Workfare in Context

This post was written by Jacob on February 19, 2012
Posted Under: Economy,Uncategorized

This week has seen a huge furore over the Government’s “workfare” scheme, whereby unemployed people, and those on disability benefits, can be forced to work for 30 hours a week. If they refuse, they can have their benefits removed for a period of three months. Amidst the uproar, I thought it might be worthwhile to detail some of the other work- and benefit-related policies that currently exist in the UK, to make clear that the workfare scheme is not anomalous, but rather that it is part of a systemic attempt by the Government and business to drive down wages, and to exploit the most those who suffer most in the current financial crisis.

Minimum wage

In 1999 New Labour introduced the national minimum wage in the face of fierce opposition from the Tories, then in opposition. The current rates of minimum wage are as follows: £4.98 per hour for 18-20 year olds, and £6.08 for 21+.  Significantly, these numbers fall short of the “living wage”, which is the estimate of what someone needs to earn in order to live “outside of poverty”. The official figures for this are produced by the Greater London Assembly’s Living Wage Unit. The current living wage is £8.30 per hour for London, and £7.20 per hour outside of London.

Workfare

It is probably best to begin by outlining the “workfare” scheme as it currently exists. Under this scheme, those who have been unemployed for a number of months can be forced to work 30 hours a week for no more than their jobseekers’ allowance. JSA at current rates is £53.45 for 18-24 year olds, and £67.50 for 25+. By dividing these figures by thirty (the number of hours work), we get hourly rates of £1.78 for 18-24 year olds, and £2.25 for those aged 25+.

Apprenticeship Schemes

In October 2010, the Government launched its first major attack on the minimum wage, by introducing a special rate for “apprentices” at £2.50 per hour. Last October this was upped to £2.60. This work can be paid at this lower rate for up to a year, after which point the standard minimum wage applies so long as the apprentice continues work for the same employer. Significantly, the Government’s definition of an apprenticeship is essentially nothing more than “full time work + gaining a qualification.” What this means in reality, is that by throwing in the possibility of getting an NVQ, a BTEC, or a “key skills” qualification, any employer can now pay a worker less than half the minimum wage. The laws also, therefore, give financial incentives to not offering employment at the end of an apprenticeship, as the employer would have to pay the national minimum wage. Instead, it is cheaper to keep contracts to a year, and each year employ a new apprentice at the cheap wage rate. It is notable that for workers age 25+, the apprenticeship rate is only 35p more per hour than Jobseekers’ Allowance/Workfare. Apprenticeships have been rolled out not only in private businesses, but in local authorities, and in the higher education sector. This massively underpaid work is now holding together the country’s infrastructure.

The Big Society

The “Big Society” was the flagship policy of the Government in its first year. The idea was to encourage huge amounts of “volunteering” (otherwise known as entirely unpaid work.) Whilst the idea hasn’t exactly taken off in all sectors, one place that it has is in preparation for the Olympic Games, where the Government has attempted to recruit 70,000 volunteers. Lloyds TSB has predicted that the Olympics will generate £10bn for the UK economy. No doubt, much of this money will head straight to the pockets of multinational companies, such as McDonalds, who have guaranteed a monopoly on food sales in the Olympic park. It is hardly a surprise that people working for no money at all can produce large profits.

Prison work

Perhaps the most super-exploited workers in the UK are prisoners with jobs. They have a minimum wage set at £4 per week, with the average wage being £10 per week – while Justice Secretary Kenneth Clarke has suggested that prisoners should work 40 hours per week. This would give a minimum wage of 10p per hour, and an average wage of 25p per hour. The UK prison population hit a low of about 45,000 in 1993. Today this figure stands at approximately 97,000 allowing for huge inputs of labour at minimal cost to businesses.

This affects all of us

It is often assumed that these schemes of work only affect the unemployed. But the truth is that they affect everyone. Unemployment figures are tricky things, but what is without doubt is that there are huge numbers of people out of work who want to be in work (even the most conservative estimates from the Office of National Statistics, find six jobseekers per vacancy. And in some areas, particularly urban centres, these statistics are much much worse. What this means is that there is a huge demand for employment, and with that demand employers can afford to pay less for work. High unemployment leads inevitably to suppression of wages for all workers – all employers can find someone who will do the same work for less money. To an extent workers have been previously protected by the national minimum wage. But as we have shown, this has been massively attacked by the workfare programme, the new minimum wage for internships, the ‘Big Society’, and the possibility of super-exploitation of prisoners. All of this adds up: the Government believes that the way out of the crisis is the provision of hugely exploitative cheap labour to increase profitability for employers. In real terms, that means they believe in a policy of impoverishment and immiseration of everyone who isn’t an employer.

