Welfare to Work Doesn’t Work—and the Evidence Is Clear

Wherever we are in the world, we are being forced to live a myth; a lie that for some can destroy us physically, profoundly harm our mental health, corrupt us socially, or leave us emotionally desolate. I am, of course, talking about work, the social and economic need to ‘earn a living’ and pay our way in the world. This isn’t to suggest some don’t thrive in the work environment, clearly there are examples of retirees who shrivel away without a job to go to each day; or those dedicated few who genuinely believe they get their identity from the job they do and savour the experience every day. But I would argue most people work for the salary they are paid each month.

By now many readers will be thinking, ‘Oh here goes, another lefty wanting to ‘smash the system’, but that is very far from my intention. I have nothing against earning a living, but what I hope to show is how our hard-earned taxes are being misspent to perpetuate a grossly unhealthy myth about the idea of work and it’s not even working.

But let me first talk about how having a job may be harmful.

How work messes with your mind

For years, psychology has been used to tell us work is good. In 2006, Waddell and Burton did some research commissioned by the UK Department of Work and Pensions and it unsurprisingly argued:

·       Work meets important psychosocial needs in societies where employment is the norm;

·       Work is central to individual identity, social roles and social status;

·        Employment and socio-economic status are the main drivers of social gradients in physical and mental health and mortality;

It sounds plausible, but there is also strong psychological evidence showing how our working conditions and a lousy workplace environment can affect our mental health, so it isn’t black and white. I mean, we know high job demands, low job control, high effort–reward imbalances, injustice in the workplace, role stress, bullying and a lack of support can create mental health problems – in other words, the kind of difficulties most of us face nearly every day.

Social effects of work may not be as good as we think

The negative social impact of work may seem obvious but let me spell it out. At its most basic level, research has shown work can degrade interpersonal relationships and create spillover impacts on families. Even worse, workplace dynamics such as exclusion or not being allowed into social or work groups can affect us badly, as can being deliberately ignored by our work colleagues

A more recent social effect has been the post-Covid trend towards remote, or lone working - while offering a lot of flexibility, it brings with it distinct isolation risks, which can significantly damage natural social functioning.

Negative spiritual effects of work

We often tend to ignore the spiritual effects, but they can have a profound effect on our well-being. Take for example times when we work in a toxic environment that lead us to feel a lack of purpose or identity. We see this when people are employed in, what they feel are pointless or unfulfilling jobs and this can undermine your sense of autonomy that can lead us to feeling hopeless, depressed, or maybe simply as though our careers have stagnated. Add a toxic management, or disrespectful colleagues and all this can disrupt your inner peace, making it difficult to maintain a contented or relaxed mindset.

So why do we work?

Well, here we come to the crux of the matter, because governments and employers want us to believe work is wholesome, character-building and gives us a sense of identity (and, of course, for some this is true), but the reality is far simpler – we work because we have to. It’s as simple as that. We work because if we don’t, we can’t pay our rent or mortgage, we can’t eat, drink, or stay warm, and all this ignores the wonderful toys our consumer society churns out every day that we convince ourselves we ‘need’ – after all, where would life be if we couldn’t buy the latest smart watch, a new electric car, the latest Apple phone, or a crazy foreign holidays,

So, we work primarily to survive and secure financial independence, it fulfils core human needs by providing routine, community and, for some, it gives a sense of purpose. For those lucky enough it can challenge us to grow, foster personal development, and give us a feeling we are contributing our unique skills to society – but here I would urge caution as this is unlikely to be the common view of work.

