UK Working Poor to be classed as "Not Working Enough"

[LadyTevar]

the guardian

One million of Britain's lowest paid employees will be classed as "not working enough" and could find themselves pushed with the threat of sanctions to find more income under radical changes to benefits, the Department for Work and Pensions has said.

DWP internal documents seen by the Guardian reveal that people earning between £330 and around £950 a month – just under the rate of the national minimum wage for a 35-hour week – could be mandated to attend jobcentre meetings where their working habits will be examined as part of the universal credit programme.

Some of those deemed to be "not working enough" could also be instructed to take on extra training – and if they fail to complete tasks they could be stripped of their UC benefits in a move which departmental insiders conceded is controversial.

The DWP said that their overall plans for those in low-paid work were not yet definite and recognised that supporting working families to increase their income was a complex area into which the state hadn't previously intervened. But the department estimates there are one million people in this lower-paid bracket.

Not all of those will be forced into jobcentres, with individuals with caring responsibilities or other constraints preventing them taking on full-time work highly likely to be excluded.

The DWP said: "There isn't any real clear, definite plan as to how this [part] would work."

However the department did confirm that docking social security payments for those who are categorised as "not working enough" formed part of their plans.

The shadow work and pensions minister, Liam Byrne, said that the policy was attempting to push people into work that wasn't there. "What this out-of-touch government fails to realise is that there simply aren't that many extra shifts to go around. Millions are locked out of work and millions more are desperate to increase their hours."

The senior ministers involved in heading up welfare reform have spoken about how their flagship reform would completely change the culture of benefits.

Speaking in parliament during answers to urgent questions on Thursday, Iain Duncan Smith said: "Universal credit isn't just about IT, it is massively about cultural change, to get people back to work and to ensure those who do go to work, particularly the poorest, benefit the most."

Documents seen by the Guardian show how millions of people currently in receipt of some sort of benefit will be categorised into seven classes including, "too sick to work", "too committed to work", a category including lone parents, and those deemed to be "not working enough".

UC aims to merges six different benefits with the claimant receiving a single monthly household payment, although earlier this week the National Audit Office warned that the underlying IT project had been beset by "weak management ineffective control and poor governance" and that £34m of the £303m spent on technology had already been written off.

Sources say that new JSA claims will be "shut down" by July 2015 while the tax credits system – created by Gordon Brown as Labour chancellor – will end for new claims by November that year. Meanwhile income support for lone parents will be terminated by October 2015. These benefits and others are planned to be folded into to one single universal payment.

One recent policy document sets out the rationale for placing conditions on those who are in work: "Moving to universal credit will not only remove systemic barriers to employment, it will also remove the distinction between in and out of work, meaning that even one hour of work would profit the claimant … the decision for the claimant will therefore be simplified – do they want the additional income from employment, or not?"

Reflecting the biggest change to social security since 1945, language now being employed at the DWP includes describing the "claimant journey" where getting into work "is just the first step".

The TUC's general secretary, Frances O'Grady said the DWP's policy would be forcing people from secure and into insecure work: "This unfair move could force people on low-paid jobs to trade relatively secure employment for work of a much more precarious nature, simply to justify a few weeks work on a slightly higher rate of pay.

"It shows how out of touch the government is with the problems facing low-income families – who already have more than enough on their plates struggling to make ends meet. They will be living in constant fear of being punished at a time when there are simply not enough decent jobs to go round."

The DWP said: "This is obviously a complex area where the state has not previously intervened and supported people to increase their earnings. That is why we are working on pilots to get this help right and to determine the most effective support for in-work universal credit claimants.

"Too many people in low-income work have no support to help them earn more and eventually move to independence."

• This article was amended on 7 September. It originally said that people earning between £330 and around £1,050 a month would be affected. This has been corrected.

[Dartzap]

Oh for fucks sake, thats basically a vast chunk of the bloody retail sector. I know Ian and Duncan have a few issues, but they can't be that moronic surely?
Two more years.....

[Thanas]

This policy is genius if one is a Tory ideologue.

