Work for the Dole

by John Quiggin on November 8, 2010

Faced with a sharp rise in unemployment since 2008, the Con-Lib government in Britain has diagnosed an epidemic of laziness, and announced measures to push the “work-shy” back into jobs. In particular, they’ve announced that those deemed not to be looking hard enough for work will be forced to undertake unpaid part-time work for community organizations.

Stripped of the punitive rhetoric, this is a cut down job-creation scheme, partly paid for by the unpaid labor of the participants. It’s hard enough to make job creation work well as a counter to unemployment, without adding in this kind of thing.

Australia has been there and done that. Following the discovery in the late 1990s that it played well with focus groups, John Howard (conservative PM) introduced a program explicitly called Work for the Dole and targeted initially at the young unemployed. It was a political success, but didn’t have any evident effects on unemployment. This evaluation of Work for the Dole and other programs suggests that it performed much less well than the explicit job creation and wage subsidy programs it replaced. Strikingly, given that the UK government is supposed to be on an austerity drive, the cost in the late 1990s was $2000-3000 per participant (around 1000 stg), on top of the benefit payment for which they were working.

But at least Howard’s moves came quite a few years into an expansion when it could credibly be claimed that there were jobs available for people willing to look hard enough. For a government that is busy creating unemployment to start attacking the “work-shy” requires a truly impressive level of hypocrisy.

{ 139 comments }

1

Barry 11.08.10 at 11:48 pm

“For a government that is busy creating unemployment to start attacking the “work-shy” requires a truly impressive level of hypocrisy.”

Remember, they have Thatcher as an example to live down to.

2

derrida derider 11.08.10 at 11:53 pm

You aint seen nothin yet. Basically I expect much of the UK labour market to collapse next year. The whole austerity thing is absolutely needless pain.

Unless this coalition manages to find itself a Falklands war I think it will be a one-term government. In the meanwhile it will lash out at the victims of its own stupidity as much as it can.

3

Barry 11.09.10 at 12:07 am

Charles Stross commented the the UK legal system, one-party government and universal surveillance was a recipe for a quite nasty dictatorship. He was speaking of the indefinite future, but it wouldn’t surprise me if that will come to pass in the next few years.

The UK has a government which has demonstrated that it’s extremely right-wing, no matter the pre-election rhetoric, and no matter what the Liberal party guys think. It already has terrorism laws so broad that they can be invoked against somebody if the police surrounding them claim to be ‘terrorized’. It’s got a power propaganda system (Murdoch to spread what the government wants, and UK libel laws to destroy anybody spreading info that the government doesn’t want). The Labour Party is discredited, and still (IMHO) far too in the pockets of a financial elite which subsists as much off of government funding as off of actual legitimate profits.

This government will hammer the UK economy in the next year, sending the economy down from an already low spot, leading to widespread unrest. AFAIK, there is really no direct electoral way to bring down the government for a few years, so this government will have close to a free hand for a while, and – I won’t say ‘temptation’, since it was probably planned all along – they’ll both want and need to do as much damage now, while they can.

In this sort of environment, a state of emergency would be very pleasing, and quite attainable.

4

chrismealy 11.09.10 at 12:20 am

Wait, I thought we were supposed to be for job guarantee / employer of last resort. Is it just the hostility to the unemployed we object to, or the whole deal?

5

John Quiggin 11.09.10 at 12:34 am

I thought it was obvious that it was the hostility to the unemployed to which I was objecting. I don’t follow UK politics as closely as I might, so I didn’t realise the Tories had scrapped Labour’s Job Guarantee, exactly following the Australian model to which I referred. Howard similarly scrapped Labor’s programs and denounced job creation as a failure before coming up with Work for the Dole.

6

Martin Bento 11.09.10 at 2:12 am

What I think would actually be a good approach, though I don’t know how well it would translate to a UK context, is for the government to generously award refundable tax credits to non-profits for hiring people. Allocating people-hours would be a non-trivial overhead cost, but much less than actually generating and supervising work. Currently, non-profits subsist largely off donations. Since the wealthy can donate more, charities that appeal to the wealthy have an advantage.The poor do not have much money to donate, but if un or underemployed, they could donate labor. However, you can deduct donations of money or goods from your taxes, but not labor. So change this. You would have to allocate the credits, so non-profits would not employ people to do nothing as it would be no cost to them. But the idea is that a soup kitchen or arts organization would have a certain number of person-hours per year to allocate to their volunteers.The volunteers would get a refundable tax credit for these hours at the minimum wage. Essentially the government would be employing people at minimum wage to work in the non-profit secotr, but it would be saleable as a tax cut, rather than a public works program.

7

Emma_in_Sydney 11.09.10 at 3:25 am

The other side of this is that it is a *huge* overhead to the existing staff of understaffed non-profits to have to think up, train, supervise, check and then usually re-do the work attempted by volunteers. I have found this out the hard way. And that’s with willing volunteers, not resentful conscripted people. If I ran a charity, I would not be signing up. ‘Free labour’ looks like a good deal until you have to administer it.

8

burritoboy 11.09.10 at 3:28 am

“This government will hammer the UK economy in the next year, sending the economy down from an already low spot, leading to widespread unrest. “

Nah, it will send the economy down from an already low spot, leading to absolutely nothing. And if Rupert’s empire gets creative enough, they’ll successfully blame it on some appropriate scape-goat group.

9

Myles SG 11.09.10 at 4:26 am

Some among what I consider to be my own party (the Tories) seem to forget that moralism is not a basis for economic policy; for just as the New Testament ought not be a justification for socialism, the Old Testament cannot be commandeered for Hobbesian capitalism.

10

mikey 11.09.10 at 5:40 am

I like Martin’s idea, the tax credit to volunteers. Anyone explored this before? What do you think, John?

11

gerard 11.09.10 at 6:33 am

What will the Lib Dem platform be next election?

With a lot of their constituency viewing them as the ‘left’ alternative to Labour, I’m guessing that after this spell in government they’re going to wind up like the Australian Democrats.

12

Jib Halyard 11.09.10 at 8:02 am

The government will always have to buy infrastructure. Roads, hospitals, things that go boom, etc. But we are in a recession, so this is not the time to be making these purchases. Better to wait till wages and interest rates are higher. Makes perfect sense to me…

13

Emma in Sydney 11.09.10 at 8:19 am

Not sure why my earlier comment is in moderation, but will try again.

The other aspect to this is that ‘volunteer’ labour is highly labour-intensive for the actual paid staff of any non-profit. You need to think up things for them to do, that are sufficiently non-critical and easy to organise, then train them, supervise, check and often re-do the work you’ve given them. It sounds ungrateful, but as someone who supervises volunteers on a regular basis, I reckon in our small organisation, it’s a net loss. Anything I’d trust a volunteer to do, it would be quicker for me to do than to supervise and then check the volunteer’s work. And that’s with willing volunteers who are trying to be helpful. If they were resentful conscripts, it would be a worse nightmare. I don’t think the community organisations will be queuing up to get these workers, myself.

14

JulesLt 11.09.10 at 8:38 am

I liked the Daily Mash version – ‘Duncan Smith finally gets to own slaves’.

The big problem in their plan is the same ‘on your bike’ one that IDS came up with the other week – the pockets of deep long-term unemployment in the UK are in the areas where there is a lack of sufficient work, so either they’re going to have to transport people to where the litter needs clearing, etc (conveniently displacing the need to pay people a minimum wage to do so) or we’ve going to have some very clean, well maintained towns that still have no meaningful employment.

There’s also something quite telling about the way that manual work is being used as the stick – it says a lot about the Conservative view of employment. And again, a shame, as the pockets of deepest unemployment are largely associated with former manual workers.

Given that many of these people are actually IDS age, I’d also be intrigued to see how he himself would cope with doing 30 hours of manual labour, after a life of relative indolence.

Another part of me says ‘bring it on’ – the Daily Mail constituency are not the swing voters who brought them to office, and the Lib-Dems will be pretty much wiped out in the next election.

(The interesting Charles Stross raised question is – what does this mean for the UK. Scotland shortly gets to vote on devolution, and Scotland rarely returns any conservative success).

15

Francis Xavier Holden 11.09.10 at 9:09 am

Having worked in health care and other community services I can tell you its a real pain and inconvenience to have “volunteers” forced upon you, many who are resentful, most who don’t have the skills needed, all are only there a short time and none will go on to work in the organisation – either as paid employees or volunteers.

These schemes require extra staff to train and supervise, extra staff to fill in the inevitable mountain of paper work and reporting requirements and has nothing whatsoever to do with the core business of the organisation.

16

guthrie 11.09.10 at 9:30 am

Surely one of the other problems of “get on your bike” is that a) housing can be rather expensive, especially in London, and b) moving house is expensive and time consuming. So that it all gets expensive in a hurry thus providing a barrier to movement of the workforce…
They could of course build more council houses, but labour didn’t do that either, so I don’t expect this lot to do so.

In theory I am not against unemployed people doing some hours of work. What I do object to is any hint that the work would be what would otherwise be paid work – any ‘work’ should only be in areas where nothing would have been done anyway. Any work which aught to be done and which they are viewed as cheap substitutes for real paid people should not be allowed.

