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On the Welfare Working Group’s latest round of welfare bashing

November 26th, 2010

welfareWell, in its Options report this week, at least the Cabinet-appointed Welfare Working Group was clear about whose interests it is there to serve: ‘The evidence on what is effective in helping beneficiaries into paid work is clear – effective interventions need to have a focus on employers and their needs.’ That would be fair enough if the focus on ‘employers and their needs’ actually meant a recognition that you can’t kick people off welfare without there being jobs for them to fill. But no, it doesn’t mean that at all. In fact, the WWG brushes that unfortunate reality aside in this bizarre paragraph :

Many submissions, while acknowledging the importance of paid work, expressed anxiety about the availability of jobs for people looking for paid work. On the other hand, many employers have told us of the difficulties they have had in recruiting people into entry-level jobs. While this problem was less pronounced during the recession, they indicate it is once again emerging.

So…. the overall lack of jobs in the current economy for the 338,000 people of working age on benefits is brushed aside with the non sequitur that some employers have been having problems in the past in finding people to fill some ‘entry-level’ jobs. Not recently mind you – but since the WWG believes that the recession and its impacts on employment are now allegedly over, this ‘problem’ about entry level jobs is now re-emerging. Really? The job market is picking up and people are turning down the jobs readily available to them? That’s a country I’d like to visit. But in the country that most New Zealanders inhabit, the job market hasn’t picked up, the recession’s impact on employment is ongoing, and – to take just a couple of examples during 2010 – public service restructuring in Wellington and local body restructuring in Auckland have been pushing people out of work, and onto an already crowded job market. Not that you’d know it from the WGG report.

The WWG has a core problem in selling the notion of a welfare system in crisis, and a nation lacking the motivation to work. Reality check: when work was available in the 2000s and job searches were being case managed, unemployment sank to record lows with fewer than 20,000 on the dole. Conclusion: when jobs are there, people work: and when they aren’t, they can’t. It’s not as if a motivational crisis has suddenly engulfed the country in the last two years, when none existed before the recession.

Not that the WWG seems interested in an honest evaluation of the statistics on employment anyway, and the academics on this panel should be ashamed at putting their names to the distortions used to support the report’s ideological bias. The panel is happy for instance, to trumpet a headline rate of 338,000 people of working age on benefits. Over at The Standard, there is an excellent unpicking of the ingredients of that figure: 85,000 have severe mental or physical disabilities. 58,000 have been documented by medical professinals as sick, 112,000 are raising children alone, and 65,000 are actively looking for work. As The Standard concludes :

In fact, when there were jobs for nearly everyone there were just 1,700 long-term unemployed who had been on the dole for over 4 years. If there are any bludgers they are a subset of those 1,700. Hardly worth turning the lives of 338,000 people and their families upside down over.

Currently, the Standard adds, even the harsh abatement rates for the income of those on benefits do not appear to sap the motivation of a large segment of beneficiaries from taking up part time work, when and where it is available. Nor is the cost of welfare prvision sopping up an intolerable share of the nation’s resources:

And let’s not forget that our society manages to support, via the benefit system, 12% of the working age population and their families by expending less than $5 billion on those benefits. That’s less than the income of the wealthiest 13,000 New Zealanders.

welfareSo…. we don’t have a welfare crisis. Nor do we have a motivational crisis revolving around our readiness to work. We therefore don’t need to stigmatise people who are already going through a hard time, though the WWG seems hellbent on doing so :‘[Reform] might involve delivering strong public messages about the use of the benefit system,’ Yep, branding the vulnerable as bludgers always helps. In reality, what we have is a job-creation crisis in the wake of a global recession, and the responsibility for dealing with that crisis rests with central government and, to a lesser extent, with employers and investors. They alone have the tools to bring about positive change in work creation. No amount of positive attitude by a solo mother is going to create a job in her local supermarket, when it is currently laying off staff. Why is this reality so hard for the Welfare Working Group to grasp – and why are they so willing to punish women bringing up children on their own?

One could go on, and pick apart the WWG’s casual denigration of the parenting work being done by sole parents. Elsewhere, WWG chair Paula Rebstock has expressed puzzlement at the relatively low ratio of sole parents in New Zealand in paid employment compared to other countries, as if this is evidence of some lack of national moral fibre. (Again, no consideration as to (a) the provision of childcare in those countries and (b) the social costs of enforced work requirements, in countries such as the US.) In line with its generally punitive approach, the WWG raises the prospect of term limits on welfare as a salutary motivational tool to get people into work, Again this is being offered without consideration of the consequences for children in families whose means of support would be terminated.

The WWG once again raises Rebstock’s pet project of unemployment insurance, along the lines offered in Canada. I’ve dealt with some of the hidden downsides of that Canadian system here.

Here’s an update of how badly Massachusetts is faring with a similar unemployment insurance scheme:

Businesses are facing rate increases of up to 40 percent to replenish the unemployment insurance fund, which is expected to end 2010 with a significant deficit…. Massachusetts’ average unemployment insurance of $646 per employee is scheduled to jump to $904 in January, adding hundreds of millions of dollars in additional costs to Bay State companies.“If it’s not a job killer, then it would at least stifle growth,’’ said Paul Guzzi, the president of the Boston Chamber of Commerce.

