The real economic free-riders are the privileged, not the poorest citizens

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The government’s undeclared preoccupation with
behavioural change through personal responsibility isn’t therapy. It’s simply a revamped version of Samuel Smiles’s bible of Victorian and over-moralising, a Conservative behaviourist hobby-horse: “thrift and self-help” – but only for the poor, of course.

Smiles and other powerful, wealthy and privileged Conservative thinkers, such as Herbert Spencer, claimed that poverty was caused largely by the “irresponsible habits” of the poor during that era. But we learned historically that the socioeconomic circumstances caused by political decision-making creates poverty. Meanwhile, the state abdicates its democratic responsibilities of meeting the public’s needs and for transparency and accountability for the outcomes and social consequences of its own policies.

Conservative rhetoric is designed to have us believe there would be no poor people if the welfare state didn’t somehow “create” them. If the Tories must insist on peddling the myth of meritocracy, then surely they must also concede that whilst such a system has some beneficiaries, it also creates situations of insolvency and poverty for others.

In other words, the same system that allows some people to become very wealthy is the same system that condemns others to poverty.

This wide recognition that the raw “market forces” of the old liberal laissez-faire (and the current starker neoliberalism) causes casualties is why the welfare state came into being, after all – because when we allow such competitive economic dogmas to manifest, there are invariably winners and losers.

That is the nature of “competitive individualism,” and along with inequality, it’s an implicit, undeniable and fundamental part of the meritocracy myth and neoliberal script. And that’s before we consider the fact that whenever there is a Conservative government, there is no such thing as a “free market”: in reality, all markets are rigged for elites. For example, we have a highly regulated welfare state that enforces “behaviour change” via a punitive conditionality regime, coercing a reserve army of labour into any available work, and a highly deregulated labour market which is geared towards making profit and is not prompted to provide adequately for the needs of a labour force.

Society as taxpayers and economic free-riders – a false dichotomy

The Conservatives have constructed a justification narrative for their draconian and ideologically-driven cuts to social security by manufacturing an intentionally socially divisive and oversimplistic false dichotomy. Citizens have been redefined as either taxpayers (strivers) or economic free-riders (skivers). Those people currently out of employment, regardless of the reason, are categorised and portrayed through political rhetoric and in the media as economic free-riders – the “something for nothing culture.” 

However, not only have most people currently claiming social security, including the majority of disabled people, worked and contributed tax and national insurance, people needing social security support also contribute significantly to the Treasury, because they pay the largest proportion of VAT, council tax, bedroom tax, council care costs and a variety of other stealth taxes. 

A massive proportion of welfare expenditure goes towards paying private companies and organisations to “get people back to work” and in rewarding shareholders with savings from the systematic reduction in benefits. This approach has not helped people out of employment to find secure, appropriate work with acceptable levels of pay, because it rests on a never-ending reduction in the value of the minimum benefit level, which was originally calculated to meet subsistence costs – only those costs of fundamental survival needs, such as for fuel, food and shelter – so that those in poverty are made even poorer, less able to meet basic needs, to serve as an “incentive” to make the advantages of any work, regardless of its quality, pay and conditions, appear to be greater than it is.

This is what Conservatives mean by “making work pay.” It’s exactly the same disciplinarian approach as that which was enshrined in the 1834 Poor Law Amendment Act – the principle of less eligibility. The 1834 Act was founded on a political view that the poor were largely responsible for their own situation, which they could change if they chose to do so.

Seriously, does anyone really imagine that people actually choose to be poor?

The impact of this approach on the large numbers of disabled people in particular, who had no choice but to seek welfare in the Workhouse, was that they were treated very harshly and depersonalised

It’s also clear that the underpinning Poor Law Amendment categories of “deserving” and “undeserving” poor – another false dichotomy – and the issue of eligibility for social security is still on the Conservative welfare policy agenda. Worryingly, the current trend is for the government to create stereotypes, frequently portraying the recipients of types of support, such as Disability Living Allowance, as passive or inactive economic free-riders, when in fact the Allowance was paid to some individuals working in the paid labour market, and the withdrawal of such funds, prevents them continuing with such paid work. More recently, the difficulties that many disabled people have encountered in accessing Personal Independence Payments (PIP) because of increasingly narrow eligibility criteria, have meant that many who depend on the income to meet the additional costs of living independently, such as specially adapted motability vehicles, have been forced to give up work.