Finally, there are quite a few people who are work shy, the problem as always is what to do about them. I recall seeing some come in for interview when I worked in North Lanarkshire, and spoke to the HR guy afterwards. There is no doubt that some do milk the system, the trick is identifying them and doing something about it. For all new labours authoritarianism against anyone who didn’t like them, they seemed incapable of dealing with the small minority of troublemakers, preferring of course to make headlines and penalise everybody.

17

Jim 11.09.10 at 9:37 am

And it’s not as if the British government isn’t aware of the Australian example. In fact, the Department for Work and Pensions published an analysis of workfare in other countries two years ago, concluding “There is little evidence that workfare increases the likelihood of finding work. It can even reduce employment chances by limiting the time available for job search and by failing to provide the skills and experience valued by employers… Workfare is least effective in getting people into jobs in weak labour markets where unemployment is high…”
More here from Stephen Evans.

18

Alex 11.09.10 at 9:45 am

Does anyone know if Iain Duncan Smith has any idea where he’ll find over a million voluntary placements? Adding large numbers of jobs in any sector requires capital – is there a budget for charities to acquire more offices to absorb the additional tea distribution operatives?

19

NomadUK 11.09.10 at 9:55 am

Unless this coalition manages to find itself a Falklands war I think it will be a one-term government.

It’s just about enough to move me to prayer.

20

NomadUK 11.09.10 at 10:03 am

Finally, there are quite a few people who are work shy, the problem as always is what to do about them

It’s always struck me that this number is so small, and the cost of maintaining them sufficiently low (especially as compared to actually doing anything about it, or to any number of other things government could be doing), that it’s perfectly reasonable to not do anything at all about them, provide them with the minimum required for subsistence, and just leave them be.

Most of the rest of us would prefer a bit more out of life than that, so I imagine it ends up not really being a problem.

21

Random lurker 11.09.10 at 10:09 am

Wait, I thought we were supposed to be for job guarantee / employer of last resort. Is it just the hostility to the unemployed we object to, or the whole deal?
It seems to me that the whole “compulsory work for no wage” is quite objectionable, and that the “employer of last resort” thing implies “wage payer” of last resort at a pay level sufficient to induce people to accept the job.

22

Hidari 11.09.10 at 10:17 am

‘Finally, there are quite a few people who are work shy, the problem as always is what to do about them. ‘

Indeed, there are some people who are workshy, who have never done a decent day’s work in their lives, who have demonstrated, over and over again, by their ‘scandalous’ personal behaviour and their avoidance of ‘normal’ work that they really have no intention of living lives as normal, decent, tax paying citizens. To take one family in particular, who we could call ‘The Royal Family…..’ (etc. etc. etc.)

23

maureen brian 11.09.10 at 10:44 am

What will happen next? It will be exactly like the second Thatcher recession in which, for instance, municipalities and other public bodies sacked all their gardeners. You know, the ones with university levels of training and 20 years of experience.

They then sent in untrained youths – some over-enthusiastic, some with no interest at all – armed with assorted bladed instruments and no knowledge or relevant supervision.

In due time the city fathers realised that the former pride of our cities, along with up to 200 years of landscaping and careful tending had gone down the pan. There was a mad scramble for lottery money and other funds to repair the damage – at far greater expense than a knowledge-based ticking over budget for maintenance would have cost.

At the point where the banks started collapsing, the UK had just about arrived at the point where its parks were once again fit to be seen. We’re back on exactly the same old carousel.

24

ajay 11.09.10 at 11:43 am

Hidari, ho ho ho very satirical, but the Queen actually does pay tax. They hide this sort of information away in a mystical place called “The Internet”.

25

Tim Worstall 11.09.10 at 11:50 am

While the devil is very much in the details the basic idea isn’t all that far from hte mainstream.

There’s this from Richard Layard (for those who don’t know, a Labour peer and Emeritus Professor at the LSE and someone who spent decades looking at the effects of long term unemployment…certainly he was teaching this stuff to us undergrads in the 80s) from 2001 in a defence of the Welfare to Work programme:

http://cep.lse.ac.uk/pubs/download/occasional/OP015.pdf

“These ideas make one focus on the intense need which many unemployed people have for
active help to overcome the barriers to employment. The main kinds of “active labour market
policies” that can be used are these:
• Job-search assistance, advice and matching to the available vacancies. Good
controlled experiments in Sweden show how unemployment has been reduced in
areas where the job centres have more staff.
• Training. This has a mixed record but the right education and training can clearly
set a person on a new path in life.
• Employment subsidies. These can induce employers to give a chance to hard-toplace
workers and thus expand the size of the effective workforce. A good
example is the Jobstart programme in Australia.
• Work experience. Where no job can be found with a regular employer, work on
publicly-useful projects can help improve people’s work habits and give them
work records which help in finding regular jobs.
These programmes can help and have been around for a long time, though usually on
a small scale. But unless they are universal, they tend to be used by people who already had
the best chance of finding work.
Thus the big new idea in Labour’s New Deal is this. We ought to offer everybody
on the threshold of long-term unemployment a choice of activity for at least a period.
And when that happens we should remove the option of life on benefit.”

Yes, choosing between training, work experience, etc, is different from work or else. But the insistence that those who refuse lose their benefits is already there.

26

Daragh McDowell 11.09.10 at 1:05 pm

While I admit that this is a difficult policy to defend at first glance (though Tim provides some background information I’d like to take a closer look at when time permits) I do have a problem with describing this as ‘unpaid labour.’ Surely if welfare benefits are being made contingent on a certain number of hours of community service/charity work/whatever then the payment for said work is, de facto, said welfare benefits.

Again, not endorsing the policy at this point. But I think its a bit unfair equating welfare benefits being linked to community service after a certain cut-off point as the return of slavery.

27

sg 11.09.10 at 1:32 pm

so Daragh, would you rather it were described as “the abolition of welfare”?

28

Daragh McDowell 11.09.10 at 1:47 pm

SG – no. I would rather it be described (accurately I believe) as ‘welfare benefits being made contingent on certain, relatively non-onerous, contributions from the recipients after a certain cut off point.’ Additionally I’d note that IDS is probably right in his thinking that work placements could provide welfare recipients with skills increasing their attractiveness as prospective employees.

29

Chris Bertram 11.09.10 at 1:50 pm

_While I admit that this is a difficult policy to defend at first glance_

No one can say of you, Daragh, that you’re not a man who likes a challenge!

30

sg 11.09.10 at 1:53 pm

daragh, making “unemployment benefits” contingent on “doing work” is the abolition of welfare (for 4 weeks). You might like to consider that the “certain, relatively non-onerous contributions from the recipients after a certain cut-off point” were the taxes they paid before going unemployed. Why should they suddenly have to work for nothing to collect their unemployment insurance?

Or is this another one of your assumptions – all unemployed people never worked, just like all people on housing benefits are unemployed?

31

Zamfir 11.09.10 at 1:54 pm

Doesn’t every country implement a scheme like this every once in while, when they have forgotten it didn’t work the last time?

The problem is always the same: if the work were worth doing (after paying for management and training and capital etc.), you should hire people in normal jobs for it. If not, you are simply firing people to re-hire them as Workfare.

On the other hand, if the work is not worth doing, you are cheaper off if just let people sit at home, where they can check the job advertisements and mind their own kids.

So people find out the program is losing money. Next step: the program is now seen as a temporary investment in people’s work skills.

After a few years, someone evaluates the program, finds out that, no shit, people with Workfare on their CV are not actually seen as highly trained by the market, and the program gets abolished.

Some years later, someone asks “why do we pay welfare to people sitting on their lazy asses?”. And the circle repeats.

32

Alison P 11.09.10 at 2:00 pm

I think it’s wrong to make people work outdoors through the winter, without paying them enough to buy decent food, waterproof clothing and shoes, and heat water to wash in when they get back. Being very poor is hard work in itself.

33

ScentOfViolets 11.09.10 at 2:00 pm

I keep tellin’ ya, Federal Service or something like it is in your future. It’s been pointed out time and again – most recently by Robert Reich – that the only sort of jobs program the government is allowed to create is the military. I can very easily see a future where private industry simply can’t manufacture the jobs needed employ even 70% of the populace.

34

Pascal Leduc 11.09.10 at 2:33 pm

The big issue that I always get with these kinds of programs is that whatever kind of job these “work for welfare” people are doing, it could instead be done by an actualy paid employee (yes non-profits actualy employ people). Depending on how draconian the program is its even possible that the welfare recipients out-compete the salaried workers (because the job is skill-less and equivalent wage of the “work for welfare” people is less then minimum) and these once salaried workers now find themselves doing the same job on a work for welfare program at significantly reduced pay.

So basicly, “work for welfare”, stupid moralising pointless busy work? or a cynical attempt at wage depreciation? discuss.

In addition we get the problem of the people who refuse to do whatever their assigned job is, for a factor of reasons ranging from moral, psychological (a man scared of heights given the job of skyscraper window washer) all the way to plain old lazyness. These now welfare-less people will now find themselves homeless and in addition to the major moral quandary of a goverment program that actualy increases homelessness, we also have the problem that homeless people do impose some social cost on the state and I have trouble imagine that in a large urban city like London that homeless people are significantly cheaper then welfare recipients.

