECD Area, 1950-1995
(June, 1994). The two reports represent major
efforts to interpret and guide what is happening
to the economies of the advanced industrialised
world and it is extremely important to judge
whether the faith they place in innovation, free
trade and economic growth is justified and, if
so, whether the conditions are likely to be met,
under which these processes, from here on, will
bring jobs to the unemployed, and improve the
quality of jobs for everyone, rather than do the
opposite.7 If the recent past is an indicator to
the future, the future is bleak indeed.
Both reports offer no grounds at all for sup-
port to protectionist policies and, on the
contrary, make it clear that competition from
other regions of the world economy, be it
technological competition from Japan and the
USA, or wage-cost competition from South
East Asia and Eastern Europe, is not to blame
for Europe’s high unemployment. They are both
___________________________________
basically saying that the countries of the EU
must face up to the implications of their
changing economic relationships with other
regions of the world economy. The new, global
economy in no way owes the EU a living and
its peoples will have to apply themselves to the
challenge of earning their way in it by showing
some more of the energy, intelligence, hard
work and solidarity that, for example, some
Asian countries are bringing to the task. The
Delors White Paper, in particular, offers a
positive vision of growing free trade as a “you
win, I win” game where a stagnant or declining
EU economy is the last thing that, for example,
Eastern European economies need. A buoyant
EU economy — it argues — sucks in the exports
of those countries, provides much of the capital
equipment they need, innovates in developing
the green products and processes which they
should use, and is a source of essential
investment.8
Furthermore, the two bodies agree that tech-
nology is not a major cause of Europe’s unem-
ployment. The entrenched nature of unemploy-
ment, and the evidence that technological
change is accelerating rather than running out
of steam, can make it attractive to argue for a
‘paradigm shift’ in social organisation. The
argument is based on the premise that economic
growth will largely be ‘jobless’ because of
technology’s productive powers. It then appears
to be a solution to argue that the link between
employment and income as a normative way of
distributing income should be cut in the
interests of social cohesion and basic justice
and that society should guarantee a basic
income without work. The problems with this
scenario are well-aired, principally the conflict
between the ‘participation’ income that should
be guaranteed to every citizen with the tax rate
that it implies, and the effect of that tax rate
and of the income guarantee on the generation
of wealth in the first place. A problem less
adverted to is the effect of this perspective on
________________________________________________________________________________________
Ethical Perspectives 1 (1994)1, p. 162
___________________________________
the future facing people who are currently
unemployed and on the political will of society
to fight high unemployment. Put crudely, if a
decent job for everyone who wants one is not a
valid objective, why should the unemployed
seek them any longer and why should those in
jobs make any sacrifices to help provide them?
The OECD study in particular concludes that
the available evidence simply does not add up
to the death of employment as a normative way
of distributing income. This will not surprise
readers who have been following its
development of the concept of the ‘active
society’ (a term which the Organisation now
prefers to that of ‘full employment’) and its
increasing emphasis on active rather than
passive manpower policies.9 It is impressed
with the evidence that low unemployment and
high participation rates tend to go together
(making it, for example, totally against the evi-
dence to argue that the entry of more women
into the labour market causes unemployment to
be higher). It describes the notions that
economic growth will be jobless and that
unemployment is technological as ‘unfounded’.
It sees access to paid work for all as a valid
challenge to social organisation and not ‘pie-in-
the-sky’. It is, of course, the conditions under
which this access can be secured which are
crucial and, here, the Organisation seeks to
steer clear of harsh capitalism on the American
model by arguing that consensus on an
imaginative social policy is an integral part of
society’s ability to live with on-going
technological change. Seeking to be even-
handed, it suggests that too little social policy
in the US, and too rigid social policies in
Europe, are “ossifying the capacity of
economies and the will of societies to adapt.”
