Think Out Loud

An invitation to debate ecology, art, human development and enlightenment

Neoliberalism and social policy: A problematic combination during a recession?

Before I launch into an explanation and partial critique of neoliberalism’s effect on social policy, the spirit and aim of welfare services bears repeating.  Social services like unemployment assistance, health care, education, and more are designed to eliminate symptoms of a pathological society: poverty and inequality, widespread disease, high crime rates, etc.  I’d like to think that social policy (especially the education sector) also strives to enhance individual potential and advance human progress.

The above description should make one thing clear: social policy is a means to a defined end; it is not an end in itself.  A key aspect of policy administration involves developing systems of measurement to gauge the effectiveness of social programs.  If a social policy fails to reach defined targets, (theoretically) it can and should be dismantled.  Similarly, if conditions improve so as to make social programs unnecessary, their funds can be allocated elsewhere.  Social programs are only as good as their positive impact-the capacity that they alone have to remedy social ills.

The neoliberal argument states that social programs are ineffective at reaching their goals.  Moreover, they might compound social problems by enabling dependency in the recipients of state aid.  Welfare recipients in the United States, they argue, have no incentive to get a job when instead they can continue to demand income from the government.

The neoliberal solution to social problems is much like their solution to any kind of problem: rely on the market.  Especially for economic problems, neoliberals point to the labor market as the saving grace of struggling households.  What people need to get on their feet is a job, and employers will compete to attract the best employees by offering employment with the best benefits packages.

Of course, this scenario makes some huge assumptions about the state of the job market.  During an economic boom, it’s quite likely that there’s more work to be done than people to do it.  In this scenario, employers are much more motivated to attract talent with services that the state traditionally provided, like retirement funding or healthcare.  But what about a labor market like the one in which we currently live?

The very nature of the labor market has changed with globalization.  Many businesses no longer compete within a finite, territorial domain, but with numerous firms in a global market.  Perhaps the most common avenue for competition is price; he who can command the lowest price will attract the most customers.  So, in order to arrive at the lowest price possible, employers have to streamline their businesses by cutting whatever costs they can.  Especially in a job market with a plethora of people vying for a job, any job, benefits packages may be the first expense to go.  Also, more employers look to cut corners by offering temporary or part-time employment.  Compensation for this work is simply not enough for a family to survive on.

To summarize, neoliberals look to the job market to pick up the slack from dismantled state social programs, but the globalized job market’s emphasis on cheap and “just in time” labor poses enormous problems for numerous people who cannot obtain the few highly-skilled, adequately compensated jobs available.  Taking Canada as an example, the adoption of neoliberal attitudes toward social policy has resulted in the following:

a. increasing levels of unemployment/underemployment

b. growing income inequality

c. expanding poverty rate

d. growing geographic isolation of ethnic and racial minorities (Shields, 2004)

Again, the lesson here is not that state programs are essentially good or that neoliberal solutions to social problems are summarily bad, but that these different approaches might be better suited to different social contexts (i.e. different stages of economic boom or bust).  Regarding the health of our societies, demonstrable progress is more important than the resilience of one theoretical approach over another.

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