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Why the 50% “success” rate is no success at all

Iain Duncan Smith has been putting out a figure that 50% of people who have been on workfare schemes have left JSA within 6 months of doing so. Being a politician, he has been very careful with his words, but on BBC Question Time last week, one of the audience members referred to this as a “success rate” and thought it sounded like the schemes were doing well. The figure given is not a success rate, it is misleading to the point of being untrue, and is meaningless anyway. There are three main reasons for this.

First, leaving JSA does not mean that you have found work. People sign off for all sorts of reasons, like they die, or leave the country. Perhaps they’ve been in an accident, or contracted a serious illness and have moved from JSA to ESA, or a close relative has got really sick and they are now a full time carer. They may even have signed off – as we know people have done despite the hardship this has meant – because they refuse to be exploited by hugely profitable companies, and they refuse to undermine someone else’s paid job by working for free. For most people however, this is not a realistic possibility, especially for anyone with children.

There is no indication from the DWP how many of those 50% have left because they have found work, but we can take some guesstimates of how many people actually found work from figures that are creeping out. Tesco has said it took 1,400 DWP Work Experience placements, and 300 people on the scheme got a job. That is a rate of around 20%, which doesn’t sound so good – and there is some question of whether this figure is correct.  Holland and Barrett revealed a similar rate with 50 people out of 250 finding work following the scheme.

Without a full set of figures from the scheme overall, these must be treated with caution – however, it is enough to show that the DWP figure is an overestimate of the effectiveness of the scheme, and likely a large one.

Secondly, once we’ve found out how many people actually found work rather than signing off for a different reason, we then need to know whether that work is a permanent position, and whether it is full time.

At the Birmingham Tesco New St demo this week, one woman stopped and talked to a Boycott Workfare member, telling him that her son worked in Superdrug for 4 weeks, and got offered a job at the end of it. 7 hours per week. And was then told by the job centre he had to take it or they would sanction his benefits. If this is a typical job that someone gets following work experience, then the idea that this is a success is shown to be rather hollow.

It is as important to know whether these jobs are full time or part time, whether they are short term contracts or permanent, to be able to judge if it is a success.  The politicians and companies talk of jobs, not full-time equivalents, and this makes me suspect that many or most of those jobs will be part time, with perhaps as few as 7 hours per week.

But all of this is irrelevant anyway, even though it destroys the figures touted by the government, and that is because on its own the figure tells us absolutely nothing, and it doesn’t matter if the rate is 1% or 99%, we cannot know if this is successful unless we make a comparison to what would have happened if workfare schemes did not exist.

Thankfully, in November 2011, the Center For Economic and Social Inclusion did a study. (PDF).  They concluded that:

“This [graph] appears to show that the youth work experience scheme has had no additional impact on the speed at which young people leave benefit, and may have actually led to them spending longer on benefit than they would have done. However, these figures require some caution – the stated intent of the Department has been to target work experience at those with the biggest barriers to work, who would likely have had rates below the average for all claimants.”

So whilst there is uncertainty, what we know is that there is no apparent effect.  More research is needed, as suggested by Ben Goldacre in this blog, which brought our attention to these figures.  Full Fact and Not The Treasury also have analyses of this study.

All of which fits with what the DWP said, back in 2008 (PDF):

There is little evidence that workfare increases the likelihood of finding work. It can even reduce employment chances by limiting the time available for job search and by failing to provide the skills and experience valued by employers.

So here is the crucial fact – on its own that figure means nothing. In comparison, the best evidence we have is that the work experience scheme makes no difference at all to someone’s chances of finding work, so where is the value in it?

In fact, there is a deeper point to be made here – workfare schemes cannot create jobs. Those 300 jobs at Tesco would have existed whether workfare was being used or not. Tesco would still have hired 300 people to fill those jobs, and 300 people would have found work. What the workfare schemes might have done is to change who gets that job – that Tesco take someone from workfare rather than a different person who responded to a job advert. The net effect on employment is still the same – 1 person gets a job.

The only effect that workfare can have on unemployment is to increase it – and that is because given the opportunity of rolling workfare placements for free, companies will happily shed paid jobs and hours, causing more people to sign on and costing the taxpayer even more, whilst the companies’ profits increase.

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MGTOW Forums

Why don't they bring back the YTS for young unemployed folk? Ok, it was shit but at least small businesses got cheap labour whilst the the cheap labour got educated with regards to job and social skills! Fuck the Corporate Welfare shite, what kind of skills does one learn by stacking shelves and having the piss taken out of them by employed shelf stackers?