(Jobs Study, p. 30)
What then has caused unemployment on
such a scale in Europe if it is neither
competition from abroad nor technology? “The
single most important cause of rising
___________________________________
unemployment, as well as a growing incidence
of low-wage jobs, is a growing gap between the
need for OECD countries to adapt and to
innovate and their capacity and even their will
to do so.” (p. 41) This answer of the OECD is
unlikely to be intuitive — let alone welcome —
to redundant steel workers, coal miners and the
like, or to people in companies that are
‘downsizing’ and ‘delayering’ themselves of
middle management. Yet, in some respects, any
Asian or African student in Europe would
probably find some sympathy with the thrust of
what the OECD is saying. He or she would see
workforces that are ageing and finding it more
difficult to welcome technological innovations;
an individualism that fosters high levels of
personal consumption alongside high
expectations of the social protection and
services that should be provided by the State;
strong currencies that favour people as
consumers (of foreign holidays as much as of
foreign goods) but which damage them as
workers by making their home market one
which other economies eagerly target; high,
universal standards of education that contribute
to long queues to be university professors while
high costs of employing people mean that the
streets are seldom cleaned. The analysis of the
OECD, however, is not elaborated as a cultural
critique. It contents itself with specific
proposals on the economic level but, in reality,
their successful adoption and implementation
will require a fundamental revision in popular
expectations and improvement in social cohe-
sion in most EU member states.
The answer of the European Commission to
the same question, as to what has caused Euro-
pe’s unemployment, if it is neither competition
nor technology, does, in fact, go deeper and
touches upon Europeans’ sense of responsibility
for each other as well as their willingness to
face reality. Its key word is ‘solidarity’ in place
of the OECD’s ‘adaptation’. For example: “In
most European countries the proceeds of
________________________________________________________________________________________
Ethical Perspectives 1 (1994)1, p. 163
___________________________________
economic growth have mainly been absorbed by
those who remained in employment, and there
is a large pool of unemployed who have been
excluded. (...) Producing more jobs from
whatever rates of economic growth the
Community can achieve requires a new
solidarity. (...) Those in employment must be
convinced that the solidarity that they will show
in accepting some sacrifices will effectively
result in those now being deprived of gainful
employment being given a real chance.” (pp.
125, 123, 53) Here, too, it is probable that our
student from Asia or Africa would nod his or
her head: for him or her, it can be disturbing
that societies which, on the one hand, have so
much, still tolerate huge differences in their
members’ economic opportunities and limit
solidarity to relatively cold and anonymous
social welfare transfers.
Insiders and Outsiders
The Delors White Paper, in its emphasis on
greater social co-operation, can be seen as a
response to much of what economics has
learned, so far, about the puzzling ability of
European economies to generate inflation even
while there is substantial unemployment. How
are we to understand the apparent inability of
an economy to increase supply without inflation
when 8%, or 11%, or 16%, of the workforce is
unemployed? The theory of macroeconomics
has come up with the concept of the NAIRU (the
n o n - a c c e l e r a t i n g i n fl a t i o n r a t e o f
unemployment). Though strange-sounding it is,
in fact, charged with material for ethical
reflection. The concept was developed partly in
order to understand how, in Europe, attempts by
government to boost effective demand in their
economies so as to stimulate the demand for
peoples’ services (a Keynesian approach to
reducing unemployment) were resulting, not in
more people getting jobs, but in prices rising.
There seems then to be a level of unem-
___________________________________
ployment that is ‘natural’ to the economy only
in the sense that the public authorities appear
powerless to push it lower. The markets undo
whatever better outcome public intervention
precariously attains. So, for example, an
important study that appeared prior to the
Delors White Paper sought to draw lessons
from the brief golden period that the economy
of the European Community enjoyed between
1987-1990.10 In those four years, strong
economic growth that averaged 4% p.a.
translated into 9 million new jobs so that the
unemployment rate fell from 10.7 % to 8.3 %.
Imagine if this had continued for another four
years, or for six! But that is the problem. As if
exhausted from doing this bit of good, while
unemployment was still at 8 %, inflationary
pressures developed, short-term interest rates
rose and, in effect, economic growth was
choked off. It seems, sadly, that the level of
unemployment in the EU is not that important to
the functioning of its economies, only
unemployment which is rising. For only the
latter poses a threat to those currently holding
jobs so as to induce wage moderation and allow
non-inflationary growth. Too many of the
people who have been unemployed for any
length of time quickly drop out of serious
consideration, by employers or unions, as con-
tenders for jobs.
