How Can a Society Achieve Almost Full Employment in a capitalist System ?

[Yamantau]

Hey everyone, after reading many threads i thought id consder my own thread.

I've been thinking a lot about the idea of full employment and how challenging it is in today’s profit-driven economy. With the rise of AI and automation, it seems like we’re at a crossroads where many traditional jobs are being replaced, leaving a significant portion of the workforce feeling surplus to requirements.

Because overall it seems people are only useful if a company can generate x profits but then there comes a point where its uneconomical to have the whole or majority of the workforce employed espcially when how are profits being generated when also people dont need x services etc there seems to be only so much profits to be made so they what exactly does one do with the overall population ?

They put us on UBI - and we lose the last remnants of political leverage we had.

This is a wonderful thought provoking post @Yamantau . It gives me faith that Mumsnet isn’t just a den of folk wanting to tear strips out of each other or bring up perceived slights about holidays or inheritances.

Back on topic -

I think this is a problem governments in the Global North are going to have to start tackling head on, instead of kicking the can down the road as is their usual way.

We can’t have full employment with the current or near-future economy. This is really going to start to bite with the people who went to university in the 2000s who believe they are entitled to a career that gives them the housing that is as good as, or better, than their parents who left school at 16 or 18 and bought houses at 2.5 x their salary, or could do it on one income in the household.

No generation ever wants to be worse off than those that came before. The way we tend to look past this problem in the UK is through rising house prices granting inheritances to middle class families. It makes them the “shareholding group”, a voter base which all parties pander to as a route to secure power, but end up shoring up their interests every time due to the above.

What we can have however is an honest look at what the UK actually needs from 2030 onwards. It isn’t inexorably rising house prices. It isn’t a lack of acknowledgement about falling incomes, rising costs of childcare, the elimination of entire white collar job sectors.

Universal basic income is coming, but the very idea of it will be torn apart ideologically by those who were keen to blame the furloughed for something they never asked for.

It will be a race to the bottom, and I’m going to wince when I see it.

much appricated it just seems theres going to be a point where society will be advanced either tech wise, or that theres only so much profit that can be made by companies before then society needs to think, what do we do with all the other people because companies can only exist if the profits are there to be made but once the profits mean companies are more likely to go bankrupt then what happens ?

so basically a whole new system thats not based on profits needs to be created to ensure the survival of humanity ?

I saw an advert today for AI and your thread is through provoking and a bit scary too
Some good answers so far and will be reading with interest

I'm in Denmark and work at a job center. We have a record high number of employed, unemployment is down. I think I vaguely remember from my education that our private sector is fairly intertwined with the public sector, and the one strengthens the other.

@JacquesHarlow

I had no problem with furlough. UBI will arrive with CBDCs, and you're right to hark back to the Covid era for some insight in to how these will be used. It will operate similarly to the social credit systems in China. But worse. To achieve carbon goals we will be prevented from travelling outwith a certain radius of where we live (our money simply won't work more than 15 mins from home for example). The government will have full visual over what we buy and will block access to health care if we buy too much sugar or alcohol or vape liquid. And we will have no income at all if we criticise any of their policies. But if we don't like it we can always check out in the nearest sarco pod, the govt will always ensure that option is available.

Although I agree will shall be monitored a lot more , I hope we are not stopped from traveling too far as my son and granddaughter live a three hour round trip away from us and we visit them once a month. I wouldn't see much of them :(
Pay per mile would be a disaster for many if that ever came in.

My father told me that in the late 60s early 70s, the government were promoting how to cope with a shorter working week because computers were going to take everyone's job.
And what does full emp,oyment achieve for a society? There will always be those who do not want to work, so how would they be dealt with. Or those who cannot work? A universal basic income may stop wol at doir, but will still come with stigma and crime

I think we are already beyond the tipping point because 54% of households are net beneficiaries of the state, not net contributors. And that’s in terms of benefits and tax credits, not NHS care etc. we have created a dependency that then encourages politicians to do more for that group and put a greater burden on taxpayers. It’s not sustainable.

At the moment, a lot of political commentators are pointing out that we have the highest tax burden since the end of WW2. In fact, with the brief exception of that short period, we have the highest tax burden in our history. Furthermore, in the late 1940s most working class and middle income jobs paid little or no income tax, where now they all pay 20% and many hit the 40% tax threshold.

I think industrial revolution’s have always destroyed and then created. I can’t imagine that people working with hand looms would think in a couple of hundred years that make-up tutorials on insta could make you some money.

I think it’s just very hard to predict what will happen. But right now higher skills is what matters. Unfortunately for the UK we have become a low wage economy in many ways and neglected focusing enough on innovation. Not everyone can be a successful technology entrepreneur, but they bring jobs with them, things still have to be made, like solar panels for example.

I remember a conversation about UBI on here, I worked out then how much it would cost to give very working age person minimal UBI and it was astronomical. Just completely unfeasible. The state is already creaking under it’s obligations.

It wouldn't be UBI for everyone though surely ?
It would have to be means tested.
A very radical idea would be to drop the prices of houses to a reasonable level right across the board. Not sure how or who would decide by how much , but might make a level playing field.
( I know this will never happen by the way, but I often think about it )

It wouldn't be UBI for everyone though surely ?
UBI stands for Universal Basic Income, so yes the idea is that everyone receives what is considered a basic income eg enough to cover essentials. There are different models but yes the idea would be that everyone gets it.

