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.