Attempts by economists to understand what
is going on here have made much use of the
concepts of ‘insiders’ and ‘outsiders’. Simply
put, insiders are people with relatively good
jobs, while outsiders have poor jobs or are un-
employed. Insiders regard the division of the
extra wealth made possible by advancing
technology as their affair; they are in a zero-
sum competition with each other, i.e. what one
gets, the other loses. Outsiders are either reliant
on a social security system that offers a degree
of security as long as one falls back totally into
its arms, or they try to shun its degrading
dependence and risk their luck at holding
________________________________________________________________________________________
Ethical Perspectives 1 (1994)1, p. 164
___________________________________
together a string of low-paid, short-term jobs.
When there is economic growth and techno-
logical change, the insiders (employers and un-
ions) disagree over what constitutes an
acceptable level of profits, the level of a wage
increase and appropriate changes in the long
established differentials between different
categories of workers. (The one area where
agreement seems easy to reach is the level of
redundancies!) The ensuing competitive
struggle sets prices rising before the economic
growth has had a chance of creating new
insider positions. What is more, a bias against
providing further insider positions sets in on the
part of employers. As they see it, the
international competition they face (if they are
internationally trading companies) or the budget
they are allocated from public finances (if they
are public sector employers) make it
economically unwise to promote anyone from
an outsider position to fill a vacant insider slot.
Any extra work that needs doing can be done
more cheaply by having outsiders work on a
sub-contract, fixed-term or part-time basis so
that these additional workers do not become
entitled to the pay or conditions attached to the
insider group. The phenomenon arises of people
in an industrial plant or large organisation
doing similar work side by side but on very dif-
ferent conditions. Sometimes, in the case of an
internationally trading company, the vacated
insider job will be transferred overseas, or filled
by automation, rather than repackaged as a
fixed-term or part-time job.
Must the experience of ‘adaptation’ to date,
evoked at the beginning of this article, be so
overwhelmingly negative? Unless it comes to
mean something different, it can only meet with
growing resistance and European societies will
again experience many of the negative tempta-
tions of nationalism. The choice is not whether
we allow our economies to change further or
not; that option is simply not there. Rather, the
choice is between one set of changes forced
___________________________________
upon us in a way which will pit sections of our
societies against each other, or to confront the
need for thorough adaptation in a solidaristic
way and design a quite different set of changes.
The second path involves seeking consensus on
fundamental ethical perspectives. It will not be
possible for the extent of the change in tax
codes and welfare systems to take place, for
example, without a quiet revolution in what
people value, expect and are prepared to do for
each other as members of the same society.
This need for a type of cultural shift to
accompany and accomodate new economic
policies can be illustrated in two areas. These
affect insiders and outsiders respectively.
Solidarity and Insiders
The most important area of policy innovation,
needed to transform an unjust and divisive
wave of economic change into one which is
more acceptable, concerns Europe’s ‘insiders’.
The Delors White Paper, for example, states
clearly that the incomes being taken out of
companies by those working in them must be
kept below what productivity improvements,
considered on their own, would allow in the
interests of reinvestment and the eventual
expansion of employment. But the challenge is
much deeper. While Europe is regarded as
having a distinctive social model, many aspects
of which are envied in other countries, we have
conspicuously failed to be characterised by
anything novel or worth imitating in the way
capital and labour, management and workers,
co-operate together.11 As governments have
seen the range of policy instruments open to
them steadily decrease, as they have had to
limit themselves more and more to ‘getting the
macroeconomic environment right’, the
importance of dynamic companies to the health
of EU societies has increased. But what are the
prospects that these companies will, indeed, be
dynamic in a sustainable way? Recent
________________________________________________________________________________________
Ethical Perspectives 1 (1994)1, p. 165
___________________________________
experience has shown that the public and
voluntary/community sectors can make little
impact on unemployment figures (despite
endless experimentation with special labour
market measures) when the private sector is set
on a determined path of shedding labour.
It can be argued that company boards and
the management of internationally trading
companies in the EU have seen the extent of
change needed, and its urgency, long before
Europe’s political leaders. Hence, their
prominent support for the Single Market, their
critique of the slowness of bureaucratic
decision-making and of multiple other aspects
of an EU that simply has not understood what is
now required to hold onto market share, let
alone expand it. An interpretation highly
favourable to European managment would say
that, despairing of bringing unions,
governments, educational establishments and
public opinion generally to see the writing on
the wall, they have pressed on reluctantly with
that set of strategies which at least it was
possible for them to implement unilaterally and
without waiting for the rest of society to see the
problem. At one international conference after
another, therefore, they have been teaching each
other the virtues of relocating overseas,
automating, rationalising their payrolls,
exploiting the advantages of ‘atypical’
employment contracts, forming defensive
mergers and alliances, and similar measures
regarded as essential for survival in a Europe
refusing to face reality.
