Olof Palme “Employment and Welfare” The 1984 Jerry Wurf Memorial Lecture The Labor and Worklife Program Harvard Law School ome time ago in Vienna, I had the opportunity to hear Dr. Bruno Kreisky's speech when he retired Sas chancellor and leader of the Austrian Social Democratic Party. As we in the audience sat there listening, we expected to hear an account of his long and eventful life and of his wide-ranging and successful political experiences. But not at all! Bruno Kreisky talked only about the future. At his retirement from offi cial life, the whole of his thinking was looking forward. His fi rst concern was unemployment. He pointed to estimates by the Organization for Economic Cooperation and Development (OECD) of changes in the age structure of the population. Those data show that if the already record-high unemployment in the OECD countries is not to rise even higher, eighteen to twenty million new jobs will have to be created between 1984 and 1989. This means that 20,000 new job opportunities must be created in the industrial nations each day throughout that period. With this view of the future, Bruno Kreisky established his main theme: that the crucial divergence in politics today is over attitudes toward unemployment and toward welfare. The Chancellor expressed his concern in this way: "I am afraid of the spread of the following philosophy: when unemployment does not disappear even when there is a boom on the way, people will say that this is not a matter of some crisis. It is, rather, a perfectly normal state of affairs that millions of people are out of work, since ERRY WURF MEMORIAL FUND (1982) we can see today that even when there already is a marked Harvard Trade Union Program, Harvard Law School economic upswing, it has relatively little effect on unemploy- ment. This means that we are faced with a long period The Jerry Wurf Memorial Fund was established in memory of Jerry in which we have millions of people who are out of Wurf, the late President of the American Federation of State, County work for months and months or even years. and Municipal Employees (AFSCME). Its income is used to initiate programs and activities that “refl ect Jerry Wurf’s belief in the dignity “And then the theorists come along. In the fi rst place, of work, and his commitment to improving the quality of lives of work- they cannot agree on a defi nition of the crisis. They come ing people, to free open thought and debate about public policy issues, and say that there isn't any crisis at all, or it was also like to informed political action…and to refl ect his interests in the quality this in the thirties. And then they say that the fact that of management in public service, especially as it assures the ability of there are millions of unemployed is, very unfortunately, workers to do their jobs with maximum effect and effi ciency in environ- a natural state of affairs. ments sensitive to their needs and activities.” EMPLOYMENT AND WELFARE 1 "I must admit," Kreisky went on, "that I was all human needs are satisfied. Quite the opposite. somewhat shocked by what happened a couple of In many parts of the world, not even the most ba­ months ago at a meeting in Washington, where very sic needs of the people can be met. All societies eminent representatives of the World Bank and the have vast unfulfilled needs. And human labor is International Monetary Fund spoke. For example, necessary to meet these needs. Jacques de Larosiere said that we must consolidate Meanwhile, an enormous amount of production the economic upswing. And how were we to do capacity is lying idle. People who would like noth­ this? First, by slowing down the inflation rate. Sec­ ing better than to have a job are also forced to be ond, by reducing budget deficits. Third, by continu­ idle, day after day, week after week, month after ing structural changes in industry. And, fourth, by month. So production goes down - unnecessari­ resisting protectionism. But there was one thing M. When economic ly. This is why unemployment is a waste. The hard facts of growth stagnates de Larosiere said nothing about, and that was that labor market and when the cost we must do something about reducing unemploy­ Second, unemployment means human suffering. statistics hide the of unemployment ment. He did not mention it at all." The hard facts of labor market statistics hide the distress of distress of innumerable individuals. It is only too increases, then Then Bruno Kreisky went on to talk about the innumerable easy to forget that each and everyone of those mil­ the welfare other great divergence: the question of the welfare individuals. It is lions of unemployed is a human being. society is society. The fact of thirty-five million unemployed only too easy to attacked. had not led to the disintegration of society, which There· is the father in one of the developing coun­ forget that each we saw in the thirties in many countries. This was tries who sees his children starve because the de­ and every' one of because it had been possible to develop the welfare velopment project, which is going to give him work those millions of society in such a way that blue-collar and white­ and enable him to support his family, lacks funds. unemployed is a collar workers "had been protected from the worst." Or the potential market in the developed countries human being. But when economic growth stagnates and when the for what he is to produce is no longer there. cost of unemployment increases, then the welfare There is the so-called "guest-worker" from south­ society is attacked. This has already happened in ern Europe or North Africa who came to the indus­ many countries. trial centers of Europe and for years took all the lowest-paying jobs but still found it possible to sup­ hese two themes of Kreisky's - employ­ port himself and the family he left behind. Now ment and welfare - are the main subject he is told to return home. T I will discuss today. There are a number of theorists and political practitioners who argue that There is the girl I met at a youth employment the power of the trade unions and the growth of the office in my own country. She is not starving. Her welfare state are in fact the causes of the econom­ parents and the community provide for most of her ic crisis and unemployment. I will return to these basic needs - but they cannot meet her need to arguments. But I want first to talk about why the be wanted, to feel that she is necessary. fight against unemployment must, when viewed "I sleep in the morning," she said. "About lunch­ from the values in which I believe, remain the time, I may go down to the employment service. prime goal of economic policy. Sometimes, they have something that might suit First, unemployment is a terrible waste. At pres­ me. If so, I go and see the company in question. ent, production resources all over the world are Usually there are lots of other applicants. Often I grossly underutilized. This is certainly not because have the wrong kind of education. Sometimes they 2 THE WURF LECTURE EMPWYMENT AND WELFARE 3 say they will call me. So I go home and wait for This brings me to the third reason to fight them to call, but they never do. This has happened unemployment. I believe that mass unemployment to me fifty or sixty times. In the evening, I stay at will ultimately constitute a threat to the type of home and watch TV or go downtown to see my open democracy that we believe in. It may in the friends. I'm quickly losing hope and confidence, long run not survive in countries with persistent and I get worried when I see what is happening to high levels of unemployment. Unemployment un­ some of my friends./I dermines the fabric of society on which democra­ cy has to be built. I mention these different aspects of unemploy­ ment because I want to emphasize that although We talk about the crisis of the economy. We say work is primarily a way to earn a living, it is also that everyone has to contribute to the solution of Ask anyone much more than that. our economic problems. But when young people I believe mass who they are, and get out of school and want a job, when they want unemployment they will answer ork - having a job - is an essential part to take full part in the world of adults, when they will ultimately by telling you of people's social being. Ask anyone who want to make their contribution, they are told that constitute a their name and they are, and they will answer by telling they are not wanted, not needed. Their contribu­ threat to the W type of open their profession. their name and their profession. I saw a short film tion to the solution of the crisis is to be unem­ produced by the Swedish labor unions. A number ployed. This causes young people to lose hope and democracy that of young people were asked about their future. confidence in themselves. It also creates bitterness we believe in. Everybody mentioned a profession. Nobody looked and despair, loss of confidence in society, in our forward to being unemployed.