Living and dying with benefits

It should be remembered that the current benefit schemes fall significantly short of what is necessary to live. Those who are unemployed will live in poverty. In 2009 a statistic slipped out: in one area of the UK, 15% of young people who are “not in education, employment or training” are dead within a decade. The Government are keen to claim that today’s mass unemployment is a result of people being “workshy”, but if this were true, then there would be no demand for apprenticeship work at half the minimum wage. Indeed, the Government are determined to claim again and again that mass unemployment is anything but a structural problem (as if, since the crisis hit in 2008, a million people quite randomly lost the ability to work.) Last week, the Guardian produced an excellent video on the lack of work available. The Government’s current strategy will condemn more and more people to poverty whether they work or not. As a solution, the Government suggest “entrepreneurship”. By this, they imagine a magical solution to all of the ills of mass unemployment. If only, they believe, the unemployed would think harder, would become more entrepreneurial, they will drag themselves out of poverty. What the Government has failed to notice, is that the most entrepreneurial people in today’s society, the managers of large businesses and corporations, and indeed the Government itself, are making their profits from employing large numbers of people at less than the minimum wage. Entrepreneurship, thus, is not a “way out” of poverty, but the very thing keeping people in it.

“Take away their benefits”

Time and again, there have been demands from the press (and indeed a section of the UK population) to take away people’s benefits. It is perhaps worth dwelling for a moment on what this might actually mean. Under the current system, if you have no money you cannot live – you cannot buy food or clothes, you can’t rent somewhere to live, and you can’t keep warm. The point of benefits is to allow for these minimum requirements for life, where they cannot be gained through earning a wage. As we have seen, even on benefits people will live in poverty, but the demand that people “have their benefits taken away” is nothing but the demand that they are made homeless and starve. The UK Government has argued that those unwilling to take part in workfare will lose their benefits. In a situation in which there is simply not enough work for everyone, they demand that you work for £1.78 an hour. If you refuse, you can probably expect not to survive.

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Reader Comments

hall

a fair days work for a days pay OR benefits, those asked or made to work should have NO complaints ! ! !

#1 
Written By hall on February 19th, 2012 @ 8:17 pm
Thomas Mac Donald

are these people going to be entitled to ‘travel costs’ as IF the so-called work-shy are going to have to travel to work every day, they are going to need bus/train fares…..then if the employers HAVE the work done on the cheap, where is the incentive to employ someone on a higher wage? the work is already done, so where does this end, will the employer HAVE to sign an agreement to employ someone for a minimum of 5/10 years on full wage? otherwise, they will get many workers on the cheap, make MORE profits then pay them off, so effectively you work your back side off for no extra money, then are dumped on the dole again to be faced with either being shunted onto another ‘slave wage’ which we know you cant possibly live on, or benefits removed…….. the welfare state was to protect people from starvation etc, crime WILL rise as a result of this, as if you have NO money the only way to eat,live etc is to steal/break the law…..crazy fat cat tories as always its the ones who HAVE money who seem to think the rest of us are all just scroungers, stick them on benefits for 2 months WITHOUT extra help and lets see them live on what is basically just enough money to pay for gas and electricity, then if youre lucky a meal or 2, depression time for the UK in both meanings

#2 
Written By Thomas Mac Donald on February 19th, 2012 @ 8:34 pm
Kathy Jagger

If the people who are on benefits have children and are asked to work under this programme, what happens to those children. Childcare costs can only be paid if both parents are working. This makes it difficult for the non working parent to carry out voluntary employment. This might be a radical idea but what about letting those parents (mum or dad) who want to be a stay at home parent do it. Pay them a decent amount through tax credits – but still less than is currently paid to nurseries. This would free up nursery places for those who wish to continue working, it would provide jobs for more people as with a decent anmount to live on many more parents would choose to stay at home. It may also reverse the trend of the so called ‘feral children’.

