THE CITIZENS INFORMATION Board’s recent report reaffirmed that 90 per cent of people are better off working than on the dole. This quiet fact has is sometimes overlooked in coverage which focused on a series of ‘indicative examples’, where people would not take on work or more hours because they would lose other benefits.
Some commentators emphasise that this means that the social welfare system needs to be more generous and flexible with its clients, others that it should be pay less and compel people to accept work. Such arguments are an intermittent feature of public debate; last year Prof Richard Tol’s work suggested that the costs of working made it financially disadvantageous for many people was contested by others in the ESRI.
What is really going on? Many newspaper reports give the impression that there is an unquantifiable population of people who are claiming benefits rather than working because they would gain relatively little by it, or even lose money. Though few are willing to say so outright, the implication is that such people are ‘spongers’. To claim benefits when there is any alternative whatsoever is considered to be immoral.
The reality is that these ‘indicative examples’ are quite rare. Practically speaking, the only thing to do is tinker with the system so that people can retain a mixture of benefits and income from work.
The term ‘better off’ is also misleading. It hints at a world of luxury and choice. Those who are unemployed are most at risk of food poverty and more likely to be indebted. So ‘better off’ is actually the difference between hunger and cold or food and reasonable comfort. The price of even a basic no-frills existence in Ireland is high.
The real spending power of social welfare payments in Ireland is in line with international standards. That minimum wage jobs are often unattractive by comparison simply shows that the minimum wage is not high enough an incentive – in fact it sometimes scarcely covers the extra costs in food and travel incurred by working. So really, the problem lies less with the unemployed than with the quality and availability of employment.
Beyond all of the rhetoric, the real question is how unemployment is treated. The coalition government committed itself to ‘Active Labour Market Policies’ (ALMPs) with the Pathways to Work document in 2012. This policy is particularly concerned with the long-term unemployed.
Over time, all unemployed persons are to be given ‘activation’ measures; these include assessment, group job-seeking training sessions, referral to training, internship or education programmes, and signing a ‘rights and responsibilities contract’ with a case worker. Failure to attend or comply with these measures or to seek or accept work or any breach in the ‘contract’ can lead to sanctions, including withholding or cutting benefits.
Thus, social welfare is transformed from a benefit given to citizens by a state that is responsible for them into a payment for engagement in the labour market. Unemployment is already difficult enough; beyond financial difficulties it causes increased incidences of poor mental health and suicide. Unemployment often leads to boredom, isolation and alienation. Clearly, these activation measures will only increase the psychological pressure on the unemployed.
Furthermore, it is far from clear that ‘activation measures’ will have genuinely positive effect on the economy. Without any activation measures, long term unemployment was at about 1 per cent in 2006, which indicates that most people choose work where opportunities are available. Since then, around 100,000 people have emigrated in order to find work. Indeed, a social welfare regime which seeks to compel people to work may also motivate people to emigrate.
Ireland lags behind the rest of the OECD in implementing these ALMPs, which emerged in the late 1990s and were largely ignored in the Celtic Tiger years. Australia is an international leader in the implementation of ALMPs and its low unemployment rate was partially attributed to this fact by the OECD in 2011.
In Employment Services – Building on Success the overall results of four years of ‘Jobsearch’ Australia are given. Over 1.4 million work placements for the unemployed were found, of these only 576,000 led to employment or education for 13 weeks, and only 361,000 led to employment for 26 weeks or more. What the rather cheery report doesn’t spell out is that at least 800,000 were referred to employment which lasted for under 13 weeks.
What this tells us is that even if Ireland manages to put emulate Australia, the main consequence will be a revolving door between the dole queue and temporary or low-quality employment. Presently, unemployment is declining at 22,000 per annum. At that rate, it will take ten years to return to pre-recession levels.
Imagine being subjected to years of ALMPs, having your job-seeking scrutinised, undergoing oftentimes irrelevant training, and cycling through short-term part-time and unfulfilling work. There may be some marginal savings for the state. But are they really worth it?
Tom Boland lectures in Sociology at Waterford Institute of Technology and is co-ordinator of the Waterford Unemployment Experiences Research Collaborative. To read more articles by Tom for TheJournal.ie click here.
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