We cannot fix welfare by continuing to rely on outdated economic theory

In the UK, and this is almost certainly an underestimation, one in five adults is unpaid caregivers not only for the elderly but also for working-age adults – something we forget in public welfare talk. 1.6 million people currently have an unmet need for care. Liz Kendall took the line, “This problem is serious because it affects the economy” and met the Secretary of State for Health and Welfare at Westminster Hall last week, telling Conservatives that they should really take this problem as “social” seriously Care is just as important a part of our economic infrastructure as the roads and railways. ”

Why? Because how are all these unpaid carers going to work and keep these jobs when they are trying to take care of someone at the same time? Incidentally, like green jobs, care jobs are an area of ​​future growth after the pandemic. By 2030, 525,000 more care jobs are forecast on the labor market. Then who will apply and stay in these caring jobs? As it stands, you are getting the minimum wage to put your life on the line. One in six people is not eligible for statutory sickness benefit – £ 95 a week which most would agree is not enough to self-isolate. A quarter of nurses have zero-hour contracts. Unsurprisingly, employers struggle with hiring all the time, and when the positions are filled it doesn’t take long.

We know that the presence of unions in a sector and collective bargaining would increase the pay of caregivers. However, organization in a sector of 18,500 mostly private employers in nearly 40,000 organizations is still extremely low. And that doesn’t even apply to the 97% of domestic workers who work in private companies and make more than a million visits to vulnerable people in their homes.

Even if unionized nurses have been successful in securing better wages and conditions, higher costs will result in job losses if nursing jobs are not publicly provided or subsidized. Why? Because when the cost of a paid carer increases, women (and women are) find it more economical to leave the labor market and take care of themselves. This, as Robert Sweeney has shown, lowers women’s employment, and since public sector wages are tied to what would be earned in the private sector, wages and conditions of care work continue to deteriorate.

Governments around the world are cautioned to stop confusing price and value. Nursing work is a personal service to which productivity improvements cannot be applied – the foundation for higher incomes. Since care is labor-intensive, the costs do not decrease if more “output” increases and more people are cared for. As we know, when “hourly performance” – a standard measure of productivity – increases by forcing caregivers to care for more patients over a period of time, the quality of care declines. The ability of employers to pay higher wages is therefore low.

If we continue to pretend that the problem of care can be solved through continued reliance on outdated economic theory, in which wages are determined by abstract market forces of supply and demand, we cannot redefine priorities by recognizing that We have underinvested In the caring economy, wages are low and wages are not set by abstract market forces, but rather determined by our values, government decisions, and a legacy of racial and gender discrimination.

Joseph Stiglitz also warned at the Open Labor conference this weekend that we need to overcome government reliance on 20th century GDP as the definition of progress. He warned that GDP is not a good measure of wellbeing or sustainability. What we need instead is a “dashboard” of measures that reflect different dimensions of our society, with the GDP measure being carefully applied, being aware of its limitations.

At the end of the debate in Westminster Hall last week, the Minister of State for Health and Social Services concluded. “I will not go into the system at this point. Financing questions lie with the Ministry of Finance. “They don’t, they are up to all of us. The pandemic has shown that the public, government and media lack a basic understanding of the adult care sector in England. In the middle of a pandemic, we are struggling to think about the future of our economy – but now is the time to do so, because if not now, when?

Back to the Future: While some powerful interest groups may welcome increased automation of our future economies, where is the majority of us who earn our income from work? Many jobs will continue to go offshore or will be automated. Two areas of the economy with the potential to meet our future needs and ensure a better standard of living are nursing jobs and green jobs. And neither is a priority for the current government. Will we sleep through this moment of 1945? We have to make decisions about how to reallocate resources and they are based on what we value – whether we are receiving care now, not receiving care but actually needing it, caring for someone else, or one day needing someone to look after us takes care.

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