Contribution and three questions for the left on welfare

This is a quick piece provoked by a discussion I’ve been following on Twitter today, revolving around whether or not Labour should structure its welfare policy around the contributory principle.

There are genuine and valid concerns being raised about the contributory principle.  Mainly, what about those who can’t contribute much/at all: young people, carers, disabled people and so on.  For many on the left, contribution should not be the governing principle at the heart of the welfare state.

What I want to briefly argue here is that people on the left should be arguing for contribution.  And this applies to two different groups: those who see contribution as an end in itself and those who should see it as a means towards the kind of welfare state they want.  To my mind, this position follows logically from the answers to three questions.

1. What kind of welfare state does the left want?

While there is a small but vocal wing on the left who are generally supportive of the existing welfare state (probably with more done on work incentives and labour market policies), I think there is a majority on the left (split between the ‘Blue Labour’ and traditional social democratic wings) who want to radically change the welfare state to win back public support for social security.  This generally involves a desire to see more generous benefits, the protection against new social risks and properly funded and dignified back-to-work and training programmes.  While there are differences and disagreements, I think more unites these two wings of the left on welfare than divides them.  In general, this is an argument for welfare expansion.

2. Where do the public stand on this vision?

Now this is where welfare policy gets tricky.  Public attitudes to welfare are volatile.  While there is a strong level of residual support for the idea of a welfare state, it is surely the case that any talk of ‘welfare expansion’ will fall on deaf – and hostile – ears.  There is thus a profound gap here between what many on the left want and where a large majority of the public tend to stand.  Which leads to question 3):

3. How do you expand welfare when the public are against your ideas?

Amongst those on the economic right of Labour, the response to this question has been: ‘you can’t’.  The nature of this strategy is to see public attitudes as immobile and predetermined. 

But this is the wrong strategy; not only is it defeatist and ignorant of the recent history of public attitudes, but it ignores the reality that, often, public opinion responds to what politicians say, and not vice versa.  Many on the left should thus see their vision of welfare expansion as ultimately possible.

However – and this is where contribution is important – this will take some time.  Shifting public attitudes is a long-term game and needs to be done incrementally.  Margaret Thatcher knew this.  The residual, stigmatising welfare state we have today is the end product of a 30 year journey.  When Thatcher first came to power, her radical plans to scale back social security were opposed by large swathes of the population.  In response, the governments of the 1980s and early 1990s implanted ideas and introduced change slowly.  Ultimately, as the present system testifies, they were victorious.

Labour should learn these lessons of history when it comes to welfare.  The road to a radically different and more generous welfare state will be long.  Contribution – while opposed by many on the left for good reasons – offers a way of increasing public support for welfare whilst boosting the protective powers of social security.  Whether Ed Miliband proceeds with this idea could define Labour’s election in 2015.

Does income equality make us happier?

I've been interested in the central claims of The Spirit Level for quite a while now.  And for those who have been in a bunker since 2009, its authors - the epidemiologists Richard Wilkinson and Kate Pickett - argue that the level of income inequality in a society determines a wide range of health and social problems.  Reducing income inequality, then, is a proposed cure for a whole batch of social ills.

I think in general The Spirit Level has increased the standard of debate around inequality.  No longer do we think of inequality in crass economic terms: will a bit more inequality make everyone a little bit richer?  Now we think about the social costs of inequality.  And part of this is how inequality makes us feel.

One of the key arguments of the pro-equality lobby is that high levels of inequality make us feel bad.  We might feel an injustice that others get so much more than us.  We might feel uncomfortable in places where people are different to us.  We might feel shame that we can't afford what others so easily can.

Turning this on its head, the opposite should also be true.  We should feel better when other people - especially those around us - are similar to us.  The world should appear more just, we should feel more comfortable and less ashamed of our social status.  But to what extent is this true?  Does higher equality make us happier?

Fortunately, data from the (now defunct) Citizenship Survey allow us to explore this further.  There is an interesting question from 2010 that asks people whether their friends earn a similar amount to them:

Subsequently, we can split people's answers into two categories: a) people who have friends who all have similar incomes to them (1) and b) people who don't (2-4).  In practice, 27% of the survey's respondents fall into category (a): what we might call the 'equal' group.  When we examine these groups against their average level of life satisfaction, we can see if there are any systematic differences.

