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I’m appalled by the qualified approval by Labour party shadow ministers[1] (and a distinguished Guardian commentator) for IDS’s savage attack on those who for one reason or another can’t work.  As Martin Kettle remarked,

YouGov reported this week that Duncan Smith’s most controversial proposal, the planned compulsory work placements for the long-term unemployed, is backed by 74% of voters. And that is reflected among MPs too.”

This general complacency in the face of almost unprecedentedly repressive proposals for driving the undeserving poor into the workhouse is profoundly depressing.  To demonise and seek to punish as scroungers and layabouts the great majority of the unemployed who are either unemployable, or else desperate for work at a time of high and rising unemployment, is nothing short of wicked. To force the medium-term unemployed to undertake compulsory unpaid ‘community work’ — street cleaning, scraping off graffiti, that sort of thing — is absolutely unconscionable.  No minimum wage — no wage at all, indeed;   no right to join a union or to strike or to demand better conditions, in fact no rights at all;  no option to pack it in and look for a better job;  occupying a job which, if it’s a genuine one, ought to be available on proper terms to an ordinary job-seeker;  literally ‘forced labour’ without even a token wage that would add marginally to overall demand in the economy and thus promote recovery from a recession for which the unemployed bear not the slightest responsibility but of which they are the defenceless victims.  To describe it as ‘slave labour’ sounds an absurd exaggeration; yet how exactly is it going to differ?  This is a kind of perverted puritanism run wild, based on a fantasy about work-shy scroungers and the idle poor, harboured by  politicians with no experience or understanding of tedious, draining, unrewarding, repetitive work supervised, often, by unaccountable bullies.

This whole philosophy, one that treats the mass of ordinary people as work fodder for the enhancement of shareholder value and managers’ bonuses, is repulsive.  We are a rich enough society to carry those who for various reasons can’t work — invincible stupidity, poor health, illiteracy, fatigue, stress and anxiety, absence of local job opportunities, whatever — without threatening to starve them if they don’t take some probably quite inappropriate job: or at any rate we could well afford to leave them alone if only we could contrive to arrange a much fairer distribution of the fruits of capitalism.  For most professional middle- and upper-class people work brings fulfilment and satisfaction.  For millions of the less fortunate, work is a wretched imposition, accepted — if available at all — as a condition of survival in a harsh inequitable society, inimical to relaxed family life, to entertainment, travel, varied experience, to leisure and pleasure and to all the things that make life worth living.  Watch the commuters packed into the trains, tubes and buses on their return from an exhausting day at work: observe the weary, resigned, stressed faces, the irritability, the universal sense of fatigue.  It’s a necessity for most, but to elevate it to a universally life-enhancing experience is a crude insult.

There’s an excellent letter on the subject in today’s Guardian from Professor Guy Standing of Bath University (name sounds like a character in Evelyn Waugh) which is worth quoting in full here:

Letters: Workfare and the cost of benefits

Those discussing welfare reform should learn some basic economics (Hardship payments to be scrapped, 12 November). The main reason there is high unemployment is that there is insufficient aggregate demand. A second reason is that a market economy needs some unemployment, for efficiency and anti-inflationary reasons. The move to therapy for the unemployed, which Labour pushed, and the workfare scheme of the coalition government, treat unemployment as mainly due to behavioural deficiencies by the unemployed. This is nonsense.

Workfare rests unashamedly on the view, stated by the government’s American adviser, Lawrence Mead, that welfare should be made so unattractive that the claimants will take any job and that they should be encouraged to “blame” themselves. There are many reasons for believing workfare is misguided and ultimately vicious. I have reviewed the evidence in several books, and years ago predicted that this is where the neoliberal state would end.

The objections to the government’s scheme and to the Labour party’s current position include cost. Workfare has proved extremely expensive, and it only manages to be less so because it drives people off welfare and out of the labour market, not into jobs. Guaranteeing the unemployed a job for four weeks is a sleight of hand. What jobs? The likelihood is that they will be “make work” schemes, scarcely of the type to motivate people. They will disrupt any search for meaningful activity, and could intensify any adverse attitude to jobs. If they were real jobs they would lower the opportunity and wages of others already doing or hoping to do such jobs.

