Some findings from an opinion poll caught my attention in yesterday's Sunday Times, with the graphic below showing who the public trusts on specific policy areas. As we might expect, David Cameron and the Tories are more trusted than Ed Miliband and Labour on the traditional Conservative issues of the economy, law and order and defence. Labour, meanwhile, romps home on its own traditional ground of health and education.
The figure that caught my eye however was the one for welfare benefits, with Miliband enjoying a five-point lead over Cameron. This seems bizarre. And is counter to the conventional media narrative that Coalition reforms are extremely popular. Only last night on BBC Five Live, the right-wing commentator Tim Montgomerie was extolling tough welfare reforms as a sure-fire election winner.
So what is going on? Why are Labour more trusted on the welfare state, contrary to anything you might read in the media about social security?
I would posit that three things might be happening. The first is that enough people are feeling the negative effects of benefit cuts - particularly ones related to tax credits and Child Benefit. Further, under a majority Tory government with Cameron as PM, there would be more to come: for younger (removing entitlement to JSA) and older voters (means-testing of some universal benefits).
The second is that the Tories are finally going toxic on welfare. I've wondered in the past how far the Conservatives might go with welfare reform - and the party has often given the confident impression that they can go as far as they like without losing public support. However, it might be the case that they are moving too quickly - beyond where public opinion lies. In policy terms, I'm mainly thinking about removing benefits for young people - which seems counter-productive and, in plain terms, cruel.
Finally, it might be that attitudes to the welfare state are softening as part of the naturally occurring attitudinal cycle. In other words, welfare attitudes - just like GDP - go up and down over time. This certainly seemed the case in the latest British Social Attitudes survey, which reported a significant shift in public opinion.
It is still too early to say whether we are witnessing a major shift in welfare attitudes. Yet the signs are that we just might be. And for Labour, this could have major policy implications - giving the party much more room to far, far bolder.
Monday, 29 September 2014
Thursday, 25 September 2014
Unemployment and well-being
Well-being is rising in the UK - and analysts argue that this is due to falling unemployment. This is an easy link to make, given that unemployment is so damaging to well-being (as well as to other indicators of health).
That unemployment is falling is good news - for well-being and for the economy. But what can we do for those who remain unemployed? How can their well-being be protected?
There are broadly three options available to governments (assuming that governments care about the unemployed's well-being, which is not altogether obvious).
One option is to implement a jobs guarantee scheme, as originally proposed by Richard Layard and now supported by the Labour Party. Depending on its form, a jobs guarantee scheme could essentially abolish long-term unemployment. Which would be, presumably, beneficial for people's health.
A second option, explored by me, is to reform training programmes for the unemployed. If programmes were more personalised, with more focus on work experience/skills and treated people with dignity, then they could be effective ways to reduce the mental health costs of unemployment.
A third option is more radical - and linked to the limitation of the previous two approaches. That is: what if these approaches simply reinforce the social norms attached to paid work? This could be problematic, as it is arguably these norms that are responsible for unemployment's negative effects on well-being. In other words, would a jobs guarantee scheme reinforce the ideology of work: the notion that Work is Good and, correspondingly, Unemployment is Bad?
The argument here then is that to truly deal with the negative impact of unemployment, you have to change the nature and status of unemployment itself. And this would require a far larger economic and social reorganisation than that implied by a jobs guarantee scheme or better labour market training programmes. It might require, for example, a strategy of reducing the number of hours we all work. Or, even more radically, introducing a basic income scheme.
In both of these strategies, a plausible outcome would be a blurring of the line between work and non-work: between employment and unemployment. Being 'unemployed' would mean less in a society where 'working' meant something altogether different.
Changing what it means to be unemployed is, however, a large undertaking. Yet we should be careful of supporting policies that might well aim to deal with unemployment's negative effects yet, in doing so, strengthen its (dangerous) hold on society.
That unemployment is falling is good news - for well-being and for the economy. But what can we do for those who remain unemployed? How can their well-being be protected?
There are broadly three options available to governments (assuming that governments care about the unemployed's well-being, which is not altogether obvious).
One option is to implement a jobs guarantee scheme, as originally proposed by Richard Layard and now supported by the Labour Party. Depending on its form, a jobs guarantee scheme could essentially abolish long-term unemployment. Which would be, presumably, beneficial for people's health.
A second option, explored by me, is to reform training programmes for the unemployed. If programmes were more personalised, with more focus on work experience/skills and treated people with dignity, then they could be effective ways to reduce the mental health costs of unemployment.