First, you hate paying benefits or assistance. So you create a category where people who are categorized as "lazy" don't get any. Then you categorize people getting benefits as lazy, since after all, they wouldn't need assistance if they were working, would they?

[Admiral Valdemar]

How dare you people not want to devote all your waking hours to furthering the corporate ideal. Don't you know that anyone who doesn't strive for a larger salary and more aggressive dominance in the workplace is a downright sleezebag waste of flesh?

[Enigma]

They are doing something similar here in Ohio WRT food stamps.

[Broomstick]

Here in Indiana anyone on food stamps longer than six months has their case reviewed. If you're disabled or taking care of children under 5 that's fine, but if not you either have to be working, document looking for work, a full time student, or enrolled in a training program of some sort. During the Great Recession, though, no one was cut for being unable to find work so long as they were actually looking for it.

[Simon_Jester]

If I read this right...

Here, they're saying that they may be dropping people who are working 20-30 hours a week at minimum wage for, literally, "not working enough." The problem then being that this is an incredibly bad-faith way to approach the question of why people aren't working; if there are a lot of 20-30 hour a week part time jobs in the economy already, then they're essentially threatening to cut you off if you haven't successfully found two jobs to work.

[Korto]

It's paradoxical, this kind of stuff, because the time when it's most reasonable to do it, when there's plenty of jobs around for everyone so anyone who wants a job can find one, is the time when they're the least interested in doing it. Unemployment figures look great, tax receipts are high, welfare costs low, why stir up unnecessary trouble?
It's when unemployment's high, tax receipts low, and welfare costs high that they start looking to try to get people off the dole, right when there's no fucking jobs for them to go to.
Ya gotta love when priorities clash.

[Minischoles]

The fun thing of this is the people it's going to hit worst are those on zero hour contracts or part time work.
Zero hour contracts are already painful enough for those stuck on them - which is most if not all of retail sector employees and hospitality - you're already screwed if your work decides that week you're not needed or to only offer you a certain number of hours now you get the government calling you lazy on top of that.

It's almost like they're trying to ensure they spend another decade in opposition.

[Dartzap]

It's almost like they're trying to ensure they spend another decade in opposition.

Doesn't that mean we end up with Millibean for a decade?

We're doomed.

[Starglider]

How dare you people not want to devote all your waking hours to furthering the corporate ideal. Don't you know that anyone who doesn't strive for a larger salary and more aggressive dominance in the workplace is a downright sleezebag waste of flesh?

You can devote your waking hours to whatever you like. However it looks like this will no longer result in automatic unlimited funding via money extracted from working taxpayers at gunpoint. You are free to fund worthwhile activities any other way you choose.

The real problem with this is the lack of sufficient employment openings in the UK at present, not that slight inconveniences or restrictions on the entitlement to other people's money represent some sort of moral issue.

[Admiral Valdemar]

You can devote your waking hours to whatever you like. However it looks like this will no longer result in automatic unlimited funding via money extracted from working taxpayers at gunpoint. You are free to fund worthwhile activities any other way you choose.

The real problem with this is the lack of sufficient employment openings in the UK at present, not that slight inconveniences or restrictions on the entitlement to other people's money represent some sort of moral issue.

My beef is with the live to work culture, being a cog in a large machine of ever growing profit, until you're useless that is (like Max in Elysium). Not the funding of personal endeavours off the state's benefits. The idea that you strive to work 70 hour weeks and gun for becoming some revolutionary ruthless entrepreneur in the pursuit of more power and stuff. As opposed to having a comfortable job and income, free of stress or delusions of grandeur and simply enjoying life.

The first comment in a Forbes article I read recently about autonomous cars becoming reality in the near future: turn your car into a mobile office on the way to work. Brilliant.

[Zaune]

There's also the fact that near-full employment isn't coming back. China and a few other Pacific Rim countries got to kick this problem down the road for a couple of generations but they're going to have the same problem the British did in the seventies and eighties: If a few hundred thousand people's jobs can be done better and more cheaply by a machine, what are they going to do instead? And what are their children going to do?

