The Cunning Plan of Pay to Work

Babs Williams

Government thinking on welfare just isn’t joined up. Or maybe there’s some cunning plan that I’m failing to grasp. But it looks as if the government is running contradictory anti-poverty programmes, pushing forward half-truths, and omitting any reasonable view of what low paid jobs should look like. It almost looks as if the government is simply hell-bent on shrinking the size of the state. Let me explain.

The government wishes to make it “pay to work.” There are three ways you can logically do this in a civilized liberal democracy.[1] Firstly, you could cut benefits to the point where those who were enjoying booze laden binging sprees at the Gold Coast on state-handouts are forced to find another way to lead their extravagant lifestyles. Secondly, you could increase the base wages of those who are in–work by legally enforcing a higher minimum wage. Finally, you could try to do both if you were mentally challenged enough to think that a significant increase in base wages would not lead to increased prices, via inflation (which they probably would). This would be worse than useless – those on benefits would have to face the double barrel of receiving less in a society where their spending power has significantly decreased.

The government, after allowing real wages to drop month on month for the past four years, adding up to the longest continuous slump in real wages for fifty years, have decided that they need to slash benefits to fulfill their target of making it pay to work. Maybe there’s some logic behind this. But in absolutely no way does it align with the government’s main inequality programme, which is tackling child poverty.

Let me explain. Clearly the poorest children live in the poorest households. As their parents’ earning power decreases under current government policy, so their chances of growing up in poverty increases. So the clear way that the current government – which is against benefits, state dependence and market intervention – would be able to combat child poverty is, ironically, by giving more benefits to poor households. In essence, having seen their wages and benefit entitlements decrease, child poverty reduction programmes effectively recycle the money already taken from households in poverty. Which brings them straight back to square one.

But beyond this contradiction, there are two moral factors that seem to have escaped the mainstream political discourse on “pay to work” measures. The first of these is that when we use the term “pay to work,” this needs to signify a society where large state handouts are not needed to support a family. Yes, this means increasing the minimum wage. After Labour spent their time in office demonizing and undermining low-skilled jobs through their aggressive politics of aspiration, is there little surprise that some (though a tiny minority) would rather stay unemployed than work. There needs to be some level of dignity given to low-income jobs, and this can start with giving people in work enough so they do not have to depend on the state. That’s a true Big Society.

The second factor involves challenging politicians who approach benefits reduction from the ridiculous angle of “there are jobs, but people would rather defraud the system than work.” This is basically a lie. Last year, fraudulent claims by those on JSA amounted to a ridiculously small 4.1% of all fraudulent benefit claims. Combine this with statistics showing claimant count vs jobs available and we are left with a picture where many who wish to work, can’t work. Yet, these same people are being demonised for the unfortunate situation that is essentially beyond their control, just so the government can justify to the working poor why their living standards are decreasing. Of course the government can then point to those on benefits who are apparently having a rave whilst spawning ASBO babies. Oh…

…Finally, I see the cunning plan.

[1] Other methods include coercion of a kind that no-one outside of an autocracy truly wishes to see.