Culture of Worklessness

This is an extract from a book I am writing that didn’t make it through the editing process.  The book, on disability and welfare in the UK, should be published at the beginning of December.  This extract uses quotes from Iain Duncan Smith’s speech to the US Congress as a starting point for an analysis of the government’s belief in a ‘Culture of Worklessness.’

“Not everyone is starting from the same place. There is no point assuming, for example, that everyone understands the intrinsic benefits of work, the feelings of self-worth, or the opportunity to build self-esteem. If you are dealing with someone from a family where no one has ever held work, or no one in their circle of peers has ever held work, there is no point in simply lecturing them about the moral purpose of work.  What you must tackle is the biggest demotivating factor that many people face – the fact that the complexity of the system and the way it is set up creates the clear perception that work simply does not pay. Thus, after generations in key communities, worklessness has become ingrained into everyday life. The cultural pressure to conform to this lifestyle is enormous, underscored by the easy perception that taking a job is a mug’s game. It is this factor which can stop someone’s journey back to work in its tracks…

“Take some of the figures we were confronted with when we came into office: 5 million people – some 12% of the working age population – on out of work benefits, 1 million of them stuck there for a decade or more. 1 in every 5 UK households had no one working, and almost 2 million children were growing up in workless families. This was the cultural challenge we faced – entrenched and intergenerational worklessness and welfare dependency…”

Iain Duncan Smith is misleading on several points.  The “1 in every 5 UK households [that] had no-one working” means 3.9m households at the end of 2011 compared to 3.5m before the recession.  Of adults who are out of work, and of households with no-one working, only 10% have never worked.  Over half of these 500k adults (370k households) are under-25 – that is more than 250k adults and 185k households.  73k of these are student households; of the remaining 113k some will have left education and be looking for, but not yet found, a job.  1/6th are over 25 and disabled or long-term sick.  Of the remaining third, some are seeking work but unable to find it whilst others have caring roles.  A mere 10% – that is 1% of the unemployed – have no obvious reason for not working.  “It is a serious mistake to proceed as if this 1% is somehow the essence of the problem of worklessness.”[1]

The “1 million of them stuck there for a decade or more” includes people who have worked in the past, and people who are receiving Incapacity Benefit/Employment and Support Allowance.  Given that only 500k adults have never worked, of whom 125k are under 25, it is clear that 725k of this 1 million have worked in the past.  What is not clear is how many of these have been unemployed from ‘lifestyle choice’ rather than because of caring roles or long-term disability or sickness.

The 2 million children in workless families is again going to refer to some children whose parents are not unemployed through choice.  Most of these – approximately 1.25m – are in lone parent households; it is difficult for lone parents to bring up children, particularly those still at primary school, whilst holding down a full-time job, and part-time jobs do not always fit easily with school hours.  Childcare costs are high, with the result that having a job and paying for child care may result only in the children not seeing much of their parent.  Only half of lone parents are able to hold down a job as well as raise children.  If the government wants to discuss workless families, it needs to do more to help lone parents, or simply recognise that it is valid for a lone parent to commit most of her (or his) time to raising children.

As for “entrenched and intergenerational worklessness and welfare dependency” – this is not just misleading, it is all but untrue.  Two-generational worklessness is rare – just 0.9% of households consist of workless parents with adult children.  Only 0.1% are households where neither parents nor adult children have ever worked.  That is 15 530 households, and in many of these younger generation has been out of education not even a year.  Inter-generational worklessness includes cases where the parents and children are not cohabiting, but sons with workless fathers are only 3% more likely to have never been in employment from 16-23[2].   And some of these will be households where there are good reasons for the parents or children to be out of work, such as for health reasons.  But even in these households, it is not necessarily “entrenched and intergenerational.”  These children will have extended family members who work, peers who work and peer’s parents who work.  It is fact of statistics that some people who are unemployed will also have parent’s who are unemployed; there are many reasons why two generations are unemployed other than a culture of worklessness.

“There is also nothing in these official statistics to suggest that households that have never worked deserve to be seen, or treated, differently from other workless households.”[3]

 

“They [workfare companies] are given complete freedom to deliver support, without Government dictating what they must do, through what we call the “black box”. That means trusting that these organisations are best placed to know what works.”   This trust seems to be misplaced.  Mr Hutchinson, then head of internal audit at A4e, spoke of multiple instances of fraud in A4e and in Working Links, with whom he had been previously employed.  Mr Hutchinson claims that, “Where I made recommendations to tighten controls, or strengthen policies and procedures, my advice was not heeded,” and questions whether “significant enhancements” were introduced when A4e won a government contract to provide the new Work Programme. “If this had been the case, I would have found it extremely odd that the numbers of suspected frauds and irregularities should continue to prevail and increase, as was the case at the time of my departure from A4e in 2011.”[4] A4e has since been investigated and found to have significant weaknesses in its work relating to Mandatory Work Activity in the South-East, whilst several of its employees are under police investigation for fraud.[5]   The National Audit Office also concluded that the DWP missed vital evidence in its investigation of fraud in A4e.[6]

“Work Programme service users cannot judge whether they are getting the level of service the Department intends because standards are not set out in one place… There is a risk that providers are less clear about how to abide by the terms and spirit of delivering a programme and that claimants have less clarity about the level of service they should expect to receive.”[7]

 

“We are already seeing positive signs that this cultural change is beginning to happen. Though the overall economic outlook is still poor, the jobs figures for the last 3 consecutive months in the UK showed some encouraging signs of stability, particularly stronger than expected growth in jobs from the private sector.”

However, this was all in part-time jobs, taken largely by people who want full-time but are unable to get it; the total number of full-time jobs fell.  “Virtually all employment growth is coming from part-time and temporary jobs but most of the people taking them want and need permanent, full-time work.”[8]  Much of the growth came from self-employment, but it is dangerous to consider exchanging one form of vulnerable There are reasons to be concerned that the large rise in self-employment, given the weak state of the economy, may reflect disguised under-employment rather than burst of entrepreneurial zeal.[9]  The number of people in involuntary part-time work (i.e. they want, but can’t find, full-time work) has risen to 1.41m, a record high.  There are also 607k workers in temporary positions who want permanent work.  Real wage continues to fall.  This, combined with the rise in underemployment, “suggests that the labour market is not tightening as much as the headline figures suggest.”


[1] Joseph Rowntree Foundation (JRF), Monitoring Poverty and Social Exclusion 2011

[2] Intergenerational Worklessness

[3] Joseph Rowntree Foundation (JRF), Monitoring Poverty and Social Exclusion 2011

[6] National Audit Office

[7] National Audit Office

[8] TUC, Male under-employment has doubled over the last four years. 15th May 2012 http://www.tuc.org.uk/economy/tuc-21009-f0.cfm

[9] TUC, Labour Market Report no. 27 2nd July 2012 http://www.tuc.org.uk/economy/tuc-21162-f0.cfm

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