Catherine Delahunty

Job creation and welfare policies are failing

by Catherine Delahunty

Last week, Business Roundtable Executive Director Roger Kerr had a beneficiary bashing opinion piece published in the Dominion Post.  I decided to write a response, which was published today.

I’m sharing it with Frogblog readers:

Roger Kerr’s ideas about welfare are so backward they belong in the 19th century. His article was a salutary reminder that some things recur every recession, and one of these is the heightened level of public blame and humiliation beneficiaries are subjected to.

I would like to disabuse Mr Kerr of the notion that it is easy trying to raise children, pay the bills and keep a safe, warm roof over your head on a benefit.

It is not. Making ends meet on as little as $161 a week is incredibly hard. Often people aren’t told about their full entitlements and make do on even less.

Let’s remember that beneficiaries (unlike many of the wealthiest people in this country) pay their fair share of taxes, and contribute to society in numerous ways.

They often volunteer in their communities, and many are full-time caregivers for children and elderly or sick relatives.

Others are out of work because they are sick or disabled, and would like nothing better than a decent job, if they could manage the hours or if their employer was flexible about working conditions.

Most people spend less than one year on any benefit and use that time to rebuild their lives and education. The very few who abuse the system pale into insignificance against the losses incurred by failed investment companies, tax evaders and corporate fraudsters.

These people do not deserve the contempt of the better-off like Roger Kerr.

The impact of this recession has been carried by Maori and Pasifika whanau, who are twice as likely as Pakeha to be unemployed.

Presumably Mr Kerr thinks these people are not trying hard enough to find a job, but the queues outside supermarkets for those fabulous checkout jobs tell a different story.

What Mr Kerr and the Business Roundtable prefer not to publicly talk about is the structural value of unemployment to a growth-based economy, where a level of unemployment helps to keep wages low and people willing to work for very little.

He may be heartened by the members and advisers Social Development Minister Paula Bennett has appointed to the Welfare Working Group, including one Peter Saunders, who believes in an inherent link between low class and low intelligence.

He may also be heartened by the appointment of Catherine Isaac (nee Judd), former president of the ACT party, who presided over a policy direction more about dismantling support for the vulnerable than creating employment which provides a living wage.

The makeup of this committee is disturbing in the current political and economic context.

Its terms of reference deterred more modern and liberal commentators, and who can blame them? Why would they associate themselves with a group being encouraged to call on the likes of Peter Saunders for “expertise”?

With such members, the Welfare Working Group may well come up with some recommendations that align with the United States welfare experiment known as the “Wisconsin Model” that Mr Kerr and the Business Roundtable are so enthusiastic about.

The Wisconsin model has elevated the mantra of “work” instead of “welfare”. This has resulted in solo mothers from one side of town being bused to low-wage jobs on the other, while their children are placed in care.

This has cost the state government more than it has saved, in increased case worker load, childcare payments, transport subsidies, and high contract payments for private social service providers.

Because the push to move people into work hasn’t been matched by investment in job creation, the economic circumstances of these families hasn’t improved.

More families than ever make their homes in homeless shelters, and schools have brought in universal free breakfasts to deal with child hunger.

The Wisconsin model cut many people off the welfare rolls, but it hasn’t improved their lives.

Three-quarters of those who have moved from welfare to paid work are now in casual, part-time and temporary jobs without medical insurance, retirement benefits, sick days, or annual leave.

These are the kind of working conditions Mr Kerr and the Business Roundtable advocate, but as the US experience shows, they won’t get rid of poverty.

Thankfully, New Zealanders are waking up to the real costs of increasing inequality. Economic commentators such as Gareth Morgan have suggested a different approach to welfare, such as a form of universal basic income.

The time has come to take bold ideas like this seriously. The current blame-and- shame culture and the absence of Government-led job creation has failed our communities.

We need a sustainable economy and a fair society that delivers a living wage to everyone.

Published in Economy, Work, & Welfare by Catherine Delahunty on Fri, May 7th, 2010   

Tags: , , , , , , , ,

More posts by | more about Catherine Delahunty