Lindsay Mitchell compares apples with oranges and goes bananas

by frog

Beneficiary bashing blogger Lindsay Mitchell published a post last week in which she attempted to argue that many people on sickness and invalid’s benefits should be looking for work.

She compared the current unemployment and sickness/invalid’s benefit figures with those in 1999, the last time unemployment was at its current level of 7.3%, and came up with this bar chart:

benefit numbers at 7.3 percent unemployment

She then concluded that for a good many people a sickness or invalid benefit is merely a de facto unemployment benefit.

Wrong!

Despite the same unemployment rate, the employment situation in 1999 was quite unlike that today.  In 1999 unemployment levels were just starting to decline from a ten year period of high unemployment.  35% of 1999’s unemployed had been unemployed for 6 months or more.

Today’s situation is very different.  There has been a rapid rise in unemployment over the last year after a sustained period of low unemployment.  So many more of today’s unemployed are likely to have a partner who is still in employment and be ineligible for unemployment benefit. Many others are likely to have their own resources to live on and have no need for an unemployment benefit, at least yet.

Mitchell should have considered this graph prepared by the Ministry of Social Development before jumping to her conclusion:

Source: DSW Annual Reports or Statistical Information Reports and MSD SWIFFT data.

Source: DSW Annual Reports or Statistical Information Reports and MSD SWIFFT data.

It shows no surge in sickness and invalid’s benefit figures to correspond with the plummeting  unemployment benefit figures between 2000 and 2006. It just shows the gradual increase in sickness and invalid’s benefit figures consistent with the inflow to those benefits being significantly greater than the outflow – only 12.5% of sickness and invalid’s beneficiaries manage a sustained exit to employment within 3 years according to Ministry of Social Development research.

I guess she ignored it because it doesn’t fit in with the conclusion she had already made.

frog says

Published in Economy, Work, & Welfare | Featured by frog on Mon, February 8th, 2010   

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