#3 
Written By Kathy Jagger on February 19th, 2012 @ 9:15 pm
Will Brambley

While the article highlights many problems, I’m not sure what you’re suggesting as the solution. You attack both low wages and unemployment, yet anything that raises wages above the market rate will raise unemployment. If it’s true as you characterise that companies are making large profits through employing people at below the minimum wage, surely raising these wages will reduce the number of people these companies employ?

I’d also strongly dispute your characterisation of entrepreneurship. Managers in large companies are some of the *least* entrepreneurial people. Managers get stable salaries while putting none of their own money at risk, whereas entrepreneurs earn whatever they make and usually have their entire wealth at stake. You make no argument whatsoever as to why “Entrepreneurship, thus, is not a “way out” of poverty, but the very thing keeping people in it”. Despite the “thus” you simply state it.

You mention how high unemployment allowing employers to keep wages down, but the only solution to both these problems if more jobs. Where are these to come from? It’s true, we could raise taxes and create more jobs in the public sector, but most estimates suggest we’d have trouble raising much revenue without losing many jobs in the private sector, so there seems to be little scope for this. It could (and perhaps should) make some impact, but it’s not going to solve the problem of a quarter of young people being unemployed. To me, the only sensible, long-term solution is for more jobs to be created in the private sector, which requires entrepreneurship.

I never get the attacks on entrepreneurship. The left argues that workers should get more, and consequently entrepreneurs less, but then complains that there aren’t enough jobs. The difference between salaried workers and entrepreneurs is the level of risk they’re willing to take. Everyone who chooses a salaried job is saying they prefer the stability of working for and being paid by someone else to making their own money directly and trying to be paid the full value of their labour. They all have the option of going it alone, but it’s a terrifying prospect to work long hours and put your entire wealth at risk for what may turn out to be a flop. I understand it’s not a solution for everyone – I choose to work for someone else because I don’t want that level of risk and stress. But it seems a bit strange to choose one path, then argue that people on the other path should get less to give you more, and then complain that there aren’t enough jobs because not enough people choose to take the other path.

Creating jobs is the only way out of high unemployment and low wages. Doing this in the public sector is unsustainable, as we can’t raise much more money without hitting employment elsewhere. So we need entrepreneurs to create jobs, and we need businesses, of all sizes, to expand to provide jobs.

#4 
Written By Will Brambley on February 19th, 2012 @ 10:02 pm
Will Brambley

I should add, I think workfare is stupid on many levels, so my post above is in no way defending it. Nor am I disputing the issues you raise. I just think you’re lacking a practical solution, and I always wonder why the left attacks those who create jobs as indiscriminately as it attacks anyone else who’s wealthy. If you reduce unemployment then wages take care of themselves, as you have employers compete for workers.

If someone creates a product that people love, creating jobs and making bucket loads of cash in the process, I say that’s something to celebrate. But for that to happen, you have to allow them to make lots of cash, as if this weren’t plausible, why would anyone risk their entire wealth and dedicate months/years of their life to something that might fail? Why attack them for creating jobs, just because they also make a lot of money?

#5 
Written By Will Brambley on February 19th, 2012 @ 10:08 pm
lori

Work out the pay that carers get..in times of elections all the party leaders bestow us with halos and plaudits not we have lord freud defending the loss of money to disabled kids by saying it might incentivise carers to go back to work..dear david cameron we dont all have full time nannies to provide care and with the increase of eligible hours to qualify for tax credits where do we find care? oh by the way currently average cost via an agency of care for a disabled person? upwards of £15…average pay of full time family carer? £55 per week and that only if the person they care for has higher rate disability needs and they need care for over 35 hours a week.

#6 
Written By lori on February 19th, 2012 @ 11:00 pm
Jonni

I think that people working on low pay are entitled to receive some of certain benefits like housing, council tax, and tax credits as well.

#7 
Written By Jonni on February 20th, 2012 @ 12:17 am
#8 
Written By Paul on February 20th, 2012 @ 2:25 am
skidmarx

It is not just refusing to go on the scheme that can result in 13 weeks loss of benefits: refuse any demand of the employer and they can terminate the placement and trigger loss of benefit, even take too long returning to the placement broker with a receipt for travel costs and you can be threatened with 13 weeks loss of benefit. Someone I mentioned this threat to claimants to compared it to Cool Hand Luke.
And on travel costs, the previous scheme that ran in 2008-9, where the claimant had to do three days work and two days jobsearching (instead of virtually full-time work while also attending Jobcentre interviews and jobsearching as it is now), did allow for the provision of a New Deal travelcard (giving child rate travel on all forms of public transport) plus fifteen pounds a week on top of JSA; now there is no travelcard, and expenses can only be claimed for bus travel, however inconvenient that might be, with receipts being taken to the placement broker (while doing virtually full-time work, attending Jobcentre interviews and having to look for work).