But worst of all, coercion will be advanced. There is no evidence that vast numbers of people are suffering from a “habit of worklessness”. Many of those not in jobs work hard, caring for frail relatives or children, dealing with episodic disabilities, and generally working. Building social policy on the basis of a tiny minority being “scroungers” or “lazy” is expensive illiberal folly. Much better would be to go in the other direction, delinking basic income security from jobs and then improving incentives for work of all kinds.

Guy Standing
Professor of economic security, University of Bath

That should be compulsory reading for all those who are tempted to suppose that there must be some merit in the coalition’s plans to force the unemployed to work at the very time when coalition policies are gratuitously throwing a million more blameless people out of work.  All men and women of good will and even a smidgin of generosity of spirit should resist these repulsive proposals by all available legal means.  They should be opposed, not for the sake of opposing, but because they are monstrous.

Brian

[1]  To be fair, Douglas Alexander, Labour’s shadow Work and Pensions Secretary, also stresses that “Jobs, not threats, get families off welfare“, which pithily demolishes Mr Duncan Smith’s whole mean-spirited and misguided project.

7 comments on Coalition ‘welfare’ policy: back to the workhouse

  • Tim Worstall says:

    Brian,
     
    As ever you’re showing that as an economist you’re a great diplomat.
     
    “This is a kind of perverted puritanism run wild, based on a fantasy about work-shy scroungers and the idle poor, harboured by  politicians with no experience or understanding of tedious, draining, unrewarding, repetitive work supervised, often, by unaccountable bullies.”
     
    Yup, harsh indeed. So, try reading through the papers of Richard Layard. Labour peer, one of the UK’s foremost labour (and Labour) economists.
     
    http://cep.lse.ac.uk/_new/staff/person.asp?id=970
     
    This one maybe:
     
    http://cep.lse.ac.uk/pubs/download/occasional/OP015.pdf
     
    “Work experience. Where no job can be found with a regular employer, work on
    publicly-useful projects can help improve people’s work habits and give them
    work records which help in finding regular jobs.
    These programmes can help and have been around for a long time, though usually on
    a small scale. But unless they are universal, they tend to be used by people who already had
    the best chance of finding work.
    Thus the big new idea in Labour’s New Deal is this. We ought to offer everybody
    on the threshold of long-term unemployment a choice of activity for at least a period.
    And when that happens we should remove the option of life on benefit.”
    Note that last line. Work or else.

    Brian writes: Thank you for this, Tim. You powerfully reinforce my post, whether you mean to or not (clearly not!). This is nothing to do with economics. It’s to do with common humanity. Note the hypocrisy, in the passage you quote, of describing forced labour (“or else”!) as the offer of a “choice of activity”. Alas, Labour peers are not immune from this kind of nasty double-talk; nor, too often, was New Labour. We ought to be able to do better than this.

    The second paper that you quote, dated January 2001, relies in part on the assumption that “employment depends on the effective supply of labour” (to quote Lord Layard’s words). Quite apart from the economist’s dehumanising attitude to working people as a commodity, the statement is true only in conditions of full or nearly full employment. In the situation we now face, where a government of the extreme right is knowingly pursuing policies conservatively estimated to destroy over a million jobs (roughly a half each in the public and private sectors) at the very time when there is a major economic crisis partly attributable to inadequate demand in the economy, this makes the suggestion that “employment depends on the effective supply of labour” a cruel joke: whether or not it was true in 2001, employment depends now on the effective supply of employers sufficiently confident about the prospect of a buoyant economy to be prepared to maintain and expand (and pay) an adequate workforce. I prefer Professor Standing’s analysis, quoted in my post: he’s a labour economist and expert too, although (unlike Lord Layard) not necessarily another Old Etonian. (Sorry, that was a slightly naughty jibe. Makes you think, though.)

  • Tony Hatfield says:

    There is an interesting DWP paper showing just how ineffective these ‘workfare’ schemes have proved to be in the U.S.A, Canada and Australia.
    t

    Brian writes: Thank you for this, Tony. Useful evidence indeed, confirming that forcing people into a chain-gang may well do both them and society much more harm than good.

