British relief frenzy

Mahatma Gandhi may never have said that “the greatness of a country can be judged by how it treats its weakest members.” But this does not affect the authenticity of this sentence. Now, Britain is in danger of failing.

According to data from the Joseph Longtree Foundation, of the 42 million working-age people in the UK, about 12% are either unemployed or underemployed; about 20% are eligible for what the British call “relief”, that is, they All or part of the income is paid by the state.

Even leaving aside the new crown epidemic, the British capitalist system usually cannot provide a subsistence wage for about one-fifth of the working-age population in the country. This is a huge change from the situation when Britain established a respectable welfare state in the late 1940s. The idea of ​​enlightening the welfare state believes that the state will guarantee full employment, and employment should provide income to maintain a decent life, and the welfare system should address job interruptions caused by unemployment, illness and childbirth.

By the 1960s, work interruptions became more frequent, not because of rising unemployment, but because the number of applications for so-called state aid (relief not covered by insurance) grew faster than the working-age population. The initial increase came mainly from the increase in the number of single mothers and the additional disability allowance. The subsequent increase in the number of applicants (including the early 1980s) was driven by unemployment and job instability.

The current situation—approximately 20% of the working-age population “lives on the state”—has been in place since the 1990s. The ever-increasing number has given birth to the current universal credit system. The system has been implemented for a long time as early as 2011. The new system combines six benefits for the working-age population (whether working or unemployed) into a monthly payment.

But the key move happened earlier. In 1995, the British Conservative Party government replaced unemployment benefits with “job seekers allowance.” Contrary to the Keynesian era of full employment promises, the applicant will receive a stipend, in exchange for the mandatory “job search”. Each applicant must prove that they spend 35 hours a week-equivalent to a full-time job-looking for work.

In March 2021, Kullin, a senior official of the UK Department of Work and Pensions, clearly explained the thinking behind this botched work contract. Kulin said: “This system does require 2.5 million people who rely on uniform relief to find work as a condition for obtaining uniform relief.” If you are looking for a job, you must find a job.

The Ministry acknowledged: “The applicant’s commitment is deliberately designed to be like a contract. It clarifies that benefits are not different from the job itself.” This means that “just as the incumbent has an obligation to the employer, the applicant is also responsible to the taxpayer.” .

Such rhetoric shows the incompetence of the system—the inability to distinguish fantasy from reality. Indeed, to get a job you have to look for a job. But if there are no available positions, you will not find a job no matter how much time you spend. The illusion behind the system (which is also the foundation of neoclassical economics) is the assumption of full employment, that unemployment is simply the result of healthy workers’ preference for leisure.

Of course, there is also a way in the madness: unified relief can be seen as a deliberate tool to shape the current surplus labor into the form required by the low-skilled labor market. But the disease has been misdiagnosed: the problem is insufficient total labor demand, not excess labor of the wrong kind.

The only way to escape this system is to replace fantasy with reality. If the private sector in the UK cannot provide decent paid jobs for all those who are willing and able to work in normal times, the state should step in and adopt public sector job security. This will immediately halve the number of unified relief applicants for “job hunting” and at the same time eliminate downward pressure on wages by eliminating the “unemployed reserve army.”

The job provided by the community, no matter how miserable, is better than seeking a job that does not exist from one company to another and accepting the devastation of the soul. Work is the ultimate way out of poverty, but the futile job search required by the British relief contract has left many of the most vulnerable members of society with nowhere to go.