Kate Belgrave

A really good post.

This article describes exactly the same sort of "success" that pro-workfare US reformers claimed after the introduction of PRWORA and state workfare-based programmes - that by substantially cutting welfare rolls, workfare programmes and punitive welfare schemes were on the right track.

In fact, they were not.

By tightening welfare eligibility criteria, introducing time limits for eligibility, introducing workfare programmes and strict sanctions for those on them and so on, "reforming" legislation merely succeeded in pushing people off welfare into poverty - and definitely into obscurity.

You can see in this article we did in January on US workfare that New York city officials, after the introduction of the city's workfare programme (WEP), had absolutely no idea where the thousands who fell off the rolls went:

http://falseeconomy.org.uk/blog/the-cruel-truth-about-us-workfare

They simply assumed that those people found work. Some of them may have - the jobs market was stronger in the late 1990s and some people may have gone into work. But many didn't.

About four years after Guiliani introduced his punitive workfare scheme, the city saw a spike in homelessness - a spike that academics like John Krinsky (from Peter Rossi) attribute in part to the loss of income that for many would have been part and parcel of the city's welfare reform programme. Before that, there'd been a spike in the number of people using foodbanks.

As unemployment in the US has increased, welfare reform has proved devastating. This article discusses some of the appalling realities of welfare reform on women and children in particular:

http://www.apa.org/pi/women/programs/poverty/welfare-to-work.aspx

and this one describes how various states are cutting, dangerously, TANF benefits and welfare support to poor families even as need increases in this era of high unemployment:

http://www.cbpp.org/cms/?fa=view&id=3498

making the point that the only outcome that a reduction in state support can have is extreme poverty for those already dangerously close to it: "these measures will carry a heavy human cost. Cuts in cash assistance benefits will leave families who are already far below the poverty line with even fewer resources to make ends meet. New time-limit restrictions will eliminate assistance entirely for many families with physical or mental health issues or other challenges that limit their ability to work. Cuts in child care and other benefits that help offset work-related costs will make it harder for the parents lucky enough to have jobs in this economy to keep them. As a result, for the foreseeable future, hundreds of thousands of poor parents and children will face even greater difficulties in meeting their basic needs."

You are absolutely right to say that it is vital to find out exactly how many people are placed in ongoing paid employment. The reality may very well be that people are being pushed off benefits for a variety of considerably less positive reasons and that we'll be seeing monumental fallout from that in the next few years.

Kit Withnail

It's crucial to factor in Working Tax Credit to all assessments of unemployment. Ever notice how every time the numbers go up the govt claims more folk are self-employed? This is because once over 25, registering as self-employed you get WTC equal to JSA, and are eligible for Housing Benefit. You also don't get hassled or kicked off. You're meant to pay NI, but it's not compulsory, and if you complete tax return with nil income on time you're also paying nothing. The reason the govt keep quiet about it is that it means you are to all intents and purposes employed. This will obviously not remain a stable state of affairs, as once the media get wise to it, the govt will have to attack that too - as of course they need pressure on the unemployed in order to maintain profit rates. But for now, it's a crucial part of unemployment to take into account.

nancy

They've been doing this since Thatchers day, it's all because people on these schemes or going to "job clubs" etc aren't counted as unemployed for the time they are on them, so it makes the figures for that month look a bit better. As the Meerkat says, "simples".

Dan Garland

Some interesting analysis of the 50% success rate claim here:

http://fullfact.org/factchecks/benefits_work_experience_scheme_participant_outcomes-3340

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Jenny

The previous post about tax credits has reminded me that the Tesco offer is not as good as it seems.Im talking about the 4 week paid placement they are now offering.
To qualify for working tax credits the placement/job has to last for a MINIMUM of FIVE weeks.
Same rule applies for the housing benefit run on and the council tax benefit run on. Coupled with the fact that it can take up to 6 weeks for your benefit to be reinstated if tesco decide not to take you on after the placement,i dont see many under 25s or OVER 25s taking this kind of risk.
Therefore they will be more likely to opt for the working for benefit option.
Tesco and the Gov. know this and anyone who thinks they dont is seriously deluded.

Kit Withnail

Jenny: I'm well aware of this, I'm not trying to say that the situation of workfare is easy. I'm trying to point out that WTC is considered a 'success' by the govt as it is classed as employment. It accounts for a large number of the people who sign off and are listed as having entered employment, and I was trying to show that this is not of course what they have done.

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