A less favourable interpretation would say
that capital, which is behind managment as its
employer and whose interest dominates the
thinking of company boards, has not been
interested in forging a new relationship with
workers and civil society. If the EU needs it, it
does not need the EU. Hence, attempts by the
European Commission to design a European
Company law and to enshrine principles and
codes of practice such as consultation with
___________________________________
workforces, minimum levels of disclosure, etc.,
generated some of the most intensive lobbying
the Commission has yet experienced. This
interpretation believes that the current global
opportunities offered capital have released it
from the checks of needing the co-operation of
labour, local communities and national govern-
ments. Only exceptional business heads will ap-
preciate that outflanking European concerns for
the quality of working life, social equity,
environmental protection and so on, will
eventually produce a wasteland of a global
economy and that, when there is nowhere left
for capital to move to, the slow, patient
reconstruction of most of what had been
destroyed will have to get underway again.
The two interpetations are extremes, of
course. A wide range of strategies have been
adopted by companies based within the EU and
with enormously different results. Sometimes
management acts arbitrarily, there is open
conflict and an industry is lost to a region.
Sometimes there is collusion between
managment and unions to have higher-paying
jobs but for a smaller number of insiders.
Sometimes there is discussion and agreed forms
of sharing in the good times and the bad which
enables a company to eventually expand and
employ some ‘outsiders’. If solidarity or
adaptation are to describe the experience of
economic change in the EU from here forward,
rather than dislocation and upheaval, the quality
of the relationships between the ‘two sides’ of
industry has surely to make some type of a
major breakthrough. It should be a cause of
wonder, and some shame, when managment
from Asia can arrive, establish strong
relationships of trust with European workers
and succeed where indigenous managment has
failed (this has happened, for example, with
Japanese investment in the British car industry).
The motivation, however, should not be simply
competition. What is at stake is how directors,
institutional investors, managment, unions and
________________________________________________________________________________________
Ethical Perspectives 1 (1994)1, p. 166
___________________________________
workers each view the undertaking of which
they are a part. They need to advance towards
accepting that their limited liability company is
also “a community of persons who in various
ways are endeavouring to satisfy their basic
needs and who form a particular group at the
service of the whole of society.”12 The ability
to survive and prosper in the global economy
will be strengthened by the adoption of a
sound, ethical perspective on the reason for
their being involved together in the first place.
Solidarity and Outsiders
It is true that recipes for economic change that
are to benefit the unemployed but which make
nothing depend on what the unemployed them-
selves do is a form of paternalism. The danger
to date, however, is of a near exclusive
emphasis being placed on what has to change
for the EU’s outsiders if high, long-term
unemployment is to end. So, reforms to
Europe’s social security systems, in order to
induce people to move from dependence on
social welfare to acceptance of low-paying jobs,
have been occupying the attention of many
economists and public administrators. It is
important to find a position that is fair to the
unemployed and fair to society in all of this.
A major redesign of the social welfare
norms governing unemployment in EU member
states is widely accepted as overdue. The
experience gathered of long-term dependence
on unemployment compensation suggests, in
fact, that its indefinite payment is a poor use of
money even in the eyes of the unemployed
themselves. The core violence of an indefinite
unemployment benefit is that society is saying
to a healthy, adult member: “we do not need
you. You have no contribution to make which
we regard sufficiently highly to pay you for.”
