Helping people into work good but jobs needed first

Written By: - Date published: 11:50 am, June 9th, 2010 - 30 comments
Categories: benefits, welfare - Tags: ,

The best form of welfare is a decent job. The Left has always said that and the record of Labour-led governments has confirmed it. During it’s nine years in power, the fifth Labour government saw the number of people on the unemployment benefit fall from 158,000 in December 1999 to 17,000 in June 2008. Total beneficiary numbers were down from 402,000 to 252,000. A stunning success built around the belief that it doesn’t make sense to punish people for not working when there are no jobs – the solution to the dole queue is a full employment policy.

The most effective welfare policy (and the most effective crime policy) is an effective jobs policy.

So, I’m not automatically against the idea that the government’s welfare working group is looking into that more should be done to help sickness and invalid’s beneficiaries into work. Having something constructive to do is good for people. Already the average term on the sickness benefit is less than a year and many go back into work. Adopting a rehabilitative approach to sickness and invalids benefits like ACC does for its claimants should lead to better outcomes for more people and save money on benefit payments that can be used to improve public services.

But all the assistance in the world won’t make a blind bit of difference while the unemployment rate is so high. You can’t help people into jobs that don’t exist. The danger is that the government will simply make it harder for people to get on and stay on the sickness and invalids’ benefits, and people in need will end up without a job or a benefit. We mustn’t have another round of punitive attacks on people in need.

I think we also need to be careful before claiming that sickness and invalid numbers are out of control. They increased by 70% and 82% respectively under National in the 1990s, 41% and 66% under Labour, and 22% and 1.7% in a year and a half under Paula Bennett. These are large percentage increases, well ahead of population growth, but they are easing off (excepting the increase in sickness that seems to to associated with the recession). And the root of most of the increase is surely demographic.

If you look at the percentage of the population on a sickness or invalid benefit by age group, it’s mostly older people on the verge of retirement whose bodies have just broken down earlier than most. An aging population inevitably means a higher percentage of people in those age groups, meaning more needing the benefits.

So, it should not be assumed that increases means abuse of the system. Rising numbers on the sickness and invalids benefits are part and parcel of an aging population. There may be some capacity for helping more people back into work and that’s a good thing. But not if it’s just a fig leaf to disguise an attack on people in genuine need who can’t get any other income.

As for the other idea the welfare working group is looking at is an insurance, rather than benefit, model for delivering welfare. More on that later but we already know what a failure it is, just look at the terrible poverty it allows in the US.

30 comments on “Helping people into work good but jobs needed first”

  1. Lanthanide 1

    Yes, I have to wonder how effective Labour’s stated goal of $15 minimum wage would be at dropping benefit and crime rates.

    Currently the minimum wage is $26,250 a year, and putting it up to $15 makes that $31,200, a mind-boggling jump of $78/week (“north of $50” anyone?). This would also have flow-on effects for those earning less than about $16 or $17 an hour. Consider all the additional income tax revenue that this change alone will bring to the government.

    I think a minimum wage of $15/hour is a much bigger “incentive to work” than dropping the tax rate from 19% to 17.5% is. On the flipside though, a significantly higher minimum wage like that may lead to swelling unemployment as businesses can’t afford to take on more staff as they otherwise would.

    • Sam 1.1

      Too right mate. It’s like when Richardson told us that we need to incentivise work by dropping the benefit rates, but then told us labour needs to be cheaper and brought the ECA in to drop wages.

      Gotta give it to Tory governments though – they are certainly consistent with their rampant inconsistency.

    • Draco T Bastard 1.2

      The minimum wage already barely, if at all, covers the costs of going to work and there isn’t much point of going to work if you’re going to be worse off.

      • Don 1.2.1

        That is the crux of the matter and has been since god knows when .When you have the remnence of the old tory system being practiced by a political party in office lying thru its teeth and the less priviledged barely able to keep theirs there will be blood and death the true meaning of capitalism.

