Pit Schultz on Sun, 29 Mar 1998 06:39:16 +0200 (MET DST)

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<nettime> Jeremy Rifkin: Creating Jobs in the Third Sector

[yesterday in Berlin, we were at a panel organized by one of the few
private universities in Germany, financed by the Thyssen AG now forced
to merge with Krupp AG. Subject: the future of work. invited: 
Jeremy Rifkin, americas last social critic and vegetarian visionary.
also invited: Peter Sloterdijk, professor at Zentrum fuer Kunst und
Medien, Karlsruhe, philospher and author of 'the critique of cynical
reason' and eloquent salon-lion. While Rifkin got all the attention
during the day, Sloterdijk got involved into some kind of a fist fight
with one of the (ugly looking) organizers from Thyssen, apparently
because his frustrations about the bourgoise cynicism and/or ignorance
with which this event was planned towards a growing reserve army of
unemployed, while he was genourously payed - and feeded like us with 
(non-vegetarian) food. as Rifkin was running away fast, and we had no
chance to do an interview with him, here comes an excerpt of a book
which just(!) appeared in Germany and may gain higher importance if
the social democrats win in autumn. 'building a content factory in
the third sector?' /p]

The Alternative to Welfare: Creating Jobs in the Third Sector

Adapted from _The End of Work: The Decline of the Global Labor 
Force and the Dawn of the Post Market Era_ 

by Jeremy Rifkin 

After years of wishful forecasts and false starts, the new computer and 
communications technologies are finally making their long anticipated impact 
on the workplace and the economy, throwing the world community into the grip 
of a third great Industrial Revolution. Already millions of workers have 
been permanently eliminated from the economic process, and whole job 
categories have shrunk, been restructured, or disappeared. 

The Information Age has arrived. In the years ahead, new, more sophisticated 
software technologies are going to bring civilization ever closer to a near 
workerless world. In the agricultural, manufacturing, and service sectors, 
machines are quickly replacing human labor and promise an economy of near 
automated production by the mid decades of the twenty first century. The 
wholesale substitution of machines for workers is going to force every 
nation to rethink the role of human beings in the social process. Redefining 
opportunities and responsibilities for millions of people in a society of 
declining mass employment is likely to be the single most pressing social 
issue of the coming century. 

Social Wages 

Up to now, the marketplace and government have been looked to, almost 
exclusively, for solutions to the growing economic crisis facing the 
country. In the current debate over corporate downsizing, mass layoffs, and 
the emerging two tier society, few pundits have considered the potential 
role of the Third Sector in restoring the work life of the country. In 
recent years, we have become so preoccupied with the market and public 
sectors that we tend to forget that the nonprofit or volunteer sector has 
played an equally important role in the making of the nation. Today, with 
the formal economy less able to provide permanent jobs for the millions of 
Americans in search of employment and with the government retreating from 
its traditional role of employer of last resort, the Third Sector becomes 
our last best hope for absorbing the millions of displaced workers cast off 
by corporate and government re engineering. The Third Sector cuts a wide 
swath through society. Nonprofit activities run the gamut from social 
services to health care, education and research, the arts, religion, and 
advocacy. There are currently more than 1,400,000 nonprofit organizations 
in the United States with total combined assets of more than $500 billion. 

The assets of the Third Sector now equal nearly half the assets of the 
federal government. A study conducted by Yale economist Gabriel Rudney in 
the 1980s estimated that the expenditures of America's voluntary 
organizations exceeded the gross national product of all but seven nations 
in the world. Although the Third Sector is half the size of government in 
total employment and half its size in total earnings, it has been growing 
twice as fast as both the government and private sector in recent years. The 
independent sector already contributes more than 6 percent of the GNP and is 
responsible for 10.5 percent of the total national employment. More people 
are employed in Third Sector organizations than work in the construction, 
electronics, transportation, or textile and apparel industries. The American 
people ought to consider making a direct investment in expanded job creation 
in the Third Sector or social economy as a means of providing meaningful 
employment for the increasing number of jobless who find themselves locked 
out of the new high tech global marketplace. The state and federal 
governments could provide a "social wage" as an alternative to welfare 
payments and benefits for those permanently unemployed Americans willing to 
be retrained and placed in community jobs in the Third Sector. The 
government could also award grants to nonprofit organizations to help them 
recruit and train the poor for jobs in their organizations. 

