A shirker, not a striver: A Tory argument against a false divide

As a longtime supporter of the “keep the curtains drawn” tendency and a leading member of “Snooze button Britain”  and also someone who has been gainfully employed my entire adult life, the current political debate around shirkers and strivers is profoundly depressing.

The obvious truth about welfare is that just as my always having had a job doesn’t mean I’m a striver, someone else not having a job doesn’t make them a shirker.

A shirker, today.

Lots of people become unemployed through little or no fault of their own. Many find work very quickly. Some don’t. Many of these people are less attractive to employers and during recessions will find it very hard to find work.

There can be many reasons for this – a criminal record, poor educational achievement, age, a need for flexible employment, and yes, for some, an attitude problem. But splitting this group into shirkers and strivers is an obviously false divide.

Why can I say this so confidently? Have I become a trot? No, it’s because over the last few years conservative policy theorists spent huge amounts of time and effort demonstrating that the behaviour of the unemployed was the result of a rational economic response to structural problems in government policy on taxes, benefits and work, not a personal moral failing.

Yes, these Tory welfare analysts argued, there were people who would rather not work if benefits were available to them. But at a certain level of expected earned income, this isn’t so much shirking as an example of homo economicus in action.1

So if the choice to not work was, under Labour, a rational act based on incorrect levels of incentives by a misguided state, how on earth did it suddenly become a moral weakness by the recipient under a Conservative government?2

The answer is, of course, that finding a policy solution is a lot harder than doing the policy analysis, and the gap between the two needs to be someones fault, and it’s certainly not going to be the Government’s.

So let’s assume that the Tories were right before 2010 about the structural causes of benefits dependency. If work incentives are thus misaligned, you have two basic options.

The first is to increase income from working. You can do this through various ways – tax credits, higher tax allowances, increasing minimum wages. The problem with each of these is that they are very expensive, either to the state or to employers. This is largely because they will apply to a lot of people who are already in work, who will be very grateful for the extra income, no doubt, but in this case were not the problem you were setting out to solve.

Your second option is to reduce the value of benefits over time, so that working becomes a more rational economic choice. The problem with this is, as any fule kno, that because you can’t identify shirkers on your striverdar, this will cause a large degree of suffering amongst the large group of people who have just lost their job, are looking for work and who just need some help to tide them over between periods of striving. This is generally regarded as a bad thing.

((Now, maybe one day someone can be hired from One, Infinite Loop to develop an algorithm that will sort us all into sheep and goats and put us on the appropriate benefits track if we lose our jobs, but until then, any across the board cut, even in just out-of-work benefits, is going to hurt a lot of people who are just plain unlucky enough to have lost their job and not found a new one.))

This is why last year the government increased all benefits by five per cent, because they recognised that for many people out of work, it was not their fault.

Yet they also froze tax credits, which reduced work incentives and meant people were relatively worse off from working than claiming benefits.

This made absolutely no sense to me, It bugs me still now, because despite all the shirkers versus strivers rhetoric today, when low-income working families really got the shaft last year compared to people on benefits, no-one even seemed to even notice. Which suggests that this whole debate is a load of bloody posing, which makes me really question what everyone thinks they’re doing.

Why did they do this? One answer is, yes,  that they didn’t really know what they were doing. A second answer is that it was the by-product of some last-minute intra-coalition bickering. A third answer is that increasing incentives to work through the tax system, whether by tax allowances or credits, is bloody expensive, and as they were already increasing personal allowances, something had to give, and it was tax credits. A fourth answer is that they needed to reduce the cost of Tax credits before the introduction of Universal Credit, because otherwise it would be too expensive. Four answers, all rubbish.

The missing element from the above analysis, of course, is thinking about the benefits recipient as an individual, not as part of a system. Hear, perhaps we can reintroduce the ‘shirker’ and the ‘striver’, but in a little more sophisticated fashion. The key to this would be increased conditionality, the placing of ever greater conditions on the receipt of relatively generous unemployment benefits over time.

This would have the benefit of supporting those who will likely find work after a short period on benefits, while intervening more heavily with those who, for whatever reason,3 are unlikely to find employment. This sort of intervention can include improved educational and training opportunities, drug or alcohol treatment, work placements, basic skills courses, or even higher levels of childcare vouchers. On the other side, one could try to balance their unattractiveness to employers with some sort of reward for employing those out of work for a long time.