A third option is more radical - and linked to the limitation of the previous two approaches. That is: what if these approaches simply reinforce the social norms attached to paid work? This could be problematic, as it is arguably these norms that are responsible for unemployment's negative effects on well-being. In other words, would a jobs guarantee scheme reinforce the ideology of work: the notion that Work is Good and, correspondingly, Unemployment is Bad?
The argument here then is that to truly deal with the negative impact of unemployment, you have to change the nature and status of unemployment itself. And this would require a far larger economic and social reorganisation than that implied by a jobs guarantee scheme or better labour market training programmes. It might require, for example, a strategy of reducing the number of hours we all work. Or, even more radically, introducing a basic income scheme.
In both of these strategies, a plausible outcome would be a blurring of the line between work and non-work: between employment and unemployment. Being 'unemployed' would mean less in a society where 'working' meant something altogether different.
Changing what it means to be unemployed is, however, a large undertaking. Yet we should be careful of supporting policies that might well aim to deal with unemployment's negative effects yet, in doing so, strengthen its (dangerous) hold on society.
Wednesday, 24 September 2014
Things can only get flatter. Why are Labour miserable at the prospect of power?
A common observation from an assorted range of journalists is that the Labour conference this week in Manchester has all been a bit flat. Something largely confirmed by Ed Miliband's disappointing speech yesterday. On my own part, I've been milling around the conference since Sunday, attending various fringe events in which I've also been observing the mood of the party's MPs and activists.
The journalists, I think, are completely correct in their assessments. Of the events I've attended, MPs seem completely underwhelmed and unexcited by the prospect of power. This should be unusual. They are, after all, talking in genuinely probable terms about how they will plan to change the country in a matter of months.
So, what is going on? Why is the Labour Party - from its leader to its activists - so unenthused about governing again? All in all, there are seemingly three things going on.
The first is that, as everyone is now aware, Labour's ability to exercise power will be severely hampered by the fiscal restraints of the next parliament. In accepting the challenge to eliminate the deficit without significant tax increases, Labour has committed itself to severe spending cuts. The choice it can thus offer the electorate is a limited one: Labour will shift around the priorities of government but will not, and cannot, significantly shift spending plans.
The second is that, although Labour is close to power, this will be - at best - limp power. Based upon polling trends, the best case scenario seems to be a tiny majority for Miliband. A more probable scenario however is a hung parliament, with Labour in coalition with the Liberal Democrats. Personally, I think there might be benefits to working with the Lib Dems - but there is a strong, systematic aversion to a Lib-Lab coalition from many corners of the Labour Party.
Finally, there is the issue of whether Labour is psychologically ready for power. Political parties are just not used to regaining power so soon after losing it. Plus, the scale of Labour's general election defeat - and its context, set amidst the death of the economic model the party worked within and advocated for 13 years - means that five years is a short time to complete such a monumental political inquest.
Ed Miliband however has arguably done an impressive job in conducting this inquest - relatively peacefully and quickly. Yet, it remains unclear what Miliband's Labour stands for. It accepts the economic terms set by the Conservatives yet aspires to build a new form of capitalism. It talks of cutting Child Benefit but of a "big offer" on childcare. Labour finds itself in a position where power is unexpectedly, and perhaps prematurely, within reach. The question is, does the party really want to grasp it just yet?
The journalists, I think, are completely correct in their assessments. Of the events I've attended, MPs seem completely underwhelmed and unexcited by the prospect of power. This should be unusual. They are, after all, talking in genuinely probable terms about how they will plan to change the country in a matter of months.
So, what is going on? Why is the Labour Party - from its leader to its activists - so unenthused about governing again? All in all, there are seemingly three things going on.
The first is that, as everyone is now aware, Labour's ability to exercise power will be severely hampered by the fiscal restraints of the next parliament. In accepting the challenge to eliminate the deficit without significant tax increases, Labour has committed itself to severe spending cuts. The choice it can thus offer the electorate is a limited one: Labour will shift around the priorities of government but will not, and cannot, significantly shift spending plans.
The second is that, although Labour is close to power, this will be - at best - limp power. Based upon polling trends, the best case scenario seems to be a tiny majority for Miliband. A more probable scenario however is a hung parliament, with Labour in coalition with the Liberal Democrats. Personally, I think there might be benefits to working with the Lib Dems - but there is a strong, systematic aversion to a Lib-Lab coalition from many corners of the Labour Party.
Finally, there is the issue of whether Labour is psychologically ready for power. Political parties are just not used to regaining power so soon after losing it. Plus, the scale of Labour's general election defeat - and its context, set amidst the death of the economic model the party worked within and advocated for 13 years - means that five years is a short time to complete such a monumental political inquest.
