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February 20, 2012

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Ralph Musgrave

Chris, A few mistakes in the above post, I think.

Re the “outrage” at firms getting subsidised or free labour, what’s the reason for the outrage? The Western countries have implemented HUNDREDS of different employment subsidies since WWII that involve supplying subsidised or free labour to firms. If you have some fundamental reason for thinking this sort of measure is immoral, or something like that, let’s have the reasons. (I’m 100% any such reasons can be demolished.)

Re the idea that the unemployed could do useful “public work”, that was first tried in Greece 2,500 years ago by Pericles. The big problem is that there just aren’t a huge number of such jobs: unless you want blatantly unproductive jobs: leaf raking, etc. The public sector just isn’t too good at creating less skilled jobs, as compared to the private sector. Plus, the private sector results in better post “subsidised employment” histories for those involved as compared to public sector jobs. See this paper (and others by the same authors):

http://ideas.repec.org/p/iza/izadps/dp154.html


Raphael Malek

If you were able to implement the above recommendation, would the 'unemployed' work for 40ish hours a week (at an hourly rate well below the minimum wage) or for 11ish hours a week (at the minimum wage)?

Ralph Musgrave

“But maybe the sort of workfare I have in mind could gradually become” standard public sector jobs (and/or jobs in private firms fulfilling government orders). Why the “gradually”? Why not just create those public and private sector jobs NOW? I think there is something wrong there.

“Note that I’m not saying that the unemployed be coerced into such a scheme either…”. Hang on: Workfare on most definitions of the word incorporates an element of coercion.

In fact this coercive element is impossible to avoid for reasons spelled out by the Swedish labour market economists, Calmfors. Google “Calmfor’s iron law of active labour market policy”

Re the Works Project Administration, I demolished this idea here: http://mpra.ub.uni-muenchen.de/19094/

JustAnotherTaxpayer

This "outrage" over workfare is either either fake or totally irrational. The left has revealed its true shallowness over this issue.

I am "outraged" that the state should subsidize the lifestyles of those on the minimum wage through the benefits system which places weight on in-work benefits. Outraged, I say! Why should the state allow these people to exploited by EVIL CAPITALISTS?

We must set the minimum wage to £25K/year - a true "living wage" for all workers.

Luis Enrique

isn't this just a case for hiring the long-term unemployed at whatever the prevailing wage is (as opposed to asking them to work for their benefits, a lower sum).

of course the government should be hiring people to do useful public works anyway (wherever the benefits > cost) but you list what might be thought of as positive externalities, or additional benefits at any rate, when the worker is from the pool of the long-term unemployed. Doesn't that just amount up to changing the cost benefit equation in a fashion that suggesting hiring more of them?

Luis Enrique

Why be outraged by the state supplying free labour to firms but not outraged by the state supply free* labour to the state?

imho what matters when it comes to workfare for the young (as opposed to the long-term unemployed) is whether it really increases their chances of getting a job. If it does, it's helping them, if it does not, it's just cheap labour for firms.

[* I mean free relative to the counterfactual of continuing to pay them benefits anyway, not free in absolute terms]

Account Deleted

Subsidised work can be just as effective in boosting well-being as normal employment, but this is tied to the quality of the work. Crappy McJobs don't tend to make people happy, whether subsidised or not.

The same point applies to the networking potential. Working in a mixed environment not only gets you job leads, but it helps socialise youth by exposing them to older workers. Working with shelf-stackers on the minimum wage, many of whom are vulnerable adults themselves, is not as much of an opportunity as being an intern for Stella McCartney.

If workfare jobs are not "real" ones, in the sense that the work would never be sufficiently valued to produce a living wage, then they should be judged solely on their success in improving the recipient's well-being and opportunities for real work.

If workfare jobs are real ones, then the employers should pay a proper wage and we can avoid the need for subsidy.

Jodi

Check out this new fact check website:

htt://www.votefacts.org

JustAnotherTaxpayer

"it's just cheap labour for firms. "

And, what's the problem? Are minwage jobs "expensive"?