A few years ago, an ex-colleague of mine told me he had been working so hard on a project that he’d literally made himself unwell. He didn’t offer this as a health update, or to warn me about overexertion. It was, oddly enough, a boast. But why is work treated, strangely enough, as if it were next to godliness

In 1905, Max Weber gave us some answers when he suggested work is driven by a "Protestant work ethic," where labour is viewed as a divine "calling" and wealth accumulation a sign of spiritual salvation. What Weber could never anticipate was how society would move away from this “Protestant Ethic” and turn to abstract deities that would command our deep devotion; deities like the “free market” - the ultimate, supreme deity in a consumerist world, demanding constant economic growth and competition; or the” Brand” where entities like MacDonalds, Starbucks or Walmart/ Asda act like patron saints, offering worshippers a sense of belonging, status, and identity in exchange for their loyalty. Then there is the role of “the media”, the priesthood and messengers of the modern era. Where social media platforms like Instagram and Facebook broadcast what society should desire, setting the trends and making us feel our lives are inadequate without the latest products.

But what about the unemployed

For a society to work there must be conformity to maintain order, co-operation and social cohesion so, it follows, if the norm is for people to work and participate in a consumerist society, then those unable to do so must be encouraged or forced to do so. To achieve this many governments internationally run “Workfare”, or to use a more British term, “Welfare-to-Work programmes to help, or one could argue force unemployed people back into work. There is nothing new about this approach, policies compelling unemployed people back into work trace back to inter-war Britain, or even as far back as the 1880 Famine Codes in British India.

 More modern “Workfare” programmes are government-administered social policies requiring able-bodied welfare recipients to engage in community work, public-service jobs, or job training in exchange for receiving state income benefits. Its declared aim being to reduce poverty, prevent long-term dependency on government aid and help individuals build recent work experience. The covert goal is to reintegrate the unemployed back into a thriving consumerist society.

Unfortunately, the World Bank, amongst others argue workfare programmes have no lasting effects on total national employment or the full-time long-term employment of those who have been out of work for over 12-months. It simply doesn’t work.

Despite this, these programmes remain popular and involve billions of pounds/ dollars of government investment.

I was thinking recently about Viktor Frankl who developed an argument suggesting the purpose of life is to secure well-being. The corollary is, of course the creation of meaningless work is contrary to the creation of well-being, and forcing people into such work may even be harmful.

We know workfare or public works programmes (PWPs) work effectively as social safety nets to provide temporary income and food security, but as long-term tools for returning people to employment their success is mixed; research shows they often fail to create lasting infrastructure benefits and, more importantly their effectiveness depends heavily on their context (whether they are targeting long-term unemployed, young people, elderly etc ) as they are not a one-size-fits-all solution to poverty or unemployment.

The effectiveness of UK workfare/ welfare-to-work programmes – the Restart Scheme

The Restart Scheme was established to help long-term unemployed people return to work, offering training in employability skills, skills development and job placements. Since 2021, 1.2 million unemployed were referred to the scheme and the government set a target of achieving 310,000 successful outcomes during a five-year period (an outcome assumes an individual secures 16-hours of work per week for a period of 6-months), costing the taxpayer an estimated £2,429 per person. The scheme achieved only 280,000 successful outcomes (88|%). In their analysis of Restart, the Institute of Fiscal argued had absolutely nothing been done to help these people, 246,400 would have naturally returned to employment without any form of assistance.

One of the reasons UK workfare programmes are destined to fail is because they are contracted out to independent employability companies eager to maximise profitability and secure the full funding for each referral (they only receive 30% of funding when the person is referred and the remainder when they secure employment). As a result, most providers ‘cream’ (only accept referrals from those who can be found work quickly) or ‘park’ (spend as little time as possible on those with complex needs and difficult to find work) to distort statistics and suggest high success rates.

The effectiveness of US workfare/ welfare-to-work programmes

The main workfare/ employability programme running in the US is known as TANF (Temporary Assistance for Needy Families), a federally funded, state-administered programme providing short-term cash assistance and support services to low-income families with children. Often referred to as "welfare”, it aims to help parents achieve self-sufficiency through work-focused programmes helping them back into work. In order to achieve this, the government funds states a total of $16.6 billion each year (the overall federal budget for means-tested budget for welfare programmes is about $1.1 trillion), but unlike workfare programmes in the UK, recipients are usually required to find employment or participate in job-training programmes within two-years of receiving assistance.

