IDS’s workfare plans – from entitlement to obligation

Despite the comments yesterday from the Archbishop of Canterbury, the coalition’s decision to introduce a limited form of workfare into the UK benefits system is a huge step forward. Rather than pushing people into despair these proposals will actually prepare people for work and get them used to the necessary disciplines that are second nature to the majority.

But there is a further reason to congratulate the government on these proposals. For the last 50 years welfare policy has been predicated on the belief that poverty was caused by structural inequalities. According to this view individuals were impotent in the face of large societal forces that unfairly held them back. Thus only government could create change through targeted interventions. Running alongside this view was the belief that government intervention had no impact on the behaviour of individuals or the culture of the society at large.

Of course, there have been many critics of this approach from Bertrand de Jouvenel and Friedrich Hayek at the very birth of the welfare state, to more recent commentators such as Lawrence Mead, Charles Murray and Frank Field. These critics argued that government intervention altered individual behaviour through the creation of a perverse incentive structure, which had the effect of institutionalising the very problems of poverty and inequality that government was trying to solve. The problem therefore was not structural inequality but individual behaviour.

The government’s new welfare proposals are so important because they appear to recognise that government welfare provision can and does alter behaviour. What is needed, therefore, is not more intervention and more spending, but targeted measures that change the incentives that drive individual behaviour. The coalition is seeking to shift millions of people out of a culture of entitlement and towards an obligation to work. People need to know that there is a way out, but they have to earn it.

The distinction is between an ex ante approach and an ex post approach.The ex ante approach, as Peter King outlines, seeks to influence incentives and thus individual human behaviour. (As Michael Howard might have said: ‘Incentives work!’)The ex post approach, detecting people ‘in need’, seeks to help them financially. While this may seem well-intentioned, at least in the short term, unfortunately in the longer-term it makes things worse by providing perverse incentives. In effect, government (taxpayer) charity crowds out individual responses. It is hardly surprising if many people react by thinking: ‘Why bother to work productively?’ Well done the coalition (so far)!

Some interventions of the Archbishop are difficult to understand but this is his most ridiculous. I do have reservations about this, though. It seems half hearted and less to do with incentives than with “helping” a particular group. I also don’t think that any form of workfare scheme will work without extreme localisation.

There’s one great big elephant in the room.IDS proposes 120 hours’ community service for the long-term unemployed in return for their benefits. Now suppose one of them insists on charging for the work. At this point, a workfare scheme could only work if the LTU were stripped of their capacity to contract for services.The only people who presently have to do 120 hours’ unpaid community service are convicted criminals, and it is precisely because they are criminals that they are not allowed to charge for their work. Their liberty to do this has been taken from them by the court in punishment for crime.

I wonder whether the government will have to change minimum wage legislation for the workfare scheme to be lawful.

Hayek famously said that ‘competition is a discovery procedure’; and even if (like me) one approves of the thrust of the government’s thinking, it seems clear that the authorities will need to be very much alert to possible improvements and modifications to their proposed scheme, both before and after it comes into operation.Inevitably after so long with a very unsatisfactory welfare system, a radically changed approach must to some extent be a matter of ‘trial and error’. Nothing to be ashamed of in this; but governments haven’t always had a good record of listening and flexibility. Meaning well (which I am convinced the coalition does here) isn’t sufficient on its own.

Richard, it’s not just a matter of changing the minimum wage laws. The government will have to deprive workfarers of the liberty to charge for services. At present, only the courts can do this, and only to convicted criminals.

Michael – I certainly agree that workfare presents some very difficult ethical issues. One concern is that the government prevents claimants from supporting themselves through various regulatory restrictions (e.g. the minimum wage, planning laws etc.) and thereby effectively pushes them into claiming benefits. Rather than adding a new layer of intervention to solve the problems created by the welfare state, the coalition should instead be focusing on dismantling the structures that have created very high levels of dependency. A strategy of incremental cuts in benefit rates combined with supply-side reforms to free up the labour market, housing and so on, would be more effective than workfare (especially at reducing the welfare budget).

