/>Ways out for ‘Workfare’
In this post, Young Fabians member Daniel Craw explores a possible solution to the current ‘workfare’ scandal
This week several objections to the government’s Work Programme have been bandied about. This wheeze gives job seekers an unpaid work experience placement. If they drop out then they lose their benefits.
I don’t want to get into the philosophical arguments about whether the principle behind losing benefits is right or wrong; the way the Coalition sees it is that if you get Job Seekers Allowance (JSA), you don’t get it for free so you’re expected to take work that is given to you. I should imagine Labour would broadly agree.
Instead I want to look at the relative merits of these objections to the Work Programme and suggest that it could be resolved by actually paying people.
Here are the objections outlined in this article by ‘The Guardian’:
- There are “complaints that jobseekers are being used as taxpayer-subsidised labour”. I’m not sure whose complaints the Guardian are referring to here, but I don’t think it’s the same majority of public opinion who support welfare reform and oppose taxpayer-subsidised indolence. If we’re going to have subsidies, it’s probably better that they support labour.
- Private sector employers get to profit from the unemployed. Surprisingly (to me), until recently only public sector and charity organisations took people on under the programme. Having the private sector involved is surely essential: if you want the private sector to deliver economic growth you have to prepare the unemployed to fill private sector jobs – whenever they actually get created. However, it does look a bit shabby if corporations are using free labour as a way to enrich themselves. You might call it ‘predatory capitalism’.
- It’s not actually voluntary if people lose their benefits. Tesco feels uncomfortable with the work experience being compulsory and sold as voluntary (Employment Minister Chris Grayling: “Our work experience scheme is voluntary”) and suggests removing the threat of benefit withdrawal. Without wishing to get into a discussion of whether there should be unconditional social security, my interpretation of JSA is that when you sign on you accept its conditions, and you are therefore compelled to take work experience.
- It’s slave labour. If you help out an organisation for free because you enjoy doing so and you agree with its objectives and it was entirely your decision to do so, then it’s voluntary. If the activity is anything else – and especially if it was arranged by the JobCentre or whichever contractor is doing it in your area – then it’s work, and you should expect to be paid at least the National Minimum Wage for it. If an unscrupulous retailer finds that they’re able to get a kid on JSA to perform a menial job that requires no training for free rather than actually employ someone then that does nothing for the unemployment rate and undermines the concept of the minimum wage.
What I don’t understand is why people on the Work Programme do not get their benefit topped up to the minimum wage by the employer for the work they do. I think this solution would address all the objections we’ve heard:
- Taxpayer’s money is still used to subsidise work not indolence
- Employers still get benefits but not at the benefit recipient’s expense
- With the minimum wage carrot now complementing the stick of losing benefits, the scheme would still be compulsory, but the DWP would not lose any more friends by saying so – to suggest that the current system is otherwise is disingenuous
- While it may still be forced, it isn’t slave labour
There is an issue in that economic theory suggests that you won’t get as many placements as you do under the scheme to date, but at least participating companies won’t be embarrassed into withdrawing completely, thus reducing the number of placements anyway.
Daniel Craw is a Young Fabians member
I think what this article proposes is no improvement on the current ‘workfare’ arrangements, and worse, fundamentally misses the injustice at the heart of the programme.
One of the principal objections to the scheme is that it provides private corporations, with the means to pay their employees a fair wage, with free labour. Effectively, the government directly subsidises participating businesses and charities thousands of pounds worth of labour hours.
When the participating companies are corporate behemoths like Tescos, which recorded profits of £1.9 BILLION (http://www.bbc.co.uk/news/business-15178825), this can never be justified.
It is a truth self-evident in a modern capitalist society that individuals will be paid a fair wage for their labour, and that it is the employer’s responsibility to provide that wage. Allowing companies to circumvent this responsibility, and simply ‘top up’ the JSA paid to workfare participants to the NMW is morally and economically wrong.
Let’s say a participant in workfare is working 30 hours a week. When ‘paid’ their JSA, this equates to £1.78 per hour for 18-24 year olds, and £2.25 for those aged 25+
If companies then topped this up to the minimum wage, they would still make a saving on their labour costs of 1/3.
This would massively incentivise companies to seek unemployed people to work within the scheme, as they stand to profit greatly thanks to the government subsidy of a third of their wage liabilities. Legions of JSA claimants seeking fully-paid work will be corralled into the scheme, with no job security, no benefit security, in the full knowledge that their employer is actively benefiting from their subsidised labour.
I’ve not even begun to list my objections to workfare on the grounds that JSA is paid to those actively seeking work, who will find this activity much more difficult when coerced into a work programme for 30 hours a week.
Neither have I included the fact that job seekers’ agreements should be individually tailored, and already include the requirement for claimants to enter work experience after 13 weeks ‘signed on’.
I leave it to more eloquent writers and truly progressive-minded thinkers to continue the denouncement of workfare on this forum.