Against workfare
by Shuggy, 24 July 2008
This term ‘workfare’, originally coined in the United States, describes a welfare system where the able-bodied unemployed are compelled to work for their benefits. Although sketchy at the moment, this seems to be what the government is proposing.
Here Johann Hari declares himself in favour on two grounds. One is that a system that allows people to languish on benefits for years erodes the work-ethic and as such does the welfare recipient no favours. The other related point is that if we don’t confront this fact, the Conservatives will introduce a much more punitive system.
I had intended to dismiss this second point with a single sentence: being harsh with people to pre-empt the Tories being even harsher with them isn’t a good reason for doing anything. But it occurred to me this needs fleshing out a bit for if he is serious about this as a Tory-defeating strategy, what he is advocating here is triangulation. With regards to welfare, it’s worth taking a moment to consider what the implications of this has been in the United States. It wasn’t Nixon, Reagan or Bush Snr who promised to end ‘welfare as we know it’ but President Clinton. One of the ironies of his presidency is that he achieved precisely the sort of thing his rightwing critics advocated - but gained no credit for it because he was perceived as being on the wrong side of the ‘culture wars’. Ending welfare as the Americans knew it was exactly what he did, for he terminated a federal government responsibility to provide relief to the able-bodied unemployed that had been established since the New Deal. This has laid the foundations for the ‘Wisconsin model’: Johann rightly criticises this punitive system but fails to make the connection between this and the sort of triangulation he is advocating.
But what of this erosion of the work-ethic, which is the central thrust of Johann’s argument - as it is of most critics of the current system? Of this business of people living a life on benefits he says:
“This isn’t what the Welfare State was intended to look like. You were not supposed to fall asleep in the safety net and raise your kids there so they know nothing else.”
This is quite correct. Beveridge, when constructing his famous report, envisaged the experience of living on unemployment benefit - as it used to be called - to be a temporary affair. But it’s worth remembering why: Beveridge imagined that unemployment benefit would cover those temporarily afflicted by seasonal and frictional unemployment. The more severe problems of cyclical and structural unemployment were something he thought could be solved through the then fashionable doctrine of demand-management. Easy to understand why these ideas should be in vogue in a nation emerging from the experience of total war; easy to understand how they came to be dashed on the rocks of experience, as indeed they were in a seventies Britain trying to cope with the combined challenges of newly-industrialising countries and oil-shocks.
Which brings me to this: to me there are two questions that Johann doesn’t really grapple with here. These are: what causes unemployment and how does welfare system work? I can’t pretend to give a comprehensive answer to either of these questions but I do want to suggest a couple of things that are missing from what I consider to be a fundamentally moralistic, and therefore flawed, analysis of these social and economic problems.
Of the first, I think this has to be acknowledged: unemployment is not a function of the morality of the poor - it is a function of capitalism. You don’t have to buy into the vulgar Marxist notion of capitalists conspiring to create a reserve army of unemployed labour to bid down wages. You don’t even have to be a Marxist of any kind to recognise what I consider to be two incontrovertible facts that can be verified from economic history. The following should, in my view, be accepted as a bare minimum:
a) Mass unemployment has been a periodic characteristic of capitalist economies from their genesis simply because they lack any inherent mechanism to prevent it.
b) To maximise profits, capitalists using the best technology available will economise on labour wherever possible.
These leaves workers who are available to move into areas where they can produce goods and services for which there is greater demand - but it is the transition that is the problem. This is what economists call structural unemployment. Now, in making this transition, we are asked to believe that it is self-discipline and moral character that is causing the difficulty here and it is on this point I have the greatest disagreement with David Cameron and his New Model Tories - and by extension with Johann Hari in as far as he with him. And while he would no doubt strenuously object, agree with him he does. If you’ve read the piece linked above, you’ll have read the morality tale about his pal ‘Andy’ who started smoking spliffs at school and never bothered getting off his arse after that. An anecdote perhaps - an anecdote certainly but we are assured this is no isolated case:
“Go to the place where I was born – Glasgow East, site of the potentially Brown-busting by-election this Thursday – and you will see them spreading before you in great concrete estates of poverty. You can taste the ennui in the air. Ask the kids what they want to do when they grow up and they shrug with heartbreaking indifference and say, “Dunno”.”
I’ll decline the injunction to ‘go there’ on the grounds that I’ve already been there. Taught there - and in this capacity it’s a case of swallowing the ‘ennui’. But there’s no point in making this observation without asking why this is. There’s the problem of unemployment, which won’t go away no matter how many people get on their bikes - but there’s something else as well and it has to do with how our welfare system works.
It is characteristic of Victorian piety to demand from the poor a moral fortitude that their critics neither exhibit themselves, nor expect from their peers. This is why, for example, David Cameron can smoke weed and snort coke and all that happens to him is that commentators admire the way he deflects ‘unjustified’ questions about his ‘private life’. But the left-behind society has no such privacy.
The other curious thing about our society is that we are asked to believe it is only the well-off and the rich that respond to incentives to work. Don’t tax incomes or profits too much lest you incentivize inertia, the Thatcherites told us. Very well - so why doesn’t this apply to the poor, the low paid, the unemployed? I can’t claim to set the world to rights but I can make a small suggestion: we might want to consider reforming a system that has a marginal benefit withdrawal rate starting at 100%, falling to something around 80% when you break into the ‘applicable amount’ and your housing benefit starts to disappear. Then there’s the rate of marginal tax once you break out of the benefits threshold altogether. Maybe a minimum citizens income might be an idea? Not sure about this myself but right now I’m thinking it would be preferable to this notion that the poor should be forced through ‘community service’ to genuflect towards the work-ethic.
Because the poor are different from us: they have less money.