This gives a rough way through the woods: A shift of resources towards improved work incentives across the board through both increased tax credits (and yes, dear Tories, smoother withdrawal rates), supported by a regime of conditionality for the receipt of non-working benefits with increasingly intense interventions over time.4.

Adopt this broad strategy, and there remains a huge political debate between right and left – how generous should this system be, at what levels, what conditions should apply. Who should be eligible and when, what mix of sanctions and opportunities would be most effective in finding people work?

There are Tories and Liberals who have thought long and hard about this stuff, and who can score strong points against the left.5

However, the one thing they don’t do is divide us up into shirkers and strivers based on the benefits we receive, because, not to put too fine a point on it, that is total bollocks.

 

  1. This explains why despite being by nature and inclination, a shirker, I’ve always worked. The rewards for working were just always enough to overcome my desire to stay in bed. The invisible hand has been getting me out of bed for the last decade or so []
  2. I want to be fair here: For all I think Universal credit is a flawed and deeply problematic proposal, it is a serious attempt to deal with this issues. Which is why it’s running into such difficulties, because a serious attempt to deal with these issues is bloody hard to get right, especially if you’re trying to do it as cheaply as possible. However, it would be unfair not to acknowledge the attempt, so I will! []
  3. whether structural or shirk-based []
  4. Though going back to the algorithm point, it might be better if you could identify those who would benefit from deep intervention as early as possible []
  5. although personally I think the Centre for Social Justice approach was deeply flawed because in order to look compassionate it massively lowballed or elided the costs, which is one reason they’re finding it hard to sell to the treasury now. []

5 Responses to “A shirker, not a striver: A Tory argument against a false divide”

  1. Tom

    I’ve always thought it odd that the conservatives didn’t support a fairly high rate of benefits for the out-of-work. If they want an entrepreneurial society, with people willing to take risks (including the risk of moving from a stable job to an exciting start-up, say), then there needs to be a good safety net there to encourage them to do so, since new businesses have a very high failure rate. Strong conditionality, or reciprocity for NI payments, I can understand, but a low basic rate seems very counter-productive.

    Reply
  2. Becky

    The problem is, political parties do not want a system that works and helps people and the country, they want a system that benefits them. The Government doesn’t act to make the country a better place, they act out of self-interest. It’s all veiled in the mantra that they serve the people, but they don’t.

    Reply
  3. Tim

    The biggest problem with any such reform of the system is that before you could do any of that in order for it not to be a massive waste of money you would need to have a good idea 1) That work incentives actually have a positive effect on employment. 2) How big an incentive has to be before it starts having that behavioural impact. 3) It has to be a simple enough that people understand that they will benefit by that amount.

    The research on this is poor to non existent.

    Reply
  4. Harry Alffa

    Perhaps you can tell me why no Labour MP I’ve contacted has given any feedback to the proposal that economic growth will follow from linking bank and banker taxes to unemployment level – a feedback mechanism.
    http://www.bailoutswindle.com

    Dynamically set banker’s top-rate income tax at ten times the percent unemployment rate.
    Set the bank levy as simply the cost to the state of Jobseekers Allowance.
    That would be around 80% and £6bn per year.
    2007 levels about 50% and £2bn.

    SMEs, I assert, will suddenly find they have honestly priced finance. They are the only route to economic growth, the banks are inhibiting them, by overcharging for everything.
    Mervyn King, August 11, 2010 – “big companies have decided to go around the banking system, to issue instruments themselves … equity issues, corporate bond issues, are being used to avoid the higher cost of bank lending. That is not something which is open to smaller companies”

    Just set it and tell the bankers to sod off and get on with it. No need for Merlyn monitoring, lying and posturing – its up to the banks if they want to reduce their tax bill.
    Note that this gives a possibility of zero percent bank/banker taxes for full employment. I suggest a minimum level!
    Note that it is only the top-rate of income tax which is linked. And only top-rate payers employed by banks.

    This would change the World forever, for the better.

    It is a purely capitalist solution.
    We have a free market, not a free-for-all market.

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  5. Richard Johnson

    I don’t know how many people in the ‘shirkers v strivers’ debate have lived on £70 per week. There is barely enough to buy food so the idea that those on benefit are living on easy street is untrue.
    Back in the dark days of the 1980′s there was talk of a new class: “The Non-Working class”.
    Few people of all classes (within reason!) choose not to work and despite their backgrounds we are all in danger of unemployment at some points in our lives.
    Maybe it would help the politicians to classify people who avoid getting a job with a new class for the modern age
    ” The Shirking Class”

    Reply

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