Ed Miliband however has arguably done an impressive job in conducting this inquest - relatively peacefully and quickly. Yet, it remains unclear what Miliband's Labour stands for. It accepts the economic terms set by the Conservatives yet aspires to build a new form of capitalism. It talks of cutting Child Benefit but of a "big offer" on childcare. Labour finds itself in a position where power is unexpectedly, and perhaps prematurely, within reach. The question is, does the party really want to grasp it just yet?
Monday, 11 August 2014
Training programmes can improve the well-being of unemployed people - but there are hugely important caveats
For
the past three years, I have been exploring whether there is much we can do to
counter one of society’s most devastating ills.
It is associated with a wide range of problems: including poor mental health, social isolation and
even suicide. This is not a disease in the typical sense
but it certainly carries the characteristics of a ‘social disease’. It is, of course, unemployment.
The
best way to counter unemployment is to of course promote or provide
employment. But in an economic system
like capitalism, there will always be a ‘rump’ of unemployed people: no matter
how fair or equal a society is. The
question then turns to what we can do to help those who find themselves
suffering from job loss.
There
are lots of things governments can do.
They can, for example, provide social benefits to ease the economic
costs of unemployment. Over the past
twenty years or so however, one particular intervention has expanded in the UK
and beyond: training programmes designed to move unemployed people closer to
the labour market.
Training
programmes for the unemployed are a diverse range of interventions. And this is
a crucial point. People most often
associate such schemes with welfare-to-work interventions like the Work
Programme. Yet, whilst the Work
Programme is the largest such intervention, there are a huge range of other
programmes: skills training, education, work experience or, more simply,
‘keeping people busy’.
My
main research question is whether such programmes mitigate some of the
psychological, health and social costs of being unemployed. But why might this be the case? One argument is that being unemployed and on
a programme is very different to being unemployed and not on a programme. It involves more daily structure and
activity, social interaction and – if they are of sufficient quality – optimism
for the future.
Some
of my findings have just been published in the Journal of Happiness Studies and the results are fairly consistent: training
programmes are associated with higher well-being amongst the unemployed. Looking at data from the large-scale Annual
Population Survey, I found that unemployed participants had higher life
satisfaction, life worth and feelings of happiness compared to unemployed
non-participants.
This
is largely in line with the small number of studies from other countries – such
as the US, Finland,
Australia,
Sweden
and Germany
– that also show a positive well-being impact of training programmes for the
unemployed.
Yet,
it is not quite as simple as this. There
are, at least, three important caveats for future policy-making.
First,
the effect of training programmes is relatively small. Whilst it is a statistically significant
effect, it is not comparable to the well-being effect of paid work. In terms of happiness at least, training
programmes are certainly no substitute for a real job. Further, there is no effect of programmes on
reducing the anxiety of the unemployed.
Second,
there are only well-being effects for certain types of participants. Women benefit less, as do older unemployed
people and the more highly qualified.
Training programmes are not a well-being panacea for all types of
unemployed people and we need to explore why they are ineffective for large
numbers of participants.
Thirdly,
and perhaps most importantly from a policy perspective, specific types of
programmes are more effective than others.
In particular, there is a crucial dichotomy at work. On the one hand, programmes that focus on
skills, training and work experience – many of which are voluntary – have apparently high well-being effects. On the other hand, programmes that focus on
intensified advice – most of which are mandatory
– are completely ineffective. Vitally,
this includes the main welfare-to-work scheme the Work Programme, which I find
to be exactly the same as ‘open unemployment’ in terms of well-being.
So,
what is going on and why do some types of programmes have observable well-being
effects? One idea is that such
programmes mimic the ‘latent functions’ of paid work.
This the theory that work is good for well-being for a wide variety of
non-economic reasons: time structure, daily activity, social contacts,
collective purpose and social status. By
mimicking these functions, training programmes can improve well-being.
A
second idea, which has emerged from qualitative research I conducted in Greater
Manchester, is far simpler. This is that
the better quality and voluntary schemes might simply treat people with
dignity, respect and care. Unemployed
people often feel stigmatised and ashamed by their status. When they enrol on a programme where advisers
treat them with dignity - and give them the time and space to develop – such
feelings of stigma and shame can be challenged.
Sadly however, this is far from the case in the Work Programme, which
invoke in many people feelings of antipathy and hostility.
