The ideology of workfare

On 9th February, Tesco in East Anglia posted a job on the DirectGov JobCentrePlus website, looking for someone on JSA to work the night shift. On 3rd March, there’s a National Day of Action against workfare.

The basic details (should you wish to apply) are
Job No: BSD/27442; Hours: TBC; Location: EAST ANGLIA IP32 (this is the 24-hour superstore at Bury St Edmunds). Duration: Permanent. Pension details: No details held. Description: Interviews as part of SBWA, dates and times to be arranged by the store. Contact Amanda Evans at Tesco.

Wage: JSA+Expenses

Tesco will pay you nothing if you apply, though you might get your busfare and a meal voucher. (Update: meal subsidy? Good heavens. What was I thinking of? These are benefit claimants, not MPs.) This has been arranged for them as part of what DirectGov calls SBWA. That’s not Supervision By Walking Around, it’s sector-based work academies.

Update: Similar job ads exist for unpaid labour in Tesco Sheffield Dinnington Superstore – DIN/18681; Tesco Clevedon Superstore – CLE/42976, and Tesco Macclesfield Hibel Road Superstore – MAC/56256.

If you’ve been on the dole for six to twelve months, the Job Centre can decide to send you to a SBWA. You will spend two weeks doing workshops of varying degrees of usefulness (and get access to free jobsearch resources, always useful)

“The exploratory talk centered around our perceived failure to achieve employment. The woman asked each of us for potential ‘barriers to employment’, which seemed to be a general trawl through people’s private lives … the national employment crisis was not suitable for discussion, apparently.”

and then you will spend four weeks or more doing unpaid work for whichever company, like Tesco or Poundland, has applied to get dosh for “training” unemployed people back to work.

Actual training appears to be minimal, from all reports: what Tesco are really interested in is your unpaid labour. After all, in the last quarter of 2011 their share value went down by £5bn and Christmas six-week sales to January 7 were down 2.3% from last year. Dearie me.

To do the government justice, even though they’re Tories, it’s not clear they just want to boost Tesco’s profits with taxpayer’s money. This kind of treatment of long-term unemployed is part of their trying to roll back the welfare state to the 1834 Poor Law Amendment Act:

the idea of less eligibility that led after 1834 to the Workhouse.
That is that any form of relief from official sources during periods of unemployment or wages below the subsistence rate should be less attractive than what could be earned by working. Liberal ideologues such as Jeremy Bentham and Nassau Senior pushed this principle hard in the early decades of the nineteenth century.
Historically the question, still debated, is whether it really worked. Less eligibility and the Workhouse were hated and in reality capital needed surplus or a reserve army of labour to cope with periods of explosive expansion. (KMFlett)

In fact, perhaps even further – to the system which prevailed for centuries where poor people went on the parish. David Cameron’s Big Society explicitly excludes the unemployed from active participation – the DWP’s line is that if you’re signing on at the Job Centre, “why should people get benefits for volunteering?” Workfare placements are compulsory, with severe financial sanctions for JSA claimants who refuse to work unpaid or who fail to show up to work the hours they’ve been told. Why let an unemployed claimant work at a voluntary job they themselves chose and want to do, when Tesco is looking for unpaid staff?

“I reckon they should have paid me … I was basically doing what a normal member of staff does for Tesco. I had the uniform and I was in the staff canteen. I obviously got access to the food and drinks in the staff canteen … that’s what they let you do … but I got nothing else apart from that.”
“I was there doing it as if I walked into the store and said, ‘Look I’ll help’.” Guardian, November 2011

The Boycott Workfare campaign has been using FOI requests and other research to establish that companies use workfare labour to cut overtime and hours for paid staff, and have a supply of forced labour to evade any strike action:

workfare schemes such as “Work Experience” lead to overtime and staff hours being cut for those who are employed. It is worth remembering that if in future, postal workers take industrial action, workfare will provide Royal Mail management with a workforce that will be forced to cross picket lines and work since if those sent on this scheme refuse to do so they will have their JSA stopped.

I’ve gone into the horrifying difference between what Iain Duncan Smith and Chris Grayling pay themselves and what they think people like you and me deserve. It’s worth considering that the US, where workfare schemes like these were modelled, minimum wage is appallingly low: the equivalent of £4.62 an hour. Even so that’s more than a night shift worker at Tescos will get, doing a 30-hour week for £57 JSA – that’s £1.90 an hour, lower than the lowest legal rate for an employer. The highest rate of minimum wage for employees over 21 is £6.08 per hour.

A US blogger who used to be more radical than he is today, suggested back when he was Calpundit that minimum wage should be indexed to Congressional salaries. If Chris Grayling, a government minister, works a 40-hour week, he would get paid £64.42 per hour.