In the Citizenship Survey, life satisfaction (once reversed) is measured on a scale of 1 - 5: where 1 equals 'very dissatisfied' and 5 equals 'very satisfied'.  The average score for the whole sample in the survey (11,063 people) is 4.1.  So where do the 'equal' and 'unequal' groups fit in?

As it turns out, the 'equal' group - those people whose friends have similar incomes to them - have an average life satisfaction score of 4.2.  The 'unequal' group - those who tend to have friends with different incomes to them (whether higher or lower) - have an average score of 4.1.

This is a relatively small difference, but it could be an important one.  And when we look at relationships like this we want to know whether such a difference is due to other factors.  It could turn out, for example, that having friends with similar incomes is correlated with other things we know increase life satisfaction: religion, where you live, age or having children.  So the next step is to assess the effect of equality on life satisfaction using multiple regression techniques that control for a whole range of variables that we also think are important for happiness.  In my model, this includes labour market status, education level, age, gender, region, income, religion and ethnicity.

Once we've done this, the results still suggest that having a strong level of equality within your group of friends is linked to a higher level of life satisfaction.  The effect is not huge (but it is statistically significant).  It is about a third of the size of the effect that marriage has on life satisfaction and a quarter of the size that having a job has.  If you want to be happy then, perhaps the old adage is true.

And don't make friends with bankers.

Is workfare really demoralising?

Workfare is a much disputed term.  In the strictest sense, it refers exclusively to work experience type programmes that unemployed people are required to take part in as a condition of social security: 'work for benefit'.  At a broader level, critics use workfare as a catch-all term to describe a wide range of welfare-to-work measures.

Whichever definition we use, the campaign against conditionality in the benefits system - spearheaded by groups such as Boycott Workfare - has come alive in the past year.  The catalyst was the public and media furore in February 2012 that accompanied the 'revelations' around Tesco's involvement in a scheme.

The various campaigns against 'workfare' often make certain assumptions.  In particular, that being placed on a workfare scheme is degrading and demoralising.  Critics often use human stories about the effect that compulsory referral has had on an unemployed person's morale and wellbeing.  The argument is that workfare makes the unemployed feel even worse than they do already.

There is no doubting the integrity of some of the claimants who have publicised their workfare journeys and the harmful experiences they've had.  However, to what extent are we exposed to a broad range of workfare stories?  Or, alternatively, are we merely hearing the voices of a small, vocal, well-educated and articulate minority of workfare participants?  Could workfare have different effects for different groups of people?

Data I'm looking at for my doctoral work support this view: that how workfare makes us feel - whether it makes us happier or unhappier - depends upon how well educated we are.  The data come from the Annual Population Survey 2011-12.  To clear this up, let's first look at the average level of 'life satisfaction' for selected groups within the labour market.  The higher the score, the higher the satisfaction.

Average life satisfaction score by labour market status

Employed : 7.52

Self-Employed: 7.53

Unemployed: 6.37

Welfare-to-Work: 6.55

As is clear, those in work - whether employed or self-employed - have significantly higher life satisfaction than those who are either unemployed or on welfare-to-work schemes.  This is not surprising; lots of research has shown that being in work is good for your general wellbeing and being out of work isn't.  Welfare-to-work participants have slightly higher life satisfaction than the unemployed, but not by too much.

However, let's next look at the welfare-to-work group more closely and separate it out by highest level of education.  Doing so will tell us whether the relationship between workfare and life satisfaction is similar for all participants irrespective of how educated they are.

Average life satisfaction score for welfare-to-work participants, by highest qualification level

Higher Education: 5.55

A-Levels: 6.30

GCSE: 6.66

Other Qualification: 6.71

No Qualifications: 7.54

The results are stark and the pattern is clear.  For people on welfare-to-work programmes who have been through higher education, life satisfaction is very low.  Much lower in fact than it is for the average unemployed person.  For workfare participants with degrees, then, the campaigners look right: workfare is demoralising.

However, workfare isn't as demoralising for other groups.  In particular, for workfare participants with no qualifications, life satisfaction is relatively high.  It's even around the same level, for example, as a person in paid work.  This strongly suggests that the effect of workfare on a person's level of life satisfaction is heavily dependent upon their education level.  

This evidence suggests that the stories we hear about welfare-to-work are unrepresentative of all participants. And in a digital age, when we increasingly consume information about policy through the internet, this is a cause for concern.  Online policy stories are often snapshots delivered by particular groups: the well-educated, the articulate, the confident.  Campaigning for policy change based upon the experiences of such vocal groups is a dangerous pursuit; especially for those who claim to defend the disadvantaged.