An adequate social wage would allow millions of unemployed Americans, 
working through thousands of neighborhood organizations, the opportunity to 
help themselves. Providing a social wage in return for community service 
work would also benefit both business and government. Reduced unemployment 
means more people could afford to buy goods and services, which would spur 
more businesses to open up in poor neighborhoods, creating additional jobs. 
Greater employment would also generate more taxes for the local, state and 
federal governments. What's more, a rise in employment would cut the crime 
rate and lower the cost of maintaining law and order. 

It is often argued that simply providing income or job training is of little 
help if not accompanied by concrete programs to help educate the young, 
restore family life, and build a sense of shared confidence in the future. 
Extending a social wage to millions of needy Americans and providing funds 
for neighborhood based organizations to recruit, train, and place people in 
critical community building tasks that advance these broader social goals, 
would help create the framework for real change. Public works projects and 
menial work in the formal economy, even if they were available, would do 
little in the way of restoring local communities. 

In addition to providing a social wage for the nation's poorest citizens, 
serious consideration should be given to an expanded concept of social 
income that would include social wages for skilled workers and even 
management and professional workers whose labor is no longer valued or 
needed in the marketplace. A viable Third Sector requires a full range of 
skills, from minimum entry level competence to sophisticated managerial 
experience. By providing a job classification scheme, grading system, and 
salary scale similar to the ones used in the public sector, Third Sector 
organizations could recruit from the broad ranks of the unemployed, staffing 
their organizations with the proper mix of unskilled, skilled, and 
professional labor that would insure success in the communities they serve. 

Financing a Social Income 

Paying for a social income and for re education and training programs to 
prepare men and women for a career of community service would require 
significant government funds. Some of the money could come from savings 
brought about by gradually replacing many of the current welfare programs 
with direct payments to persons performing community service work. 
Government funds could also be freed up by discontinuing costly subsidies to 
corporations that have outgrown their domestic commitments and now operate 
in countries around the world. The federal government provided transnational 
corporations with more than $104 billion in subsidies in 1993 in the form of 
direct payments and tax breaks. 

Additional moneys could be raised by cutting unnecessary defense programs. 
Even though the Cold War is over, the federal government continues to 
maintain a bloated defense budget. While Congress has scaled down defense 
appropriations in recent years, military expenditures are expected to run at 
about 89 percent of Cold War spending between 1994 and 1998. In a 1992 
report, the Congressional Budget Office concluded that defense spending 
could be cut by a rate of 7 percent a year over a five year period without 
compromising the nation's military preparedness or undermining national 

Perhaps the most equitable and far reaching approach to raising the needed 
funds would be to enact a value added tax (VAT) on all nonessential goods 
and services. While the VAT is a new and untried idea in the United States, 
it has been adopted by more than fifty nine countries, including virtually 
every major European nation. The main disadvantage of a value added tax is 
its regressive nature. A sales tax falls disproportionately on lower income 
groups, especially if it is imposed on basic necessities like food, clothing, 
housing, and medical care. 

A VAT also places a greater burden on small businesses, which are less able 
to absorb and pass on the costs. Many countries have greatly reduced and 
even eliminated the regressive nature of value added taxes by exempting 
basic necessities and small businesses. 

By enacting a value added tax of between five and seven percent on all non 
essential goods and services, the federal government could generate billions 
of dollars of additional revenue more than what would be required to finance 
a social wage and community service program for those willing to work in the 
Third Sector. 

