With youth unemployment hitting its highest in over ten years, at 16.1% of 16-24 year olds, many are looking for who to blame. Businesses and opposition politicians have taken aim at the Labour government, blaming the national living wage, the Employment Rights Act’s equalisation of pay for under-21s, or the rise in National Insurance. While they are not wrong to criticise the government, they are pointing to the wrong things. For communists, we know that the solution to unemployment is not to reduce wages, we need a government that is investing in job creation and public education. Our Labour government is instead choosing to invest only in warfare, depriving a generation of the opportunities we deserve.
Invest in jobs not war
Youth unemployment is not some accident of the market, it is the result of deliberate choices. Despite their name, this Labour government has chosen not to invest in the labour force of today and tomorrow, but in militarism. At the release of the Strategic Defence Review last summer, Starmer was clear that the nation should become a “battle-ready, armour-clad nation”
Instead of investing in key, growing and jobs rich industries, our government doubles down on the road to war. The Alternative Defence Review highlights how military spending has one of the lowest employment multipliers – 70th out of 100 sectors – outperformed by sectors such as agriculture, energy, transport, and construction, with health the highest ranking sector of them all.
Instead of developing a mass programme of apprenticeships and publicly funded universities, they offer military gap years and a deluge of adverts that sell the military as some kind of summer camp.
If the only viable options for many young people is precarious work and benefits, or joining the military and arms industry, we cannot be surprised when people choose the latter. It is not a moral failing of these individuals, but a systemic failing of our economy and politics.
As communists, we must not only make the case against the drive to war, but the case for a better alternative.
We need a just transition for workers in the arms industry, creating equivalent or better jobs for their technical skills in industries that do not serve imperialism.
Furthermore, we must fight for investment in key public industries, green and high tech sectors, and in free cradle-to-grave education designed to equip us for such industries. Young people need good jobs ready to take them, and an education system designed to get them there.
Raising wages does not harm the economy
The issue of youth unemployment has already been used to argue against the national living wage as well as the equalising of the minimum wage for under-21s, introduced in the Employment Rights Act.
The argument goes that the increased cost of labour is hurting businesses, and suggests that a way to get more young people in work could be to bring their wages lower down, or risk businesses raising prices to counteract.
This argument misunderstands the relationship of wages to value, prices, and profit. The value of a commodity is determined by the social labour necessary to make it. Marx explains this in Value, Price and Profit and, more extensively, in Capital.
In this situation, how do businesses make a profit? They have to pay workers less than the total value of their labour. If they didn’t, they would be spending as much money as they make – and under capitalism’s ‘free market’, a business breaking even will be out-competed by a company making profit – i.e. one paying its employees less than they are worth. This is why the label of ‘ethical employer’ is laughable under capitalism.
The exact price a product or service sells for fluctuates with supply and demand, but this price is always some amount below or above the actual value, orbiting around this amount.
Therefore, the suggestion that businesses will simply increase prices to counter the increased costs of wages is mistaken. If businesses start charging more, we will buy less. Increased costs kill the demand for ‘non-essentials’. It means less trips to the pub, club, bar, restaurant; less presents for our friends, family, and loved ones on holidays and birthdays; and so-on.
For many of us, it even means buying less essentials. We are already in a ‘cost of living crisis’, the cost of essentials have already gone up, never mind luxuries. These increases in prices were not driven by higher wages, quite the opposite, the struggle for higher wages has been fought in response to higher prices. Accounting for this inflation, many fights for ‘higher’ wages has been in truth just a fight against real terms pay cuts.
Similarly, if businesses keep prices the same but manage to lobby the government into lowering either the minimum wage in general or the youth minimum wage again, then with less income, we still will have to cut our spending further. When so many of us are already choosing between heating and eating, there comes a point where we must ask, what even is there left to cut?
Jobs under socialism
Our nation is far too wealthy to justify a single person living in poverty, yet poverty has become a normal part of life for so many young people. We have known nothing but austerity, privatisation, and an endless waste of money and life for the military and arms industry. Be it in Iraq, Syria, Afghanistan, Ukraine, Palestine – or the possible future wars that our government seems determined to see come true.
There is an alternative, however. Instead of the road to war, we can take the road to socialism.
Under socialism, our economy will no longer be planned by the unelected, unaccountable heads of monopoly corporations. It will be planned democratically by the workers ourselves, with shared prosperity – not private profit – the goal.
With socialist planning, we can develop our public education system in tandem with the needs and vacancies of our industries. Sectors would be integrated, meaning any surplus from profitable sectors could be invested in areas that may not be immediately profitable, but serve a social good. The notion of cutting wages or raising prices because the minimum wage was ‘too high’ would be unthinkable.
Youth unemployment would be a relic of the past, because our education would have been designed specifically to provide clear pathways into needed jobs. The public investment in industries would ensure such jobs existed in the first place.
Today’s farce of the overqualified generation would end. Too often graduates find their few career options not only don’t require a degree, but don’t even require A-levels. No wonder so many of our generation are left asking “what did I just go into over £40,000 of student debt for?”
We are not overqualified, we are under-invested in!
We must fight against any attempt to reverse the Employment Rights Act, link up the struggles against youth unemployment and student poverty with the wider struggle against war and imperialism, and build the fight for peace, jobs, and socialism in our lifetime.
Philip English, is the Editor of Challenge Magazine