What we do know when we look at workfare programmes critically, is that since 1997 the UK, much of Europe and parts of Asia have been eager to adopt welfare-to-work approaches based on extremely limited evidence of their ability to boost welfare recipients' earnings on a long-term basis

So too has the belief programmes prioritising moving people into work quickly are more effective than ones seeking to enhance human capital (skills training, assistance overcoming complex needs etc). Additionally, what is particularly disturbing is how both the US and UK governments have ignored the lack of evidence on how long the beneficial effects of programmes last after people leave them and their almost inevitable future return to unemployment and poverty within five or six years.

 

Political comment

Transparently, we need to rethink the whole concept of work, ranging the current work leisure balance where one-third of our day is spent in work, one-third asleep and up to one-sixth travelling to or preparing for work, leaving only four hours a day for leisure or personal study. But we also need to re-examine our entire ‘back-to-work’ approach because it quite simply isn’t working. In the UK we have 10 million people who are economically inactive and close to 6 million on out of work benefits and 49% of sick and disabled people without a job, In its response, the government is intending to invest £3.8 billion during this parliament alone on programmes supposedly geared to get them back into work; programmes that consistently fail to deliver.

Additionally, we know in the UK, 2.7m people are in work and claiming benefit largely because they have forced into part-time work and have not been able to obtain full-time employment.

Action must be taken if this is to change. In particular, we need to

·       Reappraise the nature of work and re-examine our work-leisure ratio

·       Help young people into training or education programmes by offering them proper skills

·       If unemployment levels vary regionally, offer financial incentives to move to ne areas

·       Offer employers significant incentives to take long-term unemployed

·       Provide greater support to families eg. provide greater financial support for childcare

·       Dramatically increase public works spending eg attack the homelessness crisis by funding a substantial programme to build far more social housing so workers can move to where jobs are at any given time

·       Substantially improve training programmes to respond to cyclical unemployment especially in high-growth industries

·       Lowering interest rates and use tax incentives to allow new and young businesses to expand rapidly.

There’s nothing new here – it’s what we’ve always known, but what we’ve always lacked is the real desire to bring about real and effective change. Handing out hundreds of billions of pounds or dollars to employability providers so they can mage huge profits from governmental ambivalence is not the answer. It is time to develop a cohesive and strategic plan – but the key question is whether we have the willingness.

 

Another disaster at DWP?

Once again the Tories are having to back pedal as their Universal Credit programme shows signs of falling behind schedule and facing major problems. The system, which will roll all benefits and tax credits into a single payment automatically linked to earnings, was expected to be trialled for new claimants across four areas of the country from late April.

Unfortunately, and typical ignorance of the simple realities of life, Iain Duncan Smith failed to check out with those who deliver welfare benefits and consequently he has been forced to scale back the trials to a single JCP office in Ashton-under-Lyne. So much for a grand roll-out.

Three other pilot areas in Wigan, Warrington and Oldham that were also due to ‘test out’ the new programme will not now begin processing the payments until at least July and possibly later.

Of course it would be nice to think that IDS would have the humility to admit to, and display a little embarrassment, but I suspect we may be waiting a long time. This is a man noted for his single-mindedness. No doubt over the coming days we will hear a range of excuses, but the bottom line is that it has been a kick in the pants for the Secretary of State.

In February, 2013, Iain Duncan Smith drafted in one of the Government’s most experienced trouble-shooters to take charge of the programme – a move which led to the departure of another senior DWP civil servant a few weeks later.

The delay in rolling out Universal Credit are probably due to the fact that most frontline staff do not have the training, computer programmes or experience in place to avoid making disastrous mistakes which could lead to people not receiving the benefits to which they are entitled. A point made by a number of welfare organisations months ago. Could this be more evidence that IDS doesn’t listen to those around him?