[Starglider]

My beef is with... The idea that you strive to work 70 hour weeks and gun for becoming some revolutionary ruthless entrepreneur in the pursuit of more power and stuff.

Well you're complaining in the wrong thread, because as the article stated 35 hours a week is considered 'enough' for the purposes of this legislation (less if you are a lone parent or have other carer responsibilities).

[energiewende]

There's also the fact that near-full employment isn't coming back. China and a few other Pacific Rim countries got to kick this problem down the road for a couple of generations but they're going to have the same problem the British did in the seventies and eighties: If a few hundred thousand people's jobs can be done better and more cheaply by a machine, what are they going to do instead? And what are their children going to do?

What indeed? I personally have been out of work ever since the invention of the Spinning Jenny. It was crop rotation that did for my poor father.

[Simon_Jester]

Energiewende, you're being disingenuous.

In the industrial revolution Zaune's question still mattered. It was, in fact, reasonable to ask "what will all those workers do?" Fortunately, there were answers to the question. At first, a lot of them became personal servants or produced manufactured goods which had always been in high demand but low supply. Over time that's evolved, and the children of the factory workers now mostly shuffle paperwork for a living.

But the question remains, and it's still at least worth speculating on the answer. And on having some kind of a plan in place in case the answer is "they will do nothing; demand for low-skilled labor has dropped to the point where it is no longer possible to fund full-time jobs for low-skilled workers at wages sufficient to keep them alive."

Commodities and businesses go out of style and wither away and die in the free market all the time. Is it somehow inconceivable to you that the same economic pressures might try to force laborers to go the same way?

[Zaune]

We also don't have colonies to absorb any local surplus, and neither can we rely on a convenient world war.

[mr friendly guy]

There's also the fact that near-full employment isn't coming back. China and a few other Pacific Rim countries got to kick this problem down the road for a couple of generations but they're going to have the same problem the British did in the seventies and eighties: If a few hundred thousand people's jobs can be done better and more cheaply by a machine, what are they going to do instead? And what are their children going to do?

China's population will be aging and automatisation with machines might help that. The challenge for them will be if they can time it correctly, so that automatisation coincides with the decrease labour force.

[energiewende]

Energiewende, you're being disingenuous.

Far from it; the hypothesis that economic development leads to long-run increase in involuntary unemployment is based in ignorance and is broadly equivalent to stating "the world is flat", "heavy objects fall faster than light objects", etc. It is supported by neither evidence nor theory, and is rejected by mainstream science.

In the industrial revolution Zaune's question still mattered. It was, in fact, reasonable to ask "what will all those workers do?" Fortunately, there were answers to the question. At first, a lot of them became personal servants or produced manufactured goods which had always been in high demand but low supply. Over time that's evolved, and the children of the factory workers now mostly shuffle paperwork for a living.

But the question remains, and it's still at least worth speculating on the answer. And on having some kind of a plan in place in case the answer is "they will do nothing; demand for low-skilled labor has dropped to the point where it is no longer possible to fund full-time jobs for low-skilled workers at wages sufficient to keep them alive."

Commodities and businesses go out of style and wither away and die in the free market all the time. Is it somehow inconceivable to you that the same economic pressures might try to force laborers to go the same way?

Demand is not an exogeneous variable. It depends on price. There was not unsatisified demand for manufactured goods (in any more meaningful sense than there is always unsatisfied demand for everything) before the industrial revolution because manufactured goods were expensive. The industrial revolution is fundamentally a process of making goods cheaper to produce; no one needed to create more demand nor did that demand need to exist before. It increased naturally in response to the falling price.

So what if there is a fall in demand for unskilled labour? Then the price will decrease. People will be paid less, but there's no reason unemployment would increase. This destroys the thesis though you might argue the outcome is still bad, because it's bad people are paid less. But do we observe this? No, we observe constantly increasing wages for everyone, because economic development increases the demand for labour by making it more productive. If you want me to live in your house and light and extinguish candles for you all day (as thousands of people once did), or you want me to go door-to-door collecting scrap metal in a wheelbarrow (as my parents remember people doing), you have to compete with someone who wants me to clean up a factory that can produce thousands of toasters, humorous bumper stickers, or apple pie-flavoured dog biscuits every day, and those have a market value of millions.