  • Tim Worstall says:

    We can go further into Layard’s analysis. He’s been banging on for decades about how the long term unemployed become entirely disconnected from the labour force. The solution is to reconnect those long term unemployed with the labour force. This does mean both carrot and stick, it does mean that, after some length of time (Layard says 12 months, Denmark has just made it 24 months) then people must be forced, yes, forced, into taking either training or make work jobs.
     
    You can see much the same thinking in Chris Pissarides’ (recent Laureate, as you know) statements about how long term unemployment is so damaging. We’ve got to do something to make sure that people don’t become entirely disconnected.
    Underlying all of this analysis is the obvious point that the long standing and almost traditional difference between European and US (clearly not now, in the middle of this recession though) unemployment rates is that short term unemployment rates are roughly the same in both places. Long term rates are higher, much higher, in Europe. Us unemployment benefits are time limited: European not.
    There really is a connection between these two things: it’s one of the most basic points about economics, that if you subsidise things you’ll get more of it.
    And there really isn’t any way out of this other than quite harsh conditionality. For growing the economy, stimulus, all that, only sucks up the short term unemployed (this again is a point made in Layard’s analysis). The long term so, as we’ve already noted, are pretty much disconnected from the labour force and market. This is how, as we’ve seen time and again, we can have a booming economy, firms screaming about labour shortages and wage inflation (and thus BoE raising interest rates to cool off the economy) while still having high unemployment. Because those long term unemployed don’t get picked up by that booming economy.
     
    Thus we need the conditionality, to reconnect those long term unemployed to that labour market.
    In technical terms what is being said is that while Friedman was right, there’s not stable manner of moving along the Phillips Curve, we can shift that Phillips Curve. Which is what the conditionality does.
     
    Brian writes: Tim, no-one of sound mind would deny that for many people being out of work for a long time is terribly damaging and that any government benefit system ought to do everything possible to enable such people to find work of a kind they are capable of doing. Of course this should include offers of training to enhance employability, and of proper paid jobs, if only temporary, to re-accustom the unemployed person to the work habit and thus, once again, enhance employability. What I reject unequivocally is something different: forcing anyone to take an unpaid job as a form of punishment for refusal or failure voluntarily to take a different job. The kind of community service work envisaged by Duncan Smith is plainly punitive in intention — it’s exactly the kind of work to which minor offenders are sentenced in lieu of prison — and has little if anything to do with improving the subject’s subsequent employability in a genuine job. It reflects an authoritarian view according to which members of society who lack private means (wealth or income or both) have an obligation to work, preferably of their own accord in their chosen jobs, but if not, in whatever jobs the government allocates, if necessary under duress. Such a philosophy is incompatible with a free society and there should be no place in a liberal democracy for forced labour. The vast majority of people actively, even desperately, want to work and if necessary will do virtually any work rather than languish in unemployment. Government should concentrate on creating and sustaining jobs, instead of vilifying and coercing the small minority who for whatever reason can’t or even won’t take conventional employment. The present government prefers to destroy jobs and coerce the helpless into doing meaningless unpaid work to teach them a lesson. The research paper by the Department for Work and Pensions itself, cited in the preceding comment by Tony Hatfield, strongly suggest that coercive schemes of this kind are ineffective in reconnecting the long-term unemployed with the world of work, or in reducing long-term unemployment rates, as experience in other comparable countries demonstrates. So why adopt them? Punishing the supposed sin of idleness is no business of the government or indeed of society.

    Your Lord Layard himself seems to have undergone a mid- or late-life conversion of some kind on these issues, latterly adopting a rather more humane life-view than the heartless economist’s analysis which you expound with such apparent enthusiasm:

    “[Layard] advocated many of the policies which have characterised the New Labour government … The approach he takes is based on the idea of welfare-to-work, where social welfare payments are structured in a way that encourages (or forces) recipients back into the job market.” …
    but:
    “Recently, Layard has shifted his attention to the study of what has since come to be known as Happiness economics. This branch of economic analysis starts from the argument that income is a bad approximation for happiness… Layard concludes that taxes serve another purpose besides paying for public services (usually for public goods) and redistributing income. The third purpose is to counteract the cognitive bias that causes people to work more than is good for their happiness. That is, taxes should help citizens preserve a healthy work-life balance.” (http://en.wikipedia.org/wiki/Richard_Layard,_Baron_Layard)
    By no means all work contributes to the public good. A little less commitment to punishing the supposedly work-shy and a little more activity designed to increase the sum of human happiness wouldn’t come amiss.

