Welfare to Work
It seems that US-style welfare ideas have arrived on British shores. In a white paper on welfare reform to be unveiled this week, the Work and Pensions Secretary, Iain Duncan Smith, will propose ordering the unemployed to do periods of unpaid work or risk losing their Job Seeker’s Allowance payments.
The measures will be announced to parliament by the work and pensions secretary, Iain Duncan Smith, as part of what he will describe as a new “contract” with the 1.4 million people on jobseekers’ allowance. The government’s side of the bargain will be the promise of a new “universal credit”, to replace all existing benefits, that will ensure it always pays to work rather than stay on welfare.
In return, where advisers believe a jobseeker would benefit from experiencing the “habits and routines” of working life, an unemployed person will be told to take up “mandatory work activity” of at least 30 hours a week for a four-week period. If they refuse or fail to complete the programme their jobseeker’s allowance payments, currently £50.95 a week for those under 25 and £64.30 for those over 25, could be stopped for at least three months.
The Department for Work and Pensions plans to contract private providers to organise the placements with charities, voluntary organisations and companies. An insider close to the discussions said: “We know there are still some jobseekers who need an extra push to get them into the mindset of being in the working environment and an opportunity to experience that environment.
“This is all about getting them back into a working routine which, in turn, makes them a much more appealing prospect for an employer looking to fill a vacancy, and more confident when they enter the workplace. The goal is to break into the habit of worklessness.”
I’m acutely aware that we are in the age of un/low-paid internships and other kinds of volunteer work to gain experience, and make one more attractive to potential employers – the state of my finances attests to that fact. But I’m firmly of the opinion that interns should be paid a fair rate for the work that they do, which leads me to the first reason why I think this proposal is a bad idea: people who end up working for their allowance will in effect be working for below minimum wage rates.
I also worry that this new pool of cheap labour could lead to job losses or downward pressure on pay and conditions for workers doing similar jobs to people doing “mandatory work activity”. Also, it may lead to employers looking askance at periods of voluntary work on CVs if they surmise that candidates were one of the “work-shy” who had to be forced into work.
I’m thinking that if you want to adopt a welfare policy paradigm that nudges people into work you need to do something about the labour market to make sure there are enough jobs available. Right now there are about 5 unemployed people for every job vacancy.