The failure of the Youth Contract should be a lesson for Labour

I just noticed today (because there was no publicity), that the DWP have published some data and research on the Government’s ‘Youth Contract’. This was the Government’s response to youth unemployment, launched to huge fanfare by Nick Clegg in early 2012. The program has been running for nearly two years now, so this latest from DWP gives us a good idea how it’s been working – not well.

The idea was to offer up to 160,000 wage incentives of up to £2,275 for employers taking on an 18-24 year old unemployed person. In addition, the Youth Contract was to provide for an additional 250,000 unpaid work experience places. The program runs until 2015. So what has been achieved to date?

This document gives the outputs for the first 18 months (up to Dec 2013). It says that there have been 65,000 ‘wage incentive job starts’ (remember the target was 160,000) since April 2012, but actual full subsidy payments made (i.e. a young person has worked for an employer for 6 months) only total 4,140 so far. That is horrendously bad. Why the 65,000 starts hasn’t been converted into more final payments isn’t clear.

They did a little better at getting people into unpaid work experience. 100,000 young people have been subjected to that since April 2012.

So those are the raw numbers, but how effective has the program been in terms of creating jobs and getting young people into work? The DWP published two pieces of research at the same time as the data above, one surveying employers involved in the wage incentive scheme, and one surveying participants on the work experience element of the Youth Contact.

The employers survey showed that just 19% of job vacancies were extra vacancies that wouldn’t have existed without the subsidy and another 15% were influenced in their choice of candidate (i.e. they hired a young unemployed person so they could claim the subsidy). This represents a huge ‘deadweight loss’. 81% of the job vacancies would have existed anyway without the Youth Contract, and employers probably would have hired a young unemployed person regardless in 85% of cases.

So we have a program that (on the wage subsidy element) has only paid full subsidy for 4,000 jobs (against a target of 160,000) and of those 4,000 jobs, only about 800 were brand new jobs that wouldn’t have existed but for the Youth Contract. Not very impressive Mr Clegg.

But why has the program been so unsuccessful? In contrast, the last Labour Government’s ‘Future Jobs Fund’ managed to create over 100,000 temporary jobs in about 18 months. These were overwhelmingly in the public and third sectors and the subsidy was over double the Youth Contract subsidy (about £6,000 from memory). So why hasn’t the Youth Contract achieved the same results? Is is because the subsidy wasn’t high enough to cover all the costs of employing a young person? Is it because the subsidy isn’t paid until the person has been working with an employer for 6 months? Is it just that employers won’t take someone on unless they really need someone, even at a reduced cost? I think the fact the Government have tried to do this on the cheap goes some way to explaining it, but why it’s failed so spectacularly, I’m not quite sure though.

These results should give the Labour Party pause for thought though. Their idea is for a compulsory job guarantee which would place long term unemployed people in paid employment in the private sector. The private sector hasn’t responded that positively to the Youth Contract, so why would it to Labour’s scheme? And most of the jobs created under the Youth Contract can not be called ‘new’ so is it really a good idea to subsidise private sector employers to do what they were already going to do anyway? At best you would get a small pack-shuffling effect, when what’s needed is an increase in the total number of jobs. Time for a rethink?

Farmers, floods, and fraud

A good mixture of links this week in this, my 100th blog post. We start with the floods, and a reminder from George Monbiot that ‘cutting red tape’ can have unintended consequences:

How we ended up paying farmers to flood our homes

The Scottish Independence Referendum has been in the news this week and the debate is hotting up. Alex Salmond wants to keep the pound, but the three main UK parties have all (rightly) said no. Salmond has accused them of trying to scare people into voting no, but here’s why, for an independent Scotland, keeping the pound would be a very bad idea:

Scotland under Sterling is not truly independent

News now of the conviction of 4 A4e staff who claimed money fraudulently on one of A4e’s welfare to work contracts. This is what happens when ‘performance by results’ comes up against the reality of not enough jobs – cheating:

Guilty: The four A4e staff who fiddled the books helping lone parents get back to work

Another story on the bedroom tax now, and news that landlords are beginning to actually help tenants to appeal:

Bedroom tax is appealing: cc all social landlords

This is a nice post looking at what it’s actually like to be out of work and being required to sign on at the job centre. Not nice:

More #JSA stories from jobcentres: “It’s impossible. You’re trapped.”

