The government’s central strategy for welfare is to get more people into jobs: welfare-to-work, to use the conventional shorthand. What is still unthinkable is a strategy for welfare beyond work: taking steps to improve the lives of people who will remain out of the labour market if not permanently then for significant periods.
Consider the following:
– Five million adults and two million children live in workless households headed by non-pensioners who are unemployed, disabled or lone parents.
– The New Deal for Young People found jobs for 100,000 in its first year, with an eventual target of 250,000; the New Deal for Lone Parents, admittedly at an early stage, has resulted in jobs for 16,000.
– One in five men aged 45-64 is not working; someone not working in their late 40s has a worse than even chance of ever working again.
– While overall unemployment is the lowest for two decades, over that period Britain’s biggest cities have lost 500,000 jobs while the rest of the country has gained 1.7 million. A recent Joseph Rowntree Foundation study found that people in these cities face a continuing “jobs gap”, suggesting that “supply-side” measures helping individuals to find work will not be enough.
So we can safely predict that, no matter how successful the government’s jobs schemes are, the number of people in non-working households will remain in the millions. The link between the growth of poverty and the growth in workless households is indisputable. For example, a child with a lone parent has a 30 per cent chance of being in poverty if the parent is working, against a 90 per cent chance if she is not. Yet moving all lone mothers into jobs is not on the UK agenda. Ending child poverty is.
A fundamental issue is therefore the income of people on benefits, which has fallen by 20 per cent relative to average earnings since benefit upratings stopped being pegged to the rise in earnings in 1981. The overall principle of providing a basic income floor that is in some way linked to today’s living standards has been restored for pensioners. But the principle has not been applied for working-age families, even though the Chancellor, Gordon Brown, has given some selective help to those out of work, through increased child allowances. The issue will have to be addressed if the government is serious about its long-term plan to end child poverty.
A policy of welfare beyond work, however, needs to do more than simply provide people with the means to survive. The greater challenge is to stop regarding anyone outside a steady job as “idle” or “dependent” and to help them to become active and valued members of society.
First, consider lone parents. The present system tacitly values their contribution in raising children by not forcing them to look for work as a condition of benefit (in contrast to the United States). Yet it does so in an odd way: it keeps them on a pittance; it does not distinguish between the work obligations of a mother of three toddlers and one with a single 15 year old; it claws back any part-time earnings above £15 from jobs that occupy fewer than 16 hours a week. Far from lauding their contribution, society tends to regard lone parents as pariahs.
A system that linked income and obligations more directly to the situation of lone parents might help to improve their social status. First, the government could oblige them to seek part-time work when their children were at school, but at the same time make more generous payments when they do have to survive on benefits.
Second, it could create much better incentives for lone parents and others to take up casual work that might supplement their income and build self-confidence and skills. At present all the incentives lead people to refuse work entirely until they can obtain relatively secure jobs, since frequent moves on and off benefit are difficult and in-work subsidies such as the working families tax credit do not kick in until they work at least 16 hours a week. These rules were not designed for today’s piecemeal working patterns.
A tougher case is that of the non-working over-50s, who are typically far more distant from the labour market than lone parents. Many are on incapacity benefit and view themselves as semi-retired. Yet they are in limbo because, unlike fully retired people, if they go out and do unpaid work in their local communities, they risk being deemed fit for work and hence losing their benefits. There is therefore a case for doing more to encourage such voluntary activity, perhaps by redefining benefit eligibility in terms of labour market disadvantage, rather than incapacity.
Ministers are naturally wary of creating a system that pays older people benefits to do voluntary work on the basis that they are unable to get work to support themselves: such an expectation may become self- fulfilling. But the mistake is to draw too sharp a line between stable employment and everything else. The best solution for many older people will be a shifting portfolio of casual work, self-employment and unpaid activity. The first step is to build networks in their own communities, and that may have little to do with looking actively for work. So the personal advisers staffing the new, unified, “work-focused” gateway for all claimants (dignified with the designer brand-name “One”) would do well to interpret their role extremely flexibly. A service that in the first instance stressed activity, rather than necessarily paid work, could improve social and personal well-being. It could also make eventual financial independence more likely.
On both sides of the welfare argument, people remain reluctant to talk about a social engagement beyond work: the moralists think that paid employment is the only route to righteousness, while those on the other side think that all forms of activity should be fairly remunerated in the name of social justice. Both are out of date in so far as they project a traditional concept of work as the golden answer to welfare. J K Galbraith put the role of work in some perspective last month in a lecture at the London School of Economics:
“The word ‘work’ is our most misleading social term. It designates the occupation of those who would be very unhappy without it. And we use the same word for hard, repetitive, even physically painful toil. No word in the English language stretches over such different conditions. There is, further, the perverse fact that those who most enjoy what is called work are those who are best paid. And they are also allowed the most leisure.”
Donald Hirsch’s “Welfare Beyond Work: active participation in a new welfare state” is just published by the Joseph Rowntree Foundation (£10.95 from YPS, 64 Hallfield Rd, York YO31 7ZQ)