Why Workfare will do nothing for the Employment Crisis

I was delighted to learn that Cait Reilly has been successful in her legal challenge against the government’s ‘Workfare’ scheme in which benefit claimants can be required to work unpaid for up to six months or risk having their benefits axed.

The government attempts to justify the scheme by asserting that, under it, claimants gain valuable, transferrable, employment skills while businesses get to trial staff on a risk-free basis at no cost to them. Sounds like a good deal, right? No.

The scheme effectively amounts to requiring claimants of Jobseekers’ Allowance, worth £56.25 per week, to work for free for up to thirty hours a week for employers in the private sector. As the government can make benefits contingent on attending Workfare placements, that amounts to total consideration of £1.88 per hour. Even in the entry-level positions that Workfare generally places people, the companies would have to pay someone they actually employed to do the job at least £6.19 per hour, which is the National Minimum Wage.

The Workfare system does nothing to cut the benefits bill, because it is the government, and not the employer, that foots the bill for the benefits while the claimant is on placement. This effectively amounts to the taxpayer subsidising private enterprises by providing a workforce free of charge.

But what of the supposed enhanced employment prospects of the claimants put into these placements? Only 3.5% of people referred to the work programme have been able to find paid employment lasting six months or longer. What can we make of the balance of 96.5%? Are they, as our leaders might suggest, scroungers and shirkers (such emotive and pejorative language being par for the course in the ConDem Coalition)? Did all of the 96.5%, as some might say, just "go through the motions" and not learn from the experience, that being the reason they can't get a job?

There are an estimated 463,000 positions currently available, and these are being chased by 2.68 million people currently in the dole queue. That’s nearly 6 applicants for every single job, before you even consider people currently in work and looking for their next position, which makes every vacancy even more sought after.

Ms Reilly wasn’t in paid work, but she already had an unpaid placement in a museum that was very relevant to her existing skills and experience and no doubt would have been valuable in helping her to secure paid employment in her field of expertise. To force her to give up one unpaid position in favour of another one stacking shelves in Poundland, which is far less relevant to her skills and experience, is beyond perverse.

This isn’t about pride or a belief that the position was below her (she has since taken up a paid position in a supermarket) but the principle that if work is available it should be paid. If Poundland need a shelf-stacker, a cashier, a cleaner or anything else they should employ and pay one.

Which is precisely why Workfare won’t do anything for the employment crisis. Why would any employer hire and pay a member of staff if they can get one for free from the government? Every Workfare placement is one less job on the market, and therefore one less opportunity for a claimant to enter paid work. Workfare itself is constricting the supply of jobs, meaning that the volume of applicants for every vacancy won’t be heading south any time soon.