Related to this, it’s becoming increasingly clear that Jobcentre Plus is no longer concerned with finding people jobs, focusing much of it’s attention instead on simply finding grounds to kick people off JSA. There are stories of staff there being disciplined for not sanctioning enough claimants, and over 800,000 people were sanctioned last year. The number of appeals is high though and over half of these are successful. Now it looks like DWP want to address this not by making better decisions, but by limiting the ability of people to appeal. Are they losing their grip?:

People stripped of benefits could be charged for challenging decision

Bankster news now and another reminder that the increasing power of the banks is incompatible with either democracy or the public good:

Predator Banks Enter Brave New World of Epic Scams and Public Hasn’t Got a Clue

Finally, we end with more ‘disappointing Labour news’, as it’s revealed their flagship policy to help the long term unemployed will only be funded for one year. I have a number of issues with this policy idea, but at least it would put back on the map the idea that governments can (and should) get involved in job creation. It seems though this is another big policy that’s in the end just more PR:

Labour ‘jobs guarantee’ promise limited to a year

“The moral case for welfare reform”

A few days ago the country’s most senior Catholic, Archbishop of Westminster Vincent Nichols raised some objections about the Government’s welfare reforms in comments to the Daily Telegraph. I don’t think we should pay attention particularly to what religious leaders say (about anything), but in this case, the Archbishop was merely stating the obvious. Basically, he said that the reforms were leaving some people destitute (they are), that the reforms are primarily about saving money (yes), and that the reforms are not working (depends on how you define ‘working’).

This seems to have upset David Cameron enough for him to ask the Telegraph for a right of reply. Here’s his article and he tries to answer the Archbishop with a moral argument. His argument is a textbook example of the conservative ‘strict father figure’ framing I’ve been banging on about recently. Here’s some extracts:

“First, our long-term economic plan for Britain is not just about doing what we can afford, it is also about doing what is right. Nowhere is that more true than in welfare. For me the moral case for welfare reform is every bit as important as making the numbers add up: building a country where people aren’t trapped in a cycle of dependency but are able to get on, stand on their own two feet and build a better life for themselves and their family.”

“Those who can’t work will be always supported, but those who can work have the responsibility to do so. “

“I believe very firmly that it is wrong to penalise those who work hard and do the right thing while rewarding those who can work, but don’t.”

In this version of reality (which Cameron may actually believe), it’s not necessarily the people that are to blame, but the evil system which makes people ‘dependent’, even rewarding them for “not making the right choices”.

So the system is immoral and must be ‘reformed’ to ‘make work pay’ and create the right incentives to ‘work hard and get on’. This is classic conservative moral framing, but what Cameron doesn’t mention is the enormous elephant in the room – jobs (or lack of them).

I might have some sympathy with Cameron’s position if there were more job vacancies than people looking for work, and those people were turning down work left, right and centre, but the maths just isn’t in Cameron’s favour. We’ve got around 4.5 million people without a job who want on and over a million more in part time work who’d like a full time job. At the same time, there are just half a million vacancies. Against those numbers, if you cut the amount of money people receive in social security benefits they will just get poorer. They can’t find jobs that don’t exist no matter how hard they try.

So to re-state Cameron’s case: when people stand on their own two feet, work hard and do the right thing, they will succeed, but the evil welfare system makes people lazy and dependent so must be weakened.

So how could we frame this differently? I always think Owen Jones is on to something when I hearing him talk about housing benefit. When is a discussion about how we need to get the housing benefit bill down, he just agrees strongly, but says it should be done by tackling private sector rents and building more houses. Housing benefit should be reframed therefore as landlord benefit. People don’t like feeling like they are being screwed, but anyone who is renting privately strongly suspects they are being. Jones hasn’t quite got his delivery down though I don’t think. It’s a bit machine gun with too much spraying of facts and figures, which probably won’t change anyone’s mind. I think his overall strategy is sound though.

On the welfare system as a whole I think the reframing might go something like this.

“The welfare system needs updating for the 21st Century, but to do so we need to understand the problems. The welfare state we know today was established under the assumption of full employment. That assumption no longer holds. There are simply not enough jobs. We need to rediscover what full employment means and government has a big role to play in that. Young people need paid work experience. People who’ve been out of work for a long time need a chance to get back into the workplace and update their skills. The private sector has consistently failed to perform in this regard, so where the private sector can’t or won’t offer these opportunities, government can and should. As Keynes said:

“The Conservative belief that there is some law of nature which prevents men from being employed, that it is “rash” to employ men, and that it is financially ‘sound’ to maintain a tenth of the population in idleness for an indefinite period, is crazily improbable – the sort of thing which no man could believe who had not had his head fuddled with nonsense for years and years…

It’s time to unfuddle our heads. When we talk about people having a responsibility to work if they can, so government has a responsibility to ensure that work is available and that it pays well enough to sustain people in a lifestyle appropriate for a rich country.”