The state confines its attention mainly to re-connecting disabled people deemed too ill to work with the labour market, without any consideration of potential health and safety risks in the workplace, as a strategy of “support.” Without any support.

As previously summarised, the Conservatives justify the draconian cuts to support as providing “incentives” for people to work, by constructing a narrative that rests on the false and socially divisive taxpayer/free-rider dichotomy:cant

By “trolls” Michael Fabricant actually means disabled people and campaigners responding to his tweet.

Of course one major flaw in Fabricant’s reasoning is that many people passed as fit for work are anything but. The other is that disabled people pay taxes too.

The increasing conditionality of welfare mirrors the increasing conditionality of the labour market

Under the guise of lifting burdens on business, the government has imposed burdens on those with disabilities by removing the “reasonable adjustments” that make living their lives possible and allowing dignity. The labour market is unaccommodating, providing business opportunities for making profit, but increasingly, the needs and rights of the workforce are being politically sidelined. This will invariably reduce opportunities for people to participate in the labour market because of its increasingly limiting terms and conditions.

Of those that may be able to work, over time, their would-be employers have not engaged with legal requirements and provided adjustments in the workplace to support those disabled people seeking employment. The government have removed the Independent Living Fund, and reduced Access to Work support, Personal Independence Payment (PIP) is very difficult to access because of the stringent eligibility criteria, whilst the disability benefit Employment Support Allowance was also redesigned to be increasingly difficult to qualify for.

Policies, which exclude disabled people from their design and rationale, have extended and perpetuated institutional and cultural discrimination against disabled people.

The universal character of human rights is founded on the inherent dignity of all human beings. It is therefore axiomatic that people with medical conditions that lead to disabilities, both mental and physical, have the same human rights as the rest of the human race. The United Nations is currently investigating this government’s gross and systematic violations of the Convention on the Rights of Persons with Disabilities (CRPD), and a recent report from the House of Lords Select Committee on the Equality Act 2010 and Disability, investigating the Act’s impact on disabled people, has concluded that the Government is failing in its duty of care to disabled people, because it does not enforce the act. Furthermore, the Select Committee concludes that the government’s red tape challenge is being used as a pretext for removing protections for disabled people. This is a government that regards the rights and protections of disabled people as nothing more than a bureaucratic inconvenience.

The inflexibility of the labour market isn’t an issue for only disabled people. The Department for Work and Pensions (DWP) intends to establish an “in-work service”, designed to encourage individual Universal Credit claimants on very low earnings to increase their income. Benefit payments may be stopped if claimants fail to take action as required by the DWP. The DWP is conducting a range of pilots to test different approaches but there is very little detail about these. The new regime might eventually apply to around one million people. In december last year, the The Work and Pensions Committee opened an in-work progression in Universal Credit inquiry to consider the Department’s plans and options for a fair, workable and effective approach.

The Conservatives continue to peddle the “dependency” myth, yet there has never been any empirical evidence to support the claims of the existence of a “culture of dependency” and that’s despite the dogged research conducted by Keith Joseph some years ago, when he made similar claims. In fact, a recent international study of social safety nets from The Massachusetts Institute of Technology (MIT) and Harvard economists categorically refutes the Conservative “scrounger” stereotype and dependency rhetoric. Abhijit Banerjee, Rema Hanna, Gabriel Kreindler, and Benjamin Olken re-analyzed data from seven randomized experiments evaluating cash programmes in poor countries and found “no systematic evidence that cash transfer programmes discourage work.”

The phrase “welfare dependencydiverts us from political discrimation via policies, increasing inequality, and it serves to disperse public sympathies towards the poorest citizens, normalising prejudice and resetting social norm defaults that then permit the state to target protected social groups for further punitive and “cost-cutting” interventions to “incentivise” them towards “behavioural change.”

Furthermore, Welfare-to-Work programmes do not “help” people to find jobs, because they don’t address exploitative employers, structural problems, such as access to opportunity and resources and labor market constraints. Work programmes are not just a failure here in the UK, but also in other countries, where the programmes have run extensively over at least 15 years, such as Australia.

Welfare-to-work programes are intimately connected with the sanctioning regime, aimed at punishing people claiming welfare support. Work programme providers are sanctioning twice as many people as they are signposting into employment (David Etherington, Anne Daguerre, 2015), emphasising the distorted priorities of “welfare to work” services, and indicating a significant gap between claimant obligations and employment outcomes.

