Unemployment benefits: the end of a “privilege”?

ready for work

“Tous les chômeurs de longue durée, qui sont capables de travailler, devront faire quelque chose en échange de leurs allocations”, explique le chancelier de l’Echiquier George Osborne. Le gouvernement britannique s’est aventuré sur un terrain encore jamais exploré par le pays : une logique de donnant-donnant…

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The United Kingdom’s unemployment rate has risen since the 2008 economic crisis, peaking at 8.0% in 2011. Consequently, a set of measures were implemented to curb its rise (immigration was reduced by a third) and to help the reinsertion of the jobless. Because or in spite of those measures that were more or less effective or harmful, the unemployment rate stands at 7.7% in the first trimester of this year. One year after the Work Program was implemented, a new program targeting long-term unemployed, Help to Work, was announced by Mr George Osborne, the chancellor of the exchequer.  Welfare must be “fair for those who need it and fair for those who pay for it”, Mr Osborne told the Tory conference in September 2013, a conference that takes place every year.  At the moment, if someone has not found work after three years on the Work program, he/she can still continue to claim the JSA (Jobseeker’s Allowance). With the implementation of Help to Work, all claimants of the JSA, who have been unemployed for over 3 years and are capable of work will be asked to work in return for their benefits. In fact, they will be expected to be either on a training scheme, or to do community work placement or intensive work preparation, and if they fail to comply they will lose their benefits. On the one hand, this policy is to help the reinsertion of the long-term unemployed (today they are one million).

Instead of a welfare logic, the program reflects the switch to a workfare logic.  But, on the other hand, its implementation will also be the sign of a failure of the Work Program. In the UK, recent Work Program figures showed the scheme has failed over a million people and even after two years of help, 80 per cent of people still don’t have a steady job. The Youth Contract is even worse, it’s failing 90 per cent of those on it. However, other countries such as Denmark have managed to cut the number of long-term unemployed youth with an Active Labour Market Policy: anyone who is out of work for 12 months (or six months for those under 25) gets special help with job searching, vocational training and education. This example shows that there is no single right solution to curb unemployment. However, can the failure of the Work Program be explained by the fact that the UK only spends 0.3% of its GDP? Denmark spends 1.3% of its GDP  on similar measures.

unemployment

The way the current government is dealing with the job crisis displeases many Britons. Some say, the government has failed to tackle Britain’s job crisis. For instance, in some areas such as Rochdale, a town that lies in the north of Manchester, three fourths of the working population are unemployed. Moreover, the universal credit, a welfare reform to cut social expenditures proposed by Secretary of Work and Pensions Iain Duncan Smith, which is to be implemented by the end of this year, came under fire.

The German reform Hartz IV has often been taken as an example. This reform undertaken under Schröder between 2003 and 2005 aims at reducing unemployment allowances for those who refuse to sign for a job they have the skills to do after a long period of unemployment. But according to an OECD study, this reform made income inequalities rise faster in Germany. Does the Work Program stand a chance in the UK?

Laura LENG & Lucie WACK

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