The
conclusion then is that training programmes can promote the well-being of the
unemployed. But only in specific
training contexts, for certain types of unemployed people and if they promote
the right type of values. On these terms
then, the Work Programme is certainly not the cure for the psychological impact
of unemployment.
Thursday, 19 June 2014
Labour's plans could destroy the welfare state, not save it
For some years now, social democrats have faced a 'crisis of the welfare state'. This is the dilemma of how to defend and protect social security when public confidence in the system is drained. So far, little progress has been made. The Tories are rampant: just like the NHS is natural Labour terrain, the welfare state has become a conservative issue.
Under Ed Miliband, there have been relatively few concrete proposals aimed to address the criss of the welfare state. The most important has been a job guarantee for long-term and young unemployed people: an offer that says 'we will provide you with work, otherwise you will lose your benefits'.
Today however marks a significant shift in Labour's welfare offer to voters. According to the Guardian, Ed Miliband will announce two key changes in a speech today. First, Jobseeker's Allowance (JSA) will be abolished for the 70 per cent of unemployed 18-21 year-olds who are currently low-skilled. Instead, it will be replaced by a much more targeted (and seemingly less generous) benefit that is tied to training. Second, more people will be subjected to means-tested JSA as eligibility for insurance-based JSA rises to five-years of National Insurance contributions from two years.
Purportedly, Labour's proposals are designed to mollify public distrust towards the welfare state and its perceived lack of fairness and reciprocity. However, many people have long been studying the causes of increasingly hostile attitudes towards welfare in the UK. And within these findings, two ideas have emerged that suggest Labour's proposals could have the opposite effect.
The first is that distrust of welfare is linked to the decline of the contributory principle. After decades of increased means-testing and targeting, many people feel they get little from the state in return for their contributions. This is the problem of getting 'nothing-for-something', not 'something-for-nothing'. Bizarrely, the spin from Labour appears to suggest that further shrinking the pool of people eligible for insurance-based JSA is a strengthening of the contributory principle. This is a strange and misguided logic: the contributory principle would be strengthened by an expansion, not contraction, of its practical application.
The second determinant of transformed attitudes is the changing views of young people. In a recent article, I argued that the most dramatic demographic shifts in welfare attitudes had occurred amongst the young. Twenty years ago, young people were the most 'pro-welfare' group by age, now they are the most 'anti-welfare'. The causes are complex and disputed - but it is highly unlikely that further restricting young people's access to out-of-work benefits will renew the bonds between Generation Y and the welfare state.
A good start for Labour would have been to expand the contributory principle, not further target it, whilst explicitly focusing on supporting young people, rather than restricting access to social security. If the causes of such deep, attitudinal change in the UK are indeed linked to the decline of the contributory principle and the changing views of young people, today's proposals by Labour could end up having the complete opposite effect. They could end up further destroying Britain's welfare state, not saving it.
Friday, 6 June 2014
There are better ways of helping long-term unemployed than punitive Help to Work
Originally published on The Conversation and written with Adam Coutts
There is now another slide in the UK towards American-style “workfare” programmes aimed at getting the unemployed back to work as quickly as possible. The evidence showing that workfare programmes actually work is mixed to say the least.
Under new rules, the long-term unemployed will face one of three options: daily meetings with Jobcentre advisers, six months' unpaid “voluntary” work or more rigorous training and support. There is of course a fourth option, one that explains why the reforms are so controversial: benefit sanctions.
The introduction of yet another layer of sanctions has reignited fierce debates about welfare reform. Is it fair to threaten people with destitution to get them into work? Do workfare placements take jobs out of the real labour market? And are there now similarities in the way we treat the unemployed and the way we treat criminals?
The evidence
But another key question is whether or not such programmes actually achieve what they set out to do. Fortunately for those interested in evidence-based policy, the DWP has conducted a large-scale pilot evaluation of Help to Work.
In fact, the evaluation was a randomised control trial: the “gold standard” in evidence-based policy. The first set of outcomes the DWP was interested in was the effect of Help to Work on employment trajectories and benefit receipt. In the initial report on the scheme, the researchers found no evidence of a statistically significant impact of Help to Work on re-employment.
The latest report – which had the advantage of a longer tracking period of two years – was barely more positive.
As Jonathan Portes has explained, there continues to be no effect of Help-to-Work on re-employment, although participants did spend less time on benefits over the two years compared to the control group. These are, to put it generously, modest achievements.
Health and welfare
As well as looking at labour market outcomes, the Help to Work pilot also examined the impact on participants’ well-being. In what has been a controversial and much debated agenda, the incorporation of well-being into policy has been significantly advanced by the current coalition government.