#9 
Written By skidmarx on February 20th, 2012 @ 4:05 am
JOhn Fowler

These can be useful, when I was unemployed I did one of these that meant i was there 5 days a week 9 – 5, for an extra 10 quid a week. After 4 months I got a proper job elsewhere, as I now had some experience. It is good for showing an employer that a person can actually get up every day and go to work, especially for long term employed.

However, it is so open to abuse, there should be a lot more safe guards than currently exists, this should be about improving someone’s job prospects, not cheap labour. It should be combined with qualifications and training.

(I maybe should add that I did it at a charity, not some greedy businessman)

#10 
Written By JOhn Fowler on February 20th, 2012 @ 6:57 am
Tristan

It’s a big misconception that people are unemployed because they lack skills, and that Workfare can be justified as “work experience.”

It fails to take into account the huge number of unemployed who are highly skilled career professionals (often with years of experience, degrees and the like) that are simply defeated by the economic climate.

When I was unemployed, it was because my industry was simply bearing the weight of the economic crisis. No amount of experience at Tesco would have made me more employable.

#11 
Written By Tristan on February 20th, 2012 @ 12:31 pm

Here are some pictures of workfare slaves.

Do you think they would be happier sitting at home on the dole or working for nothing but getting experience to help them onto the job ladder?

#12 
Written By nonny mouse on February 20th, 2012 @ 12:49 pm
Tom Oakley

Really good article. Thanks

#13 
Written By Tom Oakley on February 20th, 2012 @ 7:05 pm
Spencer

NONNY MOUSE – what a pile of crap. On what planet do you think that it is good to work for global organisations for your JSA. This benefits no one but these organisations who should be paying a minimum wage as regulated by law. Instead they pretend to train these FECKLESS individuals (how did these poor companies ever get staff before they was allowed to train them for nothing).

Putting pictures of YOUR FAMILY doesn’t actually produce any factual evidence with regards WORKFARE.

YOUR AN IDIOT IN THE FIRST DEGREE WHO CANT SEE PAST HIS NOSE

#14 
Written By Spencer on February 22nd, 2012 @ 9:38 am
Newbunkle

Will Brambley you’re a typical lying right wing cunt.

You create more jobs by enabling people to create their own better opportunities. i.e. let them use their share of our natural wealth to create, survive, and prosper.

You right wing thieves (yes, thieves – you want to steal the proceeds of other people’s labour) don’t want people to be enabled or allowed to live independently. That would prevent you “earning” (lol) money from other people’s hard work.

That exploiting and abusing people who have already been disadvantaged by their own country is the only way to create jobs is a blatant falsehood, but one that serves your sense of entitlement so you tell it anyway.

The problem with you right wing scroungers is that you want to maintain the power and privileges that the minority create “opportunities” so you can leech from the efforts of other people.

Supposedly you should all be cheered and applauded for “allowing” vulnerable people to come and serve you. Why would anyone agree to such a shit deal if they had the freedom to use their own share of our resources? They wouldn’t which is why you don’t mention it.

Stop spinning bollocks about the left hating growth or business, just because we expect you to do it fairly and without taking advantage of people this country has starved of resources.

I say if you can’t run a business without abusing the vulnerable then you’re fucking incompetent and shouldn’t be running a business at all.

No wonder you guys don’t like the sound of equal access to our natural wealth, you might have to compete properly and earn your own money instead of being coddled.

#15 
Written By Newbunkle on February 22nd, 2012 @ 1:06 pm
Giles

The section of Jacob’s post on the NMWA is misleading. Before the Low Pay Commission set the minimum rate for “apprentices” there was no minimum and “apprentices could be paid any rate at the beginning of their employment/apprenticeship – I have seen sub £2 per hour being paid to young women working their socks off.

So the apprentice rate is an improvement for many of those working eg as trainee hairdressers.