  • Clive Willis says:

     
    The pressing problem for IDS is that the numbers of the unemployed far outstrip the number of jobs available and that the situation will almost certainly have got worse by the real point of departure, which I believe to be 2013.  There is too much stick and not enough carrot in the proposals as they stand at present. He ought to give himself room to modify those proposals in the light of events. I don’t doubt Duncan Smith’s courage and sincerity in tackling issues that recent governments have been too cowardly or bone-headed to confront, but the White Paper seems far too draconian for current circumstances. My hope is that the talented Douglas Alexander will persuade IDS to think again…

    Brian writes: Thank you for this, Clive. On the arithmetic, please see my response to Merrick, below. On the substance, I’m not sure that it’s useful to accuse past governments of having been too cowardly or bone-headed to confront the problem of long-term unemployment. The fact, surely, is that it’s futile and counter-productive to tackle it mainly, or perhaps at all, as one of people living on benefits who are deemed able to work. There is no safe or reliable way for bureaucrats, doctors or social workers to make a definite judgement of who is or is not psychologically or even physically fit to do a specific job: that may be reasonably clear in some cases but it will be impossible to determine in a host of marginal ones. The only meaningful sanction or threat of sanction to use against those who are judged, perhaps wrongly, to have no justification for refusing to take a succession of specific jobs is to reduce and eventually to cut off their benefit payments: but if the bluff has to be called, leaving the refusenik to starve is plainly not a realistic option, which is why in the end it’s bluff. Even if the bluff works, its use to force a damaged person to do work that she bitterly resents, for which she will be inadequately paid or (as envisaged by IDS) not paid at all, which destroys her self-respect and perhaps the respect of her family and her peers, can only be counter-productive, in every possible way: it will make her less, not more, employable in a genuine job if and when one becomes available.

    Instead of worrying away at an inherently insoluble dilemma of this kind, governments should exploit the reality that the vast majority of the unemployed will jump at the chance of almost any job. That means concentrating on job creation by every possible means: subsidising employers who take on more labour, rewarding with tapering benefits the formerly long-term unemployed who take poorly paid jobs, pumping demand into the economy and stimulating a flow of cheap loans for investment so that productive economic activity picks up, confidence is restored, businesses start to invest and build stocks again, and we return by stages to more or less full employment. This is indeed what the last Labour government did, and was doing, until it was rudely interrupted by an election.

    There will always be a smallish residue of people who won’t, for a variety of reasons, some good, some bad, be willing to take jobs even when they are available, preferring to live on state benefits. We should stop obsessing about them. The numbers involved will always be small, the benefits paid to them will always be meagre and the cost to the taxpayer minimal and affordable, certainly compared with the cost of tax avoidance and evasion in the City or the grotesque waste of billions on Trident or the Olympics. And who knows? one of the despised long-term unemployed may take advantage of the leisure bought with unemployment benefit at the state’s expense to write the iconic novel of our century, to paint the greatest picture since Rembrandt, or to conceive a solution to capitalism’s central contradiction which out-Keyneses Keynes. We should not, perhaps, resent our taxes helping to pay the rent on some apparent layabout’s modest bed-sitter: like the man said, some mute inglorious Milton here may rest, some Cromwell guiltless of his country’s blood. Being employed is not always and for everyone, even for society, the highest good.

  • Merrick says:

    There are 467,000 job vacancies. There are 797,000 people who have been unemployed for over 12 months.
    So even if every vacancy in the country went to long-term unemployed people (regardless of how unqualified they are), we’d still have 330,000 people long-term unemployed being punished for not getting a job that doesn’t exist.

    Brian writes: Thanks, Merrick. Exactly so. And since the coalition government’s plans entail more than half a million men and women in the public sector losing their jobs, and another half a million plus in the private sector losing theirs, the arithmetic of encouraging and if necessary forcing the long-term unemployed into genuine work will soon belong even more blatantly to Cloud Cuckoo Land.