Do you ever want the unemployed worker idle rather than producing real output?

kinglear

Workfare for the state would require an army of people to be employed ( ergo quite a reasonable idea at the moment) to look after it ( think of all the health and safety issues for a start)I personally don't think raking leaves is pointless - nor is getting rid of graffiti, chewing gum and rubbish. I would happily subscribe part of my taxes to be put towards this.
More importantly, there was a TV programme recently where in an unemployment black spot, half a dozen people who said they wanted to work were actually given jobs.
3 of them didn't turn up the first morning, and another arrived 2 hours late. One employer got a Pole to show the new employee how to do a very simple task and the new man said he wouldn't take instruction from a foreigner. Yet another employer had to let the person go because they were doing the job at about half the rate of the eastern europeans he employed, even after a month's trial.
So a)in this country today we are probably at the point where it would be hard to get quite large numbers of unemployed to do ANYTHING worthwhile and b) employers prefer the largely better educated Poles/Czechs/Latvians etc etc that WANT to work and do so quite happily

Luis Enrique

kinglear can you remember what that programme was?

John Moss

Workfare is a sensible way to get more for the same out of local, taxpayer funded services, while helping people back to work.

My street is "cleaned" once a fortnight by my Council. However, this is a cursory whizz by in a sucker truck and the pavements rarely get touched. Fallen leaves can lay sometimes for months and last year they had been snowed on twice before the Council finally responded to the death-trap they had become.

If the guy with the trolley and brush had five helpers, they could do five times as much work, so, my street would get cleaned every two days, or it could be cleaned every week, but properly. Those leaves could be making compost by the time the snow comes.

Say the helpers were asked to do three days work in return for their continued benefits, leaving two free to look for work? That's not unreasonable.

They get work experience, we (taxpayers) get cleaner streets and the guy with the trolley also benefits because he can now claim experience of supervising people, go on to a better job, creating a vacancy, say, for somebody who previously was one of his helpers.

What's not to like?

Jon

But if they're doing work, they're not actually unemployed, are they? They're workers, doing labour in exchange for renumeration. They're only unemployed in the bureaucratic sense - the state doesn't recognise them as workers.

If they're workers then they should have the same rights as other workers. To say otherwise is really an ideological commitment - the idea that the state can't create employment, that the only legitimate work comes about through market forces.

There's also a further question that I think comes up when you consider what institutionalising such a system would do. What do the incentives look like? I don't mean for workers, I mean for employers. What are the incentive for employers going to look like when free (to them) labour is a viable option for low skilled work?

Rob

We could have full employment very easily, so long as we don't mind either:

a) people doing jobs they don't want to do

or

b) people doing jobs where the cost of paying them to do it is greater than the amount that anyone would voluntarily pay for it

In all likelihood, we'd get both. At one extreme, we could pay people full benefits and then auction off their labour time to employers, with no reserve. Everyone would find work quite easily, and everyone on such a program would be financially better off than they are now. They'd just be doing horrible work for which they have no personal enthusiasm. Maybe the camararderie, social aspect and 'status' that comes from having work would offset this, but I'm not convinced.

At the other extreme, we could pay people to do "public works". We already do this for middle class professionals in 'the regions', as most of the country is known ('development knowledge resource coordinators' and so on). The main problem is that it's actually quite hard to identify useful things for people to do, and to coordinate them to do it. The regional development agencies got away with pretending that they knew how to do this for most of the last 20 years, but their ability to keep the scam going had more to do with their excellent PR (particularly the claim that everything was being paid for by 'Europe') than any demonstrable success. Trying to find valuable work for "unskilled" people is even harder. Limiting the scheme to the public sector just compounds the problem.

Any system that compels people to work against their will, or tries to pretend that useless work is useful, will ultimately fail. Trying to justify it on the grounds that it will help people to make friends, or that it will lead to higher benefits, ignores the fact that we could do those things now, without the compulsion or the waste. We could solve the incentive problem and the social justice problem by turning benefits into a basic income.

