Workfare replaces jobs and undermines wages
The minutes from the Social Security Advisory Committee’s meeting on the 7th December 2011, demonstrate that concerns were raised last year that workfare was replacing paid employment.
“….there was also a potential issue around equity between work experience placements and permanent staff. For example, many retail jobs required staff to work for 16 hours each week, with overtime payable for any hours worked beyond that. Work Experience allowed for 25 hours work activity, so overtime to permanent staff was being reduced or removed. [p.9-10] There was also evidence to suggest that work experience placements were being taken on to cover Christmas vacancies.”
This is certainly what Boycott Workfare has found, with ASDA sending paid staff home early over Christmas and using workfare to fill the gaps, Argos explaining “Christmas is our busiest time of year and we are pleased to provide the opportunity for work experience during this time” and a staff member from Holland and Barrett informing Corporate Watch that workfare has replaced overtime that used to be available.
In February of this year, the following account emerged from one MP on the Public Audit Committee:
“… the situation that I am observing in retail where people are being placed for free in retail operations for work experience….
…squeezing out permanent employment in relatively low-paid retail. I have noticed companies such as Tesco making their standard contracts four-hour contracts. WH Smith has a zero-hour contract policy, as do places such as Primark in my constituency. I have constituents who have worked in those places and who are not getting the hours of work that they used to have, which is obviously having very substantial follow-on impacts on tax credits and so on….
…In my constituency, one of the things that is happening is that many people are being given work experience-unpaid-in retail,…when they [retailers] are offering jobs, a company such as A4e, which operates in Slough, can say to Primark, “If you want more of our free workers, I hope you are going to give our people 20-hour jobs…
…I want to know how – it is not even in the Report – we protect against the risk of job substitution as a result of this programme, because it is not factored into how people are paid.”