Monday, February 18, 2013

Cait Reilly versus IDS: why "Workfare" doesn't work

"Workfare" is a system encouraged by Ian Duncan Smith to help the unemployed gain work experience, in order to gain skills that will give them a better chance of getting a job, and at no extra cost to the government or the employer. That's the official explanation, in any case.
IDS believes that it is justifiable that unemployed people work for their benefits as it will help them maintain a more pro-active mindset, as well as keeping them familiar with the working environment.

Internships are a popular form of casual employment in various industries in London, particularly in media, law, fashion and the arts, where employers offer work as an opportunity to a longer-term career prospect of paid employment. The employer typically pays for travel costs.

Indentured Slavery was a system popular in the Southern states of the USA in the 19th century that helped Africans gain long-term work experience in the cotton industry. The initial travel expenses were paid up-front by the employer, and the employer paid the daily expenses for the duration of the African's work experience.

Spot the difference? It's just a matter of presentation and perspective.

The case of Cait Reilly has provoked reactions from opposite ends, as she has succeeded in highlighting the moral bankruptcy at the heart of IDS's approach to generating employment.

Regardless of your opinion of the "Workfare" scheme in general, the first question should be if it is actually effective at helping the unemployed find work. The statistics published so far have shown that people who have taken part in the scheme have been less likely to get a job afterwards than those who didn't. Somehow, the scheme is not just ineffective at it's supposed primary purpose - it is actually detrimental to it.

How this is possible, or is this just some kind of statistical anomaly? Right now, that seems unclear, and it is just possible that the statistics are just a freakish one-off. So on that point right now, it seems fair to reserve judgement. The kindest thing to say about the effectiveness of "Workfare", is that it is not yet proven its worth.

However, what does seem fair to judge is the economic sense, as well as the social destruction, being done to the country by the concept of the "Workfare" scheme. Some commentators, even supposedly from the left, have defended the scheme as supporting work experience, and criticised out-of-work graduates for feeling they are too good to work in a place like "Poundland", as IDS himself implied.
This misses the point, though the point they raise does deserve an answer, which I'll get to later. The real problem with this scheme is not that the work itself is considered lowly. The real problem is that the government are giving the private sector free temporary workers that they would otherwise have to give real jobs to.

I wrote an article some months back explaining how the economics of fascism created an economy where the public sector is there to support the inefficiencies of favoured interests in the private sector, at the expense of employees' (especially unions') rights. In other words, government ministers think it is their job to economically support large private companies from failure, but not individual taxpayers. In an economically-fascist state, the government are a cash-cow for the moneyed private sector industries.
The "Workfare" scheme perpetuates this kind of logic. Tendering-out government services to private companies is another economically-fascist policy, when this policy costs the government far more money than it would if they did it themselves. The government's financially eye-watering use of G4S in the Olympics (rather than just using the police or army to begin with) is a prime example. But the whole point here is that the Conservatives are either so blind in their certainty (or so reckless) that they fail to see the economic lunacy of such practices. Labour's use of PFI was another example of government being a "private sector cash-cow", paying for the costs in the event of failure, but letting the private sector take the profits. The economics of fascism are completely counter-productive to the government's financial health, because they always result in the government being taken for a ride by private sector interests; there the private sector has the best of both worlds (all the profits and no costs), and the government the worst of all worlds, paying for the private sector's failings and having no control over its own expenditure.
As a result, the economics of fascism always lead in inefficiency and incompetence in the private sector as well as the government, and to unsustainable government debt. It seems that fascists generally despise government because they think it doesn't work, so have devised an economic system that makes government fail by leeching the government's money to the private sector elite. In this way, fascism is literally a vampire towards the health of good government. Which is the situation we have now in the UK.

"Workfare" is in effect another form of government tendering to the private sector, where employers have the best of both worlds (employees at no cost to themselves, and can be easily replaced), and the government has the worst (it still pays out state benefits to the "Workfare" participant, but receives no taxes as the person is not on a taxable salary). This is why such a scheme makes no economic sense at all: it costs the government everything, and costs the private sector nothing.
This then has a detrimental knock-on effect to the job market overall. Every job for free that is taken up by the "Workfare" scheme is a potential opening for a real paid job, one that gives someone a salary and boosts government tax receipts (and whose salary feeds back into the economy generally). So the the government are also shooting themselves in the foot a second time. The scheme is therefore creating poverty and dependency in the long-term by potentially creating an entire sub-class of government-subsidized workers on the beck and call of whichever employer feels like getting something for nothing. There are already an increasing number of part-time and temporary staff at the lower end of the job market: this scheme is likely to make that situation even worse.

The final criticism is creating the precedent of unemployed people having to work to earn their government benefit, which in any case sounds like an ironic joke. This seems even slightly sadistic. If an unemployed person wishes to gain work experience, there are plenty of charities or volunteering jobs around, especially since government recently withdrew funding from many charitable organisations, and are crying out for help. This was the point that Cait Reilly made: she already had a voluntary job in the sector she was educated in.
Even so, why do the unemployed need to be forced to work for the benefits that they are entitled to through the taxes they have paid into the system? Since when has it become fashionable to assume that unemployed people don't have jobs because it's their fault, and therefore should be forced to work for practically nothing? This just feeds into the easy (lazy) thinking that being unemployed means you are bone-idle. Not only that, it implies that the government and IDS in particular somehow equate £60 a week with an employee's salary. It is not: JSA is a basic sum of money to pay for the bare essentials, nothing more. It may be true that there are some who are in work and who do not earn a great deal more than JSA per week, but that is the fault of the employer and the wider economy, not the fault of the unemployed. If wages are low compared to the cost of living, do something to raise the wages or lower the cost of living; do not punish those who don't even have a job in the first place.

Lastly, there is the point IDS mentioned about unemployed graduates feeling they are "too good" for menial jobs like in "Poundland". Whatever his views, the fact that there are not the relevant jobs in the sector they trained in, or that they gained a degree in a non-vocational subject, is due to a combination of government and private sector shortsightedness and poor strategic planning. Wanting half of young people to have a degree is a noble government aim, but pointless unless you expect to have thousands of highly-educated shelf-stackers. A similar criticism can be levelled at the private sector heavyweights who always demanded a degree (even regardless of the discipline) in order to get the most basic white-collar job.
There is more to education than university: vocational training has proven to be far more useful in the long-term to a young person's career; and proper advice about the true state of affairs in the workplace would be of far better use to a young person, so they can make an informed decision about if they should take the time to get a degree in the first place, or just make an earlier start on the career ladder.

But one thing is clear: "Workfare" doesn't work, in any real sense of the word.

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