Workfare in Context

This week has seen a huge furore over the Government’s “workfare” scheme, whereby unemployed people, and those on disability benefits, can be forced to work for 30 hours a week. If they refuse, they can have their benefits removed for a period of three months. Amidst the uproar, I thought it might be worthwhile to detail some of the other work- and benefit-related policies that currently exist in the UK, to make clear that the workfare scheme is not anomalous, but rather that it is part of a systemic attempt by the Government and business to drive down wages, and to exploit the most those who suffer most in the current financial crisis.

Minimum wage

In 1999 New Labour introduced the national minimum wage in the face of fierce opposition from the Tories, then in opposition. The current rates of minimum wage are as follows: £4.98 per hour for 18-20 year olds, and £6.08 for 21+.  Significantly, these numbers fall short of the “living wage”, which is the estimate of what someone needs to earn in order to live “outside of poverty”. The official figures for this are produced by the Greater London Assembly’s Living Wage Unit. The current living wage is £8.30 per hour for London, and £7.20 per hour outside of London.

Workfare

It is probably best to begin by outlining the “workfare” scheme as it currently exists. Under this scheme, those who have been unemployed for a number of months can be forced to work 30 hours a week for no more than their jobseekers’ allowance. JSA at current rates is £53.45 for 18-24 year olds, and £67.50 for 25+. By dividing these figures by thirty (the number of hours work), we get hourly rates of £1.78 for 18-24 year olds, and £2.25 for those aged 25+.

Apprenticeship Schemes

In October 2010, the Government launched its first major attack on the minimum wage, by introducing a special rate for “apprentices” at £2.50 per hour. Last October this was upped to £2.60. This work can be paid at this lower rate for up to a year, after which point the standard minimum wage applies so long as the apprentice continues work for the same employer. Significantly, the Government’s definition of an apprenticeship is essentially nothing more than “full time work + gaining a qualification.” What this means in reality, is that by throwing in the possibility of getting an NVQ, a BTEC, or a “key skills” qualification, any employer can now pay a worker less than half the minimum wage. The laws also, therefore, give financial incentives to not offering employment at the end of an apprenticeship, as the employer would have to pay the national minimum wage. Instead, it is cheaper to keep contracts to a year, and each year employ a new apprentice at the cheap wage rate. It is notable that for workers age 25+, the apprenticeship rate is only 35p more per hour than Jobseekers’ Allowance/Workfare. Apprenticeships have been rolled out not only in private businesses, but in local authorities, and in the higher education sector. This massively underpaid work is now holding together the country’s infrastructure.

The Big Society

The “Big Society” was the flagship policy of the Government in its first year. The idea was to encourage huge amounts of “volunteering” (otherwise known as entirely unpaid work.) Whilst the idea hasn’t exactly taken off in all sectors, one place that it has is in preparation for the Olympic Games, where the Government has attempted to recruit 70,000 volunteers. Lloyds TSB has predicted that the Olympics will generate £10bn for the UK economy. No doubt, much of this money will head straight to the pockets of multinational companies, such as McDonalds, who have guaranteed a monopoly on food sales in the Olympic park. It is hardly a surprise that people working for no money at all can produce large profits.

Prison work

Perhaps the most super-exploited workers in the UK are prisoners with jobs. They have a minimum wage set at £4 per week, with the average wage being £10 per week – while Justice Secretary Kenneth Clarke has suggested that prisoners should work 40 hours per week. This would give a minimum wage of 10p per hour, and an average wage of 25p per hour. The UK prison population hit a low of about 45,000 in 1993. Today this figure stands at approximately 97,000 allowing for huge inputs of labour at minimal cost to businesses.

This affects all of us

It is often assumed that these schemes of work only affect the unemployed. But the truth is that they affect everyone. Unemployment figures are tricky things, but what is without doubt is that there are huge numbers of people out of work who want to be in work (even the most conservative estimates from the Office of National Statistics, find six jobseekers per vacancy. And in some areas, particularly urban centres, these statistics are much much worse. What this means is that there is a huge demand for employment, and with that demand employers can afford to pay less for work. High unemployment leads inevitably to suppression of wages for all workers – all employers can find someone who will do the same work for less money. To an extent workers have been previously protected by the national minimum wage. But as we have shown, this has been massively attacked by the workfare programme, the new minimum wage for internships, the ‘Big Society’, and the possibility of super-exploitation of prisoners. All of this adds up: the Government believes that the way out of the crisis is the provision of hugely exploitative cheap labour to increase profitability for employers. In real terms, that means they believe in a policy of impoverishment and immiseration of everyone who isn’t an employer.

Living and dying with benefits

It should be remembered that the current benefit schemes fall significantly short of what is necessary to live. Those who are unemployed will live in poverty. In 2009 a statistic slipped out: in one area of the UK, 15% of young people who are “not in education, employment or training” are dead within a decade. The Government are keen to claim that today’s mass unemployment is a result of people being “workshy”, but if this were true, then there would be no demand for apprenticeship work at half the minimum wage. Indeed, the Government are determined to claim again and again that mass unemployment is anything but a structural problem (as if, since the crisis hit in 2008, a million people quite randomly lost the ability to work.) Last week, the Guardian produced an excellent video on the lack of work available. The Government’s current strategy will condemn more and more people to poverty whether they work or not. As a solution, the Government suggest “entrepreneurship”. By this, they imagine a magical solution to all of the ills of mass unemployment. If only, they believe, the unemployed would think harder, would become more entrepreneurial, they will drag themselves out of poverty. What the Government has failed to notice, is that the most entrepreneurial people in today’s society, the managers of large businesses and corporations, and indeed the Government itself, are making their profits from employing large numbers of people at less than the minimum wage. Entrepreneurship, thus, is not a “way out” of poverty, but the very thing keeping people in it.

“Take away their benefits”

Time and again, there have been demands from the press (and indeed a section of the UK population) to take away people’s benefits. It is perhaps worth dwelling for a moment on what this might actually mean. Under the current system, if you have no money you cannot live – you cannot buy food or clothes, you can’t rent somewhere to live, and you can’t keep warm. The point of benefits is to allow for these minimum requirements for life, where they cannot be gained through earning a wage. As we have seen, even on benefits people will live in poverty, but the demand that people “have their benefits taken away” is nothing but the demand that they are made homeless and starve. The UK Government has argued that those unwilling to take part in workfare will lose their benefits. In a situation in which there is simply not enough work for everyone, they demand that you work for £1.78 an hour. If you refuse, you can probably expect not to survive.

@jbardrosenberg