Tag: unemployment

Leaving the Work Programme

It has been announced that one in ten people referred to the Work Programme, 73,260 up to last April, have been subject to sanctions for failing to avail themselves of the opportunities. Or it has not been announced, depending on your point of view, despite the very specific figures and the ministerial comment: the Telegraph explains that this is what “the Department for Work and Pensions (DWP) is expected to confirm next week when it publishes the first official statistics on the overall success of the programme.” If this is an official announcement, it would be another clear breach of the UK Statistics Authority’s Code of Practice.

We know what the Minister Mark Hoban thinks of the figures; he thinks it shows that people are scrounging. “Sadly some people are clearly very determined to avoid having to get job at all.” There are other possibile explanations. It might be, for example, that people think they are better able to find work if they’re not on the programme. It might be that the tens of thousands of people who have been forced to claim JSA instead of incapacity benefits are too sick to work, and now they are being cut off benefits altogether. It might be that people are being sanctioned for not replying to letters. It might be that some have found work – because, despite the propaganda, that’s what most unemployed people do. It might be that people who are being cut off from benefit are being forced into crime or prostitution instead – it’s happened before. We just don’t know, which is why we need the detailed evidence and statistics.

Freud on risk

Lord Freud, criticising the “dreadful” welfare system, thinks that poor people don’t take enough risks. There’s a basic distinction to make here between risk and vulnerability. Risk is about the chance that something will go wrong; vulnerability is about the harm that happens when it does. Bankers like Lord Freud can take risks, because they can recover from them if they go bad. Poor people can’t take the risks that bankers do because they’re vulnerable when things go wrong. The point of social protection is to make people less vulnerable; the problem with the personalisation and conditionality he advocates is that it’s making them more so.

Freud dismisses the argument that he hasn’t tried to live on a low income himself: “you don’t have to be the corpse”, he says, “to go to a funeral.” Maybe not, but it’s an awkward place to be if you don’t know who you’re burying.

The World Bank on jobs

The new World Development Report 2013 is available, with a focus on jobs. One of the straplines on the website, also on p 57 of the report, claims that

“Jobs are created by the private sector; public action sets the stage”.

Sometimes the balder claims are qualified, but similar sentiments keep cropping up in the course of the report:

“it is not the role of governments to create jobs … as a general rule it is the private sector that creates jobs. The role of government is to ensure that the conditions are in place for strong private-sector-led growth …” (pp 21-2)

This is ideological claptrap. Do we think that police, teachers, firefighters, roadbuilders or health workers don’t have real jobs?

“The private sector is the key engine of job creation, accounting for 90 percent of all jobs in the developing world.” (p xiii)

Doesn’t that imply that the public sector in developing countries is small by comparison with countries that are economically more successful? And where would the private sector be without the demand for infrastructure generated by governments?

There’s yet more doctrinaire stuff:

  • “Any taxes create distortions” (p.27)
  • “The solution to all these demographic and technological challenges rests with the private sector.” (p.58)
  • “Different labor outcomes among persons with disabilities stem from productivity differentials, from disincentives created by the system of social benefits …” (p.84)
  • “policies should aim at removing the market imperfections and institutional failures preventing the private sector from creating more of those jobs.” (p 257)

This tone isn’t maintained consistently all the way through the report, but it’s troubling to see that the Bank still gives so much prominence to the discredited economic purism that led to Structural Adjustment. I thought, or hoped, that we had moved on from there.

Youth unemployment

The trend is clear in much of Europe: young people are much more vulnerable to exclusion from the labour market than older people, and as economies have faltered the differential is growing. The response has often been interpreted in terms of ‘activation’, emphasising the preparation of unemployed people, and at a discussion I was at yesterday, considerable emphasis was put on employability. But employability is not the problem. The preparation of young people for the labour market is not worse than it was ten years ago; in many places it is better. The fundamental problem is that there are not enough jobs. No amount of preparation is going to change that.

Changing young people is not the way; we have to change the job market, or employers, or the economy. There are arguments for all of those, but I’d argue that the core problem rests in the job market. Entry-level jobs are limited; middle-grade opportunities, that make it possible for people to develop their experience and opportunities, are disappearing. This is not going to improve spontaneously; it implies that governments have to act to develop jobs for people to do. That implies some expense, but as Keynes argued, long ago, it is better to waste some money doing something useful than to waste a lot doing nothing.

Submission to the Social Security Advisory Committee

The Social Security Advisory Committee has invited comments about the new draft regulations, with a deadline of 27th July. Details of the consultation are here. My submission is available here.