  2. Bored 2

    I am not so sure we should be bagging the NACT government on job creation by comparing them to Labour. Sure the numbers look rosy for Labour but they were gained on the back of the last great finance bubble where money was poured into housing, where expansion of primary industry did not have to bear the true environmental cost, and when energy was cheap.

    Conversely NACT have had a popped bubble and very changed conditions. To blame them by comparison is a rather shallow exercise regardless of how the numbers are constructed, except to say that they are masters at spin, (should you ever have dealings with them count your fingers after they shake your hand).

    My biggest issue with both NACT and Labour is that they both have adhered to the recent orthodoxy of failed market economics. And neither seem to be able to recognise the coming train wreck of energy shortage and a completely changed economic reality. NACT are more extreme in this regard, the biggest worry is their drive to ensure that the private sector dominates what was once the public domain, and to turn us into a nation of serfs to capital.

    • Pete 2.1

      Fair cop Bored, Labour were luckier in that regard. However, I’m pretty sure I recall electioneering on the back of job creation (I swear I heard talk of ‘growing the pie’ by some) – and wasn’t there a whiz-bang Job Summit to help with job creation too. Both the Job Summit and the electioneering talk (whether or not you ever believed the substance) are surely National’s to own, and therefore also theres to come through with, regardless of the other opportunities they cut (and, indeed, they probably should be completely because of those cuts) – educational opportunities and benefit changes spring to mind…

  3. just saying 3

    Please don’t imagine that ACC actually has a “rehabilitative approach”. The current ‘Return to independence ‘ scheme is ousting long-term claimants onto WINZ benefits as phil Riley has himself admitted.

    A big cause of the increase in sickness/invalids benefits is neolib changes in the workplace. Anyone who can’t give 110 percent, and do so without presenting any special needs won’t be considered. My sister was severely intellectually and physically disabled, but worked in factories until about the mid-eighties, and was never able to get a job again. She was never able to perform at the level of other workers but her workplaces considered providing a few jobs for people in her position to be a civic duty.

    My first two employers up till then, had the same policy, one of them a very big company. Nobody seemed to think this was anything more than normal.

  4. Bill 4

    You know, these bastard politicians and their masters shut down the factories and workshops where I, as a waged slave used to work ’cause they said my slavery was costing them too much.

    They deliberately created the unemployment.

    Not me and not any other unemployed person.

    And you know what? You couldn’t pay me to give up my time again.

    So, if I survive on a pittance and they still claim I cost too much and jump all over me at any given opportunity attempting to turn me back into a waged slave…while simultaneously griping that waged slaves are costing too much…and I don’t particularly want to be enthralled again, then shouldn’t those of you who think being a waged slave is just fine and dinky be better off by allowing the likes of me to carry on and argue for better benefits in order that your wage rates increase?

    I mean, fuck all this ‘A decent job is the best form of welfare’ shit. It’s not. Not for me and it’s not for many, many others either. ( They just don’t say it too loudly for obvious reasons) It might be for you, but that doesn’t make it a universally applicable truth or anything. And it’s high time that some well meaning people on the left who should know better stopped buying into that shit.

    But if you can’t bring yourself to disengage from the jobs myth, then at least ensure decent jobs for those with them by calling for enhanced rates and forms of welfare.

    • Mutante 4.1

      I like the cut of your jib Bill. I myself went from a decent job working for good people who paid proper wages to doing the same thing for minimum wage with shit hours to boot. When you end up earning $260 a week after tax it’s not worth the time and effort and any wingnut that says otherwise can spin on it as far as I’m concerned. It’s insulting to demand smiling, unquestioning commitment from an adult and then turn around and rip them off like that. Bastards tried to bribe us into overtime with lollies and pizza too. I’m a 32 year old man.

      Anyways, I’ve gone back to university this year. At least that’s interesting and constructive. Mind you the VC of Canterbury would chuck out all the mature students if he could, along with the humanities and arts. He’s a real slash and burn type.

      Here’s hoping by the time this degree is finished we’ve chucked NACT out.