The Conservatives have always constructed discourses and shaped institutions which isolate some social groups from health, social and political resources, with justification narratives based on a process of class-contingent characterisations and the ascribed responsiblisation of social problems such as poverty, using quack psychology and pseudoscience. However, it is socioeconomic conditions which lead to deprivation of opportunities, and that outcome is undoubtedly a direct consequence of inadequate political decision-making and policy.

It’s worth bearing in mind that many people in work are still living in poverty and reliant on in-work benefits, which undermines the libertarian paternalist/Conservative case for increasing benefit conditionality somewhat, although those in low-paid work are still likely to be less poor than those reliant on out-of-work benefits. 

The government’s Universal Credit legislation has enshrined the principle that working people in receipt of in-work benefits may face benefits sanctions if they are deemed not to be trying hard enough to find higher-paid work. It’s not as if the Conservatives have ever valued legitimate collective wage bargaining. In fact their legislative track record consistently demonstrates that they hate it, prioritising the authority of the state above all else.

There are profoundly conflicting differences in the interests of employers and employees. The former are generally strongly motivated to purposely keep wages as low as possible so they can generate profit and pay dividends to shareholders and the latter need their pay and working conditions to be such that they have a reasonable standard of living.

Workplace disagreements about wages and conditions are now typically resolved neither by collective bargaining nor litigation but are left to management prerogative. This is because of deregulation to suit employers and not employees.  Conservative aspirations are clear. They want cheap labour and low cost workers, unable to withdraw their labour, unprotected by either trade unions or employment rights and threatened with destitution via benefit sanction cuts if they refuse to accept low paid, low standard work. Similarly, desperation and the “deterrent” effect of the 1834 Poor Law amendment served to drive down wages.

The global financial crisis presented an opportunity for Conservative supporters of labour market deregulation to once again champion “economic growth” at any costs by “lifting the regulatory burdens on business.” Neoliberal commentators argued that highly regulated labour markets perform reasonably well during boom periods but cannot cope with recessions – and that therefore the UK and other developed economies need to deregulate their labour markets to ensure a strong economic recovery (even though the UK already has one of the most deregulated labour markets in the developed world).

The “problems” with labour market regulation are seen by Conservatives as being rooted in:

  • The social security system which provides a safety net and maintains basic living standards for those who are out of work, by reducing the gap in living standards between those in and those out of work, it diminishes the incentive to find or keep jobs. Where the safety net is financed by taxes on wages, it also raises total labour costs.
  • Minimum wages which may “price workers out of jobs” if set at levels above those prevailing in an unregulated labour market.
  • Employment protection legislation, such as restrictions on the ability of employers to hire and fire at will, also raises labour costs, diminishes flexibility and willingness to hire, thus reducing employment. (See Beecroft report)
  • Trade unions which raise wages to levels which “destroy jobs and reduce productivity and efficiency through restrictive practices.” (See Trade Union Bill).

Regulation of the labour market, however, is crucial to compensate for the wide inequality in bargaining power between employers and employees; to realise comparative wage justice; to increase employee’s job security and tenure, therefore encouraging investment in skills (both by the employer and employee), which has a positive impact on labour productivity and growth, and to ensure that a range of basic community, health and safety standards are observed in the workplace.

In the Conservative’s view, trade unions distort the free labour market which runs counter to New Right and neoliberal dogma.

Since 2010, the decline in UK wage levels has been amongst the very worst in Europe. The fall in earnings under the Coalition is the biggest in any parliament since 1880, according to analysis by the House of Commons Library, and at a time when the cost of living has spiralled upwards. And whose fault is that? It’s certainly not the fault of those who need financial support to meet their basic survival needs despite being in employment.