I’ll finish this with a quote from a recent Jack Monroe article which is a pretty good antidote to this ‘work hard and get on’ nonsense:

“Poverty can happen to anyone. That’s why I unsettle some of the stalwarts of the Tory party. Because their rhetoric of “work hard and get on” can fall apart in the blink of an eye. I worked hard. I got on. And I still spent a year and a half scrabbling around in a festering pit of depression, joblessness, benefit delays and suspensions, hunger, and the entrenched, gut-wrenching fear that I was failing as a parent.”


Framing Fairness

I blogged recently about George Lakoff’s ideas about framing and how conservatives present their ideas in a way that appeals to the frames that all people have to a greater or lesser degree. Applying this to the concept of ‘fairness’, I think conservatives frame things in a very odd way, but it does seem to chime with a lot of people. Here’s three examples in which this type of framing is used:

1. It’s not fair that someone on benefits should earn more than someone working, so we should cut benefits.

2. It’s not fair that when private sector workers no longer have decent pensions, public sector workers do, so we should cut public sector pensions.

3. When private sector wages are stagnating, it’s not fair that public sector workers should be different, so we should cut public sector wages.

The message here is:

“Government is powerless to do anything about pay and conditions in the private sector, so the only thing it can do is to level the playing field by hitting public sector pay and conditions as well.”

The Labour Party accept all these propositions as far as I can tell, but all of these propositions could easily be reframed with a progressive slant:

1. It’s not fair that someone on benefits should earn more than someone working, so we ensure jobs pay enough to provide a decent standard of living.

2. It’s not fair that when private sector workers no longer have decent pensions, public sector workers do, so we should sort out the scandal that is the market for private pensions.

3. When private sector wages are stagnating, it’s not fair that public sector workers should be different, so we should ensure that wages rise in line with productivity and growth.

I think both progressives and conservatives would agree that the situation in all three propositions is unfair (work should pay, pensions should be decent), but it’s the fairness of the solution that is the difference, and that rests upon your belief (or not) in the ability of government to come up with positive rather than negative solutions to these issues.

The idea of “I’m being screwed so I don’t see why anyone else should get away with it”, seems a popular one, surely a more popular idea would be “You’re being screwed, so let’s do something to change that”? Governments can and should do something about all three of the points of unfairness I raised, but what would that “something” look like?

The issue generating the unfairness around points 1 & 3 is one of jobs. Or lack of them. There are always (even in better times) many more people looking for work than there are jobs. This means employers don’t really need to compete for workers, and so wages have lagged behind gains in productivity. Competition is good we are always told, so why not some more competition in the labour market? This could be achieved if the government was willing to create jobs for those unable to find regular jobs and pay them a decent wage. At a stroke, this would pressure the private sector to improve its offer to workers, and it would widen the gap between what you could get on benefits and what you could get in work.

And what about pensions? Private pensions seem to me to be a bit of a con. The fund managers skim off huge fees for doing not very much, and the value you get from your pension depends upon the vagaries of the financial markets. Part of pensioners income is also derived from government bonds, so the government is already heavily involved in private pensions. The government already very successfully administers and pays the state pension to millions, and it could also cope with paying earnings-related pensions to all upon retirement. We could then do away with a lot of pension fund managers and their fees and a whole chunk of people’s monthly income could be spent rather than saved, raising employment in the process.

Those are a couple of ideas then (there are undoubtedly other ways of achieving the goal or more and better paying jobs and better pensions). From where I’m standing, it should be relatively easy to reframe the fairness debate. Everyone knows they are being screwed. This is why Labour’s “cost of living crisis” resonates. The only problem is that they don’t really have any solutions at the moment. They agree with cutting social security, don’t have any ideas on jobs and won’t do anything about pensions. The “cost of living” line could take them to much more radical places, but seem to lack either the vision or (more likely) the will to go there.

JCP PR fail, Labour MP facepalm and the economics of the 1%

This week’s news has been dominated by the flooding in Somerset and in Surrey. Cameron got his wellies on and sprung into action, promising that “money was no object”. Cynics pointed out that it took until the flood waters threatened the playing fields of Eton before he gave a shit. Here’s some non-flood related stories from the last week.

