My friend Hayley posted a link to this article by Patrick Armshaw. He makes the excellent point that Workfare is bringing the substitution effect into play- paid workers are being substituted for JSA claimants. Why would companies pay employees when the unemployed can work for free while the tax payer funds their benefits?

By joxin

This effect is likely to be hidden however, as rather than stopping hiring, companies are likely just to offer fewer hours to their current staff. While critics of TESCO etc. might be labeled job snobs the main problem with this type of work isn’t the status it’s the insecurity. Zero-hours contracts, where the employer has the power to offer however many hours they wish each week, are not going to allow people to provide for their families, but do make it easy for them to cut back on paid staff when free labour is available. The evidence is that underemployment is increasing rapidly- people want more hours but employers are not offering them. Instead of supporting people in this situation the government has responded by cutting their tax credits.

According to the Guardian -DC Property Maintenance takes job seekers on unpaid for four weeks and sometimes they extend it if they “really want to employ them but it is not the right time.” WTF does that mean?? Could they not just keep their details on file and give them a ring when there’s a vacancy? Instead they just string the job seekers along with the hope of a job at “the right time”- when the moon aligns with Venus I assume. Not that they should be taking on jobseekers without any job prospects in the first place.

The point of this “work experience” is debatable. I hate the patronising suggestion that the large majority of JSA recipients really need to learn what it’s like to work 40 hours a week and how to get up on a morning. Employed people, if you lost your job tomorrow how long would it take you to forget what it’s like to work full time? 3 months? 6 months? I thought not.

I think the main reason this kind of policy gains popular support is that many tax payers don’t like the idea (painted by certain politicians and sectors of the press) that claimants are enjoying their hard earned money without having to work for it. So my suggestion is, that if people have to work for their benefits, they should get the minimum wage. At £ 6.08 per hour anyone over 25 would be able to work up to 11 hours on £67.50 per week JSA. A 21 year old getting £53.45 would only be able to work just under 9 hours but 18-20 year olds on the lower minimum wage of £4.98 would be back up to nearly 11 hours. (Age discrimination anyone?)

This would hopefully limit the substitution effect and reinforce the link between work and pay. Of course what we really need is more jobs…