[Massachusetts Govenor Deval] Patrick has not indicated how he would deal with the problem. Earlier this year he signed legislation that froze previously scheduled rate increases, and a spokeswoman yesterday said another freeze is under consideration.

“The governor will focus on the need to maintain fund solvency, keep business costs down, and provide benefits to people who need them when weighing his options relative to another freeze,’’ said the spokeswoman, Kimberly Haberlin. The administration did not say what it would do if the unemployment fund runs a deficit.

Clearly then, during a recession, unemployment insurance imposes unsustainable costs on employers and on government. Just as the welfare system does. No magic bullet there. No ‘welfare crisis’ either. Just hard times, which we should be dealing with by other means than stigmatising the most vulnerable people in our communities. In a year’s time, will the government be willing to tell the Pike River families to get off their backsides and get off welfare?

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Content Sourced from scoop.co.nz
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    1. 8 Responses to “On the Welfare Working Group’s latest round of welfare bashing”

    2. By Alec Morgan on Nov 26, 2010 | Reply

      To focus on sole parents for a minute.

      Long time beneficiary advocate Paul Blair from the Rotorua People’s Advocacy Centre wrote a 120 page study on solo parents and work that was finally released in 2009 after a 6 month objection from MSD.

      Paul concluded “Adding full-time paid employment to this mix for many of these people would simply worsen their work-life balance,” he said. “Part-time employment is a better option and it should be given statutory recognition through less punitive abatement rates of benefits.”

      Which encapsulates it, not enough jobs, static minumum wage, 90 day fire at will, Roger Kerr and Paula Rebstock are in effect advocating for people to live in their cars and cardboard boxes, for huge soup kitichens and stealing to eat, for increased suicides and so on. The only vaguely promising sentence in their options was the “guaranteed minimum income” or as previously called by Keith Rankin and others-UBI-Universal Basic Income” lots of potential tax, abatement and payment details to work out on that but it would help remove the benefit stigma.

    3. By Joe on Nov 27, 2010 | Reply

      The getting punitive with those out of work is cruel and stupid – particularly in the current economic context. Better to improve the mental and physical health of those on benefits, improve skills, facilitate a sense of belonging in the community, a sense of investment in society. Who should government be serving, who should business be serving if not people? This is a government that believes it is a right to earn millions of dollars above the average annual wage w/out increased tax, but a privledge to be provided support to meet the basic needs of life.

    4. By Jitterati on Nov 27, 2010 | Reply

      From Stuff.co.nz‘s report on Wednesday:

      In an issues paper published in August, the group called New Zealand’s welfare system “unsustainable, outdated and fragmented”.

      If changes were not made, the 356,000 working-age adults on a benefit would eventually cost the country $50 billion.

      Some made-up statistics are impossible to kill, aren’t they?

    5. By Steve Hill on Nov 28, 2010 | Reply

      This latest Welfare Report is the usual rubbish we’ve learned to expect. It’s pretty apparent that whoever wrote the damn thing did not consult with anyone who has the misfortune to be on a benefit!
      My wife and I share her benefit. I want to work, but because it’s my wife’s benefit, I an’t get any help for training. I’ve lost count of the number of job applications I’ve put in. All to no avail.
      We would love to get our own business. Try to raise capital when on a benefit…..
      No-one in their right mind truly wants to remain on a benefit. It’s degrading, and eats up your self-esteem, and self-confidence. And there’s the never-ending struggle of trying to make ends meet.

    6. By Jeff Mitchell on Nov 28, 2010 | Reply

      Instead of a Welfare Working Group, we should have a Warfare Working Group. The bogus smokescreen of “humanitarian aid” in Afghanistan has cost us hundreds of millions of dollars. I want my money back. If the National Party is conservative, as they claim to be, then why don’t they cut all foreign aid to Afghanistan, and instead invest that money in New Zealand? It’s time to cut out the crap – politicians can be the first target.

    7. By Andrew R on Nov 28, 2010 | Reply

      I haven’t read the report yet.

      Does it address the welfare payments to those earning over $70,000 as a result of the tax cuts. After all we have to borrow to pay for that tax cut — is there really any difference?

    8. By Megan on Nov 29, 2010 | Reply

      Jeff – and others – might be interested to know that in this year’s budget the government has budgeted $3,090,859,000 for the armed forces, and ‘over $570 million’ on services to assist people into employment and benefits.

    9. By Penny Bright on Dec 9, 2010 | Reply

      Where’s the review on the ‘lazy corporate welfare bums’?

      Where’s the evidence that proves private provision of services formally provided ‘in-house’ by central and local governments is a more ‘cost-effective’ use of public monies?

      Wouldn’t we potentially save billions of NZ tax dollars by cutting out all those private ‘piggies in the middle’?

      When can we expect the Cabinet-appointed Welfare Working Group to come out with this recommendation?

      ‘CUT OUT THE CONSULTANTS AND PRIVATE CONTRACTORS!’

      Penny Bright

      http://waterpressure.wordpress.com

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