These are the main points I have raised:

  • Couples. There are gaps in the definitions which require filling, including specification of relationships and identification of transitions.
  • Periodicity. The frequent references to days and weeks, e.g. in qualifying conditions, work requirements and sanctions, need to be reviewed to be consistent with monthly operation
  • Discretion. Wherever discretion is to be exercised, there need to be appropriate mechanisms for review and redress.
  • Sickness while unemployed. The allowance made for everyday sickness – that is, periods of sickness that do not amount to “limited capacity for work” – is too low.
  • Limited capacity for work related activity. We are still waiting for regulations that might clarify how this is defined.
  • Work search. The proposed requirement to engage in work search for 35 hours each week is not meaningfully related to the process of job-seeking and inconsistent with effective administration.
  • Contributory benefits. Regulations governing contributory entitlements need to be reviewed for consistency with the new mode of operation – filling gaps, reviewing periods and making consistent requirements.

JSA for the victims of domestic violence

With the winding down of Income Support, we are losing the main residual benefit that is available for people with very low income who don’t fit other pre-set categories. The DWP have announced a new rule, “easing” conditions for JSA claimants who have been victims of domestic violence. “Victims will be offered a period of support without worrying about looking for work.” This is very much to be welcomed, and I hope the precedent will be extended to others in catastrophic or unpredictable situations.

More job seekers

The DWP has sent out 124,000 letters today to tell lone parents with children aged 5 to 7 that they will have to claim JSA instead of Income support, from this May onwards. Yesterday I commented critically about the assumption that the claimant count is expected to fall by half a million in five years …

The return of the roundsman system

There were demonstrations at the weekend to protest the position where young people are forced to take a four-week ‘Work Experience’ in order to remain entitled to Jobseekers Allowance. Tesco’s advertisements said, apparently mistakenly, that the posts would be permanent. Many of the critics consider that such posts should not exist at all. Newly published figures tell us, however, that over 30,000 people, mainly young people, have been sent to such placements.

The idea that people should work for their benefit is most strongly influenced by the idea of “workfare” from the United States. Workfare is based partly in a belief in the value of work, partly in a desire to deter people from claiming benefit. Representing workfare as “work experience” is an attempt to claim a positive value in the experience.

The “work experience” placements differ, however, in an important respect: the economic value of the labour goes not to the government, or the benefits agency, or to the public, but to private employers. Under the Old Poor Law, paupers were hired out to local enterprises as cheap labour. This was called the “roundsman system”. The designers of the “New Poor Law” were convinced that this undermined the position of the independent labourer, and the principles they introduced – including the abolition of poor relief outside the workhouse – were supposed to protect the position of people who worked. The same kinds of fear are prompted by the current arrangements. In the nineteenth century, many employers hired workers by the day. Present-day employers in the UK don’t in general work that way, but they do have “core” and “peripheral” workers, and they can vary their capacity by taking on short term, casual staff. If employers can draw on a pool of temporary, peripheral staff for free, why should they pay for casual employment?

Rising unemployment

The Chartered Institute of Personnel and Development estimates that unemployment figures are likely to reach 2.85 million in the coming year, equivalent to 8.8% unemployment.  In principle, this figure should be independent of the claimant count – people who are unemployed do not necessarily qualify for benefits.  In practice, it may not be.  Part of the government’s current policy is to disqualify people from long-term incapacity benefits, in the form of Employment and Support Allowance.  The medical reassessments have led to many people leaving the benefit rolls – 36% of reassessments are brought to an end because the claimant is no longer entitled, but that reflects a certain turnover in the figures anyway (for example, among women who have had to claim sickness benefits while pregnant).   More important for the unemployment figures are the further 39% who are found to be fit for work.  It is not immediately clear how many of these people will go on to claim Jobseeker’s Allowance instead of ESA, but those who do will be redefined as actively seeking work.  If only a third of them make that shift, it will increase the unemployment figures by more than 300,000 – taking the figures well over three milllion.

People who have never worked

One of the recurring myths in the British social security system concerns generations of families who have never worked. The issue has been the subject of recent correspondence on the JISCmail list on Social Policy.

There are relatively few households in Britain where there are adults of working age that consist entirely of people who have never worked. The DWP has issued statistics for households and for individuals; this applies respectively to 1.7% of households of working age (about 350,000 households) and 1.4% of individuals. More than a third in both categories are adults under the age of 25.

The primary determinant of worklessness is the economy, and variations in the economy over time mean that the experience of previous generations is hardly ever the same as that of the current generation. Forthcoming work for the Rowntree foundation by Rob Macdonald, Andy Furlong and Johann Roden compares the search for “three generations who have never worked” to the hunt for the Yeti.