Thursday 24 July 2008 at 20:02
I worked very briefly in such a workfare office in New York City, for a private non-profit. A little research on the topic made it clear that the program was often effective for a certain (who knows which?) population. Unlike the sort of workfare the word was invented to describe, the required “worklike activities” were geared toward finding work, so searching want ads could qualify. It provided a helpful structure for some, provided leads on jobs for others. Many clients (as they were incorrectly called) benefited from English lessons or similar classes. But I also saw a schizophrenic who went into an active psychotic episode in response to letters (that I couldn’t stop) threatening to cut his aid. And someone with cognitive deficits so bad that he showed up for his wife’s appointment at our office on the day he was supposed to have an appointment elsewhere who nevertheless was declared able-bodied. There were also a very few with clinically diagnosable personality disorders who refused work in the manner depicted by the right.
The legislation didn’t, in New York, actually create the 5-year limit that was in the Federal law. New York State picked up most of the tab after those 5 years. And it did involved marginal benefit withdrawal and similar changes that were, in themselves, positive.
However, despite Clinton’s original promise that his program would invest money that would pay off in the long run, it was implemented as a cut in the overall welfare budget. Had it originally tripled the welfare budget so that the social workers could do a proper job (as if any social worker has ever been allowed to), the program might have been a success.
Friday 25 July 2008 at 4:49
This is an excellent essay, Shuggy.
While some forms of “workfare” may be benign, we’ve had versions of it in Canada, and it appears to have had the most noticeable effect as a subsidy for low-wage employers, also creating downward pressure on wage rates. The latest fad is the “training wage,” which allows employers to pay young workers below the minimum wage, for years at a time, which also keeps labour in a buyers’ market.
I’m for ending all that, and ending “welfare” altogether, via the “minimum citizens income” you mention. In Canada, the amount of savings - in policing welfare and unemployment allowances, and in other expenditures, grants and tax allowances to families, students, and in cost-recovery from taxing individuals who get bumped up through the tax brackets as a result - would probably more than offset costs to the treasury. A universal, annual minimum income would also eliminate the excuse of using unemployment benefits as a kind of subsidy to big companies in the forestry and fisheries sectors that rely on seasonal labour, but aren’t prepared to pay properly for it.
In this country, we could probably pay for the whole damn scheme from the Unemployment Insurance reserve, which, last time I looked, had a surplus that amounted to $51 billion (yes, fifty-one billion), accrued from years of statutory worker contributions to the fund. It’s grown that big mainly because of restrictions that have made it increasingly difficult to draw from the fund if you lose your job. So the government uses it for general revenue.
Friday 25 July 2008 at 10:37
Good post.
There’s a whole series of further problems about Workfare however, which illustrate how it will not only not make the welfare system work, but will be a destructive factor, both for those on it, and on the labour market itself. Many of its faults stem from the fact that the out-of-work are treated as I* objects* of social policy.
Firstly, those on the present New Deal system are assigned to ‘work placements’ which are close to workfare (minimum training, often doing tasks previously carried out by those sentenced by the Courts to do ‘community service’). There are no employment rights, those on the schemes are vulnerable to bullying, constant threats (being ‘exited’ from Benefits, in the jargon) and receive a pitiful ammount of money (the Dole plus £15.00 a week - plus travel - minus the first £4.00 of expenses. This will get worse when the long-term unemployed are obliged to clean the streets, remove graffeti, since there will be a need for *overseers* to direct the motly crew (and note that a very large number of young Caribbeans are on the Dole, how will they like being forced to do menial work by the Baas?). The system will be ripe for numerous abuses (and at present there are plenty already, companies and religious groups, sorry, the ‘voluntary sector’, creaming off money and so on).
Since it is in reality Community Service by another name this is, frankly, criminalising the workless.
Secondly the united union of dustmen, and mud-larks will not welcome the use of cheap labour to replace them. Any work done by Workfare undermines the conditions of those paid real money for doing the same jobs.
Finally, the historic demand of the British labour movement in response to unemployment has been “work or maintainance”. We have nothing to learn from schemes dreamt up in Houndstown USA where the Sherrif, Deputy Dawg, sends idlers to the Chain-Gang. No doubt the wealthy liberals who write for the Independent and the Guardian imagine that when they have got rid of the Dole we will all magically turn up as servants and other ‘productive’ workers.
Or not. Only someone who is illiterate about economics, and has not heard of segemented labour markets and structural unemployment would buy this analysis.
Anyway, congrats..
Wednesday 30 July 2008 at 9:21
I have a lesion of the spinal cord in an accident, but after being told I would not walk again, then had to have major spinal operations because my bowel and badder packed up, I was then sent to a spinal injuries hospital in London but because i live in Wales the Welsh Health boards refused to allow me to go, I could of course pay for an ambulance but they refused to fund my treatment.
Anyway I wanted to work and had a job, but of course in my area the last survey found that 85% of offices factories and work places had done nothing to make access any better. My local health board has steps to get into the building a lift which does not work and if you do use the life when you arrive at the top open the door you have three steps down.
SO what i use to do is have a wheelchair at the bottom of the stairs and a wheelchair at the top I bought both, I would then get out of my chair at the bottom and go up the stairs on my bottom, and then do it in reverse.
One day the health and safety stated this was a bad idea and I might easily have an accident, so what did they do get a lift for me, nope they sacked me, I appealed and was given compensation which I refused because i wanted my job back, the tribunal stated take the money.
It’s been like this for ten years I get a job mainly rubbish like handing out baskets or picking up litter or like one job sitting in an office with nothing to do all day, I was called the cripple in the room, I was the person which the company enjoyed showing, here is Robert he is our disabled person, now I cannot find a dam job because of immigrants fighting over the rubbish jobs i get, or because the job center send unemployed.
Bugger workfare.