Tag Archives: welfare

Unemployment – Morality, Money and Increasing Returns

Returns to Scale in Frankfurt's business district
Returns to Scale in Frankfurt’s business district ©DWP

The causes of unemployment make it a moral issue. Radical solutions are required.

In an earlier post I noted some features of unemployment from a UK perspective. The main thrust was that a fairly constant proportion of the population in employment (around 72% of those of working-age) hides a serious decline in the availability of adequate work, due mainly to the increase in women in the workforce and the fall in the ratio of full-time to part-time work. In a paper I wrote and referenced here on welfare I hinted at a moral dimension to the issue of unemployment in a capitalist economy (by which I simply mean an economy where physical means of production tend to belong in more or less concentrated hands).

I have now written a rather more formal paper (pdf 198kb) which I presented to the Post-Keynesian Study Group annual workshop in May this year in which I expanded on why we have a persistent problem with unemployment, and why this has a significant moral implications in our attitude to the unemployed. In this light of this I review the inadequacy of current policy and look at some of the more radical solutions proffered. The following is a non-technical summary of the paper. Continue reading Unemployment – Morality, Money and Increasing Returns

The Callousness of a Conservative

Charles Moore is the official biographer of Margaret Thatcher, former editor of the Daily Telegraph and an Old Etonian. He has nicely epitomised the indifference, evident intentional ignorance and convenient innumeracy of a particular type of Conservative. Writing in his column in ‘The Spectator’ magazine (May 4th) he devotes a mere 262 words to writing-off the problems of those on low incomes in Britain.

[T]he people who best understand how welfare works are either its recipients or those who work on low wages and are scarcely better off for doing so

he writes. So far so reasonable. He goes on:

These people recognise that being on welfare is — in effect, though not morally — like having a job. There is a wage for it, plus various equivalents of overtime and fringe benefits, and the task is to get as much of these as you can.

There’s a half-truth in there. If work seems like an impossibility, or hardly worth the candle given its poor rewards and insecurity, self-interest would suggest that you look for all the benefits you might be entitled to – although many don’t. But he continues:

 One effect of this has been to destroy the working class. Its more enterprising members have become middle class and the rest have discovered that they can live by not working.

At a stroke of his expensively-educated pen, Moore dismisses the existence of all those struggling to make ends meet in low-paid jobs. Four million Britons over 18 are in jobs that pay £7 per hour or less; seven million in ones paying no more than £8 per hour. (The minimum wage is set at just over £6.) They cannot reasonably be said to have joined the middle class, and if they could ‘live by not working’ they certainly choose not to. Continue reading The Callousness of a Conservative

Welfare Myths and Welfare Facts

Job Centre on Christmas Day
Ready to Work!
I am publishing here a paper on ‘Welfare Myths and Welfare Facts’ (pdf 65kb). This is a summary, but please read the complete paper.

The belief, held by nearly one third of the population according to polling figures, that at least half of welfare claimants are either fraudulent or are refusing suitable work when offered, is demonstrably wrong. It is clearly fuelled by misleading and misrepresentative information fed to us not only by most media outlets but by our own leaders, probably as a ‘divide and rule’ strategy.

The total cost of out-of-work benefits is much smaller than is frequently claimed, including by those who are in a position to know better. A significant proportion of out-of-work benefits are ultimately paid for by their recipients through their lifetime NI and tax contributions. The large majority of those actually receiving JSA are intent on finding work and actively seeking it, but a proportion of them are currently doomed to failure – some probably permanently – through no conscious decision of their own.

As a result, the lowering of benefits and the threat of benefit withdrawal is increasing hardship for many, while probably doing little more than increasing ‘churn’ in a sluggish labour market. Given the current low level of benefits in relation to a generally acceptable minimum income and the dubious fairness of an absolute obligation to work for others for a breadline wage, further downward pressure on benefits seems to have little justification morally, socially or even economically.

The only real way to see more of the long-term unemployed improve their own lives and their contribution to society is the provision of more and better-paid employment opportunities. Along with this will have to go resource-intensive engagement with those who are poorly equipped to support themselves, never mind to play a productive role in society.

Download the full paper: ‘Welfare Myths and Welfare Facts’ (pdf 65kb).