It’s the stupidest political gimmick since the last one.If we want welfare claimants to get back to work, then proper free market solutions are in order, in no particular order:1. Get rid of the taxes that destroy most jobs – VAT, National Insurance, income tax and corporation tax (and plug the gap with land value tax!).2. Reduce red tape, reduce the size of the state, get out of the EU etc.3. Reduce the marginal rate of benefit withdrawal – the Laffer Curve explains why a lower withdrawal rate would lead to an overall lower cash cost of welfare.4. Scrap National Minimum Wage and so on.All this knee-jerk authoritarian right wingery is just not for me, I’m afraid

Mark, what you argue for might all be necessary, but the evidence from the US is that worklessness has a profound impact on behaviour, particularly for those who have never worked and don’t ever expect to. Your way might work but it would be extreme brutal and would, in all probability, need the very authoritarian measures you are critical of to police the fall out from the shock approach to reform.The one really encouraging aspect to these reforms, to take up Prof. Myddelton’s point, is that they are being introduced slowly and incrementally with the aim that they are implemented properly.

Richard, at the heart of the matter is that you can’t operate a workfare system without stripping a person of his liberty to contract for his services exact a fee.The only basis on which this can justly be done is retribution for crime. Under IDS’ proposals, a workfarer will have to work 120 hours over four weeks for GBP 30 a week. Next to him there could be working a convicted criminal serving 120 hours which he can spread over a year while drawing Jobseekers Allowance at GBP 65.30 a week.

This should clarify matters for you:http://www.thedailymash.co.uk/news/society/duncan-smith-finally-gets-to-own-slaves-201011083228/

Why not simply give the long-term unemployed four (or more) weeks work on the minimum wage? Who could complain about that? Surely the whole fairness thing originates from the fact that workfare is unpaid? Give the long-term unemployed temporary periods of real, paid work and all the objections would fade away.

I've been forced to undertake workfare and it is utterly demoralising, both for myself and for the people who I was working with. As an introduction to and an approximation of paid work it is totally ineffective since it provides none of the benefits associated with having a job, namely a wage, a sense of community and belonging, a chance to improve your circumstances, opportunities for training and further education, a positive self-image, status and acceptance in society...and justice. It is just so wrong.
Submitted by Michael Petek on Mon, 08/11/2010 - 18:41. "...There’s one great big elephant in the room.IDS proposes 120 hours’ community service for the long-term unemployed in return for their benefits..." “Community Work Placements” forces claimants to work for six months without pay. Six months – 780 hours – is more than twice the maximum community service sentence for convicted criminals. Workfare does not help people find jobs and being unemployed is not a crime. Another effect is undermining the minimum wage - it's work for about £2 an hour. It's all about criminalising unemployment. The community sentence is no different to a sentence handed out by the courts (except it lasts longer). Ministers have been bought by "welfare to work" pimps who have found a new way to make money from the government. **** The government using the number of vacancies to question why anyone is unemployed shows that they are mathematically illiterate. The only way there could be no vacancies would be if no one ever retired, no new jobs were ever created, no one was ever sacked, no one ever got promoted, made redundant, died, or left to get another job. It would have to be a completely static system for there to be no vacancies. however as we are human it isn't. at any moment in time people will be changing jobs, leaving jobs, or creating new jobs. Unless we have evidence that there are a significant number of vacancies left open through a shortage of applicants, or a large number of genuine new jobs, that exactly match the skills of unemployed people, in the area they live in, the argument about the number of vacancies is irrelevant. Shame the pro-government media is not prepared to question this argument. Help to Work wont help and it wont work. "Help to work" is a euphemism for slave labour. If it's not paid work then it is slave labour. Why employ a worker when you can have a slave for nothing? But they are paid JSA for being unemployed and looking for work. To be employed in this country you need to be paid the minimum wage, by law. This is a way of subverting that law. Orwellian newspeak at its best from British politicians: "Help" = pointless and spiteful punishment "Volunteer" = forced labour No wonder unemployment seems to be "falling." they are making it impossible to be officially unemployed and hence all the fake self-employed with little work to support tem. Political sadism. Unpaid work is a disaster for the poorest people in Britain who will be the only people forced to do it (if you've got money, you don't bother to sign on in most cases as you find it too humiliating). "Cleaning war memorials" for free will not help you pay the bills. 6 months of cleaning war memorials, and you'll be poorer than when you started.

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