Health and well-being are hugely important factors in the context of unemployment and the transition to work. Decades of research has shown the deleterious impact that being unemployed has on mental health and happiness as well as affecting how long someone remains unemployed.
In recent years, we have argued that labour market programmes can improve the health and well-being of unemployed people. This is because they act as a supportive step in which unemployed people gain access to some of the benefits of paid work such as daily structure, social contact and a sense of purpose.
The evidence suggests that programmes which provide a supportive training environment, constructive work experience and tackle the wider problems that people have such as mental health issues, participants may gain a stronger sense of hope and self-efficacy: the belief that they themselves can get a job. Participation in these programmes have also been linked to reduced levels of depression and suicide rates.
In the initial evaluation of Help to Work, the researchers tested whether receiving intensified advice or participating on community projects raised the well-being of participants. Importantly, they found evidence of a barely minimal impact. Compared to the usual system of support, participants were no more likely to report higher life satisfaction, life worth or feelings of happiness, although participants on the community projects reported feeling less anxious.
Unfortunately, this evidence appears to have been ignored and consideration of health and well-being as important outcomes of policy has been abandoned.
A hard balance to strike
Should we be surprised that Help-to-Work will have little effect? Perhaps not. The international evidence on “active labour market programmes” – summarised by the DWP – shows they are hard to get right. There is little evidence, for example, that compulsory work activities are effective in boosting employment returns. Perhaps most importantly for Help-to-Work, this is especially the case for the most disadvantaged out-of-work groups.
But this does not mean that back-to-work schemes are always ineffective. The Future Jobs Fund – before being scrapped by the current government – was a surprising success story. The message is that training schemes must appropriately “fit” those they are trying to help, as well as being designed with particular local labour market conditions in mind. It is very hard to get a job where there are no jobs in the local labour market.
The question we must ask is whether the exceptionally modest effects of Help-to-Work programme justifies its expansion. And this is not just in economic costs, but in well-being ones as well. The use of pure and punitive workfare measures and sanctions may well increase instances of debt, food bank use, depression and ill health among those it is intended to help.
We need to seriously consider whether there are more effective – and less dehumanising and stigmatising – ways of helping the long-term unemployed. In areas where there are no jobs to go into could government policies such as back to work programmes be used to protect and promote the wellbeing of unemployed people during difficult economic times rather than make it worse?
We also have to look elsewhere for examples of how labour market programmes can be designed such as Scandinavia and Europe rather than continuously following the US work-first approach. Finland’s Työhön Job Search Training Programme is such an example which has been found to have both positive effects for the labour market and programme participants.
Finally is long-term unemployment really a problem because claimants see an adviser just once a fortnight? Or, alternatively, is long-term unemployment linked to more structural issues of labour demand, regional inequalities and ill health? Programmes such as Help-to-Work should be based on robust evidence about how to move people into the labour market: and, perhaps more importantly, on the reality of why people remain out of work.
Tuesday, 11 March 2014
Take part in my PhD project
As part of my PhD research, I'm keen to hear from people who have experience of - or are currently participating on - a welfare-to-work programme. In particular, I'd really like to speak to people on the government's Work Programme: their flagship welfare-to-work scheme.
If you are on or have been on the Work Programme - and would be happy to speak to me - please do get in touch on the e-mail address below. I'm particularly keen to hear from people in the North-West: so Greater Manchester, Merseyside, Lancashire and Cheshire.
All the interviews I am conducting are completely anonymous and confidential. To get in touch, either send me an e-mail on the below address or fill in the form at the bottom of the page.
E-mail: daniel.sage@stir.ac.uk
Thank you!
If you are on or have been on the Work Programme - and would be happy to speak to me - please do get in touch on the e-mail address below. I'm particularly keen to hear from people in the North-West: so Greater Manchester, Merseyside, Lancashire and Cheshire.
All the interviews I am conducting are completely anonymous and confidential. To get in touch, either send me an e-mail on the below address or fill in the form at the bottom of the page.
E-mail: daniel.sage@stir.ac.uk
Thank you!
Thursday, 13 February 2014
The politics of income tax (part 1): are the rich digging their own grave?
This is the first of two posts I'll be writing on the politics of income tax. This is an area I think has been underdeveloped in political and policy debates over the course of the Coalition's first term. This is probably for several reasons. Other issues (economic growth, immigration, welfare) have dominated and perhaps the government's most important tax reform - increasing the personal tax allowance - is ordinarily seen as a universal Good Thing.