In its announcement of the delay the Department of Work and Pension made no attempt to explain why it was unable to proceed as planned. Interestingly, in a neat little sidestep a spokesman for the department searched for a way to get IDS off the hook and tried to suggest it was “sensible” to start with one area before rolling it out to the other three in July.

Speaking on behalf of DWP, he said:

“It will allow us to make any changes that we feel we need to make and see what works and what doesn’t”.

Liam Byrne, Labour’s Shadow Work and Pensions Secretary, tried to capitalise on this bungling by condemn UC and describing the announcement as “yet another embarrassing setback”.

He went on to say:

“The scheme is already late and over-budget and in spite of earlier promises Ministers have admitted that they have no idea when out of work claimants will move over to Universal Credit … The truth is the IT for Universal Credit appears to be nowhere near ready. Universal Credit calculations depend on salary data from HMRC's new PAYE Real Time Information system. Obligations for small firms to provide PAYE data on or before each employee payment have recently been delayed from April until October. And DWP are so worried they are now barring access to their five main contractors. This scheme is now on the edge of disaster. Ministers must admit this project is in crisis and start to fix it now – before millions of families tax credits are put at risk.”

Regrettably, Byrne failed to point out that UC will create significant challenge to low-income families. The simple reality is that, according to a Resolution Foundation report, “Conditions Uncertain”, almost 1.2 million low-paid workers entitled to support under Universal Credit will have to look for extra work or face the risk of having payments withdrawn. Furthermore, in a report by Tanni Grey-Thompson, 100,000 disabled children stand to lose up to £28 a week and 116,000 disabled people who work will be at risk of losing up to £40 per week from help towards additional costs of being disabled.

These are injustices that appear to be going through on a nod and a wink. The Tories and their Lib-Dem puppies will force this programme onto the most vulnerable in our society and it is a responsibility of those on the left to expose the extent of these injustices and campaign for their eradication.

We have a responsibility to do everything in our power to protect the poor and the vulnerable. If we fail them now we have no right to ask for their support later.

Tory slash and burn economics are hurting the most deprived

A financial education charity has said tax and benefit changes coming into force today will leave households £200 worse off. Credit Action, a financial education charity, has calculated they will leave households £200 a year worse off.

According to their research reductions to what parents could claim in childcare costs through the working tax credit alone would leave some families worse off by up to £1,560 a year.

Other changes due to come into force today include a £1,000 rise in the threshold at which people start paying income tax - this will mean 500,000 people will be lifted out of paying income tax altogether, a freeze in the inheritance tax threshold, an extra 5% on stamp duty for homes worth more than £1m and restrictions on tax relief on pension contributions for those on more than £150,000 a year.

The government is also cutting childcare support through the working tax credit. The resolution foundation says this will cost 450,000 people, which includes almost 290,000 lone parents, an average of £436 a year. For some families with two or more children it could be up to £1560 lost. This little-noticed change will have a huge impact on hundreds of thousands of families, but particularly mothers who work part time for low pay. Cuts to childcare support make no sense if it simply makes it harder for parents to work – as the office for budget responsibility has warned – and so ends up costing the taxpayer more.

The biggest losers will be those earning more than £35,000, with someone on £50,000 seeing their take-home pay reduced by £500 a year, according to the Institute for Fiscal Studies.

The results of Osborne’s Budget are really quite frightening, especially for the poorer sector of our society. And what are the government doing to help them? Nothing – it seems they are oblivious to the demise of the average man and woman in this country. Understandable really, given that over 20 of the Cabinet are millionaires and have never really experienced hardship.

This bunch of elites and toffs are totally unaware of the economic realities facing society -

1. The VAT rise will cost families with children £450 this year alone
2. Tax credits and child benefit will be frozen from April
3. Petrol prices are soaring with the VAT rise adding 3p per litre
4. Economic growth has stalled
5. Unemployment is rising again – now at a 17 year high
6. Nearly 1 million young people are now out of work

But fear not, for the government have a strategy to help the less well off. Called the child poverty strategy, it aims to offer genuine opportunities to the most deprived people in Britain. Many disagree with the principles outlined in it pages and argue it is a bungling attempt to solve a critical problem.