More on the bedroom tax now, and week by week, this is a policy that seems to be on life-support. Labour have promised to scrap it if they win next year, but it the whole thing may have imploded before we get that far. Joe Halewood explains why here:

Councils cant administer an unlawful policy – The bedroom tax is dead!

Jobcentre Plus news now, and David Henke summarises a big PR failure playing out on social media:

Tweet Wars: How humourless Jobcentre Plus was humiliated by bolshie bloggers

Here’s a nice vid of an interview with economist John Weeks in defense of government:

The Economics of the 1%: Neoliberal Lies About Government

News now of a prominent Labour MP doing something entirely in character for the modern Labour Party, but nevertheless a bit shocking. Lecturers at Queen Mary University in London were part of a national strike over pay, but Tristram Hunt decided to cross the picket line in order to deliver a lecture about socialism! Should he not be standing side by side with workers trying to secure better pay and conditions? Hunt strikes me as the sort of politician who would be comfortable in any party. He doesn’t seem to hold any core beliefs. A pretty typical career politician in other words. Here’s the full story:

Tristram Hunt defends crossing picket line for socialism lecture

Finally, here’s Chris Dillow’s recipe for succeeding in business:

How to succeed

The Bedroom Tax, Big Benefits Row and the degradation of the teaching profession

A lot to get through this week, but first up, the Bedroom Tax. UN Special Rapporteur Sharon Rolnik finally published her report in housing in the UK, and as expected, she repeated her call for the Bedroom tax to be scrapped. What was striking during her visit to the UK last year, was the willingness of Ministers like Grant Shapps to tell obvious lies about the visit, like she wasn’t invited (she was) or she hadn’t met any Ministers (she had). There was a similar reaction to her full report as this Guardian article explains:

Ministers savage UN report calling for abolition of UK’s bedroom tax

But Rolnik’s report wasn’t solely focused on the Bedoom Tax. Far from it. Jules Birch gives a very good summary of the report’s findings in a blog for Inside Housing:

Rights Row

And after some interesting decisions in the appeals courts regarding the Bedroom Tax, Joe Halewood – who has blogged tirelessly on this wretched policy – predicts the whole edifice may soon come crumbling down:

The Bedroom Tax is Dead here’s why

Moving on now, and this week Channel 5 hosted a debate provocatively titled “Big Benefits Row”. I watched it myself and found it to be quite shouty, although actually quite sympathetic to those claiming social security benefits. The two exceptions were Katie Hopkins and Edwina Currie. I’m not sure how much they say, they actually believe, as they both seem to make quite a bit of money from being invited on TV to voice opinions many find offensive, but if they are genuine, they would seem to be outstanding examples of Geogrge Lakoff’s “strict father figure” frame, which I blooged about here. In their world, those who do the right thing, work hard and play by the rules will always succeed, so anyone who is claiming benefits must be doing something wrong. You could see this in the show when a member of the audience explained (very robustly!) how she was volunteering, doing training and applying for endless jobs but still couldn’t find work. Edwina Currie’s response was just to shout back at her repeatedly “Get a job” or “Try harder”.

There were two good blog posts I noticed this week from people who were actually in the studio during the debate Jack Monroe and Sue Marsh:

Dear Edwina, Thankyou for last night. I hope it was as good for you as it was for me.

Diary of a Benefit Scrounger: The Big Benefits Row

Teaching now, and I came across this blog post written by a teacher who has recently left the profession. My partner is a teacher, and what what she tells me, a lot of this rings true. This paragraph in particular hits the nail on the head about the stresses teachers are under:

“What I couldn’t cope with was the toxic culture of fear that now pervades the whole profession. People no longer talk about ‘what this brilliant kid did’ – it’s always about who had a drop in and what grade they subsequently received. As a profession, we have been reduced from largely innovative, invested individuals to a bunch of approval-seeking junkies, because we know we’re only as good as our last Ofsted rating. Forget what the kids think of you; forget what the parents think of you, if Ofsted say ‘nope’, then that’s it. You’re not good enough.”

This is no way to treat dedicated professionals, and as the blog goes on to explain, it’s pretty terrible for the kids they teach too:

Life lessons, fear of failure and why I left teaching.

A couple of shout outs for blogs I like now. First, two posts from Irish blogger Robert Nielsen, one on concepts of freedom, and one on endogenous money:

The Two Types Of Freedom

Endogenous Money Or How Loans Create Deposits

And here’s one by Peter Martin on government budgets, and why when people like Ed Balls talk about balanced budgets and surpluses, we should treat them with scorn:

Why Governments Can’t Choose to Run Balanced Budgets.