How about simply making the minimum wage equal to 10% of that? Congress can then increase their own salaries anytime they want, but only if they’re willing to help out the working poor at the same time. Seems fair to me.

But why? On the face of it, allowing supermarkets and other employers to cut down on their paid employees by paying these big corporations to take free labour from long-term unemployed is madness, especially in a struggling economy. As Paul Krugman noted in January, it’s been known for half a century that

austerity in the face of depression was a very bad idea. But policy makers, pundits and, I’m sorry to say, many economists decided, largely for political reasons, to forget what they used to know. And millions of workers are paying the price for their willful amnesia.

(Update) By Tesco’s own figures, not even one in four of the claimants who work for Tesco for free get a paid job at the end of it. Over three-quarters of the people that Tesco take for four weeks “work experience” go back on the dole at the end of it.

Britain’s largest private employer, which made over £3.5bn in profit last April, said that it had taken on 1,400 such claimants in the last four months. This amounts to 168,000 hours of unpaid work if all participants in the scheme work for 30 hours a week.
Tesco said; “Over 300 young people have recently gained a paid job at Tesco following their work experience in recent months.”Guardian, 16th February 2012

Krugman said:

in Britain and elsewhere, the policy elite decided to throw that hard-won knowledge out the window, and rely on ideologically convenient wishful thinking instead.

In a nutshell, the economy thrives when employment is high, it suffers when employment is low. Because when people are out of work, they’re not spending money – so businesses aren’t making money from them – and they’re not being taxed, so the government isn’t getting revenue from them. To improve the economy, you need to get more people back to work – you need to spend money on policies that will ensure people are getting good well-paid jobs and so will be paying tax and spending money and boosting the economy. Paul Krugman again, on the 2003 US boom-that-wasn’t:

But if the number of jobs isn’t rising much, aren’t workers at least earning more? You may have thought so. After all, companies have been able to increase output without hiring more workers, thanks to the rapidly rising output per worker. (Yes, that’s a tautology.) Historically, higher productivity has translated into rising wages. But not this time: thanks to a weak labor market, employers have felt no pressure to share productivity gains. Calculations by the Economic Policy Institute show real wages for most workers flat or falling even as the economy expands.

An aside: how weak is the labor market? The measured unemployment rate of 5.9 percent isn’t that high by historical standards, but there’s something funny about that number. An unusually large number of people have given up looking for work, so they are no longer counted as unemployed, and many of those who say they have jobs seem to be only marginally employed. Such measures as the length of time it takes laid-off workers to get new jobs continue to indicate the worst job market in 20 years.

Workfare isn’t going to help. And the SWP knows this. The Centre for Regional, Economic and Social Research at Sheffield Hallam University conducted research for the DWP on workfare in 2008, and concluded that:

“There is little evidence that workfare increases the likelihood of finding work. It can even reduce employment chances by limiting the time available for job search and by failing to provide the skills and experience valued by employers.”

Examples of workfare programmes in other countries which did seem to be helpful in getting people back to work always turn out to be different from this 1834 workfare system in that the programmes are genuinely voluntary and pay a wage.

But David Cameron and his Tories are cheap-work Conservatives:

The ugly truth is that cheap-work conservatives just don’t like working people. They don’t like “bottom up” prosperity, and the reason for it is very simple. Lords have a harder time kicking them around. Once you understand this about the cheap-work conservatives, the real motivation for their policies makes perfect sense. Remember, cheap-work conservatives believe in social hierarchy and privilege, so the only prosperity they want is limited to them. They want to see absolutely nothing that benefits the guy – or more often the woman – who works for an hourly wage.

Workfare is bad for the economy, but good for cheap-work conservatives.

Also:

• Government work placement schemes little more than slave labour
• Wanted: Free Labour for Tesco
• High street names criticised for taking unpaid benefit claimants
• Work for free and ‘be of benefit’ to a multinational like Tesco
• ‘I can just get another unemployed person’
• Youth unemployment, Job Centres, and me

The sad thing is, I found out about this job ad from Dr Eoin Clarke at The Green Benches. He’s properly outraged about this, and his post was going viral on Twitter (and Tesco are going to wake up to an unexpectedly nasty PR problem Thursday morning). But Ed Miliband will say nothing as clearly derogatory to condemn this cheap-work conservatism. Where is the Labour Party’s moral outrage?

Update, Sunday 19th February, from the DWP Press Office twitterfeed:

Work experience schemes make a real difference to people, helping them move into work. Schemes are voluntary, no one forced to take part

— DWP Press Office (@dwppressoffice) February 18, 2012

DWP is categorical that no jobseeker has or will be forced to work for a private company under work experience scheme #workfare

— DWP Press Office (@dwppressoffice) February 19, 2012