Responding to the publication yesterday of the Government’s child poverty ‘strategy’ and social mobility strategy, the Chief Executive of Child Poverty Action Group, Alison Garnham, said:

“A child poverty ‘strategy’ which does not set out how poverty numbers will fall, and by when, is not a strategy and is incredibly disappointing and surprising given the Prime Minister’s stated commitment on tackling poverty.

“The ‘strategy’ is unlawful because it has not kept to the requirements laid down in law by Parliament. An expert Child Poverty Commission should have been set up and consulted in the strategy’s preparation. This failure shows in the poor quality of the ‘strategy’ itself.

“It is absolutely staggering to see in the 'strategy' cuts to housing benefit and support for sick and disabled families that will make poor families poorer. On top of benefit cuts, wage stagnation and rising prices for basics like food, fuel and clothes mean there is an immediate crisis for families. Urgently addressing the financial crisis for families should be the foundation for the strategy.

“Requirements on social inclusion and the progress Ministers expect to make on their targets by 2014 are missing. We are astonished to see a consultation on scrapping child poverty duties for local government promoted in the ‘strategy’, instead of being clearly ruled out.

“The ‘strategy’ starts from a false premise, suggesting that the last decade made no progress and did not address worklessness. In fact there’s been a downward trend for child poverty in workless households, but an upward trend for in-work poverty, which is now the larger problem.

“Although we finally have a document that tells us what the Government plans to do, it appears to do very little. Taken together with the social mobility strategy it is hard to see how they will have any traction on the major problem of child poverty we face. Britain could have the same low rates of child poverty as other European countries, but to achieve this we need a strategy that learns the lessons of what successful countries on child poverty have got right and addresses the structural unfairness in our own economy.”

On top of all this, on April 1st housing workers and their tenants faced the start of a two-year package of reforms to housing benefit that will have far-reaching effects on families and communities across the whole of the UK.

The new housing benefit caps for people in the private rented sector and the move to cut the number of properties people can choose from will have an immediate impact on families looking to find a new rented home.

There is also an important change to the levels of housing benefit that people in both the social and private sectors will receive if they have adult children at home.

From 1 April, tenants sharing their home with other adults need to collect more money from them to contribute towards the rent, or make up the difference from their own money. This will be an incentive to tenants to encourage their children to leave home and could also lead to greater risks of rent arrears.

Sarah Webb, Chief Executive of the Chartered Institute of Housing (CIH), said:

"People are going to have their options about where they can live cut significantly and it is likely that demand for the properties that remain available will be squeezed further.

"Government has argued that rents will fall as a result of the measures. There is no evidence at this time to suggest that landlords will respond to the changes by cutting their rents. Indeed, the latest surveys from across the sector suggest that rents are going up as demand outstrips supply and the number of new homes being built continues to be half of the level needed."

The average rent in England and Wales edged ahead by 0.2% to £684 a month in February 2011, to leave the typical cost of being a tenant 3.9% higher than in February last year, according to letting agency network LSL Property Services.

Ms Webb added: "Where tenants face significant shortfalls the choice is going to be stark, find money from somewhere else or move. Given these are people on low incomes their ability to save by cutting back on other items is severely limited.

"Ultimately, this will mean low-income families moving from the communities where they have jobs, where their children are in schools, where they having strong social networks."

The full measures which have now come into force are:

1. There will no longer be a five bedroom Local Housing Allowance rate. Weekly Local Housing rates will not exceed £250 for a one bedroom property; £290 for a two bedroom property; £340 for a three bedroom property; £400 for a four bedroom property.
2. The £15 excess will be removed as soon as the Local Authority reviews a claim. Claimants will no longer be able to pocket any excess money after their rent is paid.
3. Non-dependants living in households of Housing Benefit claimants will see their deduction increases take effect from April 2011.
4. Disabled people with a long-term health condition who need overnight care or live with someone with similar needs, may now be able to claim Housing Benefit for a private rented property which has an additional bedroom for a non-resident carer.