Powerful vested interests are likely to resist the idea of providing a 
social wage in return for community service. Yet, the alternative of leaving 
the problem of long term technological unemployment unattended is even more 
onerous. A growing underclass of permanently unemployable Americans could 
lead to widespread social unrest, increased violence, and the further 
disintegration of American society. 

A Different Kind of Work 

In the past, the government has often been accused of throwing large sums of 
money at the social economy with little of it getting to the people and 
communities in need. Much of the expense involved in government programs has 
been eaten up in the delivery of social services, with little left over to 
assist the impacted communities. Still, there have been notable exceptions. 
Volunteers in Service to America (VISTA), the Student Community Service 
Program, the National Senior Service Corps, the Peace Corps, the National 
Health Service Corps, and, more recently, AmeriCorps, are federal work 
programs established to promote individual service and support volunteer 
efforts in local communities in the United States and abroad. 

Although the costs of these government sponsored programs in community 
service are small, the economic returns to the community are enormous and 
often exceed the expenditures by many times. Dollar for dollar, government 
investment in work programs designed to complement and support the volunteer 
sector have proven to be among the most cost effective means of providing 
social services in local communities. Yet, despite scores of successful 
experiments and programs in recent years, the money given over to such 
programs is small compared with other governmental expenditures in the 
social economy. 

Many Democrats have looked to government sponsored programs to hire the 
unemployed and those who have slipped under the social safety net and into 
the permanent underclass. More recently, both Democrats and Republicans have 
championed the establishment of empowerment zones in the nation's inner city 
ghettos. These designated areas would receive special tax credits and other 
government benefits to help attract new business. Businesses that employ a 
resident of the Empowerment Zone would save up to $3,000 a year in payroll 
taxes. Despite the political fanfare surrounding the notion of empowering 
poor inner city communities, few politicians are sanguine that many new 
businesses are going to relocate in the urban ghettos of America, or that 
many new private sector jobs will be generated from the creation of 
empowerment zones. 

The country might do better to redirect its efforts away from expensive 
government sponsored projects to aid the poor and quixotic attempts to 
stimulate economic development in inner cities and, instead, support the 
expansion of existing non profit service programs in impoverished 
communities. Recruiting, training, and placing millions of unemployed and 
poverty stricken Americans in jobs in nonprofit organizations in their own 
neighborhoods and communities is likely to have a far greater impact, per 
dollar spent, than more traditional public works-oriented programs and 
market directed initiatives. 

In the debate over how best to divide up the benefits of productivity 
advances brought on by the new high tech global economy, each country must 
ultimately grapple with an elementary question of economic justice. Put 
simply, does every member of society, even the poorest among us, have a 
right to participate in and benefit from the productivity gains of the 
information and communication technology revolutions? If the answer is yes, 
then some form of compensation will have to be made to the increasing number 
of unemployed whose labor will no longer be needed in the new high tech 
automated world of the twenty first century. Since the advances in 
technology are going to mean fewer and fewer jobs in the market economy, the 
only effective way to ensure those permanently displaced by machinery the 
benefits of increased productivity is to provide some kind of social income. 
Tying the income to service in the community would aid the growth and 
development of the social economy and help strengthen neighborhoods across 
the country 

Restoring hope and rebuilding the social economy ought to become the central 
theme of a new partnership between the government and volunteer 
organizations in local communities. Feeding the poor, providing basic health 
care services, educating the nation's youth, building affordable housing, 
and preserving the environment top the list of priorities in the years 
ahead. Providing a social wage to millions of Americans, in return for 
performing meaningful work in the social economy, will benefit both the 
market and public sectors by increasing purchasing power and taxable income 
as well as reducing the crime rate and the cost of maintaining law and 
order. Preparing for the decline of mass formal work in the market economy 
will require bold new public policy initiatives. By empowering the Third 
Sector, we can begin to address some of the many structural issues facing a 
society in transition to a high tech, automated future. 

from: cy.Rev. A Journal of Cybernetic Revolution, Sustainable Socialism & 
Radical Democracy:  Issue #3, September 1995 

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