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125 Int'l Lab. Rev. 87 (1986)
Meshing Labour Flexibility with Security: An Answer to British Unemployment

handle is hein.journals/intlr125 and id is 101 raw text is: International Labour Review, Vol. 125, No. 1, January-February 1986 Meshing labour flexibility with security: An answer to British unemployment? Guy STANDING * I. Introduction Two points attract widespread agreement across the political spectrum in Britain. One is that the labour market is in a mess, the other that the social security system is in a mess. There is, of course, rather less consensus on what should be done about either. Yet the two points are clearly linked. Mounting concern over the operation of the labour market and the social security system comes at a time when faith in the new economic nostrums of the present Government is waning. The monetarist route to price stability and full employment has been discredited by the persistence of inflation (albeit at lower levels) and high unemployment, which has been rising steadily for more than six years, to about 14 per cent in 1985. Over that period economic strategy has broken sharply with the Keynesian methods of demand management pursued between 1945 and 1979. It has essentially put Keynesianism into reverse, relying on macro-economic policy to control inflation and on micro-economic policy to influence employment, with the stress on supply-side measures designed to inake the labour market and labour force more flexible .I Critics argue that the most telling comment on the British experiment 2 is the simple fact that, after six years, unemploy- ment stands at record levels. Its defenders retort that it is a long-term strategy: the Government itself is not able to determine the level of unemployment, while the institutions and expectations that do, take time to be remoulded. In the meantime, the social security system plus short-term manpower policies (so-called Special Measures) will cushion the shocks and check the rise of unemployment. But therein lies the threat of impending crisis, for, as is argued below, growing labour flexibility is directly undermin- ing the foundations and delivery capacity of the social security system. One point needs to be made at the outset. Flexibility is a heavily loaded notion, conjuring up only positive images, while terms such as rigidity and inflexibility have pejorative connotations. It will help to * International Labour Office. This is a substantially revised version of a paper delivered to a conference on basic incomes and the labour market, held in June 1985 in London. Thanks are due to Frances Williams for useful comments. Copyright C International Labour Organisation 1986

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