35

nick s 11.09.10 at 2:33 pm

Given the number of private “training providers” who did pretty well out of YOP/YTS in the 1980s, I think we already have good precedent to follow the money on this one.

Where no job can be found with a regular employer, work on
publicly-useful projects can help improve people’s work habits and give them
work records which help in finding regular jobs.

Well, that’s nice in theory, though in practice it often means having some spotty 20something “training facilitator” condescend to a bunch of middle-aged time-served tradesmen whose main problem with “work habits” is that there are no fucking jobs.

Surely if welfare benefits are being made contingent on a certain number of hours of community service/charity work/whatever then the payment for said work is, de facto, said welfare benefits.

See, there I was thinking that there was already a de facto agreement in place which goes by the name of “National Insurance”. Silly me.

36

Lemuel Pitkin 11.09.10 at 2:57 pm

While I admit that this is a difficult policy to defend at first glance…

I think, Daragh, that if you found that the continuation of this sentence was “and therefore I’ll wait to speak up for the Coalition until the topic turns to something defensible,” you’d be doing your side quite a bit more good.

37

chris y 11.09.10 at 3:43 pm

Where no job can be found with a regular employer, work on publicly-useful projects can help improve people’s work habits and give them work records which help in finding regular jobs employers fire the people they’re already paying and replace them with a free workforce at government expense.

38

engels 11.09.10 at 3:54 pm

Maybe, just maybe, everyone in Britain has the right to food, shelter and other basic means to a life worthy of a human being and this isn’t contingent on their willingness to fold paper clips for David Brent, serve coffee to yuppies or fire pockets at Iraqis, or generally be a ‘goodie good’ working class person in any other way? Just an idea…

39

ScentOfViolets 11.09.10 at 3:59 pm

Where no job can be found with a regular employer, work on publicly-useful projects can help improve people’s work habits and give them work records which help in finding regular jobs employers fire the people they’re already paying and replace them with a free workforce at government expense.

In the U.S. we seem to have a dearth of businesses who can do road and bridge maintenance. Are you saying that this program (assuming the enrollees are capable of doing the work) would not aid those businesses in doing infrastructure upgrades? I’m not sure what you’re getting at exactly.

40

burritoboy 11.09.10 at 4:01 pm

“Does anyone know if Iain Duncan Smith has any idea where he’ll find over a million voluntary placements?”

Plus, you’re going to need a huge government bureaucracy to manage this thing. Assume 50 voluntary placements for a case manager (the government staffer who’s organizing this). That’s 20,000 case managers at roughly 100,000 USD per year: budget for front-line case managers alone: 2 billion USD for that. Support for those 20,000 case managers we might estimate roughly 20,000 managerial, support and technical staff: another 2 billion USD. Throw in some money for rent, computers, paper supplies, electricity bills and so on: 500 million USD. Budget for this: at least 4.5 billion USD per year.

41

ScentOfViolets 11.09.10 at 4:11 pm

The big issue that I always get with these kinds of programs is that whatever kind of job these “work for welfare” people are doing, it could instead be done by an actualy paid employee (yes non-profits actualy employ people).

What about things like basic nursing care or visitations to shut-ins? It would be cheaper to have semi-skilled people doing this rather than registered nurses, and it would free up those nurses to do more critical care. Also, if transportation to where the jobs are really is a big problem, well, old people are everywhere, aren’t they? Keep these people in the neighborhood, and serving people in the neighborhood.

42

nick s 11.09.10 at 4:28 pm

Are you saying that this program (assuming the enrollees are capable of doing the work) would not aid those businesses in doing infrastructure upgrades?

Are you saying that the IDS proposal amounts to a programme of “infrastructure upgrades”? Because if you are, you really ought to stop digging your own hole.

43

Lemuel Pitkin 11.09.10 at 4:41 pm

In the U.S. we seem to have a dearth of businesses who can do road and bridge maintenance. Are you saying that this program (assuming the enrollees are capable of doing the work) would not aid those businesses in doing infrastructure upgrades?

Yes, I want to drive over bridges maintained by unpaid “volunteers”. Because they’ll do super reliable work!

44

ScentOfViolets 11.09.10 at 4:42 pm

Are you saying that the IDS proposal amounts to a programme of “infrastructure upgrades”? Because if you are, you really ought to stop digging your own hole.

And if you’re going to put words in my mouth like that, you’ve already lost the argument, haven’t you? Do try to be a bit less snarky. Among other benefits, you won’t look like such an idiot.

45

ScentOfViolets 11.09.10 at 4:44 pm

Yes, I want to drive over bridges maintained by unpaid “volunteers”. Because they’ll do super reliable work!

That’s being rather emotive. But no, to put some substance there, what happens if these “volunteers” are paid real money instead of what is essentially scrip?

46

Steve Williams 11.09.10 at 4:55 pm

burritoboy@35

‘Plus, you’re going to need a huge government bureaucracy to manage this thing. Assume 50 voluntary placements for a case manager (the government staffer who’s organizing this). That’s 20,000 case managers at roughly 100,000 USD per year: budget for front-line case managers alone: 2 billion USD for that. Support for those 20,000 case managers we might estimate roughly 20,000 managerial, support and technical staff: another 2 billion USD. Throw in some money for rent, computers, paper supplies, electricity bills and so on: 500 million USD. Budget for this: at least 4.5 billion USD per year.’

I have no more time for this policy than anyone else on this thread* but I’m sure these are very much high-ball figures from what the government is intending. This workfare programme is only intended for people who have been on Job Seekers Allowance for some time, and these people will already be making weekly-or-fortnightly interviews on their job-hunting progress at the local JobCentre (without attendance at these interviews currently, JSA is either suspended or stopped, so the relevant claimants will be attending these meetings) and will have a Case Manager already, and I strongly suspect the government will try and load the extra work onto these people, rather than hiring others to do it, where doing so is possible. There probably will have to be significant costs in training seminars for JobCentre workers and database upgrades, amongst other things, though.

ScentOfViolets@36

‘What about things like basic nursing care or visitations to shut-ins? It would be cheaper to have semi-skilled people doing this rather than registered nurses, and it would free up those nurses to do more critical care. ‘

This is unlikely to be a lot of use in the demographics that are most over-represented in British JobCentres, which is to say, middle-aged men made redundant from jobs in heavy industry, and ex-convicts. These are not demographics that I anticipate lonely, frail old women being especially comfortable with admitting to their homes. Care of the elderly actually requires a certain amount of training, and people without that training are likely to do more harm than good.

As a general point, one argument that hasn’t been made on this thread yet, but one that is actually very important to the numbers as a whole, is the disproportionately large amount of space taken up in the stats by ex-convicts, who have especial trouble finding work because of the ‘black mark’ on their CV. Workfare programmes are going to do nothing to persuade prospective employers to overcome what are clearly well-established prejudices in hiring for real jobs, but they do suggest that charitable-sector employers are going to have to find work for people they normally wouldn’t allow in.

*I’m certain, in fact, that it will be a failure, for many reasons, but those outlined by Alex and Zamfir seem like good places to start

47

Phil 11.09.10 at 4:56 pm

What about things like basic nursing care or visitations to shut-ins?

What? Providing nursing care to housebound people is a skilled job requiring a huge amount of effort and dedication – you marvel when it’s done well (and curse when it’s done badly). It’s also not in any way a nine-to-five job. I can’t think of many jobs that fit the ‘workfare’ profile worse.

48

NomadUK 11.09.10 at 5:00 pm

what happens if these “volunteers” are paid real money instead of what is essentially scrip?

Well, correct me if I’m wrong (and I’m sure someone will), but haven’t you just nationalised the infrastructure maintenance system (albeit with unqualified and untrained personnel)? Which seems to run counter to the aims of the programme — or at least of the oiks who put it in place.

49

ptl 11.09.10 at 5:05 pm

36 you think in the UK, registered nurses do all that now? Health Care Assistants, aka Carers, do a lot of it even within hospitals, outside, in nursing homes and “in the community”, Carers do. Some of them are wonderful, some, pretty awful. But at least, they are not unpaid conscripts (as opposed to underpaid voluntary drudges) . At least, a fair number of them have been trained, and worked under supervision, for quite some while.

well, old people are everywhere, aren’t they?

indeed we are.

50

Pascal Leduc 11.09.10 at 5:06 pm

But In that case it stops being workfare and it starts being state funded public works project, and in that case its a good idea.

A few large infrastructure projects and infrastructure renewal would create long term benefits while eating up the unemployment glut. Much better then being forced to repair the infrastructure during a boom where labor is in short supply. In this case however you dont need a special anti-welfare policy, you just need to give these people jobs (real jobs). But as we all know the goverment cant create jobs, so this is impossible.