In next week's post I'll be looking at the politics of raising the tax threshold (something I've briefly written about before). But this week I want to look at the politics of the top rate of tax, which has come down under the current government from 50p to 45p.
In justification of the top rate tax cut, conservatives tend to argue (or boast) about how much the very richest pay as a proportion of the total tax take. In their defence, this is true: the top 1 per cent pay around 30 per cent of all income tax revenues. It is an astonishingly high proportion - and an astonishing example of how reliant our tax system is on the very rich.
Implicitly, the people who use this defence of the rich hint towards the moral vigour of the richest and the value of their contribution to society. But there is also another, probably more accurate and certainly more popular, view: all this signifies is how much the rich are paid relative to the rest of society. In other advanced countries the rich do not pay such a high share: this is because (a) they earn relatively less and (b) the middle earns relatively more.
This can be easily illustrated. Imagine two societies (A and B) where population earnings both total £1m per year. In both societies, everyone who pays income tax pays the same rate on everything they earn: 20 per cent. This means that both societies have exactly the same tax revenue: £200,000.
However, the richest 20% in Society A earn £750,000 of the total £1m. In Society B, they take a much smaller, but still significant, amount: £400,000. This means that although the tax take for both societies is the same, there is a massive gap in the reliance on the rich. In Society A, the richest 20% pay £150,000 of the total tax take (75%), whilst in Society B they only pay £80,000 (40%). In other words, Society B imposes a smaller tax burden on the rich via a more equal distribution of incomes in the first place.
Thus, by emphasising the disproportionate contribution of the very richest, conservatives unwillingly draw attention to the enormous inequality in pay across Britain. And in doing so, they also point to the solution. If you really want a smaller tax burden on the rich, support policies that result in a much fairer distribution of incomes in the first place.
In next week's post I'll be looking at the politics of raising the tax threshold (something I've briefly written about before). But this week I want to look at the politics of the top rate of tax, which has come down under the current government from 50p to 45p.
In justification of the top rate tax cut, conservatives tend to argue (or boast) about how much the very richest pay as a proportion of the total tax take. In their defence, this is true: the top 1 per cent pay around 30 per cent of all income tax revenues. It is an astonishingly high proportion - and an astonishing example of how reliant our tax system is on the very rich.
Implicitly, the people who use this defence of the rich hint towards the moral vigour of the richest and the value of their contribution to society. But there is also another, probably more accurate and certainly more popular, view: all this signifies is how much the rich are paid relative to the rest of society. In other advanced countries the rich do not pay such a high share: this is because (a) they earn relatively less and (b) the middle earns relatively more.
This can be easily illustrated. Imagine two societies (A and B) where population earnings both total £1m per year. In both societies, everyone who pays income tax pays the same rate on everything they earn: 20 per cent. This means that both societies have exactly the same tax revenue: £200,000.
However, the richest 20% in Society A earn £750,000 of the total £1m. In Society B, they take a much smaller, but still significant, amount: £400,000. This means that although the tax take for both societies is the same, there is a massive gap in the reliance on the rich. In Society A, the richest 20% pay £150,000 of the total tax take (75%), whilst in Society B they only pay £80,000 (40%). In other words, Society B imposes a smaller tax burden on the rich via a more equal distribution of incomes in the first place.
How equality reduces tax reliance on the rich
Thus, by emphasising the disproportionate contribution of the very richest, conservatives unwillingly draw attention to the enormous inequality in pay across Britain. And in doing so, they also point to the solution. If you really want a smaller tax burden on the rich, support policies that result in a much fairer distribution of incomes in the first place.
Monday, 20 January 2014
Labour's compulsory skills training for the unemployed - would it work?
Labour's big announcement on welfare today is the proposed introduction of new skills courses in English and maths for people at risk of long-term unemployment. The idea is that around 10 per cent of new unemployed people (and even more who are long-term unemployed) have extremely poor basic numeracy and literacy skills. If the Government intervenes at an earlier stage, then unemployment will be brought down.
Putting aside debates about the conditionality of the policy (which will no doubt dominate many discussions within Labour today) would the policy work? Or is it just a policy gimmick, designed to make Labour look supportive - but tough- towards the unemployed?
In general, there are two main question marks surrounding the potential success of the policy. The first is the extent to which poor basic skills are actually the main barrier towards re-employment. Steve Fothergill, an expert on welfare-to-work at Sheffield Hallam, argues that poor skills are only part of the problem when it comes to unemployment. There are other important barriers too: such as poor health amongst many unemployed people and, in particular, the weak - and in some instances non-existent - demand for labour in certain parts of the UK.