Bearing all this in mind, how can the government legitimately talk about increasing fairness, supporting those who are less privileged and increasing the chances for the poor? Once again it seems the Tories are full of lies and dishonesty just so they can hang onto power.

Musings of a new granddad

Recently I became a grandfather and since the birth I’ve had the opportunity to reflect on the kind of society young Zach will inherit as he grows up. A chance to also consider whether all those changes I dreamed of and campaigned for as a young man have happened.

Back in the 1960s and 1970s we were going to change the world. Our heroes were radicals with exotic names – Tariq Ali, Daniel Cohn-Bendit and Mao Tse-Tung. We fought on the streets, on campuses and in the back rooms of dingy pubs, all in the belief that any day the old order would fail and we would herald a new age. An era with equality for all, an absence of poverty and above all, freedom from the threat of nuclear war.

Forty years on, it seems to me very little has changed. Our revolutionary leaders either conformed to the “system”, or have been discredited. Tariq Ali became one of the leading lights of mainstream Labour party politics, Daniel Cohn-Bendit joined the Greens and sits in Strasbourg as a member of the European Parliament and Mao has been thoroughly discredited and found to be far more authoritarian than all our worst nightmares.

In the 60s and even in the 70s, we marched against a variety of wars, including the Six-Day war and Vietnam. Today we oppose conflicts in Iraq or Afghanistan. Forty years ago, we marched from Aldermaston to London in opposition to nuclear weapons. Nowadays, we stand silently as the government announces there will be a replacement for Trident.

As a young man and eager member of the Communist party, determined to change the world I stood horrified as the Berlin wall was raised, and watched the oppression in Czechoslovakia. There is no Communist party today – well there is, depending on whether you want to look at the Communist Party of Great Britain, the New Communist Party or the Communist Party of Britain (Marxist-Leninist). The revolutionary road has been largely superseded by the democratic path but, just like in the 1960s there is little or no money in the coffers, so most of the hard left find it hard to stand candidates.

The Labour Party back in the 1960s was led by a one-time lefty, who swung to the right once he took over the leadership. Those on the left in those days had held much hope in the leadership of Harold Wilson, only to find him slipping away from the fundamental values outlined in Clause lV of the Constitution of the Party. In 2011, there is no Clause lV – well that’s not strictly true, but there is no longer any requirement for the party to seek control for the means of production and distribution. Blair and his New Labour project effectively put paid to that idea. The latest incarnation of leadership in the Labour Party is a product of the New Labour project and despite being nicknamed “Red Ed”, his pronouncements against strike action to oppose the cuts are reminiscent of the words of Wilson, Callaghan and Kinnock.

In the 1960s, we rediscovered the notion of poverty and began to realize there is an ‘underclass’ in modern society – a sector who earn less than 60% of the national average income. Fourteen years ago, New Labour declared war on poverty – they failed – we still have an underclass and little, if anything has changed. The top elite still own the vast majority of the wealth in this country. A carer will still live on a substandard income whilst a banker can earn an annual income in excess of £8m

So am I cynical? Yes – and I think I have a right to be. My generation let our young people down. We sold out our values for the comfort of a modern three- or four-bedroomed semi in the ‘burbs. We satisfied our idealism with pay increases and a more comfortable life. When Maggie set about dismantling the unions we didn’t cry out in horror and when Blair finished the job we sniffed and said: “So what can I do about it?”

In short, my generation doesn’t have much to be proud of. A lot of failed ideals and trashed values. So my prayer for my young son is simple. Learn from us – don’t sell out, don’t give in and don’t trust those who tell you that sooner or later the system is about to change. It isn’t. The system will never change – you have to change it.