As for your idea to reduce employment requirements in a field (home care in your case), once again this has little to do with workfare. Now if its a good idea is dependent on weather or not unskilled people can really do this kind of work, if they cant then a good idea would be special funding for worker training while they are on welfare. but that would actually cost the state more money, and its not like they can just print it. (oh wait)

51

engels 11.09.10 at 5:12 pm

it would free up those nurses to do more critical care

Or alternatively to join the dole queue.

52

Pete 11.09.10 at 5:17 pm

In the U.S. we seem to have a dearth of businesses who can do road and bridge maintenance.

Really? I can believe that there’s a shortage of money for same, but not a shortage of construction workers, especially given the recent collapse in the housebuilding market.

53

ajay 11.09.10 at 5:18 pm

A few large infrastructure projects and infrastructure renewal would create long term benefits while eating up the unemployment glut.

Only if we had a lot of unemployed construction workers sitting around. It wouldn’t do much, at least not directly, for an unemployed computer programmer or Woolworths cashier.
Does Britain have a lot of unemployed construction workers sitting around? OR have most of them gone back to Poland?

54

Salient 11.09.10 at 5:19 pm

The only I learned from my time volunteering in a nursing home is how comprehensively unqualified I am to provide useful service to residents of a nursing home. (I suppose I also learned not to trust people who say “they just want someone who will spend time with them and listen to them” but have not ever attempted to provide such a service themselves.)

So I guess the next step is to establish nonprofits that do some simulacrum of the work all those former public-sector employees used to do, so the million-odd former public servants can be in effect re-employed part-time for less money than they earned before. Awesome. But this will all work out because nonprofits get to wield the mighty free hand of the market, whereas the government needed to keep its boxing gloves on.

Hell, I can write the copy for the next Tory speech now. “Look at these people. They apparently have all the time in the world to volunteer for — [cue sneering tone] a food bank for Muslim immigrants [/sneer] — but they can’t find it in themselves to accept some honest work to do, at a fair wage? Maybe if they spent less time feeding their friends on the taxpayer’s sterling** and more time looking for jobs, they’d have gotten ahead in life.”

Folks have already commented on crowding out hired-on nonprofit employees, but I’ll note that there may also be a significant and lasting crowding out of actual volunteers: perhaps volunteering will become more of a thing that people do because they’re paid [welfare] to do it, and less of a thing one does out of generosity and devotion to a cause.

Also, will religious organizations qualify as recipients of this nonprofit labor? I am envisioning a group of people volunteering their time to promoting, e.g., abstinence-only education.

*go go gadget mandatory high school service requirements that wouldn’t accept my volunteering at the library fundraiser book sales or at Golden House battered women’s shelter because of weird documentation technicalities, but did accept among other things church youth group volunteer work, hosting a bible study. I am so excited at the awesomeness of implementing such a program for welfare recipients.

**I don’t know what y’all would substitute for ‘dime’ in this context. :-/

55

Steve Williams 11.09.10 at 5:27 pm

engels@51

‘Or alternatively to join the dole queue.’

They might get their old job back on workfare!

Thanks to Phil for making my point, but better, and more succinctly. A worthwhile subject for a post – here or somewhere else – would be the scandalous state of the care industry in Britain, where most of the work, in nursing homes at least, is done by badly-paid, poorly-trained, badly-treated staff, who do a difficult, mundane, dirty, thankless job for essentially zero reward, and where the employment situation is only salvaged by South African and Australian women on what are essentially extended gap-years who are desperate enough for the cash.

You would think, in an aging society, that those who cared for some of the most vulnerable people day in, day out would be well-rewarded and well-regarded, at least as well-regarded as, say, firemen, but in fact nursing home workers seem to as generally despised as everyone in other forms of social work. One of the reasons ‘the Big Society’ idea will fall flat in the end is precisely because you’d have to be mad to help others in Britain, considering the dreadful pay you’ll receive and the bile that’s directed your way by those not in immediate need of your services.

56

ScentOfViolets 11.09.10 at 5:32 pm

What about things like basic nursing care or visitations to shut-ins?

What? Providing nursing care to housebound people is a skilled job requiring a huge amount of effort and dedication – you marvel when it’s done well (and curse when it’s done badly). It’s also not in any way a nine-to-five job. I can’t think of many jobs that fit the ‘workfare’ profile worse.

And that’s why I said basic nursing care. You know, stuff like sponge baths, recording stats like bp, that sort of thing. That’s not to say that this sort of job wouldn’t require training – of course it would. But not nearly as much as being a real nurse.

57

Pascal Leduc 11.09.10 at 5:34 pm

Despite most news stories being about the unemployed manager and engineer, unemployment for people with an undergrad and higher remains at the less then 5% range and hasn’t in fact gone up all that much in the slump. I don’t in fact know what to do with these people (I went back and started a masters), they could of course be retrained into lower skill jobs or just other equally skilled jobs but its not exactly optimal.

The Woolworth cashier probably doesn’t want to be another cashier and would probably jump at the chance to get a construction labor job. Also the above poster said that the hardest hit by unemployment are ex-convicts and former factory workers. I have trouble imagining two groups more perfect for retraining and employment in this field.

Plus dont forget that short of disassembling our modern society we kinda have to fix the infrastructure, unless the UK is some kind of shining city on the sea im pretty sure it has the same crumbling ill maintained infrastructure that every single other country on the planet has.

58

ScentOfViolets 11.09.10 at 5:38 pm

what happens if these “volunteers” are paid real money instead of what is essentially scrip?

Well, correct me if I’m wrong (and I’m sure someone will), but haven’t you just nationalised the infrastructure maintenance system (albeit with unqualified and untrained personnel)? Which seems to run counter to the aims of the programme — or at least of the oiks who put it in place.

Yes, that’s exactly what I am doing (to some extent.) I’m suggesting that while very bad in and of themselves, “Work for Dole” programs might be the sort of acceptable gateway into some sort of real federal service if you really want to go with the notion of long-term chronic un- and underemployment for 10%+ of the working-aged population.

59

zamfir 11.09.10 at 5:51 pm

The main reason simple variations on nursing are so lowly paid is that they run on uneducated women with little other work experience. When unemployed, these women go back to stay-at-homing and disappear from the statistics. When there are jobs again there are always enough of them to drive their wages to minimum wage, or find some construction to pay them even less.

So there is always a ‘shortage’, since the unemployed carers mostly don’t see themselves as unemployed, but wages never rise either.

60

ajay 11.09.10 at 5:54 pm

The Woolworth cashier probably doesn’t want to be another cashier and would probably jump at the chance to get a construction labor job.

Certainly every time I look at a cashier I think “She’d jump at the chance to work on a building site, she would”.

61

zamfir 11.09.10 at 5:58 pm

At least your curves get appreciated at building sites.

62

MPAVictoria 11.09.10 at 6:17 pm

ScentOfViolets:
People tend to view other people jobs as “low skilled” and “not requiring much training” right up to the point where they have to actually do said jobs.

63

Stuart 11.09.10 at 6:25 pm

Out of interest if the Conservatives are so opposed to long term unemployment, would they permanently disavow the use of interest rates to control inflation, given that this tool implicitly works on the principle that if too many people are employed, you get wage inflation as companies compete for a limited work force, and therefore wages spiral upwards and with them the cost of everything, thus leading to inflation. Considering it is government policy (all parties I know of) to avoid the situation where everyone that wants a job can get one, it seems fairly obscene to then stigmatise the people they are forcing out of employment by their policies.

64

Phil 11.09.10 at 6:37 pm

basic nursing care. You know, stuff like sponge baths

You’re crazy.

65

burritoboy 11.09.10 at 6:41 pm

“This workfare programme is only intended for people who have been on Job Seekers Allowance for some time, and these people will already be making weekly-or-fortnightly interviews on their job-hunting progress at the local JobCentre (without attendance at these interviews currently, JSA is either suspended or stopped, so the relevant claimants will be attending these meetings) and will have a Case Manager already, and I strongly suspect the government will try and load the extra work onto these people”

Good luck with that idea. The problem is that you will need a different type of case manager entirely – the current ones try to make sure that the claimants are looking for work. It’s a completely different thing if your case manager is essentially employing you (or directing you into workfare programs which you would be mandated to accept). The first case manager can easily manage the files and documents of a large number of people (hundreds, possibly). The second? I think my estimate of 50 is probably too high.

66

Substance McGravitas 11.09.10 at 6:42 pm

The kind of person I’d like to care for me when I’m ill is someone who doesn’t want to be there and is barely getting paid.

67

Tim Worstall 11.09.10 at 6:58 pm

“would they permanently disavow the use of interest rates to control inflation, given that this tool implicitly works on the principle that if too many people are employed, you get wage inflation as companies compete for a limited work force, and therefore wages spiral upwards and with them the cost of everything, thus leading to inflation. “

This is exactly the point that drives Layard’s (mentioned above) suggestions.

He notes that the long term unemployed appear to become entirely detatched from the labour market. Partly through their becoming so discouraged. Partly because businesses are most reluctant to hire the long term unemployed.

Thus, with each turn of the cycle, it’s the level of short term unemployment which determines the unemployment rate at which we get inflation, interest rates start to rise etc. Because the long term unemployed simply aren’t connected to that labour market in a meaningful manner.

