BETWEEN THE 2010 bailout and the 2016 Brexit, Ireland has totally transformed its social welfare regime.
Advocates of the new regime suggest that it has reduced unemployment, by providing training and internships and pushing people into work. Critics, ourselves included, have suggested that the new welfare regime treats the unemployed harshly, increasing stress and pressure, and pushing people into precarious work.
What you need to know about unemployment
Recent figures on unemployment showing a drop to 7.3% unemployment have been warmly greeted in many quarters, with due caution around the persistence of youth unemployment at double the national rate, and long-term unemployment remaining significant at around 4%.
Beneath the headline story of persistently declining unemployment, our social welfare system has been transformed over five years, with increased emphasis on “activation” that is, offering retraining and enforcing job seeking via sanctions.
The pre-crisis entitlement to welfare has been replaced by a quasi-contract called the Record of Mutual Commitments, which requires that jobseekers accept any offer of work suggested by the Intreo office.
Failure to comply results in sanctions of €44 per week for up to 9 weeks, putting claimants below the breadline.
The sums saved by paying less welfare are dwarfed by the cost of administering the new system, so these welfare reforms must be judged in regard to their wider consequences.
Welfare policy has knock-on effects for the wider economy
At the beginning of 2016 an outline policy document for welfare policy, Pathways to Work 2016-2020, promised “a programme of quantitative and qualitative studies to evaluate the impact of the changes made to date and to inform future policy.”
Yet, aside from research which demonstrates that these policies are inappropriate for lone parents, little has been done and there are at least three things that really need investigation.
How do activation measures impact the low-wage economy?
The numbers in part-time, short-term, low-wage jobs have increased dramatically in recent years.
Welfare policy is now “employer-centric”. The Intreo office provides any employer a steady stream of jobseekers who have little discretion over what work they choose, who therefore must accept jobs which may not provide them with a living wage, less still a mortgage.
Longitudinal research in Australia also demonstrates that continuous poor quality employment has worse consequences for health and wellbeing than unemployment itself.
In the last calendar year, around 8,000 individuals were sanctioned. What are the consequences?
Detailed analysis in the UK demonstrated that sanctioned individuals tended to leave the Live Register, but not find employment.
What happens in Ireland? Is there a spillover into homelessness, crime or emigration?
Certainly sanctions are increasing despite the drop in the numbers unemployed, and detailed breakdown on sanctions by location, cause and category of person, should be made public.
What psychological impact does the new welfare system have on jobseekers’ wellbeing?
Beyond those sanctioned, all jobseekers are threatened with sanctions in all communications with the welfare office, which demands they prove their job search activities.
Our qualitative interviews with jobseekers suggest that the pressure exerted by the welfare office exacerbates the negative experience of unemployment. Longitudinal research in Switzerland shows that sanctioned individuals have worse health and future earnings than their counterparts.
These elements deserve further research, and in particular, allowing independent appraisal of data kept within the Department of Social Protection.
We copy the UK system
Ireland’s model of welfare activation was inspired by the UK, a jurisdiction recently admonished by a UN report for breaches of human rights.
Since 2013 the UK has halved their level of sanctions, probably because there is no clear evidence that sanctions help people find jobs, and the “collateral damage” is unacceptable. Rather than repeating these mistakes, Ireland should learn from this policy experiment and redesign the welfare system.
People prefer to work
The 2012 reforms were understandable in crisis Ireland, with unemployment at 15%, an enormous fiscal deficit and the Troika demanding activation policies.
So, a system that pushes people to accept any work had a certain short-term attraction and is politically expedient for some political positions who blame the unemployed for their situation.
Yet ESRI research has demonstrated not only that work pays, but that most people prefer work even without financial incentives.
Our report, Rethinking Activation and Sanctions suggests
We recommend this as a resource neutral way to improve our economy and especially the position of lower-paid, non-unionised workers.
‘Self-help’ doesn’t create jobs
Meanwhile, when not threatening sanctions, state services adopt the language of self-help to manage the unemployed, telling individuals to keep their chin up, discover their talents, invest in themselves, keep smiling, reach for the rainbow, and eventually a job will appear.
For instance, the Intreo jobseeker pack advises: ‘Try to present your weaknesses as strengths. Focus on the positive” (p.9).
More people constantly applying for the same pool of jobs just means more rejections overall, exacerbating the stress and anxiety of unemployment. Telling people to improve themselves does not create jobs.
We argue that the new welfare regime normalises low paid, short-term, precarious work, in the growing ‘gig’ economy. There are positive elements within the new policies, particularly the emphasis on giving people access to skills and training which will qualify them for work.
But it is undeniable that state has decisively tipped the playing pitch in favour of low-wage employers.
Such a low-wage economy gives poor returns to the exchequer, draws more heavily on public services, and most importantly cannot provide people with the security to plan for the future, get a mortgage or even rent.
System is suspicious of claimants
Beyond that, the new welfare regime is suspicious and distrustful of claimants, making the social safety net precarious and uncertain.
This has a corrosive effect on social cohesion for everyone, and especially the young who are denied a full payment until they are over 25, and are corralled into poor quality employment, lone parents, who should be guaranteed their payment as their parenting work is vital to the state, and the long-term unemployed, who need assistance not harassment.
The economic recovery in Ireland should not come through a division of society into winners and losers, with jobseekers and precarious workers at the bottom. The consequences will be worse for everyone, economically, socially and politically.
Tom Boland lectures in sociology and Ray Griffin lectures in strategy at the Waterford Institute of Technology. They are co-authors of ‘The Sociology of Unemployment’, Manchester University Press (2015).
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