Moving to systems which would regard
every unemployed person as having a
contribution to make to society, and one which
___________________________________
society should value sufficiently to pay them
for making, however, means steering the ship of
social welfare reform between some dangerous
reefs. It does not mean accepting that
unemployed people are currently being paid ‘for
doing nothing’: on the contrary, frequently for a
household to live anywhere near decently on
social security in a Western country is an
achievment (and usually attributable to the hard
work of a woman). Nor does it imply that there
is no longer a need to improve on the existing
level of unemployment benefits: on the
contrary, there is a clear link between material
poverty and long-term unemployment in coun-
tries like Ireland and the UK. Nor again is it
giving public authorities the right to demand
the execution of certain tasks as a condition of
people receiving their unemployment
compensation: in the advanced industrial
societies of today, people who cannot find a job
because of the pace of change in the economic
structure are entitled to an income out of
justice, not out of charity. Finally, it is not
saying that only work which is organised as a
job gives people recognition and dignity:
voluntary work is to be highly esteemed but it
has to be voluntarily-assumed and presupposes
a context of relatedness to others (such as the
home-maker has in a family, the member of a
religious order has in his or her congregation,
the volunteer has in the social or political
circles of which he or she is part) that suffuses
the work done with a meaning transcending a
cash contract. A moment’s thought allows us to
see that people who are unemployed for a long-
time are the least likely to be in a position
where a person can work without pay and not
experience alienation.
There are several promising directions that
reform of Europe’s ‘social model’ can take.
First, it is clear that encouraging people to
move from dependence on social welfare into
the secondary labour market will only increase
poverty unless measures to ‘make work pay’
________________________________________________________________________________________
Ethical Perspectives 1 (1994)1, p. 167
___________________________________
are also implemented. (For example, the raising
of effective wage rates via mimimum wage
legislation, the abolition of social charges, an
earned income tax credit.13) Second, the
freedom of unemployed people to avail of the
different types of employment coming on
stream (part-time, fixed-term, task-specific, etc.)
could be enormously increased if social security
systems were more flexible.14 Third, while
some jobs may almost inherently be low-
paying, they should not also be dead-end. The
segmentation in the world of work captured by
the very phrase, ‘the secondary labour market’,
needs to be overcome by increasing the
mobility between the different types of job.
Related to this issue is the question of how
we view and value those jobs which a large
number of people can do. “It is important to
identify to a greater extent the employment
possibilities for those who encounter difficulties
in integrating into a working world which is
becoming increasingly complex and
demanding.” (Delors Paper, 93) It is clear that
people differ enormously in their ability to cope
with, and fit into, an economy where change is
a way of life. It is also clear that, no matter
what demand and opportunities exist for highly-
skilled and conceptually trained workers, very
many of the jobs that must continue to be done
by people for people (cleaning, catering, retail
servicing, driving, security, etc., etc.) will
remain jobs that are unskilled and possi
___________________________________ ___________________________________

ble for a large number of people to do. It is im-

portant then — to those who do these jobs and
for social cohesion — that Europe have nothing
to do with a job snobbery that would dismiss
routine, repetitive jobs as inferior and seek
avidly for the technologies that will make them
no longer necessary. It is false to think that an
economy whose strength is its capacity for
innovation will make every worker into a
consultant. While Europe is right to reject the
American model for its poverty wages and lack
of social protection, it should not, thereby,
scorn the willingness of millions of Americans
to engage in relatively simple jobs.

Conclusion
The dislocation that is evident throughout the
world of work today, and the insecurity and
pain it is causing, is influencing political life in
the European Union. What Americans would
call the ‘feel bad’ factor tempts some to support
protectionist measures, abrupt limits to
immigration, cuts in taxation and social
services, workfare or — if they are outsiders —
abuse of the social welfare system and black
market activity. It is important to appreciate
that very few people are escaping; the
upheavals in the world of work are affecting
insiders and outsiders. Making common cause
requires forging a fresh consensus on fun-
damental values of which two key ones are the
nature of a business enterprise and the place of
a job in a person’s life. These are the key areas
where social innovation must match the
apparently ceasless innovations on the part of
technology. They may, hopefully, prove capable
of redirecting the process of technological
change itself.

Notes

________________________________________________________________________________________
Ethical Perspectives 1 (1994)1, p. 168
___________________________________ ___________________________________

1.Some individuals leave the labour force in the face of poor job prospects while others decide not to enter.
These discouraged workers are considered ‘hidden’ or ‘disguised’ unemployed. Their numbers are significant,
adding 5 to 20 percent to the unemployment count depending on the country. See OECD, Employment Outlook.
Paris, 1993. For a good case study of one country, see John SCHMITT, Jonathan WADSWORTH, Why are two
million men inactive? The decline in male labour force participation in Britain. Centre for Economic
Performance, Working Paper no 338, LSE, March, 1994.