  • patrick says:

    Underlying all of this analysis is the obvious point that the long standing and almost traditional difference between European and US (clearly not now, in the middle of this recession though) unemployment rates is that short term unemployment rates are roughly the same in both places. Long term rates are higher, much higher, in Europe. Us unemployment benefits are time limited: European not. [Tim Worstall, comment]

    Yes, but it’s perhaps worth bearing in mind that US imprisonment rates are much, much higher than Europe’s.  I wouldn’t necessarily assume that  everyone whose time-limited benefits run out in the US finds work.  It may be that they find other ways of supporting themselves that we perhaps wouldn’t want to encourage.  And a friend from the UK who’s over in the US working at the moment said to me recently that it’s striking how there seems to be much more real, grinding poverty on display in the US than over here.
    Passing thought:  Listening to George Osborne, you might think that changes in unemployment rates were caused solely by fluctuations in the national laziness level…

    Brian writes: Thank you for this, Patrick. I very much agree that it’s risky to ascribe the lower rates of long-term unemployment in the US than in western Europe to the fact that unemployment benefit in the US is withdrawn earlier in the US than on average in Europe where in some countries there is no time limit at all. Apart from anything else, benefits practice and policy in western Europe vary greatly from country to country — as implied by the fact that in the period leading up to the 2008 global financial crisis, six of the 30 OECD countries — one in five — actually had lower long-term unemployment rates than the US. (See this US Congressional Budget Office research paper, footnote 12, page 15 [PDF].) Also, as you rightly say, the inference from the US figures that because of the early withdrawal of federal unemployment benefit, more long-term unemployed find jobs when the benefit runs out, is extremely shaky, especially when overall unemployment in the US has been running for many months at almost 10%, as now. It’s more likely that unemployed people who lose their unemployment benefit after the short set period experience extreme privation and a degree of real poverty that I hope we in the UK would find unacceptable, until and unless there is a federal decree permitting the extension of the benefit period and its restoration to those from whom it has been withdrawn — see the wrenching case history here, which appears to be representative rather than exceptional. Do we really want to start treating people like that in Britain?

  • Clive Willis says:

    Many of the refusenik layabouts will doubtless always be with us and will, equally doubtless, find ways of beating the system. What recent governments singularly failed to tackle were two issues: first, the situation in which one and the same person could have more disposable income from benefit payment than if he/she went to work (and in which transport and, sometimes, clothing costs further depleted the nett income); second, the bureaucratic nightmare of far too many varieties of benefit. In the latter case, it remains to be seen whether the so-called ‘Universal Benefit’ is a valid answer or not, but perhaps it’s worth a try.

    Brian writes: Clive, thanks. I agree that the two issues you mention need to be addressed — especially the second, although as I understand it the so-called ‘Universal Benefit’ won’t and can’t in fact replace all other benefits, and I’m suspicious of any system which claims that one size fits all when every individual’s case is unique and different.

    Your first issue doesn’t bother me personally, although I realise that it greatly excites many others, such as Daily Mail leader writers. The vast majority of people would prefer having a proper job to living on benefits, even if the benefits are worth marginally more than the job, and the general outrage at the very idea of giving more in benefits than would be earned in a job is much too often used as a populist pretext for keeping benefit rates pauperisingly low.

    Besides, it’s impossible to do a generally valid calculation to assess the level at which the velue of benefits exceeds the net income from a job, since it depends entirely on the kind of job which is both available to and appropriate for each individual claimant, which will obviously vary enormously case by case. A physically frail 59-year-old woman newly recovering from a long illness might well be entitled to more in benefits than she would earn if she could be employed as a labourer on a building site, but the comparison is obviously meaningless. Instead of fussing about people drawing benefits who could be working, we should be worrying about the wanton destruction of existing productive jobs by deliberate government policy, the effects of destroying those jobs on the standard of living of the most vulnerable and helpless people in our society, and the absence of any specific government plans for reviving aggregate demand and thus new job creation in the economy. Our first and overriding concern should be for unemployed people who are desperate for a job but can’t find one because of a level of national unemployment made significantly worse by government policy. At the same time we should ensure that the much smaller number of unemployed who can’t (or won’t) work, even if jobs are available for them, don’t sink into the kind of deep poverty which shames us as a rich society.

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