Sounds harsh but

In the most radical clampdown on the work-shy yet, Iain Duncan Smith will announce that the unemployed will be found compulsory 30 hour-a-week work placements and if they fail to turn up they will lose their Jobseekers\’ Allowance for at least three months.

So they\’ll be working for nothing.  However, one of our major problems is that many people do in fact work for nothing. Out of work benefits are such that going out to work,  a few/some/many people are in fact working for free as their in work incomes are no different (and in some cases less) than those out of work benefits.

And there are really only two solutions to this: we can taper those out of work benefits withdrawal rates so that work always pays. But this is howlingly expensive. Or we can cut out of work benefits: this has the side effect of severe collateral damage in that those who really cannot (or cannot find) work live in (yes, OK, by the standards of a modern society) destitution.

This is the magic get out method though. If you\’re going to have to work to get your benefits no matter what then both of those problems are diminished.

If you already have to work for \”nothing\”, ie, the benefits level, then the tapering and the absolute levels of benefits don\’t need to change as much in order to get to our desired position: that work pays.

I would note that all of this is implied in the research of Richard Layard. The long term unemployed must be forced, in some manner, to reconnect with the labour market. It might be benefit withdrawals, might be compulsory training or make work jobs, but the solution is going to be to force (through incentives, naturally, not at gunpoint) people back into having a connection with the world of work.

This, however, seems an infelicitous choice of phrasing:

People who cannot work, for example the terminally ill, would be given support with no time limit.

9 thoughts on “Sounds harsh but”

  1. Given the amount of unskilled or low skilled work that isn’t being done- litter picking, cleaning graffiti, ditch clearing- it might produce some minor benefits apart from its effect on the incentive to work.
    And given that claimants time and energy would be taken up, it will reduce the incentive for people to have a job in the black economy and claim benefits.
    It would help to re-introduce the idea that the world does not owe anyone a living.
    I doubt if it will be followed through though.

  2. I’ve been unable to work since falling seriously ill nearly two years ago. I currently receive £90 a week Employment Support Allowance for which I am most grateful. Of course, I paid National Insurance contributions for 30 years so feel a certain amount of entitlement to my ‘handout’. However, the government proposes to change the rules on this benefit. At the moment, 75% of those applying for ESA are either refused the benefit after a medical, or they withdraw their claim as they get better before the medical appointment is given. Of the 25% who are classed unfit for work, a mere 10% are put into the Support group. This category is reserved for terminally ill patients, those who are paraplegic or in a coma. Virtually everyone else, including some cancer sufferers, are placed in the Work Related Activity Group. This triggers a process where you must attend five interviews with an employment expert who will help you return to some sort of work and they will be paid on their results.

    So far so good. However, the rule change proposed by IDS is that those people on Contributory ESA (those who have partners working or who have savings of more than £16,000) will only be allowed to claim ESA for one year. After that you’re means tested. Those workless households or people who haven’t paid NI contributions or bothered to save, will be given ESA, housing benefit, council tax benefit ad infinitum. The idiots, like me, who’ve saved for their old age and whose partner works will receive nothing. Even though I will probably still be unfit for work, I will no longer receive ESA and my wife will have to support us both on £12,000 a year. The system hardly seems fair and doesn’t reward good behaviour. If I’d spent all my money and if my wife gave up work, I’d be looked after. It’s perverse.

  3. It all sounds good, but who’s going to make sure that it gets done?

    We already know that a lot of people don’t turn up to do community service and the people in charge don’t care that much about that.

    IDS might really want this, but the distance between him and the person policing the individual is going to be so great, and there’s not really going to be any measurable output which will have individuals going to the papers to keep the government on their toes, so unless a council worker actually cares about people turning up and doing something, it won’t happen.

    And then, there’s the fact that because it’s government there’s going to be an appeal system, so anyone who doesn’t want to do anything will claim harassment, bullying or workplace injury.