2.At the end of May, 1994, some 19 anti-dumping measures and 12 other trade restrictive measures were being
imposed by the EU that effectively limited exports from Eastern Europe. See the first ‘transition report’ of the
European Bank for Reconstruction and Development.
3.This process seems much further advanced in the USA. The experience within the EU may be uneven with, for
example, the UK most closely resembing the USA yet hardly one member country is untouched by people’s
growing concern for their jobs and the prospects facing their children. This insecurity has been invoked to
explain the significant ‘no’ votes in referenda on Maastricht and the low turnout in the recent elections to the
European Parliament.
4.The term ‘creative destruction’ was used by the economic historian, Joseph Schumpeter, to express the
essentially restless, even violent, dynamism of a capitalist economy. The figure of ten percent is in ‘Job Gains
and Job Losses in Firms’, chapt. 3, Employment Outlook. July 1994, OECD, Paris.
5.For example, see Serge PAUGAM, La societe française et ses pauvres. L’experience du revenu minimum
d’insertion. Paris, Presses Universitaires de France, 1993.
6.“Never before in history has opulence on such a scale been gained by people who earned it, and done so
legally” is one reflection on executive earnings in the USA. See Robert B. RIECH, The Work of Nations.
Preparing ourselves for 21st Century Capitalism. New York, Knopf Inc., 1991, p. 219.
7.A subsequent report from Britain, Social Justice: Strategies of National Renewal, Report of the Commission on
Social Justice. Vintage, 1994, is the fruit of a similarly long inquiry into whether economic growth is bringing
people where they want to go. It can usefully be read in conjunction with the Delors White Paper and the OECD
Jobs Study. It was established in 1992 by the British Labour Leader of the time, John Smith, who took the
occasion of the 50th anniversary of the Beveridge Report to encourage the left in Britain to look imaginatively at
what social and economic policies are feasible for Britain to pursue at this point in time. It is known also as the
Borrie Commission Report after its chairman, Sir Gordon Borrie.
8.Unfortunately, a quite different tone creeps into the OECD Jobs Study. Its Secretary General, in his foreword,
describes the mandate of his Organisation as helping its member countries prosper and innovate so as to remain
at ‘the head of the pack.’
9.“The basic thrust of the notion of the ‘Active Society’ is to foster economic opportunity and activity for
everyone in order to combat poverty, dependency and social exclusion”, Labour Market Policies for the 1990s,
(p. 8), OECD, Paris, 1990. ‘Passive’ manpower policies are those which focus on the needs of unemployed people
for income support and protection of a minimum standard of living; ‘active’ policies focus on their needs to
enhance their ‘employability’ and eventually gain re-integration into the economy.
10.Jacques H. DREZE, Edmond MALINVAUD, Growth and Employment: the Scope for a European Initiative.
European Economy, Reports and Studies, 1, January, 1994.
11.The Borrie Commission gives an interesting example of a Japanese manager being quite convinced that the
learning had to go the other way: Britain had to look to Japan to see how workers should be valued. Op cit., p.
75.
o o
12.JOHN PAUL II, Centesimus Annus, 1 May, 1991 n 35. See also n 43.
13.There is evidence that the employment effects of minimum wages are not always negative, see David CARD
and Alan B. KRUEGER, ‘Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New
Jersey and Pennsylvania’ in American Economic Review, Sept. 1994. The real drawback to them may be that the
benefits pass primarily to ‘work rich’ households (see the text above) rather than to the long-term unemployed.
America has institutionalised an earned income tax credit (EITC) which involves an effective subsidy per hour
worked for the low paid. Thus, the more the poor work, the greater the income boost they get. Jacques Dreze

________________________________________________________________________________________
Ethical Perspectives 1 (1994)1, p. 169
___________________________________ ___________________________________

has argued forcefully the case for the abolition of social charges on low wages. See Op. cit.
14.This point is accepted in principle by the European Commission’s White Paper, European Social Policy — A
Way Forward for the Union, of July, 1994, and developed in more detail in chapt. 6, “Security; Building an
Intelligent Welfare State”, of the Borrie Commission Report (Op. cit.).

________________________________________________________________________________________
Ethical Perspectives 1 (1994)1, p. 170