A note on 'Little Guy Conservatism'

Today, Conservative Home launched a week long series of articles on what Tim Montgomerie calls 'Little Guy Conservatism'.  This fits in with a now quite well-established debate in the Conservative Party about the need to reach out to working-class voters.   In its various guises, it has been labelled 'blue-collar conservatism', 'white van conservatism' and 'conservatism for the underdog'.  The hero of 'little guy conservatism' is, of course, the striver.

The basic idea behind Montgomerie's project is that the Tories, under Cameron, got modernisation wrong.  The Cameroons believed that voters disliked the Conservatives on social issues: immigration, crime, the environment.  The reality is, however, that the Tories failed on economic issues and public services.  Many people didn't trust the Conservatives on economic and job security; on providing good, well-funded and fair public services; and on making sure the rich paid their fair share.  In short, for the age-old political debate on how resources should be distributed, many people didn't think the Tories were on their side.

I actually agree quite strongly with Montgomerie's thesis.  The reason the Conservatives didn't win in 2015 is because people didn't trust them with their livelihoods.  There are now signs however that the top of the Tory Party are listening to these arguments.  This is evident in the decision to freeze fuel duty and the enthusiasm for increasing the tax-free personal allowance.

However, I think there are two forces working against this project; which, in the end, should make Ed Miliband sleep a little easier at night.  The first is that there are still many in the Conservatives who advocate slashing and burning public services, the welfare state, employment rights, minimum wages and so on.  This influence is also evident in the Tory high command.  Every time Cameron makes a speech, we're told about about 'The Global Race'.  This strand of thought works against the idea of blue-collar conservatives: that the Tories need to convince people their living standards and jobs are safe with them.

The second problem is how the project is framed by its key proponents.  It baffles me how Montgomerie et al can consider referring to 'little guys', 'white vans' or 'underdogs' makes them appear in-touch with the needs of ordinary, working- and middle-class voters.  It is a remarkably crude, tabloid caricature of working people, which treats them as a different species to the political class rather than the people that politicians should serve.  The problem is summed up in the image below, produced by Conservative Home, in which blue-collar conservatism is represented by dog food.  Until the brains behind this project realise that comparing your target electorate to dogs is unbelievably patronising and offensive, then I'm not sure Labour has too much to worry about.

The paradox of public opinion and welfare

I've just read this interesting piece in the journal Soundings about contributory welfare.  It's written by Graeme Cooke of the IPPR, with a response by Kate Bell and Declan Gaffney.  It comes at a time when the contributory principle - 'something for something' welfare - is enjoying a resurgence within certain centre-left circles.

This resurgence is largely because the centre-left is looking for a way to make welfare popular again.  And contribution is back in favour because of something I think we can call the 'paradox of public opinion'.

The paradox starts with the perception that many people don't like aspects of the welfare system.  In particular, they don't really like out-of-work benefits and - increasingly - certain universal payments.  Over several decades, and increasingly so at the moment, politicians (especially the Conservatives and the Liberal Democrats) have interpreted this as a public demand for greater means-testing.  To focus the system on those who need support the most.  Subsequently, as 'demand' has risen for means-testing, the use of it has gone up in the benefits system.

However, for those on the centre-left, the greater use of means-testing reveals a difficult paradox in public opinion.  This is that although the way to placate public distaste with the welfare state appears to be to respond to it by means-testing, such a response ends up creating a vicious circle.  One where the feeding of public 'hunger' for welfare cuts only creates a larger appetite.  

For many on the left, reasserting the contributory principle offers a hope of reasserting support for the welfare state.  This is because means-testing concentrates social security on an ever decreasing group of people, meaning that the vital ingredients of public support for welfare are lost: self-interest and solidarity.  Contribution could - the argument goes - revitalise both ingredients: by widening the pool of people who benefit from the welfare state and by making welfare more reciprocal.

When a man is tired of life, he might just be tired of London: regional wellbeing in the UK

As many people know, the ONS - supported by the Prime Minister - has been expanding its efforts to measure the population's wellbeing.  This comes at a time when a lot of academic and think-tank work has argued that governments should take far more notice of 'happiness' indicators to judge the success of policies.