Luis Enrique

ta JAT

therealguyfaux

The WPA was filled with many artistic types whose jobs were secured through being the politically-correct party at the time; much of the public works buildings had third-rate murals inside or statues outside. Most writers were diverted into writing travel-guides (for whom? The Joad family?) Actors and directors were sent to remote saharas of the beaux arts, as Mencken called smalltown America, to put on Bertolt Brecht/Clifford Odets-type plays. And Handicrafts people made "boondoggles," from whence the expression originated.
At the time, a joke that was going around was that WPA stood for We Play Around. How will any new such programme escape the structural patronage/money-wasting aspects of the Franklin Roosevelt-era programme, and more to the point, who polices it once in place to curb abuses?

Mark

I have to agree with Raphael's comment. The minimum wage is £6 odd an hour. If JSA is £67 then fair enough, have the person 'work' 11 hours (minimum wage)for their benefit. This is still work experience and could be placed on a CV. Anything more than 11 hours is straight forward exploitation and thus free labour.

Rupert Evered Hardy

so

1. where are the jobs?

2. I will if you will - haha

3. what's democratic about 'workfare' - unless you are happy living in a fascist country like UK 2012????

Lucy

Urm...the people in workfare are being paid, they are being paid my hard earned tax money that I pay? Which I could really rather do with. I'd rather them be earning that money than be sat about on their arse expecting it. Welfare needs to be cut.

Lucy

All these people moaning about workfare and hows its slave labour, what are you doing to create jobs? Are you setting up a business and employing people? No? Well thats just the attitude of this country. Lazy and LOVE to moan. Its easier to sit about and do nothing and just moan about it on the laptops you can afford to buy!
People have NO idea the luxury life we live in here in England. No idea at all, everyday is paradise to us. I would love to see people be able to live a week in Zimbabwe, Liberia or Somalia.

Mark

Oh dear! Let's compare our lot to the third world. I work, I work hard. I've also been on benefits. I can assure you that £67 pw is not a luxury. Try paying water rates, gas & electric and so on. And before you say these are luxuries, they are not when they get cut off due to none payment.

JustAnotherTaxpayer

"where are the jobs"

There is a good argument that workfare is just a trap for lefties to fall into. Some evil Tory masterplan. Lefties will show how completely stupid they are by saying things like:

a) we should not subsidize evil capitalists in the benefits system

b) there is no demand for labour at £0/hour

Seriously. How stupid can you get, guys?

I mean, you can make (b) true by saying the labour force has been deskilled after 13 years of public sector non-jobs, but, how stupid would a LEFTIE have to be to make THAT kind of argument. Oh, wait.

Keith

The real problems with this idea which I assume is a Trotskyite make impossible demands of the capitalists device;is that it involves the issue of 1, the relative pay of workers and of other income recipients. Should anyone be paid for work only a level of income defined by benefit levels and the pay rates of people with very low bargaining power in the actual capitalist Labour market? 2, any employment floor from a left perspective requires Trade union membership rights and collective bargaining rights. The popularity of workfare schemes and active Labour market policy for the conservatives is it is another way to weaken Unions. Real collective bargaining rights would drive up all wages under such a policy. 3, assuming it was applied and did drive up wages then you have the same need to expand money supply and possible inflation problems as other forms of demand stimulus. Your actual reason for making this argument is to establish that it will not happen under capitalist anti union neo liberal norms.

A final point to consider is that leisure is a positive good providing you have some minimum income and maybe the market does not provide a adequate test of that inherent value? It is only in a society and culture dominated by commercial values that money and wealth and work are valorised as virtue. The likes of socrates or the vagrant monks of india distain money and commerce. Forcing people to work even if it did make them happy is not in accordance with a Liberal philosophy of life. Is it not like trying to force people to be religious on the theory it will make them happier? That leads to an inquisition.

JustAnotherTaxpayer

"Forcing people to work"

Yet more leftie hand-wringing BS. "Force" is what the state exercises when you refuse to pay due taxes. It will be, in its ultimate form, physical.

The state will exercise no force here, it will simply withhold JSA. Economists have a word for this: "incentives".

Steve Williams

Yes, the incentive not to starve to death.