(Please note, this is Layard’s analysis, not mine). An analogy (this part is mine) would be Marx’s reserve army of the unemployed. Layard is pointing out that it is only the short term unemployed who are such, the long term unemployed have dropped out of the labour market altogether.

So, by reconnecting the long term unemployed with the labour market (training, workfare, made up jobs, employment subsidies, whatever) we then lower the unemployment rate at which inflation and interest rates rise. OK, this is all based upon NAIRU and so on, concepts that many don’t really like (I seem to recall JQ indicating he wasn’t all that fond of it).

It may even be an incorrect analysis of the whole situation. But what the suggestions for carrot and stick (again, Layard’s words), including cessation of benefits as the stick, are all about is, within the confines of this analysis, to solve that very problem you’re concerned about. To increase the number who can be employed without having to raise interest rates.

Me personally I’d say let’s have a citizen’s basic income and the hell with trying to force anyone to work or not, as they wish, but that’s another story.

68

Pascal Leduc 11.09.10 at 7:08 pm

Certainly every time I look at a cashier I think “She’d jump at the chance to work on a building site, she would”

why she? also why do you assume that the infrastructure work is on a construction site, are you thinking road work and bridge construction? What about the power system, clean water, waste water, waste management, inspection of all of the above, maintenance of the equipment, maintenance of the maintenance of the maintenance equipment, not to forget a clerk and management service to ensure the effective running of all of the above.

I think you underestimate peoples ambition to think that they would rather stay cashier or on welfare rather then take a higher paying job with better benefits, training and social clout. I am quite confident that there are more Woolworth jobs then there are people who want to work at Woolworth, the rest of the workers just work there because its the best they could find.

69

engels 11.09.10 at 7:20 pm

I’d put it slightly differently. Everyone is owed a minimum income, funded by taxes on any economic activity (ie. all of it) that requires the use of natural resources (which belong to everyone) as a human right. Until such a system is properly instituted everybody else in Britain is spongeing off the unemployed.

70

John Quiggin 11.09.10 at 7:34 pm

To be clear, I agree with Layard’s analysis and support active labour market programs including job creation programs. But, as discussed above, there are plenty of difficulties in making such programs work. When you add in the notion that participation is a punishment for being workshy, or simply unemployed, failure is virtually guaranteed.

71

MPAVictoria 11.09.10 at 7:40 pm

Now Phil I am sure Grandma would love to get her sponge bath from a 40 year old tattooed ex-con.

72

engels 11.09.10 at 7:42 pm

I hope Layard is better at economics than he is at philosophy.

73

John Quiggin 11.09.10 at 7:43 pm

As regards the Lib Dems, presumably there would have been some political cost to going into Coalition with Labour. But it’s hard to imagine that it could have been worse for them, not only in electoral terms, but for their whole raison d’etre as a party than the decision they actually took.

74

nick s 11.09.10 at 8:20 pm

if you’re going to put words in my mouth like that, you’ve already lost the argument, haven’t you?

So you didn’t actually write the following?

Are you saying that this program (assuming the enrollees are capable of doing the work) would not aid those businesses in doing infrastructure upgrades?

In that case, you’d better tell the mods that you’re being repeatedly spoofed by someone who’s completely ignorant of the topic under discussion, and is making you look bad as a result.

75

Antoni Jaume 11.09.10 at 9:21 pm

Tim Worstall 11.09.10 at 6:58 pm

“[…]
Me personally I’d say let’s have a citizen’s basic income and the hell with trying to force anyone to work or not, as they wish, but that’s another story.”

Is it never the case that an economical activity is wealth destroying? In such an instance I think rational to keep people from such activities.

76

ScentOfViolets 11.09.10 at 10:41 pm

People tend to view other people jobs as “low skilled” and “not requiring much training” right up to the point where they have to actually do said jobs.

You do know that I actually said was this:

That’s not to say that this sort of job wouldn’t require training – of course it would. But not nearly as much as being a real nurse.

Right. To say that A is less skilled than B does not imply that B is unskilled.

77

ScentOfViolets 11.09.10 at 10:42 pm

Er, that A is unskilled, that is.

78

ScentOfViolets 11.09.10 at 10:47 pm

It may even be an incorrect analysis of the whole situation. But what the suggestions for carrot and stick (again, Layard’s words), including cessation of benefits as the stick, are all about is, within the confines of this analysis, to solve that very problem you’re concerned about. To increase the number who can be employed without having to raise interest rates.

Yes. The basic problem here is to get people employed in a way that conservatives wouldn’t bitterly oppose. Programs like these, while rather nasty, may be the sort of back door into which some sort of guaranteed federal employment could be set up.

It’s not the way I’d prefer, but . . . the only other alternative I could see in this environment would be the military.

79

ScentOfViolets 11.09.10 at 10:52 pm

To be clear, I agree with Layard’s analysis and support active labour market programs including job creation programs. But, as discussed above, there are plenty of difficulties in making such programs work.

Yes. And the problem with long-term unemployment is only going to get worse instead of better. Unless you buy into the notion that the slack can always be taken up by providing “services”.

80

Phil 11.09.10 at 11:00 pm

Me personally I’d say let’s have a citizen’s basic income and the hell with trying to force anyone to work or not, as they wish, but that’s another story.

M3 T00. I’d be really interested to know how support for CBI breaks down across the political spectrum – as a Marxist, I think I’m quite a long way from Tim on most other issues.

81

engels 11.09.10 at 11:18 pm

I get the impression that what left-wing supporters of basic income (like me) have in mind is quite different from what libertarians do. Eg. I believe Charles Murray sees it as a device for reducing government spending by doing away with most existing benefits. Whereas I am guessing most people on the left see it both as involving increased taxing and spending overall and as a supplement rather than a cheap alternative to, eg., state provided education, health care, child care, etc. So I am sceptical that the supposed agreement between libertarians and lefties on this issue is a terribly meaningful or politically useful one.

That said, I suppose you could say that there is an anti-moralising tendency in Marxism and libertarians also often see themselves as anti-moralising and this is partly why both camps are sympathetic to it.

82

Nicholas Gruen 11.10.10 at 12:48 am

As for this being a one term government, it’s got five years and it’s putting all the pain up front – or so it hopes. That’s bad economics as it should impose the pain more slowly, but it will be good politics. I can see the slogan now “morning in the UK”.

On another tack, the PM is very keen on public transparency and evaluation, so I hope those who want to expose how dysfunctional doing this now is can grab hold of some of that zeitgeist to ensure that the data gets out there to demonstrate how ineffective this will be.

83

Nicholas Gruen 11.10.10 at 12:50 am

Btw, John, are there studies of work for the dole not by ACOSS (Our peak body of NGO welfare organisations for our non-Australian friends) for whom I have the highest regard, but I wouldn’t call them unbiased.

84

derrida derider 11.10.10 at 3:06 am

As a labour economist and civil servant (not in the UK) professionally involved in designing labour market programs on and off for 20 years, and who was once a true believer in them, I have to say that Zamfir’s comment at 31 is spot on. In fact I reckon don’t bother commenting further unless you’ve read and absorbed it.

These ideas are not at all new, people. The fact that governments keep ignoring the massive accumulated evidence on them shows you just how resistant ideology is to empirics.

85

John Quiggin 11.10.10 at 4:13 am

I think Zamfir has the right starting point. We should be looking at real jobs that yield a net social benefit, not make-work. That said

1. There’s a countercyclical case for temporarily expanding public sector employment during recessions

2. There’s a labor market case (which varies according to the point of the cycle) for preferentially hiring the unemployed or subsidising employers to hire them.

The empirical evidence isn’t incredibly encouraging, but that largely reflects the fact that most programs are crippled in various ways, with Work for the Dole being the most crippled of all. My reading is that countries that focus a lot of policies on keeping unemployment down have generally done better in the long run.

86

ScentOfViolets 11.10.10 at 4:33 am

As a labour economist and civil servant (not in the UK) professionally involved in designing labour market programs on and off for 20 years, and who was once a true believer in them, I have to say that Zamfir’s comment at 31 is spot on. In fact I reckon don’t bother commenting further unless you’ve read and absorbed it.

These ideas are not at all new, people. The fact that governments keep ignoring the massive accumulated evidence on them shows you just how resistant ideology is to empirics.

I’d say it’s quite the opposite here; we had this organization called the WPA that most people seemed to think worked pretty well. If you’re going to ignore that, or say that you don’t think the WPA was superior to the alternative, well, I’d say that yes someone does have a problem with empirics.

87

ScentOfViolets 11.10.10 at 4:35 am

Whoops! Try again:

As a labour economist and civil servant (not in the UK) professionally involved in designing labour market programs on and off for 20 years, and who was once a true believer in them, I have to say that Zamfir’s comment at 31 is spot on. In fact I reckon don’t bother commenting further unless you’ve read and absorbed it.

These ideas are not at all new, people. The fact that governments keep ignoring the massive accumulated evidence on them shows you just how resistant ideology is to empirics.

I’d say it’s quite the opposite here; we had this organization called the WPA that most people seemed to think worked pretty well. If you’re going to ignore that, or say that you don’t think the WPA was superior to the alternative, well, I’d say that yes someone does have a problem with empirics.