In practice, these expanded efforts have involved including four new questions into the Annual Population Survey.  These new questions measure four dimensions of wellbeing:

• Satisfaction with life
• Happiness
• Life worth
• Anxiety

Part of my PhD is exploring the relationship between wellbeing and labour market status, especially differences between welfare-to-work participants and other unemployed people.  But as part of my work I must also look at what other factors are important in determining a person's wellbeing.  These include, for example, gender, marital status, age and religious belief.

I've also been looking at the link between where you live and wellbeing.  And in the course of this research an interesting trend has emerged.  This is that London - for each of the four indicators of wellbeing outlined above - always comes last.  

Take a look at the tables below, which rank each the 11 regions in order - from those with the highest level for a particular indicator of wellbeing to those with the lowest (except 'anxiety', which is runs from least to most anxious).  London is bottom in each league table and - if you look in at the hard numbers - it is often way behind.

I don't know any academic research that explores why this might be.  But there are certain things we know are linked to wellbeing that London might have a poor record in: inequality, community, the environment.  We also know the family is often important for wellbeing and, considering many people move to London away from their families to pursue work, this could also be a factor.  Finally, we mustn't rule out the idea of 'the rat race' that, if these figures are anything to go by, may have something to it.

More research is needed on the link between area and wellbeing, but the ONS evidence looks robust.  The relationships in the table above hold even when a range of other factors are controlled for: such as employment status, age, gender, ethnicity and many more.

For years, health and social scientists have pored over the so-called 'Glasgow Effect'; that is, the unusually bad physical health outcomes associated with Glasgow.  Now, it might time to start investigating a possible 'London Effect' for mental wellbeing.  And, if you want to know where to live, it should be obvious from the table above: South West is the best (and Scotland isn't too bad either).
 

How Labour can win the 'welfare war'

I've just read this paper - passed on to me by Duncan O'Leary from Demos (who is doing some interesting work on attitudes to welfare) - about public opinion on the welfare state in the US since the mid-1990s Clinton reforms.

The paper is set up in a remarkably similar way to my own recent publication on attitudes.  Specifically, the authors argue that the Democrats - very much like New Labour did here - adopted some of the language of the Right in terms of welfare to actually try and refashion public attitudes to be more favourable to left-wing arguments.  This is something that seems to have been forgotten in recent years.  The rationale at the time was that in order to make real progress on poverty and inequality, the Left needed to acquire popular support for its favoured policies.  And to do this, it had to recognise public concerns with the welfare state.

The consequences  - as we now know in the UK - have not worked out as the Left planned; with much tougher attitudes towards certain recipients of the welfare state (especially those seen as 'undeserving') and a generally poisonous press climate.  This has made it profoundly tricky - if not electorally impossible - for Labour to defend social security.  Even the party's announcement last week of a Job Guarantee programme for all long-term unemployed people - something you'd think might appeal to all shades of Labour - drew the ire of the party's left for its accompanying emphasis on toughness, sanctions and personal responsibility.

The results from the US are broadly comparable, with welfare reform having no success in producing more favourable attitudes towards social security policies.  Whilst American attitudes have not undergone as deep a transformation as British ones, it is worth remembering that US opinion was already at a much lower base of support than in the UK.

So what are the messages from these very similar stories?  Well, firstly, the experiences in both the UK and the US suggest the opposite from what many commentators seem to accept as a truism: that politicians respond to public opinion.  Rather, the shift in attitudes in both countries strongly implies that what political parties say can have a significant effect on what the public think.  And once Labour realise this, they will be liberated from the destructive game they so often seem to play with the Conservatives on welfare.

The second message is argued by the authors of the US paper.  This is that for policy areas like social security - in which there is little 'proximity' to most people's lives - the 'visibility' of political messages becomes increasingly important.  This means that people pay little attention to policy detail and pay a lot of attention to policy message.  We can see this phenomenon at play in the debate about the benefits cap.  It won't affect the majority of people: so the Coalition frame it as a symbolic policy, about what is fair and what is not.  Labour, alternatively, complain about the sloppy detail of how the policy has been made and voice concerns regarding its consequences.

To win what some are already calling a 'welfare war', Ed Miliband and Labour need to learn two lessons from how public attitudes have shifted in the past decade.  First, that it is in Labour's power to shift the terms of debate.  And second, that in order to do this, it will have to win a war of hearts, not just of heads.