Keith

"The state will exercise no force here, it will simply withhold JSA. Economists have a word for this: "incentives"."

Yet more Fascist right wing hand-wringing BS.

The state will exercise no force here, it will simply threaten people with destitution unless they make Tesco etc even bigger profits.

See what I did? Am I not clever. Lets define freedom as not having to pay tax and all other limitations on freedom can be ignored. An old and unconvincing trick.

JustAnotherTaxpayer

"Yet more Fascist right wing hand-wringing BS."

Yeah, just like the Working Tax Credit is a manifestation of fascist right-wing BS, because it gives people an incentive to work not starve. You want to go down this road, where benefits cannot be conditional on work? Really?

"make Tesco etc even bigger profits"

Your dislike of the profit motive clouds your judgement. Why do you prefer that people sit idle, rather than producing real goods and services?

Jim

I think you should all watch that BBC documentary linked to above by JAT (the one done by Evan Davis in Wisbech in 2010).

Then come back and give your views on how many of the unemployed actually want to work (or indeed have any incentive to work, given the benefit system).

fake

If a job is worth doing, someone is likely doing it.

Housebuilding, street sweeping, shelf stacking.

So whether it is Tesco or the government, someone is getting "free" labour, and so somebody else isn't getting paid for doing the same job.

Now you may argue that long term it will create more skilled (or less lazy) workers = more employment = more wealth = further employment.

If you think that is the case, then why does it matter who gets the free labour, as long as anyone can sign up for it.

הכנסה נוספת

agree with Jim. you should see the whole picture.

Jim Denham

Big Bill wasn't the only one who had musical thoughts about the WPA:

W.P.A.

Louis Armstrong & The Mills Brothers (Decca, 1940)

Louis Armstrong:
Now wake up boys, get out on the rock
It ain't daybreak, but it's 4 O'clock.
Harry (?) Mills:
Oh, no, no, no, Pops, you know that ain't the play.
Louis Armstrong:
What you talkin' 'bout, it's the W.P.A.

The W.P.A.
The W.P.A.
Sleep while you work, while you rest, while you play
Lean on your shovel to pass the time away
T'ain't what you do, you can die for your pay.
...The W.P.A

Louis Armstrong:
Why work for a living, that's all so passe
...The W.P.A

etc, etc.


Metatone

JAT - I object to providing Tesco with free labour because the government won't provide my business with the free labour.

Why should the government be subsidising Tesco (and other large firms) in their competition with smaller firms?

Jim

@Metatone: have you actually asked it? Because if you haven't the requirements for your 'free' labour may be higher than you think:

http://cityunslicker.blogspot.com/2012/02/slaves-cost-more-than-you-think.html

Shuggy

Agree, from experience, about the benefits of working. But why should the tax-payer subsidize corporations to have people working for less than the minimum wage?

Electro-Kevin

It seems odd to me that we have around 6 million on assorted benefits and are relying on immigration to get unskilled work done.

There should be no benefits for persons within range of suitable work.

The 'right' to be unemployed because the available work - offered at statutory minimum wage and conditions - is disliked is a right which this country can no longer afford (as though it ever could !)

With this precept in place we probably wouldn't need Workfare in the first place.

ejh

You want people building houses on workfare? Really? How well built do you think those houses will be?

Peter Davis

After reading the article and the posts, there are some issues that still need to be addressed:

+ The education system must focus more on preparing students to do physical jobs
+ Funding for workfare should come from money now earmarked for welfare programs but also by systematically reducing the size and scope of useless government programs. This means that many government employees would eventually lose their jobs
+ Workfare projects should be chosen by local communites on a plebiscite basis
+ Private contractors should bid on the jobs rather than establish another government bureaucracy to manage them
+ Wherever possible, workfare jobs should be based on piece-work
+ Those unemployed should be given a choice: accept a workfare position or lose cash benefits. Those refusing to work are probably marginally competent or mentally disturbed. It would be reasonable to provide them with basic food and lodging but only a tiny amount of cash.

Accomplishing a viable workfare program would be truly revolutionary.

hrsaccount

I agree peter!

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