So we may counter-argue that: 

  • Genuine minimum standards, including minimum wages are needed. Without them the lower end of the market becomes casualised, insecure and sufficiently low-paid, which in turn also produces major work incentive problems. On the other hand, regulation that protects or gives power to already powerful groups in the labour market creates serious inequality in access to work. Additionally, the creation of special types of labour exempt from normal regulation is particularly unhelpful. It often tends to reinforce the privileged status of core workers while generating jobs which are unsuitable vehicles for tackling the problem of social exclusion.
  • The benefit system needs to take into account that those who take entry-level jobs may require additional help from the welfare state to support their families. Without this type of benefit, adults in poorer families will be the last to take such relatively low-paying entry-level positions. Furthermore, a highly conditional social security system that provides below subsistence-level support also serves to disincentivise people because financial insecurity invariably creates physiological, psychological, behavioural and motivational difficulties, people in circumstances of absolute poverty are forced to shift their cognitive priority to that of surviving, rather than being “work ready.” This was historically observed by social psychologist Abraham Maslow in his classic work on human motivation and well-evidenced in research, such as the Minnesota semistarvation experiment, amongst many other comprehensive studies.
  • Employment taxes, on both employers and employees, should be progressive to support the creation of new jobs rather than making the already employed work longer hours. Yet the UK system also has numerous large incentives to offer employees insecure and short-hour contracts. This is remarkably short-sighted and counterproductive.

 The balance of “incentives” in Conservative policies.

The following cuts came into force in April 2013:

  • 1 April – Housing benefit cut, including the introduction of the ‘bedroom tax’
  • 1 April – Council tax benefit cut
  • 1 April – Legal Aid savagely cut
  • 6 April – Tax credit and child benefit cut
  • 7 April – Maternity and paternity pay cut
  • 8 April – 1% cap on the rise of in working-age benefits (for the next three years)
  • 8 April – Disability living allowance replaced by personal independence payment (PIP), with the aim of saving costs and “targeting” the support
  • 15 April – Cap on the total amount of benefit working-age people can receive 

In 2012, Ed Miliband said: “David Cameron and George Osborne believe the only way to persuade millionaires to work harder is to give them more money.

But they also seem to believe that the only way to make you (ordinary people) work harder is to take money away.”

He was right.

Here are some of the Tory “incentives” for the wealthy:

  • Rising wealth – 50 richest people from the Midlands region increased their wealth by £3.46 billion  to a record £28.5 billion.
  • Falling taxes – top rate of tax cut from 50% to 45% for those earning over £150,000 a year. This is 1% of the population who earn 13% of the income.
  • No mansion tax and caps on council tax mean that the highest value properties are taxed proportionately less than average houses.
  • Benefited most from Quantitative Easing (QE) – the Bank of England say that as 50% of households have little or no financial assets, almost all the financial benefit of QE was for the wealthiest 50% of households, with the wealthiest 10% taking the lions share
  • Tax free living – extremely wealthy individuals can access tax avoidance schemes which contribute to the £25bn of tax which is avoided every year, as profits are shifted offshore to join the estimated £13 trillion of assets siphoned off from our economy
  • £107, 000 each per annum gifted to millionaires in the form of a “tax break.”

Disabled people have carried most of the burden of Conservative austerity cuts:

2014-02-17-BurdenoftheCuts-thumb
The Conservatives are on an ideological crusade, which flies in the face of public needs, democracy and sound economics, to shrink the welfare state and privatise our essential services.

In a wealth transfer from the poorest to the very rich, we have witnessed the profits of public services being privatised, but the losses have been socialised – entailing a process of economic enclosure for the wealthiest, whilst the burden of losses have been placed on the poorest social groups and our most vulnerable citizens – largely those who are ill, disabled and elderly. The Conservative’s justification narratives regarding their draconian policies, targeting the poorest social groups, have led to media scapegoating, social outgrouping, persistent political denial of the aims and consequences of policies and reflect a wider process of political disenfranchisement of the poorest citizens, especially sick and disabled people.

This is juxtaposed with the more recent gifted tax cuts for the wealthiest, indicating clearly that Conservatives perceive and construct social hierarchies with policies that extend inequality and discrimination. The axiom of our international human rights is that we each have equal worth. Conservative ideology is fundamentally  incompatable with the UK government’s Human Rights obligations and with Equality law. The chancellor clearly regards public funds for providing essential lifeline support for disabled people as expendable and better appropriated for adding to the disposable income for the wealthy.

Public policy is not an ideological tool for a so-called democratic government to simply get its own way. Democracy means that the voices of citizens, especially members of protected social groups, need to be included in political decision-making, rather than so frankly excluded.

Government policies are expressed political intentions regarding how our society is organised and governed. They have calculated social and economic aims and consequences. In democratic societies, citizen’s accounts of the impacts of policies ought to matter.