Raising the basic skills of some unemployed people is thus a good move; but it might be relatively ineffective if it is unaccompanied by other policies as well. This is why Labour's job guarantee - a demand-boosting measure - is so important. But there should be other policies as well, designed to deal with the poor physical and mental health outcomes of many unemployed people.
The second question mark is implied by Rachel Reeves herself in her article for Labour List today. This is that unemployment is experienced by a far broader social demographic than those with low skills: such as managers, professionals, graduates and the high skilled. Reeves is right to say that the benefits system should do more to offer economic security to such groups - but what about offering more support to get back into work? Many people with long experience and high skills will find work anyway. But for others it will be more difficult to find a job. Basic skills courses for these people are irrelevant and there is nothing in the way of support proposed for them.
Poor basic skills are an undoubted barrier to work for many people - but they are not the only problem. The fact that in some areas there are just too few jobs to go around is a much bigger - and far more complex - barrier for governments to deal with. Many unemployed people also suffer from poor physical and mental health; and basic training courses offer nothing to those with higher skills.
Along with the job guarantee policy, this is a good start for Labour. But it must be accompanied by a wider range of measures to move people from welfare to work: ones that understand the reality of why people are unemployed.
Putting aside debates about the conditionality of the policy (which will no doubt dominate many discussions within Labour today) would the policy work? Or is it just a policy gimmick, designed to make Labour look supportive - but tough- towards the unemployed?
In general, there are two main question marks surrounding the potential success of the policy. The first is the extent to which poor basic skills are actually the main barrier towards re-employment. Steve Fothergill, an expert on welfare-to-work at Sheffield Hallam, argues that poor skills are only part of the problem when it comes to unemployment. There are other important barriers too: such as poor health amongst many unemployed people and, in particular, the weak - and in some instances non-existent - demand for labour in certain parts of the UK.
Raising the basic skills of some unemployed people is thus a good move; but it might be relatively ineffective if it is unaccompanied by other policies as well. This is why Labour's job guarantee - a demand-boosting measure - is so important. But there should be other policies as well, designed to deal with the poor physical and mental health outcomes of many unemployed people.
The second question mark is implied by Rachel Reeves herself in her article for Labour List today. This is that unemployment is experienced by a far broader social demographic than those with low skills: such as managers, professionals, graduates and the high skilled. Reeves is right to say that the benefits system should do more to offer economic security to such groups - but what about offering more support to get back into work? Many people with long experience and high skills will find work anyway. But for others it will be more difficult to find a job. Basic skills courses for these people are irrelevant and there is nothing in the way of support proposed for them.
Poor basic skills are an undoubted barrier to work for many people - but they are not the only problem. The fact that in some areas there are just too few jobs to go around is a much bigger - and far more complex - barrier for governments to deal with. Many unemployed people also suffer from poor physical and mental health; and basic training courses offer nothing to those with higher skills.
Along with the job guarantee policy, this is a good start for Labour. But it must be accompanied by a wider range of measures to move people from welfare to work: ones that understand the reality of why people are unemployed.
Tuesday, 14 January 2014
What is Ed Miliband offering the middle-class on the welfare state?
As the general election approaches next year, Labour faces two key challenges. The first is trying to revive some form of support for the welfare state. The second is attracting the kind of voters - i.e. middle-class ones, especially in parts of the south - that won Labour three majorities between 1997 and 2005.
In an intriguing article in today's Telegraph, Ed Miliband appears to be trying to kill these two very difficult birds with one stone. In the piece, Miliband argues that the fate of the middle-class is tied to the future of the welfare state. Whereas the typical sales pitch to Telegraph readers is usually centred around tax cuts, Miliband makes an explicit argument that middle-class prosperity can only be revived by an expansion of the welfare state. There are few concrete policies but Miliband highlights further/higher education, pensions and housebuilding as areas ripe for state intervention.
This is - as Miliband says himself in the article - a long way from New Labour's focus on "aspirational self-confidence". It is a much more (small-c) conservative vision of intervention than Blair's vision of the "active" or "enabling" state: one which seems to have far stronger emphasis on people's social and economic security than, for example, spreading opportunity or offering a safety net.
It is also a much more traditionally social democratic proposal, in which a larger, more intervening state plays a central role in how people's lives are shaped. It will probably annoy many liberal or conservative commentators but I doubt that matters much to Ed Miliband. The only thing that matters to him is whether his vision of a larger state appeals to the kind of people who read the Telegraph.
