Is “work pays” still a useful policy, or are we now needing a Universal Income?

Summary

The “work pays” policy was a cornerstone of social policy and practice for much of the 20th century. However, the decline in the quality of much work in the 21st century, matched with new limits and cuts in benefits, now means that the former certainty of this policy is now undermined. A Universal Income is a suggested new tool in fighting poverty and disadvantage, but it currently has some flaws.

Discussion

In the 1980s and 1990s the strong belief in community regeneration was in a policy known as “work pays.” For anyone who was unemployed, the belief was that helping someone get a job was the single best thing that you could do as a practitioner. It improved people’s mental health, their physical health, their range of contacts and support, the life chances, and these benefits extended to the immediate family – children would do better at school, for example.

Some of these claims were articles of faith rather than being based on documented research, but the feeling was it so obvious as not worthy of a long study.

And mostly this belief was well-founded. Though I do recall at some meetings in Manchester in the voluntary sector in the 1980s having to remind people that it had its limits. Some of my reminders were:
– There are some people we can get along with at work but we would never invite home.
– There are some supervisors who are basically not very nice at work, and the temptation to storm out of work with a “you can stuff your job” over the shoulder is sometimes hard to resist.
– And, it is hard if you are the first person in your household to have a job, because you have to go to sleep earlier than everyone else, and everyone assumes you have more money to share, even in your first week or month when you are spending on buses etc and waiting to be paid.

Those caveats aside, broadly the “work pays” policy was a strong cornerstone of social policy, certainly up to 2000.

But, slowly a drift in the economy started to undermine this policy. The push for a “flexible labour market” led to a freelance culture being spread from middle-class professionals to working class communities, the most obvious aspects being zero-hours contracts and self-employment as a means of avoiding employment law duties.

Sensing that the world of work was becoming less rewarding, the policy consensus by the national political parties at the time was to “align” welfare benefits with the labour market. At it’s best, this could mean that the transition from unemployment to work was smoother. But more often at it’s worst, this meant that benefits were driven downwards to match the falling standards in the world of work.

Trade unions also had increasing legal restrictions placed on their operations. In a climate of declining membership and de-industrialisation, trade unions were at risk of becoming craft associations again. This trend, if followed for some years, could protect the higher career grades at the expense of labourers etc, just as the craft guilds had been up to the 1870s when the unionisation of dock workers started the era of mass working class membership.

Perhaps the lowest point, so far at least, of these trends in ratcheting down employment rights, welfare benefits rights, and trade union protection rights, was in the creation of Universal Credit.

The proponents of Universal Credit tried to pretend that “work pays” was still effective, conveniently ignoring more recent evidence of its failings as outlined above, and in its later stages being cut back even further by Chancellors of the Exchequer in the name of Austerity. Limiting the number of children that can be supported by a family while being unemployed is probably the most egregious of these cuts.

Few serious social policy advisors would now argue the advantages of Universal Credit; but there is a lot of interest in its possible replacement by a Universal Income.

In short, a universal income would be payable to every adult, working or not. For me, it should be paid weekly because the idea of poor people budgeting monthly is a vindictive fiction – every poor person has times with no money, but a few days to ‘pay day’ is easier to live with than trying to go for weeks with nothing.

But a universal income must also have additional costs top-ups. The additional costs that disabled people have to meet are probably the largest here. Child benefit, at a rate where children are genuinely taken out of poverty, is another.

Finally, any such changes will involve winners and losers. This is a fair point, but let’s be honest about the score so far, that already some people have been on a winning streak through incredible tax cuts and loopholes. Maybe “work pays” as a policy is over, but we are still a fair way from “living pays”.

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