Sunday, December 24, 2006

Welfare and Well Thought Out Arguments

Polly Toynbee talks commonsense on welfare in the Guardian. She's writing about England, but much of this resonates with welfare debates in New Zealand too. Some good snippits.

"Work is the best welfare, a hand up, not a hand out" was New Labour's first mantra and it remains true for most people most of the time, but not all. This social contract has mostly been kept by both sides under Labour. Tax credits and benefits for children have doubled and, for the first time, pensioners are now less likely to be poor than the general population, thanks to pension credits. Fulfilling their side of the imagined contract, 70% of the long-term unemployed have taken jobs and there are now virtually no young long-term claimants, thanks to the New Deal.

But yesterday Hutton shook a threatening stick at those he regards as social-contract defaulters. He made a good case: one in 10 of those who draw jobseeker's allowance has spent six of the past seven years on benefits, yet in many areas there are unfilled low-skilled jobs alongside high rates of unemployment. If the jobs are there, why don't they take them? He picked on Glasgow, which has above average unemployment and twice as many unskilled vacancies as the national average.

Is it that simple? There is a very grey line between the plain idle and those who are illiterate, mentally unfit, psychologically odd, ex-prisoners, unattractive to employers, non-English speakers (Labour has stopped free English courses), drug addicts, alcoholics and other bad prospects. In Glasgow, for example, what are these vacancies? Mostly part-time hotel and catering, bar work and waitering with unsocial hours. Those running programmes to help the unemployed into work say these are student jobs, or for young foreigners: the hardcore unemployed are simply not equipped to do this work. Many live on peripheral estates miles out of town with no night buses back - a taxi costs three hours' work at the minimum-wage...

...But let's keep this in perspective: there are only 100,000 of these hard cases, and the jobseeker's allowance is a pathetic £57.45 a week, not enough to survive on. I tried, and fell into unavoidable debt within weeks. Those in debt fear taking a job as loans sharks chase them once they start earning...

...Meanwhile, the minimum wage is so low it can be impossible for those without children to work at a profit. Why work if it leaves you even worse off? The social contract says work is the best welfare, but for some it isn't. One reason why is housing benefit - the glitch in the system. Beveridge never solved it, Labour promised a review but abandoned it; yet losing housing benefit on taking a job is a great disincentive to work.

Look closer at housing and see the damage done by gross inequality, as wealth at the top stamps on those below. London has the highest unemployment, with half its children born poor. Yet it is also the richest place. This is no mere accident of Dickensian contrasts, but partly cause and effect. As the City reaps its £9bn bonuses, that money fuels an ultrasonic house-price boom. It's bad enough around the country at 180% up in the past decade, but far worse in London. Rents are sent sky high, making it impossible for the unemployed to lose housing benefit by taking a job. They will never own a shed in the capital as the gap yawns ever wider between the 70% homeowners counting untaxed winnings every month, while the rest and their children are consigned to social housing forever.

[Emphasis Mine]

1 comment:

Anonymous said...

*cough* [huge] capital gains tax *cough*

> There is a very grey line between the plain idle and those who are...

I knew a guy who i would call socially odd. He had basically zero value to almost any employee. I knew nother who was odd in a more criminal/lazy manner, the problem remained almost identical from a practical point of view because there was basically no potential for the latter or the former person to change whatever incentives one applied.

the point being there IS no line - there isn't even a shade of grey, all there is a 'blame' difference.