Finally, with the Winter Olympics getting under way this week in Sochi, there’s been a lot of negative coverage of Russia and what it’s like for gay people there. Channel 4’s Dispatches program aired a documentary about Russian gangs who target gay people over there and video their actions. It’s pretty horrendous stuff. Here’s a video of some tough Russians from the Interior Ministry showing a softer (but obviously completely heterosexual) side:

Are cuts to social security moral?

A lot of people would answer no straight away to this question, but stay with me. I’ve just started reading George Lakoff’s “Don’t think of an Elephant!” which is about how people view the world through different ‘frames’ and how political parties seek to exploit these frames in their political messaging. Lakoff’s central thesis is that those with a conservative world view frame things from the point of view of a strict father figure, while those of a more liberal persuasion frame the world from the point of view of a ‘nurturant parent family’.

So what is meant by the strict father figure frame? Lakoff explains:

“In this model there is also a definition of what it means to become a good person. A good person – a moral person – is someone who is disciplined enough to be obedient, to learn what is right, do what is right and not do what is wrong, and to pursue her self-interest to prosper and become self-reliant. A good child grows up to be like that. A bad child is one who does not learn discipline, does not function morally, does not do what is right, and therefore is not disciplined enough to become prosperous.She cannot take care of herself, and thus becomes dependent.”

To bring it back to the title of the blog then, for those who view the world though the strict father frame (a conservative viewpoint), cutting social security is a moral position, because a Lakoff also writes:

“Consider what this all means for social programs. It is immoral to give people things they have not earned, because then they will not develop discipline and will become both dependent and immoral. This theory says that social programs are immoral because they make people dependent. Promoting social programs is immoral.”

This strikes me a quite a good description of the language Tories like IDS use when discussing social security. They talk about ‘welfare dependency’ as though it’s a great societal evil, and separate people into those who are deserving of help and those who aren’t. They talk about people who ‘want to work hard and get on’. The Tories are for these people. This all implies that if people have the discipline and drive to succeed, then succeed they will. Any failure to do so must be down to the personal failings of the individual. I think this last point was quite eloquently dismissed in a blog by Jack Monroe todaybut it is an idea that many people undoubtedly subscribe to, and the right are extremely proficient in pushing these kinds of messages, while the left are poor at pushing their own. Witness Labour’s almost total inability to defend the welfare state and it’s acceptance of this strict father framing.

I suppose my point then is that a lot of people seem to assume the cuts to social security are because the Tories are evil, or because they want to shift resources from poor to rich. Maybe there are elements of that, but I think for politicians like IDS, they genuinely do believe what they are doing is morally right. The left need to accept that a lot of people agree with him and come up with strategies to reframe the debate.

50p taxes, deficit nonsense and political messaging

This week’s roundup starts with the hysterical reaction to Labour’s announcement of their intention to reinstate the 50p rate of income tax for high earners. Chris Dillow ridicules talk of economic disaster:

The idea that a tax tweak will cause disaster is ignorant of history

Next, also from Chris Dillow, a nice post about some of the nonsense we hear about the public finances:

A lot of talk of the public finances is simply fallacious

Moving on, and Paul Bernal blogs about the worrying news that David Cameron’s views on spying and use of big data stem from the information he’s gleaned from watching TV dramas:

No, Prime Minister

A bit closer to home (to me) now, and a story in my local rag about Bradford Council’s “Employment Opportunities Fund“. This is a successful, but very limited program aimed at creating job opportunities to young, older and people with disabilities who’ve been out of work for a long period of time:

Jobs scheme is to get funding boost

Political messaging now, and an article by Zoe Williams on George Lakoff and why the conservatives (small c) are winning. Among other things, Lakoff explains why rebutting moral arguments with evidence often doesn’t work:

George Lakoff: ‘Conservatives don’t follow the polls, they want to change them … Liberals do everything wrong’

Another thing that happened this week was that some people got offended. A couple of those who were offended said they were all for free speech but people shouldn’t say or do some things. In other words, they don’t believe in free speech. And these were Lib Dem activists! People general don’t have a right not to be offended as comedian Steve Hughes explains well :

Steve Hughes – What’s wrong with being offended?

Last up, and following news that whistleblower Edward Snowden has been nominated for the Nobel Peace Prize, here’s a nice interview with Snowden which aired recently on German TV:

German Television does first Edward Snowden Interview