      • ianmac 4.1.1

        My older lad has done the same thing having an Honours degree but could get no job so he has switched to Auckland to do a Law degree. Seems strange to go to Uni because there are no jobs???

        • rainman

          I’d love to go to uni and retrain so that I could be useful again. I know it’s wage slavery I’m aspiring to, but it beats sinking deeper into poverty with every passing week.

          The only way I can study (in a quick enough timeframe to have it be useful for employment) is to sell the house, though, and there is a distinct level of unease among the family when I mention that option.

          • jimmy

            After 18 years or so of education I finally got a job using my brain/degree a couple of weeks ago, quite a weird feeling indeed. Turns out Arts isnt a complete waste of time.

          • Bill


            “…but it beats sinking deeper into poverty with every passing week.”

            Which is why I earnestly want the left liberals to step outside of the jobs = dignity mindset and fight alongside those of us on various benefits to have the benefit levels raised and eligibility loosened up in some areas.

            That not only empowers beneficiaries to speak out…knowing that you won\’t be completely isolated as WINZ goes to town on you for being honest would be a massive leap forward.

            And then of course, there is the fact that a less financially onerous benefit system will tilt the labour market in favour of workers.

            So… beneficiaries win by having enough $ to cover their proverbial arse. Workers win through the inevitable upward pressure on wages. And local businesses win as beneficiaries will continue to spend 100% of their income.

            Did I mention that inequality will be lessened, poverty driven crime will decrease, stress related illness will reduce meaning time and money savings for our health care system?

            Or that I’m surprised and heartened that what I said didn’t result in me being buried under a torrent of abuse? And that I’m further surprised at the degree of agreement voiced here?

            • rainman

              Bill, just wondering how we would afford that? Lifting benefits to a reasonable level implies lifting lower levels of income too.

              BTW I’m not arguing “jobs=dignity” (although it is nice to be busy using one’s wits to do things of value); I’m arguing “jobs=paying the damn mortgage and the other bills…”. Somewhat more of a necessity.

              • IrishBill

                We’ve got billions of dollars a year flowing out of the country as expatriated profits. Most of them to the lucky country and most of them via companies the public used to own. Just think how much we could do with that money.

                • just saying

                  Along with our billions going overseas….

                  I’m no mathematician, but it seems to me that the difference between the median wage and the average wage means a degree of income redistribution within NZ would go a long way too.

              • Bill

                Lift benefit levels and you will see higher wages.

                Then set benefit levels at a given %age of average wage or whatever.

                Business will see more custom and increasing sales.

                More earning and spending = more tax.

                And if the sums don’t work ( and I can’t see why that should be….everything is relative) then take it from the fucking profit margins in the form of increased business tax or increase the taxes paid in the higher tax brackets.

                Make profit serve people instead of having the poorest stomped on to increase profit and make the rich merely sacrifice a little cash instead of pinning the poor so the rich get a few extra bucks.

                • rainman

                  IrishBIll and, um, normal Bill (sorry Irish!)

                  Nationalising foreign-owned companies and whacking extra taxes on the rich, however noble both of those ideas are, are unlikely to occur in my lifetime. National is heading in the opposite direction to this tax-wise, and will privatise what they can get away with. Labour won’t/can’t go harder on the tax issue for a while, let alone nationalising things. There are no other options, other than an effective revolution.

                  Now I can buy the view that in the future, ordinary Kiwis will be shaken out of their apathy and there might be some strong protest, even rioting, but I can’t buy the view that this will make any significant difference.


        • Mutante

          It was also a matter of not wanting to be stuck in the same line of work forever and the current jobs climate was just the catalyst I needed. I’ve been meaning to go back to uni for years since I bombed out in my early 20s thanks to too much bad behaviour and too little study.

          The whole “arts degrees are useless” thing is a hackneyed old cliche coming from a Greek chorus of right wingers who know the price of everything and the value of nothing, as Oscar Wilde so succinctly put it. They can be a boon for travel. Just about any basic BA you like and you can teach English overseas. My younger sister is teaching in Korea at the moment and hers is in music.