Many of the jobs your children and grand children will be doing probably don't even exist yet.

One of the challenges we face is how automation and AI strips out low and semi skilled jobs and what people who would have perfomed those jobs do.

But then that has been an issue since the industrial revolution.

I think employment as a concept is changing. When I was young it meant 36 hours a week in a job. Now it may mean multiple jobs, gig jobs, zero hours, part time and flexible hours…
Few people I know seem to be in full employment. It’s often a hybrid employment model of some time with not enough work available . I think capitalism is cherry picking just enough.
I think this is the future for many. Casual contracts and instability with varying levels of under-employment, rather than unemployment. Official employment figures will not dramatically fall, but the reality will change. You will work as needed, rather than be supported in a career.
I say this as someone with a role essential to service users that would be highly impacted if I left- but I’m still on a casual contract

I think we need a rethink on what is full time, working time and flexible working. I also think we need to change our views on what jobs are “valued” by society.

At one end of the scale we have people working 60, 70, 80+ hours and at the other, people who can only work a relatively few hours.

If routinely someone is working a 60,70 80+ hours a week you could split that into two jobs of 30, 35, 40 hours. Equally not everyone is capable of working full time so we need much more creativity on what flexible working can be.

I know we have fit notes that set out what someone can’t do/ adjustments they need but we could use a similar approach to say what someone can do. This is really important for those with both mental and physical conditions and disabilities. As well as carers, be that parents or those caring for disabled or elderly relatives.

it seems overall that theres only so much profts that can be made before its a case of theres not enough profit to go around then its rinse and repeat by the main large companies that run the essential services and after that its then how can you get majority of society being productive if the profits are not there to begin with due to it being un economical for many businesses to employ people. thats if im making sense

So a gov approved scheme of 'work, get nothing but pay lots of tax, don't work, get funded' ?8
Who on earth would choose to work in this circumstance?
A min wage job while people berate you and report you for whatever ... look at the 'sandwich artist' and go ape threads for who would work a minimum wage for that level of grief!

I agree with this. I work in education not as a teacher and a lot of the other roles used to be a permanent contract. Yes they were part time but generally enough hours, like 25 or 32.

Increasingly they are fixed term and fewer hours and increasingly see people working for more than one school in the same type of role and then also working somewhere else For thier 3rd or 4th job, plus they also make something and sell it.

I suspect that UBI will be introduced, along with social housing which will be basic - something like a small flat.
But in time the higher tax payers will come to resent having to pay to support people on UBI, resent them having children, resent them wanting to retrain for new jobs etc. Just the same as they do now.

100% employment isn't realistic or desirabld in a capitalist economy because if everything is a market there needs to be a pool of currently-umemployed people and a pool of currently-unfilled posts so that there can be competition on both sides to attract the best matches. However in a healthy system any periods of unemployment are short - the most employabie of the unemployed get snapped up quickly, the least employable are given training and access to upskilling programmes until their employability increases. That's not the system we've got.

But it's not as bad as the OP lays out because demand for products and services isn't a fixed quantity that can be met by automation and AI. The more people who are employed at better-than-breadline income levels, the bigger the demand for goods and services, so it is in the interests of the corporate sector as a whole to have more people gainfully employed and more likely to buy their goods and services.

That's where responsible government needs to step in to add some controls to unlimited free market capitalism by making businesses bear the full cost of their business decisions. If a factory employing 10,000 workers at a cost of £200m pa can convert to an automated system that only needs 1,000 workers to service machines with a total cost of only £100m for the same productive output they need to be obliged to contribute a fair chunk of the £100m saved towards retraining and redeploying the 9,000 excess workers so that they can continue in gainful employment. And it's in the interests of the factory that they are forced to do so because if all businesses do the same without investing in helping redundant workers then their factories full of AI and robots will stand idle because there will be no market for their output due to the massive unemployment levels.

We have more people in Full Time work than ever before. We have few people who are unemployed, but want to work and are fit to work. We have others who are NEET.
We hear about some very well paid Directors and Senior Managers. But overall I get the impression that many well known and large businesses are only clinging on. Many shareholders are only getting 4% dividends many less, many not getting inflation increases.
Think of the big stores that have closed like Debenhams. Motor industry is not having an easy time. Ford, Vauxhall Aston Martin all facing cut backs. Renault is always in trouble.
Banks closing branches to stay alive. Continental Banks having real troubles like Commerzbank from Germany.
The transition to new industries will be painful for most of us. The rundown of Oil from Scotland and North Sea will cost jobs now. Scrapping the coal mine in Cumbria will mean a lack of high value careers in that are and only tourist min wage jobs will remain. There will be Green industries created in 8 or 10 years time. Those are two examples but will be repeated over UK and much of Western Europe.
Those of us who do not know how to manage change in these existing workplace will find life on low wages difficult for the 8 year gap.

UBI can't work without a productive economy to fund it.

Currently the public sector accounts for 43% of GDP which is already unsustainable.

It's not entirely new. Several UBI experiments were run since the 70s and, overall, the outcomes are favourable. Most notably UBI reduced doctor attendance and improve educational outcomes so there appears to be net positive contribution to society as a whole. Poverty costs governments a lot more than any such schemes are likely to. People are also much more likely to become more enterprising once their basic needs are met so, again, this will likely lead to improved productivity, creativity and more job creation for most.
UBI is universally seen as socialist incentive but I think it can fit quite well with capitalist values.