In an intriguing article in today's Telegraph, Ed Miliband appears to be trying to kill these two very difficult birds with one stone. In the piece, Miliband argues that the fate of the middle-class is tied to the future of the welfare state. Whereas the typical sales pitch to Telegraph readers is usually centred around tax cuts, Miliband makes an explicit argument that middle-class prosperity can only be revived by an expansion of the welfare state. There are few concrete policies but Miliband highlights further/higher education, pensions and housebuilding as areas ripe for state intervention.
This is - as Miliband says himself in the article - a long way from New Labour's focus on "aspirational self-confidence". It is a much more (small-c) conservative vision of intervention than Blair's vision of the "active" or "enabling" state: one which seems to have far stronger emphasis on people's social and economic security than, for example, spreading opportunity or offering a safety net.
It is also a much more traditionally social democratic proposal, in which a larger, more intervening state plays a central role in how people's lives are shaped. It will probably annoy many liberal or conservative commentators but I doubt that matters much to Ed Miliband. The only thing that matters to him is whether his vision of a larger state appeals to the kind of people who read the Telegraph.
Friday, 3 January 2014
Is welfare conditionality justified?
Conditionality is at the
centre of welfare reform. It underpins
everything that the Coalition – and before it New Labour – have done. Nothing is given away for free in the land of
social security: everything is tied up with conditions and consequences.
The major break with the
past came during the New Labour years.
This was when benefits for the unemployed and other ‘economically
inactive’ groups - like lone parents and the disabled - became increasingly conditional
upon certain behaviour, such as looking for work or participating on
welfare-to-work schemes.
The logic of
conditionality is twofold. First,
conditionality will improve employment outcomes: use a bit more stick and soon
people will be on their bikes. Unemployed
people need more ‘incentives’ to find paid work.
Second, it is only fair
that in return for income support, people should have to fulfil certain duties
and obligations to the rest of society.
This is the argument for rights and responsibilities: people have the
right to help but the responsibility to look for employment. No one has the right to a ‘life on benefits’
if they are capable of work.
Whilst the first argument
is more of an empirical one, the second is moral. Is it right to ask people to behave in a certain
way in return for social security? Or,
alternatively, is income support a social right that the Government should be unable
to remove?
Advocates argue that it is
fair to expect the able to seek work and that benefits must be conditional on
doing so. Expecting people to give
something back in return for help is a basic tenet of reciprocity; if people share
in the benefits of society, then they have a duty to contribute something
back. If we fail to impose these
requirements, we risk violating reciprocity and undermining social trust and
common bonds.
There are strengths to
this argument: unconditional benefits would allow people to live indefinitely
at the expense of others. Whilst the
common retort is that the number of potential ‘free-riders’ would be
negligible, ‘unconditionality’ would nevertheless endorse free-riding as
socially legitimate. To many people this is both economically dangerous and morally
untenable. Most of us go through life
carrying the responsibility to work: if a person is able, it is unfair that the
option to evade such responsibilities is made available.
However, the major problem
with this argument - and of much of the rhetoric surrounding welfare
conditionality - is the disproportionate attention given to benefit claimants. If welfare support is a contract there is by
definition another party involved: the state.
Yet in practice we hear
very little about what the responsibility of the state is. This is crucial: it is blindingly clear that
the responsibility to take a job does not exist irrespective of what is being
offered to people. The most extreme
example, proposed by the theorist Stuart White, is of a slave society. Few of us think that in such a society there
is a moral duty to work: to do so would be to cooperate in “our own
exploitation”.
What the responsibilities
of the Government should be are up for debate.
People from the Right tend to consider a job – any job – will do, but
many people rightfully expect more. It
is not just about providing any kind of work but the right kind of work: work
that can be meaningful, can match a person’s hopes and ambitions and can be
married with other aspects of life, such as home and childcare.
So in one sense the
Government is right: social security for people who can work should be conditional
upon taking up opportunities. However,
it is the nature and environment of these opportunities, and whether they are
even available, that is the deal breaker for justifying conditionality. Does a person with social anxiety have the
responsibility to take a job in a busy pub?
Does a lone parent have the duty to work evenings in a call centre? Does a medicine graduate have the obligation
to stack shelves?
Or rather, do people have
the right to a labour market that can provide them with fair, appropriate and
decently paid work? If this requirement
is satisfied, then it seems there is a strong case for conditionality. If not, as it actually appears, the case for
conditionality is weakened. The danger
then is of a government that exploits conditionality to coerce and to
stigmatise. And of a situation in which
people are enforced to oblige in their own exploitation.
This article was originally written for London Student
Subscribe to:
Posts (Atom)