[K. A. Pital]

Real I.e. Inflation adjusted incomes in America for the lower 80 percent were flat for decades. This does not correlate with rising wages for everyone, sorry.

[energiewende]

That is a prenicious half-truth. Cash payments have stagnated or even reduced, but total payment including payment in kind has increased, mostly to take advantage of tax deductions:



I live somewhere without many tax deductions, so real wages have increased substantially.

[K. A. Pital]

What are those nonmonetary compensations? How does this correlate with de-facto flat incomes?

[energiewende]

I would guess that the largest are medical insurances, pensions, and employer contributions to social security, in that order. But, I have never worked in the US.

What is a de-facto income? This looks like the real wages graph but using households rather than individuals and not correcting for hours worked.

If you are talking about 95th percentiles, remember these incomes used to be suppressed by the high top rate income tax, which was over 70% between 1936 and 1982. This doesn't represent money that is "shared" to others but rather deadweight loss to the economy of money that is never earned at all.

---

Before this thread turns into another shaggy dog story, I would point out that:

1. No rebuttal is offered that reduced demand for low skilled labour does not increase unemployment.

2. It is accepted that it does not reduce wages.

3. I have presented strong evidence that total payment by employers for labour has increased.

[Simon_Jester]

Commodities and businesses go out of style and wither away and die in the free market all the time. Is it somehow inconceivable to you that the same economic pressures might try to force laborers to go the same way?

Demand is not an exogeneous variable. It depends on price. There was not unsatisified demand for manufactured goods (in any more meaningful sense than there is always unsatisfied demand for everything) before the industrial revolution because manufactured goods were expensive. The industrial revolution is fundamentally a process of making goods cheaper to produce; no one needed to create more demand nor did that demand need to exist before. It increased naturally in response to the falling price.

Excuse me, I see the problem. You're using a technical term in a technically precise sense, one which unfortunately makes the term useless for normal people by excluding an important idea. At least, I assume you are using the term in a precise way- though I find it inexplicable that in economics "demand" does not mean "volume of the goods which are desired."

Is it just not part of economics to believe that there is such a thing as "priced out of the market," that someone might desire something like their own horse, or a spare suit of clothes, or a cast-iron stove... but be unable to pay for this, and therefore not have it?

Because that's the sense in which I am using the word "in high demand." Things like, oh, food, clothing, warm shelter, metal tools and cookware... all these things were very much desired prior to the industrial revolution. But the quantities that could be made by the available means of production were limited, there wasn't enough labor or machinery available to produce the goods in quantity enough to satisfy everyone who wanted them. Therefore, these goods became expensive- sometimes expensive enough that people died for lack of them, because of inability to pay.

I had always thought this was a textbook example of the consequences of supply and demand: high demand and low supply means scarcity and high prices. Industrialization raised the supply curve, with effects I'm sure you're familiar with.

So what if there is a fall in demand for unskilled labour? Then the price will decrease. People will be paid less, but there's no reason unemployment would increase. This destroys the thesis though you might argue the outcome is still bad, because it's bad people are paid less. But do we observe this? No, we observe constantly increasing wages for everyone, because economic development increases the demand for labour by making it more productive.

The real problem I perceive is that the labor market is becoming increasingly segregated. It's not just about whether you want to hire a worker, it's about what kind of worker you want to hire.

More and more, buyers want labor with certain qualities- qualities it takes considerable time and effort to rebrand yourself as having. If people fail to do this fast enough, they may wind up caught between two stools in the labor market despite a high demand for certain kinds of labor. An increase in the price of plowshares does sword merchants no good if they cannot beat the one into the other in time to take advantage of it.

[Broomstick]

I would guess that the largest are medical insurances, pensions, and employer contributions to social security, in that order. But, I have never worked in the US.

...And yet, you are holding yourself out to be an expert on working in the US. Maybe you want to stop and re-evaluate your stance?