Do we need to become less efficient?

Tweet Yesterday's story about the continuing increase in the number of NEETs is something which should worry all of us. To have so many people, especially young people, who see no hope of gainful employment in or near their communities is a depressing situation.

The traditional answer of the political right has been to encourage people to 'get on their bikes'; to become more mobile and move to where the work is. It's a solution which makes sense only to those who see people as a labour pool for the economy rather than as members of a community. It's the right answer for some individuals; but the wrong answer for a society or a community.

A more enlightened approach has been to lay on ever more training and education programmes, so that people are ready for work when it's available. But once people have been on one or more of these courses, and are still out of work, it's easy to see how the attraction starts to fade.

We've had a policy of trying to attract industries to the locations which most need the employment opportunities, albeit that that policy has been followed on an intermittent basis, with differing levels of enthusiasm depending on the state of the economy and the party of government. It's brought some jobs, and some of the companies have stayed and made a success of their investment. Others have proved to be more transient. The apparent successes of the boom years can quickly look hollow when things turn bad.

One of the most obvious responses to the economic downturn in the private sector - shortly to be imposed on the public sector as well through budget cuts – is to try and do more with less. Generally that means trying to achieve the same or more output with lower input; usually fewer staff working longer hours (or for lower wages, often by moving factories lock, stock, and barrel to lower cost countries).

That isn't just a product of the recession, though; it's a long term driver of a competitive economy to try and reduce input costs. The economy is built on an assumption that 'economic growth' will soak up the excess labour. That doesn't always happen in the good times; it certainly doesn't happen during a recession.

But if continued compound economic growth is ultimately unsustainable, as I believe it to be, then depending on growth to solve the problem of unemployment is a strategy which is doomed to failure. The current recession should have served as a warning to us, but the powers that be seem determined to ignore that warning and rush back to 'business as usual' as rapidly as possible. The outcome will inevitably be that we have a persistent and growing number of people who remain economically inactive for the foreseeable future. 'Efficiency' may make narrow economic sense, but it doesn't always make broader social sense.

There is an alternative though. If instead of employing fewer people to work longer hours we were to employ more people working shorter hours, we would be more effectively 'sharing out' both the available work and the rewards for doing it. (And, in the process, cutting the levels of tax on those who do work which currently go to support those who do not.) We'd also have a more equal society, and probably a happier one to boot.

No doubt many, especially those who do not yet understand that the dependence on growth is unsustainable, will see this as unrealistic. Or maybe just plain undesirable. My response would be that more equality is inherently a good thing. And the alternatives facing us if we wait until growth actually hits its limits are likely to be far, far worse.