If an employee is sacked because she is about to qualify for the MW or a higher rate within it that is an automatic unfair dismissal and a claim can be brought in the ET. There is no minimum qualifying period of employment required to assert that right. (SS 104 A and 108 Employment rights Act 1996 as amended)

#16 
Written By Giles on February 23rd, 2012 @ 1:31 pm
Owain

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

The link is to some interesting thoughts from Bill Quango MP (he’s not actually an MP though).

Also, great points Giles.

#17 
Written By Owain on February 24th, 2012 @ 1:55 am
Will Brambley

Newbunkle: “You create more jobs by enabling people to create their own better opportunities.” I couldn’t agree more. That’s why I want the government to make it a lot easier for anybody to become an entrepreneur and get paid the full value of their labour.

Aside from your characterisation of me as someone “earning” money from other people and having people come and serve me, as I said I’m not an employer – I’m quite happy not being paid the full value of my labour, in the Marxist sense, because I’m not willing to take the risk inherent in being an entrepreneur. My argument is simply that people do have that option if they wish to stop being “exploited”, and I wholly support the government making it much easier for people, whatever their circumstances, to be able to take that opportunity if they wish.

My solution is precisely the opposite of “want[ing] to maintain the power and privileges that the minority create “opportunities””. I want everyone to be able to start a business and employ people, to devolve economic power to anyone who wishes to take the risk and go it alone. It’s the left that seems to want to punish anyone who chooses to do that, stopping people from taking economic power for themselves.

But then, given your first sentance I probably shouldn’t have expected a level of comprehension that involved actually reading my post and responding to it, rather than to some ridiculous strawman you seem to have built.

#18 
Written By Will Brambley on February 24th, 2012 @ 11:20 am
X

In response to the rancid tory who posted this pathetic piece of shit:

“NONNY MOUSE
Here are some pictures of workfare slaves.
Do you think they would be happier sitting at home on the dole or working for nothing but getting experience to help them onto the job ladder?”

Suck on this you slimesucker:

Reg your pathetic web page called “Nonny Mouse”

‘jumping on a bandwagon’ it is obvious to anyone with the capacity to identify a conniving crowd of slimesuckers that the companies who get labour for free are the winners, not the vulnerable youngsters who are forced onto these workfare schemes. What sort of evidence does this this feeble page have to offer to the contrary? thrown together by the aptly named ‘nonny mouse’ it’s nothing more than some middle class twits doodle, knocked together in their lunch break to hoodwink us that the victims of workfare are having a jolly old time. All you have produced ‘nonny mouse’ (just shorten it to nonce) as evidence is a few photos of a couple of groups of youngsters smiling for a fucking camera.
If you had any intelligence at all you might realise that your shitty capitalist system has long passed it sell by date and will soon have to be replaced – and when it finally melts, you and all your slimesucking friends will be the redundant ones and I for one am greatly looking forward to that day.

What a silly snotty nosed little twat you are.

X

#19 
Written By X on June 7th, 2012 @ 1:19 am
X

In response to the rancid tory who posted this pathetic piece of shit:

“NONNY MOUSE”

Suck on this you slimesucker:

Reg your pathetic web page called “Nonny Mouse”

‘jumping on a bandwagon’ it is obvious to anyone with the capacity to identify a conniving crowd of slimesuckers that the companies who get labour for free are the winners, not the vulnerable youngsters who are forced onto these workfare schemes. What sort of evidence does this this feeble page have to offer to the contrary? thrown together by the aptly named ‘nonny mouse’ it’s nothing more than some middle class twits doodle, knocked together in their lunch break to hoodwink us that the victims of workfare are having a jolly old time. All you have produced ‘nonny mouse’ (just shorten it to nonce) as evidence is a few photos of a couple of groups of youngsters smiling for a fucking camera.
If you had any intelligence at all you might realise that your shitty capitalist system has long passed it sell by date and will soon have to be replaced – and when it finally melts, you and all your slimesucking friends will be the redundant ones and I for one am greatly looking forward to that day.

What a silly snotty nosed little twat you are.

X

#20 
Written By X on June 7th, 2012 @ 1:20 am
Jacqui Farasowskyie

Eveyone, lets get things into perspective here. The Governments and big corporations all want to gain control of the world population by brainwashing and rounding us all up like sheep and keep us downtrodden and in our place. They don’t want people to move up the social ladder, they don’t want people to succeed. They put all these barriers into place so you continually come up against brick walls.
Sit up and take note:
THE NEW WORLD ORDER IS CREEPING UPON US SLOWLY BUT SURELY.

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