Work for the Dole

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.

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?

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.

“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.

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

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…

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).

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.

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?

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.

‘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.)

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”.

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.

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.

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?

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.

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.

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.

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…

“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.

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.

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.

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

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.

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)

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.

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. :-/

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.

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.

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”.

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.

basic nursing care. You know, stuff like sponge baths

You’re crazy.

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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…

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.

@ 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.

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.

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.

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.

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?

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.

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!

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

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.

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.

@ 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.

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.

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.)

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.

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

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.

http://blogs.ft.com/westminster/?p=67686

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.

#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.

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

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.

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.

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.