    The result will be a system that will be manipulated by the feckless while the genuine unemployed will turn up to do some pointless, unsuitable work rather than spending time getting real skills to help put them back into work.

  4. “The system hardly seems fair and doesn’t reward good behaviour. If I’d spent all my money and if my wife gave up work, I’d be looked after. It’s perverse.”

    That’s the welfare system writ large: perverse. Perverse incentives resulting in gross unfairness.

    We could have a welfare system that made sure no-one starved or was homeless by running hostels, with Jamie Oliver catering (that’s an incentive!) for those who have nothing. And then have a proper insurance-based welfare system that pays out properly for a period of time for those who paid their premiums.

    MarkS’s mistake is to think that he has “contributed” to the “system” when in fact he’s just been forced to pay into a Ponzi scheme.

  5. The day to day to costs of seeing if people are actually turning up and then working even if they do turn up plus the constant search for suitable make-work (that will be a health&safety field day) will cost a fortune. If it is privatised (=corporate socialism) then some friends of the tories will be making a lucrative raid on the public purse but that is hardly the answer to returning millions to work.
    Henry Hazlett(if my memory serves) speaks of demobbing an army, in that the money which paid for the army can be returned to the economy to enable new /expanding business to employ all the demobbed soldiers. That would seem to be the viable solution.
    However we live in a country whose so-called government is borrowing 250-300 thousand million a year more than it is getting in tax. They can’t cut tax if they are to have any chance of getting out of their borrowing rut( unless they make really huge cuts in the state which neither this government nor any of the other dross are willing to do-it would cut and compromise their power).
    As you pointed out a few blogs ago Tim, the economy has done very well in creating jobs to replace those lost so far (although lots of the new jobs are part-time only). It has not done all that well in creating extra new jobs. I am sure that it could if 200 thousand million plus of tax rip-off was returned to peoples pockets. That isn’t going to happen. What I think will happen is that the longer people stay on the states enforced payroll the more rights they will gain. This is bad to an extent but it is also right to an extent. Not everyone is a scrounger and if people find themselves part of this there is no way the state should be able to treat them as some kind of Todt slave labour force. Most of the work they do will be beetle-tracking anyway because if they do anything useful they will be undercutting workers already employed.
    This is more political gimmicks. The way to create work is huge cuts in state thieving and dictat to create jobs and then most of those on benefits will have jobs to find. A small number of people can be sent out into the cold with some assurance that they can and will find jobs in a reasonable time. However, to send millions out into a system being bled dry by the state is a bad plan.

  6. There are very many useful, even necessary tasks all around us, that never get done. Snow clearance from residential roads and paths. Help with feeding for hospital patients. Services to the elderly and disabled living at home.
    But initiatives either survive and thrive, or dive, dependant on who is running them. If you put any branch of government, including local authorities, in chargeof any of these schemes, they will fold.

  7. Ask yourself this: What would you want, if you were unemployed and you wanted to better yourself? Obviously, a job. But if you can’t have that, what would you want from a “scheme”?

    I would want to be part of something that gets results, that is well run, that would set me apart from the shirkers, and that could provide me with a good reference when I’m applying for jobs.

    That means having a track record for turning up for duty on time, working hard, being effective, and getting results. All the government should be doing, is providing insurance cover and possibly free bus passes. But let the initiatives be run by the voluntary sector, not some bored hostile ‘crat from the council. And let that same voluntary sector leadership have the power to hire and fire their workfare people.

    Fired from three placements- lose your benefits.

  8. “we can taper those out of work benefits withdrawal rates so that work always pays. But this is howlingly expensive.”

    Completely and utterly not true. Think of benefit withdrawal as taxation and then apply the Laffer Curve logic – the cash-cost-minimising welfare withdrawal rate must be somewhere around 50%, so bringing it down from 80% to 100% will reduce the cash cost of the welfare system.

    Next.

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