88

Salient 11.10.10 at 5:49 am

Reading the article a little closer, here at home — was I the only one to not notice at first that under the proposed system [a] the WAP assigns you work, you don’t get to pick your poison from a list of approved NPOs or whatever, and [b] they pick placement for you from local businesses or community projects, meaning you literally could end up working for free at a private for-profit business (or for a church of a religion you don’t belong to) for 30 hours/week? [Re: use of ‘church’ there, don’t bother trying hard to convince me that Christian-ministry projects will get the thumbs-up for free workers while other religions’ projects mostly won’t is unlikely; I’m an American; it just won’t register.]

The only conceivable good that might come of this [and it’s cold comfort at best] is the weird fight between everyday businesses and the government over whether those businesses are “benefiting the community” or not, i.e. ought a WalMart-type chain outlet be entitled to a share of the free 30 hr/wk workers? Are they not benefiting the community? The hand-wringing and moralizing that will have to occur in the light of day ought to be interesting; I think e.g. popular pub owners should mischievously maneuver to be first in line for potential free workers, sales figures in hand to argue that they are “benefiting the community” by providing a much-requested service. (Same goes, but for quite the opposite reason, for mosques that invest in community projects.)

I think everyone that runs or owns a business in the UK that many people would allege themselves morally put off to work for, should prepare to loudly proclaim their community-bettering characteristics and their right to a share of the free labor. A few such assertions, if high-profile enough to get press, might tank the whole WAP nonsense…

89

nick s 11.10.10 at 5:51 am

we had this organization called the WPA that most people seemed to think worked pretty well.

Whoever is spoofing ScentOfViolets needs to stop right now: nobody could be so ignorant as to conflate extensive public works programmes and dole-shaming schemes that demand the same kind of “community service” currently meted out as a punishment to juvenile delinquents.

90

zamfir 11.10.10 at 7:01 am

JQ, it might he better not to mix temporary stimulus and schemes to get the long-term unemployed back othe market. The first should be organixed somewhat on the quick, and should hire whoever is best for the job. The aim is to get people back to work who would normally have no problem getting a regular job. It’s also presumably a temporary measure.

Serious programmes for the hard to employ should have much more the character of an education program, with the continuity to build up real expertise in the executing organizations, and trust relationships with potential employers who can give.further on the job training.

One of the hard parts of such programs is to convince employers, who have very good reasons to be skeptical about the employability of the people who went through such programs. If you have the luck to actually have a functioning job training program for hard to employ people, shoving an extra million people through in times of recession might just kill the program.

91

Alex 11.10.10 at 9:34 am

This is comically ignorant:

What about the power system, clean water, waste water, waste management, inspection of all of the above, maintenance of the equipment,

The services trades – electricians, plumbers, HVAC engineers – are usually considered to involve more skill and training than anyone else on a building site (or a shipyard for that matter). I mean, the unqualified unwillingly working for bugger all money with mains electricity, natural gas, and water under pressure. What could possibly go wrong?

*headdesk*

Serious programmes for the hard to employ should have much more the character of an education program, with the continuity to build up real expertise in the executing organizations, and trust relationships with potential employers who can give.further on the job training.

This is sensible. It’s like the crack about needing a lot of Harberger triangles to fill an Okun gap – there’s a fundamental difference between projects that aim to grind out productivity in the long term, and ones that aim to relieve misery in the short term.

92

Tim Worstall 11.10.10 at 9:49 am

@ 80 and 81. I have a feeling that the difference about a cbi between us (me the classical liberal, not libertarian please note) is that I regard a welfare safety net as a not particularly desirable necessity and a cbi as the least bad version of it while you are more on the side that it’s a moral duty that there should be such redistribution.

We end up in the same place via very different paths.

As to the WPA: perhaps a better analogy is the Civilian Conservation Corps. Low paid made up grunt work (if Wikipedia is to be believed, around $300 a month (using average wages to correct the value of money) to the worker, about three times that sent to the family back home.). Not a million miles away from what current UK benefit levels are.

93

Zamfir 11.10.10 at 10:39 am

TW, the important question in relation to things like the CCC is why you actually want people to do them. For stimulus purposes, sending people a check to sit at home works just as well as having them lay pavement.

On the other hand, laying useful pavement and building useful parks requires other resource than just an army of unemployed. A managing organization, planning and design, trucks and cranes, raw materials. Even if your grunts are costless, the other expenses might well make the project a net loss, unless you actually needed that road or park.

But if you really, really needed that road, you could build it as a normal project, employing normal employees. There is only a small window of projects that make sense with unpaid grunt work, but not as a normal project. There just are not that many tasks anymore where grunt labour is the main cost.

From an economic point of view, paying people to do nothing can easily be a more efficient stimulus than crude make-work. I don’t know how it worked out in the 30s, but in these days the CCC would probably be a value-destroying program, whose only benefit is that upright citizens know their taxes are not spend on idlers.

94

Barry 11.10.10 at 11:24 am

Stuart @63 – the whole point of NAIRU and right-wing policies is precisely to keep a substantial ‘reserve army of the unemployed’ readily available to replace any worker who wants a wage increase.

95

Tim Worstall 11.10.10 at 11:27 am

“From an economic point of view, paying people to do nothing can easily be a more efficient stimulus than crude make-work. I don’t know how it worked out in the 30s, but in these days the CCC would probably be a value-destroying program, whose only benefit is that upright citizens know their taxes are not spend on idlers.”

Sure. Which brings us back to Layard’s point. Which is that the value comes from reconnecting the long term unemployed with the labour force.

Mebbe he’s right and mebbe he’s not. But that is his point.

96

ajay 11.10.10 at 11:55 am

don’t bother trying hard to convince me that ‘Christian-ministry projects will get the thumbs-up for free workers while other religions’ projects mostly won’t’ is unlikely; I’m an American; it just won’t register.

Yes, you are an American. And, as you’ve shown elsewhere, one who is ignorant about Britain. Maybe you shouldn’t say too much on this topic.

97

ajay 11.10.10 at 11:59 am

From an economic point of view, paying people to do nothing can easily be a more efficient stimulus than crude make-work

It’s difficult to see how, I must admit, unless the work is so crude that it’s actually destroying value. Even if it involves, to take an extreme, paying an unemployed heart surgeon a pittance to work in an Oxfam shop, surely that’s still economically preferable to paying the same woman the same amount to sit around doing nothing. Even though it’s still far from the economic ideal, which presumably is paying her a lot more to do heart surgery.

98

Zamfir 11.10.10 at 1:21 pm

Ajay, that only works if the task has no other inputs than the unemployed people, which is rare. Some of those other inputs are specialized people who would not otherwise be unemployed and therefore have to be taken away from other economic activities. Other like capital, material and space will to some extent be taken away from other activities too. To create net value, the result of the task has to be worth more than those other inputs.

The Oxfam example only works as long as there is already an existing Oxfam organization, that already has shops and a distribution network, and only lacks some people to man shops. But if you want to do this on any size relevant to the economy as a whole, you’ll have to set up new organizations, with some professional management, experienced with new buildings etc.

In theory, you could find among the unused parts of the economy of the moment a set of well-placed store-fronts, with unemployed experienced shopkeepers in the neighbourhood, experienced distribution managers near unused offices and warehouses, and unused cash registers and everything else you need. But in reality, you won’t be able to neatly divide the unemployed people and resources into functioning units, but need some already employed people and resources to add to the mix before you create useful activity.

@ Time: a problem is that anything program resembling the CCC is about as bad as you can imagine to reconnect people to the labour market, since you do not connect them to the real labour market at all. To reconnect, you have to embed people within a functioning organization, where they can pick up relevant skills and knowledge from the people around them, and where the organization can get to know them and find a longer-term place for them to work in.

Training people to do work that doesn’t exist in the market, surrounded by other people who haven’t held a job in years is unlikely to be the killer solution to a problem that is already hard in the best of economic times.

99

ajay 11.10.10 at 2:12 pm

98: that makes sense, thanks.

100

Salient 11.10.10 at 5:25 pm

And, as you’ve shown elsewhere, one who is ignorant about Britain. Maybe you shouldn’t say too much on this topic.

I wasn’t the one on this thread making nonsensical comparisons to the WPA, mind you, and the bit about Christian charities was a facetious/bitter reference to a U.S. policy shift in the 80s-90s, not a sincere prediction. One presumes a joke is distinguishable from speaking in earnest. But thanks, it was amusing in 96-99 to see you scold me and then immediately make a rather silly mistake yourself, which had already been made and corrected upthread. Maybe you shouldn’t say too much on this topic?

101

ajay 11.10.10 at 5:46 pm

Happy to keep you amused, Salient. Heaven knows it’s better than having you freak out over the use of naughty words.

102

Lemuel Pitkin 11.10.10 at 5:53 pm

Zamfir’s comments here are very good. However, with respect to 98, it’s important to remember that recession does not just involve unemployed people, but also idle capacity, in almost the same proportion. (I.e. there is very little substitution between capital and labor, or between “skilled” and “unskilled” labor, in the short run.) This makes it much less likely that public programs to employ the unemployed will crowd out more valuable activities in a deep recession, as now, than at other times.

