‘Market Workfare’: Social Security, Social Regulation and Competitiveness in the 1990s

Abstract

A Regulation Approach framework has been adopted to analyse the very rapid period of change in social security policy since the late 1980s. It is argued that the changes can be explained in terms of a number of regulatory dilemmas which emerged or were intensified under neo-liberal capital accumulation. Some of the regulatory dilemmas – high levels of economic inactivity, inflationary pressures consequent to higher employment and low levels of wages – it was thought could be managed through the social security system using what we call ‘market workfare’; by which we mean in-work means-tested social security benefits which have some measure of compulsion to work attached, such that it counts as workfare. The aim of in-work benefits is to reduce wages further so that the market can respond by creating more low-wage employment. By this stratagem it is the market which responds to labour demand, rather than the government creating work opportunities. The parliamentary neo-liberal right's approach to ‘market workfare’ is discussed, and then it is suggested that the marked similarities between New Labour and the previous parliamentary neo-liberal right can be explained because both administrations were attempting to manage the same regulatory dilemmas.