      • Jum 4.1.2

        It’s in your hands Mutante. Get the word out. There are excellent networks all around New Zealand which are sticking up for all sorts of people undergoing all sorts of demeaning things.

        Together we really can get rid of the bastard NAct.

        • Mutante

          @ Jum, I’m more active politically than I have been in years thanks to this government. My two pet causes have always been my somewhat pointed and puerile satire (blame Viz for that) and I’ve been a vocal opponent of the burgeoning surveillance state since my teens. I organised the demo against the Search & Surveillance Bill in Christchurch recently. Important stuff in my opinion because the more free space we have to organise in the better.

          So yeah, I’m up for networking with just about everyone when I have the time.

  5. just saying 5

    Couldn’t agree more Mutante and Bill.

    What infuritaes me is that a minimum of 6 percent (I think that’s the figure) unemployment is deemed necessary, by these bastards, to keep wages and working conditions sufficiently appalling to keep this neolib economy ticking over to their satisfaction, and the same people are also able to bash the crap out of anyone who actually is unemployed . And get ordinary people to support them in doing so. Maybe a community service medal might be more appropriate under the circumstances.

    And it pisses me off to hear that Labour might just consider raising the minimum wage to a measly $15 bucks an hour if it gets back in. Whoop dy doo. An improvement yeah, but still a big bloody insult IMHO.

    Benefits must rise, for everyone’s sake, as you say, but they won’t.

    There’s an alarming amount of ‘I’m alright jack’ backed up with ‘there is no alternative’ espoused by those who consider themselves left-wing

  6. Olwyn 6

    To add to what you guys are saying, According to this piece on Stuff, the Employers & Manufacturers Union is threatening legal action against those who complain about their job on Facebook:

  7. kriswgtn 7

    $15 a hour is a must or yeah you might as well stay on the dole.People on bene’s STILL pay taxes :).

    Job creation hasnt exactly been a priority of this govt.A cycle way? hahha what a joke

    I remeber Key spinning that this budget is going to create 170,000+ jobs?? where and how??

    @ least labour did create jobs and did manage to up min wage

    There are homeless in Wgtn living in bus shelters

    Totally not acceptable and before any of you NAct sockpuppets start up re Housing NZ etc etc

    Do you have any idea of how hard it is to get one???

    Except if youre a refuge- then youre in

    Jobs need to be created and frankly seeing this joke of a govt inability to act on it,and them cutting Public servants jobs with more to come,it is only going to get worse

    You cant blame all of it on the recession.Key and Co must be kicked out in 2011 and then held accountable for all the shadey crap they have pulled

  8. vto 8

    I agree with much of what Bill and Mutante and just saying are saying.

    Tell you what though.. I’m betting that things are about to get one hell of a lot worse. When Europe and the US and Aussie start an unstoppable cascade to depths so rarely plumbed all hell will break loose.

    Watch for it some time over the next month or six. A gentle cascade at first (it takes a while for a mountain to tumble) but steadily gathering speed. Tragic. Hope I am wrong. But, as said, I betting on it happening. The second and bigger bottoming of the depression “W”.

    • Jum 8.1

      Just remember Vto that this prime minister and a few choice acolytes were chosen to bring this to NewZealand.

      Don’t take on new debt. By the time this government has finished with its policies, you’ll be lucky to end up with what you already own.

      • vto 8.1.1

        Many people have suggested similar re Key and his disciples, Mr Jum. Travellerev was always claiming similar with plenty evidence etc. But what makes you say this?

    • rainman 8.2

      vto, I hope you are wrong too. But I admit the same thoughts occur to me int the still quiet hours… and there is much more talk of such things in the wind out there. Just listened to Taleb on Radio Open Source, and he was clearly saying the crisis has not yet begun. I was out in the cold, weeding the garden, but felt an extra shiver.

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