However, that is an argument for public spending in general, not for programs like this.

103

ajay 11.10.10 at 6:09 pm

In theory, you could find among the unused parts of the economy of the moment a set of well-placed store-fronts, with unemployed experienced shopkeepers in the neighbourhood, experienced distribution managers near unused offices and warehouses, and unused cash registers and everything else you need.

It’s fairly likely that a lot of unemployed people will be found in the same place as the, if you like, “employment infrastructure” they would need – as a few years ago a lot of them had jobs which used that very same infrastructure. e.g., you’ll find an empty shopfront in the same area as 15 unemployed cashiers, because three years ago the shopfront was occupied by a Woolworths and the 15 cashiers worked there. How feasible it is to resurrect dead businesses like this on a large scale I don’t know.

104

zamfir 11.10.10 at 6:28 pm

Lemuel, good point. The main difference is that the government doesn’t pay benefits to idle capital, so it can’t commandeer them but has to get them on market anyway.

Which is of course what it should do with people too. Even better, if you want infrastructure work as stimulus, hire a construction firm. The construction firm will then gladly hire people.

That’s the weirdness. If they really thought oxfam shops needed more shopkeepers they’d give oxfam a wad of cash to hire people. But we can’t do that! We have to get the budget under control!

105

Cryptic Ned 11.10.10 at 6:30 pm

The main difference is that the government doesn’t pay benefits to idle capital

What about the government continuing to give tax deductions for capital which isn’t being used?

106

Cryptic Ned 11.10.10 at 6:30 pm

[by “capital” there I mean capital goods / factories / equipment]

107

geo 11.10.10 at 6:37 pm

Zamfir @ 98: a problem is that anything program resembling the CCC is about as bad as you can imagine to reconnect people to the labour market, since you do not connect them to the real labour market at all. To reconnect, you have to embed people within a functioning organization, where they can pick up relevant skills and knowledge from the people around them, and where the organization can get to know them and find a longer-term place for them to work in.

Not sure I understand this. Presumably the projects the government undertook during the 1930s did not all involve unskilled labor with minimal supervision and administration. If a government can find (or create) the money and is willing to spend it, why can’t it hire and train (or hire away, just as businesses do) the necessary technical and administrative people? How is this disconnected from the “real labor market” or the “real economy”? The newly employed workers will significantly increase effective demand, which will call into existence new businesses, which will hire other workers. Eventually the private economy will recover and absorb those working in the new public enterprises, either by hiring them away or buying the enterprises. And if the private economy doesn’t recover sufficiently to do that, then the government adjusts its taxing and spending policies to allow it to continue creating employment and purchasing power. Isn’t that the whole idea of Keynesian demand management?

108

Lemuel Pitkin 11.10.10 at 6:48 pm

The main difference is that the government doesn’t pay benefits to idle capital, so it can’t commandeer them but has to get them on market anyway. Which is of course what it should do with people too. Even better, if you want infrastructure work as stimulus, hire a construction firm. The construction firm will then gladly hire people.

This is all exactly right. And just to spell it out, the reason government doesn’t pay benefits to idle capital is that “labor” consists of human beings, who have an absolute claim on society for a decent existence, while structures and equipment exist only in order to be used in production. But the fact that the government isn’t paying for the idle productive capacity doesn’t mean it isn’t idle.

109

Salient 11.10.10 at 6:57 pm

Heaven knows it’s better than having you freak out — Fair enough, I’ll accept my drubbing over that as well-deserved.

If a government can find (or create) the money and is willing to spend it, why can’t it hire and train (or hire away, just as businesses do) the necessary technical and administrative people?

I thought a major point was that the government in question isn’t willing to find or spend that money, and is in fact concurrently cutting public sector jobs that help provide essential services, and the explicitly acknowledged entire point of this WAP enterprise is not really to maximize useful work, but to punish the people who would be assigned the work, for being bad people. It’s a bit like prison chain gangs for welfare recipients. We should probably be careful to avoid comparisons with programs designed to make socially efficient use of a slack labor market; WAP is meant to be frankly and explicitly punitive.

110

Lemuel Pitkin 11.10.10 at 7:11 pm

We should probably be careful to avoid comparisons with programs designed to make socially efficient use of a slack labor market; WAP is meant to be frankly and explicitly punitive.

Right.

This discussion has gotten very muddled by people mixing up the proposal under discussion, which is intended to punish the unemployed, with genuine job-creation programs as in the New Deal.

111

Cryptic Ned 11.10.10 at 7:27 pm

This discussion has gotten very muddled by people mixing up the proposal under discussion, which is intended to punish the unemployed, with genuine job-creation programs as in the New Deal.

Especially with those job-creation programs being persistently characterized as “not actual employment” because they employed people who were obviously unemployable by the fact that they had been unemployed, and these people were doing work which was obviously useless because the Magic Hand wasn’t paying them to do it.

112

Zamfir 11.10.10 at 7:28 pm

@ Geo, the Keynesian stimulus only requires that you give people money out of deficit. If you get something useful in return, all the better, but that has no bearing on the stimulus. The big difference between the 1930s and now is that in the 1930s, make-work was the only politically viable way to give people money.

My point is that we shouldn’t mix different objectives. Benefits are good against poverty and starvation. It also contributes to the deficit, which is good for stimulus.

If you need more public spending to get enough stimulus, like now, you use the normal channels to find the best way to spend it, and you spend it by hiring people and firms the way you always do. I’ve never met a department, government or otherwise, that didn’t know what to do with extra cash. The people here have as task to spend the money as wisely as possible, and hire the best people for the jobs at hand.

If you want to retrain long-term unemployed, set up retraining programmes based on international experience with such programmes. The aim of such programmes should be to get people to real jobs. Not to produce useful stuff, not to keep people of the streets and definitely not to keep them out of unemployment statistics. Sometimes those real jobs happen to be created by extra public spending.

If you these things separately, I just don’t see how make-work is going to add anything. If the goal is to be useful, organize it as normal work. If it is training, organize it as training. If it is to keep people from poverty, give them money.

113

geo 11.10.10 at 7:28 pm

Sorry, I didn’t read all preceding comments before weighing in, somewhat irrelevantly. Carry on.

114

Zamfir 11.10.10 at 7:32 pm

And if the goal is to scare them out of benefits: be honest about it, call it the poorhouse and let visitors pay to throw rotten fruit at the poor. That’s at least how we used to run such things here in the Netherlands.

115

Norwegian Guy 11.10.10 at 10:02 pm

@engels:

That said, I suppose you could say that there is an anti-moralising tendency in Marxism and libertarians also often see themselves as anti-moralising and this is partly why both camps are sympathetic to it.

In Norway, most people I’ve seen advocating for a basic income (or citizen’s wage as it is usually know) are centre-right liberals. I’ve seldom heard socialists do so. Most Marxist would probably consider it some kind of petty bourgeois scheme. Other would see it as a plot to cut benefits. Social democrats are also opposed. One of the reasons might be that giving people a basic income, but not a job, doesn’t connect them to the working life – and hopefully to the labour movement.

One problem that I would point to with a basic income, is that in most proposals I have seen it would be lower than current insurances for working people. So if the basic income is for instance one-half of a average industrial worker wage, this would mean that you would lose money compared to getting perhaps two-thirds of your former income in unemployment insurance or disability benefit, or compared to full pay for sick leave.

116

engels 11.10.10 at 11:13 pm

Well, Norwegian Guy, I can’t match your abilities at armchair opinion polling. However, I wasn’t advancing an a priori statistical hypothesis about the popularity of Basic Income among ‘most Marxists’ (in Norway? down your local? in the world?), just giving my own opinion that there are currents within Marxism that can make one synpathetic to it. (I feel this is fairly clear if you read the whole of my comment and not just the sentence you snipped.)

117

engels 11.10.10 at 11:30 pm

PS. I think you are confusing Marxism (or socialism) with labourism. Marx’s idea of socialism wasn’t about giving everybody a job.

118

ScentOfViolets 11.11.10 at 12:45 am

Serious programmes for the hard to employ should have much more the character of an education program, with the continuity to build up real expertise in the executing organizations, and trust relationships with potential employers who can give.further on the job training.

But the very fact that someone is unemployed seems to make them automatically that much harder to employ regardless of their actual skills and employment history. You seem to be assuming here that these are chronic low-skilled layabouts.

TW, the important question in relation to things like the CCC is why you actually want people to do them. For stimulus purposes, sending people a check to sit at home works just as well as having them lay pavement.

And here you’re just shifting the goalposts. Your original claim was that:

The problem is always the same: if the work were worth doing (after paying for management and training and capital etc.), you should hire people in normal jobs for it. If not, you are simply firing people to re-hire them as Workfare.

As a matter of historical record, that’s simply not true.

119

ScentOfViolets 11.11.10 at 12:51 am

Especially with those job-creation programs being persistently characterized as “not actual employment” because they employed people who were obviously unemployable by the fact that they had been unemployed, and these people were doing work which was obviously useless because the Magic Hand wasn’t paying them to do it.

