I have recently spent more time than is healthy flicking through the suggestions proposed to Your Country, Your Call, Ireland’s latest doomed exercise in Magical Thinking. They are hilarious, of course, but there’s a desperate edge to much of my laughter. Because the ideas are not just stupid. They are often illegal, and sometimes dangerous.
One of the most common suggestions has been that the unemployed be made to work, in various ways, for the benefit of the nation. The top two suggestions, last I checked, were variations on this theme. The idea is very much in the air these days, being regularly aired on current affairs and discussion programs as a way of killing two birds with one stone – getting people back to work, and putting all hands to the pump in the cause of saving the nation’s economy. It is so current, that I think it needs to be pointed out that it cannot bear scrutiny for more than a number of seconds without its hopelessly impractical and socially and economically damaging nature becoming apparent.
The notion of forcing people to work for their social welfare payments is not new, and is known as “workfare”. It has been tried in some countries, with limited success. But whereas the old call was for this work to be of a socially useful nature, it is more often suggested now that this be for the good of “the economy”, in other words, that private, for-profit businesses receive the benefit of forced labour, paid for by the state. It was probably inevitable that after years of taking credit for apparently selflessly “creating jobs”, the private sector would come to regard itself as primarily charitable in nature. The proposition is simple: Companies are having a hard time meeting costs, and people are having a hard time finding jobs. Make people work for free and both problems are solved.
The primary obstacle to this is that it is, in all likelihood, illegal under EU law. It is State Aid, the subsidisation by the state of private industry, and contrary to competition laws in that it gives Irish business an unfair advantage over businesses in other member states. But even if it were not illegal, such a scheme would be profoundly damaging to the economy. It cannot, even in the short term, be economically wise to prop up unprofitable companies on such a scale. With “wages” so low, demand for the products and services provided by these business will also be low, at exactly the same time as they go into overproduction due to their extra new staff. The glut of products on the market will drive prices down, furthering the cycle of deflation. Further, prices and wages will stay low, because the entire economy will have been artificially stabilised.
Further again, how long is such a scheme proposed to last? Even if it did succeed in bringing companies back into profitability, at what time is it proposed that the social welfare recipients thus employed will take the step up to full employment? Why, and when, would a company who are getting staff for free suddenly decide to start paying one of them? And if they did, which of their previously unpaid workers would get the real job?
So much for the private sector. Public or community-based work, though not blocked by the same European Law problems as private sector work, is not without it’s drawbacks. Firstly, it is of no direct benefit to the economy. It might be nice, socially and aesthetically, to have litter-free streets, or well pruned hedgerows, but sending the unemployed to do such work has no bearing on the economy. Indeed, in the case of any serious work, it denies the private sector a possible contract, thus putting pressure on companies previously reliant on such work, perhaps ultimately putting them out of business.
As with the private sector version, there arises the question of demand. How much of the work to which people will be put is actually necessary? There’s only so much litter to pick up, so many hedges to trim. In any case, all but the most basic of tasks will require equipment and supervision. Even with free labour, this scheme would constitute a massive increase in public sector spending, at a time when the common view is that a reduction in same is required.
Demand, in fact, is the key here. The economy is not in trouble because labour cost too much. If demand is sufficiently high, it will be worthwhile for businesses to pay whatever the market demands that labour should cost. An artificial reduction (or in fact abolition) of wages does not solve the demand problem, indeed it worsens it. But that is not the real motivation of the scheme. The real motivation is the same as that which was behind the Victorian Poor Law. It is the furious certainty that somewhere out there, people are getting something for nothing. Being on Social Welfare must then be made so unpleasant that recipients finally decide they’d rather work. This, of course, assumes that there are jobs to be had.
There will always be people who are eaten up by the idea that money is being given away for nothing. These are the people who propose stringent and thorough means tests for all state benefits. Tell them that means testing often costs so much to perform that it makes the programs more expensive, and they will reply that a principle is at stake. They would rather cost the state more than give anything to people they consider layabouts.
This is the primary philosophical objection to workfare: it assumes everyone is abusing the system. If the primary purpose of unemployment benefit is to keep people going while they search for work, then workfare is of no use. It deprives people of the time needed to search for employment, and where necessary to retrain.
A few years ago, Ireland was as close to full employment as it is possible to get. At one point, in Dublin, less than 1% were in receipt of Unemployment Benefit. Indeed, we had a labour shortage (demand, you see) that we filled with migrant workers. Now, unemployment is, according to the latest figures, at 12.6%. Perhaps the extra unemployed, previously in gainful employement, all decided to become lazy leeches off state largesse. But it seems like a remarkable coincidence that they did so at exactly the same time as the economy contracted. Maybe, just maybe, they’re not working because the jobs aren’t there.
Finally, (and I leave this point to last, because, though I believe it wholeheartedly, it is the sort of thing that sounds hopelessly quaint these days), there is such a thing as the dignity of work. Many of those unemployed worked in areas in which there is simply no work now. Having them out tending flower beds outside the local parish church, for payment that barely covers the essentials, is detrimental to the morale, the spirit we are repeatedly told is needed to overcome our current economic problems. Camus wrote that “there is dignity in work only if it is work freely accepted”. If it came to it, many would rather tend a bar in Australia by choice than be forced to work against their will in Ireland. If they left, they might think themselves betrayed by their country. They would be right.