However, in the UK, the way that policies are justified is being increasingly detached from their aims and consequences, partly because democratic processes and basic human rights are being disassembled or side-stepped, and partly because the government employs the widespread use of linguistic strategies and techniques of persuasion to intentionally divert us from their aims and the consequences of their ideologically (rather than rationally) driven policies. Furthermore, policies have become increasingly detached from public interests and needs.

We elect governments to meet public needs, not to “change behaviours” of citizens to suit government needs and prop up policy “outcomes” that are driven entirely by traditional Tory prejudice and ideology.

 

proper Blond

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19 thoughts on “The real economic free-riders are the privileged, not the poorest citizens

  1. Thanks again, Kitty, another great article.
    Just read another news item that highlights some of your points here – more draconian behaviour modification tactics used by ‘providers’. To say that reading this has left me shocked is an understatement. The public have no idea the things that are going on, and how claimants are not only dehumanised, but fined of rightfully-entitled benefits that only provide a sub-subsistence level of income.

    http://www.thenational.scot/news/scheme-that-fines-jobless-10p-for-tuts-is-investigated.15840

    Liked by 2 people

  2. its time that lot at the top realised that without people doing the menial jobs, like cleaning (for bigots like them for one) schools, hospitals etc. for which they get a minimum wage, this country wouldn’t function at all. when i was a young woman, i trained as a nurse. we got very little in the way of wages. and still had to tip up to mum when we went home to help out at home. and pay for any meals we had whilst there. i trained for 5 years. 6 years later i got married and had kids. why am i telling you this? because at no time in my life have i been able to save for later years. we didn’t have holidays once the kids came along. was the odd day trips using a cheap family day rover to a park, museum, country house or swimming in our local vicinity.my husband did 9 years in the army. when he came out all he could get in way of a job was as a storeman (his job in the army)..very low paid. but jobs like these have to be done by someone.he ended up as a porter at a local hospital. still low paid.result was as i have said. we could not afford to put money away each week/ the bills and food took most of it and meals had to be made to stretch. we couldnt even afford fruit.

    Liked by 2 people

  3. Nobody is getting free stuff. This idea is a shared illusion. Everyone is getting paid. Those who produce and sell the products, those who work and pay taxes, those who are paid to contribute economically as consumers while keeping their dysfunctions out of the workplace, are all being paid. No one is losing. It’s a win/win/win.
    Many of the people reviled with concerned that they get “free stuff” are working very hard; and not getting sufficient compensation to pay for basic needs. Others are seriously disabled, requiring major accommodations to be effective employees. Most employers prefer not to make such accommodations (quite understandably), so these people can not be employed. Government or private concerns could develop special training and projects to employ those who could work, but rarely do.
    Others, though not traditionally disabled have such chaotic lives (for any of many possible reasons) that they are unemployable.
    Others will be employed and able to make their own contributions to the general revenue; but for right now that has not happened.
    Yet, these people are all actively contributing to the overall economy while their lives are sorting out. Fewer people are actively sick and destitute on the streets, and thus not bringing down property values, causing problems for local businesses, presenting disincentives for people of means to shop or enjoy public space, or presenting even greater problems for health care and crime industries.

    Like

    1. Employers are legally required to make reasonable adjustments, but we have a government that does not enforce that law. As for your comment: ” Fewer people are actively sick and destitute on the streets, and thus not bringing down property values, causing problems for local businesses, presenting disincentives for people of means to shop or enjoy public space, or presenting even greater problems for health care and crime industries.” It’s an offensive comment. We are talking about people who are destitute and ill, who have fallen on difficult times, and all you seemed concerned with is property prices, businesses and keeping other people’s experience of consumerism pleasant, untroubled, sanitised and removed from the truth.

      Inequality and poverty are the reasons why we have destitution, it is not the casualities of policy that are the “problem”, it is other people’s callousness, lack of care, concern, complicity and utter indifference towards the kind of increasingly uncivilised society that we live in. Some people are very poor because others a very very rich, resources are unequally distributed, and even worse, too many people don’t care about this. The real problem is the 1% of very powerful, very wealthy hoarders who contribute very little to the society that they have taken so much from. There is also a problem with people who are currently comfortable, who fail to see that unemployment, sickness, disability and downward social mobility can happen to ANYONE, and turn a blind eye to the plight of others who these circumstances have happened to.

      Like

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