I think that’s it right there. Are programs like “Work for the Dole” just plain bad, inefficient, and counterproductive in their aims? You’ll get no argument from me on that score. Are all such programs involving government hiring the unemployed laboring against the immutable laws economics, doomed to exacerbating the very situation they were intended to correct?

If you try to do that, well, that’s where I do object. Especially when there is solid historical data that says that just ain’t so.

120

John Quiggin 11.11.10 at 3:51 am

“My point is that we shouldn’t mix different objectives.”

This is trivially true if you assume a linear world, as many instruments as objectives, and a positive value for simply-specified objectives. I agree with the third, and I don’t have too much of a problem with the first.

But when you have fewer instruments than objectives, you must either take account of multiple objectives or let some objectives take their default value.

121

sg 11.11.10 at 4:48 am

The Guardian is reporting a new set of anti-unemployed initiatives, including people being banned from the dole for three years if they don’t take a job when it’s offered. This three-strikes-and-you’re-out rule is also straight from the John Howard playbook, though it’s harsher.

Three years at 64 pounds a week, a 10,000 pound fine for not accepting a job when offered. At a time when jobs are drying up and the government is planning on sacking 500,000 people.

I wonder if the Lib Dems will exist as a party after the next election?

122

zamfir 11.11.10 at 7:12 am

Jq, I am not sure I understand your point. Governments run thousands of programmes, policies and projects. How is there a lack of instruments?

123

Tom 11.11.10 at 9:35 am

Are there not two effects to consider in all of this :

1. The efficacy of a Work for Dole programme, which as people suggest is likely to be low
2. The deterent effect of such a programme, which provides, I would think, a pretty big incentive to people to try and find gainful employment before they end up on Work for Dole.

The possible additionality of the second effect will certainly be of significant interest to The Treasury i.e. shorter spell on benefits = less AME spend.

124

NomadUK 11.11.10 at 9:55 am

2. The deterent effect of such a programme, which provides, I would think, a pretty big incentive to people to try and find gainful employment before they end up on Work for Dole.

One can have all the incentive in the world to find gainful employment, but, as has been pointed out, there simply aren’t the jobs to go around.

On the other hand, it’s a brilliant policy for giving people incentives to go out and mug a Parliamentarian or knock over a bank.

125

Zamfir 11.11.10 at 10:22 am

I propose whippings. Simpler to organize, just as much of a deterrent, and they leave people with time to look for jobs.

If you sell the right to whip and donate the proceedings to Oxfam, everyone is better off.

126

Chris Bertram 11.11.10 at 10:22 am

127

Daragh McDowell 11.11.10 at 2:00 pm

@Chris -126

So if the FT is to be believed, nothing new is occurring in any case, so there’s no point in getting worked up about it?

128

Chris Bertram 11.11.10 at 2:33 pm

Well the policy has been tried before, and failed before. That doesn’t stop it being disgusting in itself, and disgusting as a pander to the punitive instincts of the readership of the Daily Mail. Where it is enforced, it will be very unpleasant for its victims.

129

Daragh McDowell 11.11.10 at 2:55 pm

@Chris – tend to agree, if not on your interpretation of the thought processes going on n IDS’ skull.

130

Hidari 11.11.10 at 3:19 pm

#125 Why stop at whippings? Indeed, I believe Jonathan Swift once proposed a solution to a similar problem. Perhaps, if this solution was widely adopted, Gordon Ramsay could make a reality TV show featuring celebrities’ favourite recipes for surplus (or slurp-us) labour, starring some ex-members of Atomic Kitten, those blokes from How Not to Decorate, and Bez.

131

Chris Bertram 11.11.10 at 3:21 pm

I really can’t believe that the blokes from How Not to Decorate would taste nice, and it might be very dangerous indeed to ingest pieces of Bez.

132

Zamfir 11.11.10 at 3:27 pm

Hidari, think NAIRU theory. We need those people around, not dead. Without them, there might be wage inflation!

133

Daragh McDowell 11.11.10 at 3:39 pm

Again my liberal principles force me to disagree with Chris – we need to take a calm, evidence based approach when designing government regulations about ingesting pieces of Bez. Ultimately its for the individual to decide whether eating Bez is in their interests.

134

StevenAttewell 11.11.10 at 6:45 pm

Lot of good stuff being said in this thread, so only a few things to chime in on:

Zamfir:

The advantage to direct job creation as a form of stimulus are three-fold: first, unlike traditional forms of stimulus, direct job creation is much more efficient at creating jobs because it’s creating jobs both as a primary effect of the program and through the multiplier effect, whereas traditional stimulus relies entirely on the multiplier effect. This becomes quite clear when you look at the rate of jobs created per $100 billion spent, for example. (http://realignmentproject.wordpress.com/2010/06/26/budget-neutral-jobs-policy-in-an-era-of-irrational-austerity/)

Second, direct job creation prevents a huge loss to the economy – namely of the labor of the unemployed. To take the U.S case – because the U.K statistics are all either indexes or percentage changes – output per worker is about $110,000 a year. So just taking the 10 million on Unemployment Insurance, that’s as much as $1.1 trillion in lost production. That’s value that could be used to any number of progressive ends. Where direct job creation most differs from “work for the dole” is that direct job creation begins from the principle that the labor of the unemployed is of worth – both in a fiscal and moral sense – that the unemployed overwhelmingly want to work and should be freely offered work.

Third is that it’s actually less inflationary than traditional stimulus – since it actually expands supply at the same time that it expands demand. Not that relevant right now (at least in the U.S, more so in the U.K where inflation is likely to be higher), but handy during stagflation.

The issue with the “normal channels” is that you actually get less employment than by doing a separate direct program. We found this out in the U.S during the 1930s – http://realignmentproject.wordpress.com/2010/07/15/the-curse-of-self-liquidation-direct-job-creation-vs-traditional-public-works-a-job-insurance-supplement/ – existing departments and firms already have an employed workforce, so that you tend to pick up new jobs only at the margins (adding on a new shift, bulking up existing work crews, etc.); they also have more of a bias to substitute capital equipment for labor (using backhoes instead of a couple hundred workers), and it also tends to slow the process of hiring people way down.

135

Norwegian Guy 11.11.10 at 10:05 pm

@engels:

Yes,I did read the whole of your comment. And I am in many ways sympathetic to a basic income myself. But I do think you are pointing out something important, that the left-wing and the right-wing proposals for basic income are hardly compatible. And I’m more familiar with the proposals from anti-socialist liberals, who present it as a way to reduce the bureaucratic welfare state. And their proposals could probably help the very poorest, but at the price of making does between say the 10th and 50th percentile worse of. What is important is, I think, what level the basic income is set at – most proposals I have seen are quite low – and how many other benefits are abolished, since they are no longer seen to as needed. And even if the basic income level is at first set reasonably high, it’s not hard to imaging that raising it might not be a priority for a future right-wing governments, making it gradually less and less worth.

By the way, Steven Attewell has a good discussion of basic income at his blog.

My impression was that Marx was the one connecting socialism and the labour movement, as opposed to the earlier, utopian socialists. But you knew Karl better than me, Friedrich, so I’m sure you’re right :)

136

engels 11.12.10 at 7:09 pm

NG – Thanks, and sorry for my snarky post. I’d also say I was ‘sympathetic’ to Basic Income rather than a true believer. Basic income capitalism wouldn’t be close to socialism but it would be a lot better than ‘real existing’ capitalism. (I’m sceptical that that BI capitalism could ever really exist, though. If it was likely to, I wouldn’t be fighting against it on the grounds it was a ‘petty bourgeois scheme’.) I’m not an expert but I think the standard responses from BI supporters to what you say would be, firstly, that it ‘connects’ the interests of unemployed workers with employed workers by giving them a common interest in raising the level of the grant and, secondly, that the fact that this is a large and potentially powerful political constituency means the level is likely to rise, not fall, over time.

137

StevenAttewell 11.12.10 at 8:55 pm

NG –

Hey, thanks!

Question for engels:

How do you mean “connects” the interests? Wouldn’t employed workers pay taxes to fund the BI, whereas unemployed workers wouldn’t? Historically speaking, hasn’t this tended to be the cause of a break-down of interests, between different segments even within the low-wage segment of the working class?

138

engels 11.13.10 at 12:22 am

Steve – If the BI is funded out of general progressive taxation then those with the highest incomes pay much more in taxes to fund the BI than they receive back from it. Those with the lowest incomes (including the unemployed, who btw do pay certain taxes) receive more from the BI than they pay in taxes to fund it. Going up the income distribution there is a point at which the existence of the BI stops being in the material interest of an individual taxpayer. The location of this point depends on the level of the BI and the progressivity of the taxes that fund it. However, on any reasonable proposal it includes employed workers as well as unemployed workers, but not the highest paid workers. This large section of the population (apart from those at the threshold) has a material interest in raising the level of the BI.

139

Fr. 11.14.10 at 7:23 pm

It seems like such a bad idea that the French government has already dubbed it “excellent” (can’t find the news report again, but the statement came from either Baroin or Wauquiez).

Comments on this entry are closed.